Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 29, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-32525 | |
Entity Registrant Name | AMERIPRISE FINANCIAL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-3180631 | |
Entity Address, Address Line One | 1099 Ameriprise Financial Center | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55474 | |
City Area Code | (612) | |
Local Phone Number | 671-3131 | |
Title of 12(b) Security | Common Stock (par value $.01 per share) | |
Trading Symbol | AMP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 111,889,817 | |
Entity Central Index Key | 0000820027 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Revenues | |||||
Net investment income | $ 773 | $ 300 | $ 1,428 | $ 933 | |
Premiums, policy and contract charges | (805) | 352 | (94) | 1,019 | |
Other revenues | 113 | 68 | 259 | 213 | |
Total revenues | 2,906 | 3,013 | 9,681 | 8,769 | |
Banking and deposit interest expense | 3 | 10 | 10 | 53 | |
Total net revenues | 2,903 | 3,003 | 9,671 | 8,716 | |
Expenses | |||||
Distribution expenses | 1,285 | 1,028 | 3,693 | 2,963 | |
Interest credited to fixed accounts | 172 | 170 | 455 | 523 | |
Policyholder Benefits and Claims Incurred, Net | (719) | 1,104 | 338 | 824 | |
Amortization of deferred acquisition costs | 9 | 85 | 77 | 349 | |
Interest and debt expense | 64 | 37 | 149 | 124 | |
General and administrative expense | 822 | 763 | 2,475 | 2,292 | |
Total expenses | 1,633 | 3,187 | 7,187 | 7,075 | |
Pretax income (loss) | 1,270 | (184) | 2,484 | 1,641 | |
Income tax provision (benefit) | 239 | (44) | 425 | 284 | |
Net income (loss) | $ 1,031 | $ (140) | $ 2,059 | $ 1,357 | |
Basic | |||||
Net income (in dollars per share) | $ 8.86 | $ (1.14) | $ 17.42 | $ 10.87 | |
Diluted | |||||
Net income (in dollars per share) | $ 8.65 | $ (1.14) | [1] | $ 17.03 | $ 10.73 |
Management and financial advice fees | |||||
Revenues | |||||
Revenue from contracts with customers | $ 2,367 | $ 1,893 | $ 6,720 | $ 5,365 | |
Distribution fees | |||||
Revenues | |||||
Revenue from contracts with customers | $ 458 | $ 400 | $ 1,368 | $ 1,239 | |
[1] | Diluted shares used in this calculation represent basic shares due to the net loss. Using actual diluted shares would result in anti-dilution. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 1,031 | $ (140) | $ 2,059 | $ 1,357 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment | (22) | 27 | (21) | (14) |
Net unrealized gains (losses) on securities | (339) | 95 | (538) | 268 |
Defined benefit plans | 29 | |||
Total other comprehensive income (loss), net of tax | (361) | 122 | (530) | 254 |
Total comprehensive income (loss) | $ 670 | $ (18) | $ 1,529 | $ 1,611 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Assets | |||
Total assets | $ 170,726 | $ 165,883 | |
Liabilities | |||
Policyholder account balances, future policy benefits and claims | 34,864 | 33,992 | |
Separate account liabilities | 95,129 | 92,611 | |
Total liabilities | 165,019 | 160,016 | |
Equity: | |||
Common shares | 3 | 3 | |
Additional paid-in capital | 9,118 | 8,822 | |
Retained earnings | 16,955 | 15,292 | |
Treasury shares, at cost | (20,468) | (18,879) | |
Accumulated other comprehensive income (loss), net of tax | 99 | 629 | |
Total equity | 5,707 | 5,867 | |
Total liabilities and equity | 170,726 | 165,883 | |
Ameriprise Financial | |||
Assets | |||
Cash and cash equivalents | 7,736 | 6,751 | |
Investments | 33,518 | 41,031 | |
Separate account assets | 95,129 | 92,611 | |
Receivables | 15,920 | 7,819 | |
Deferred acquisition costs | 2,735 | 2,532 | |
Restricted and segregated cash and investments | 2,351 | 2,558 | |
Other assets | 11,079 | 10,551 | |
Liabilities | |||
Policyholder account balances, future policy benefits and claims | 34,864 | 33,992 | |
Separate account liabilities | 95,129 | 92,611 | |
Customer deposits | 18,693 | 17,641 | |
Short-term borrowings | 200 | 200 | |
Long-term debt | 2,831 | 2,831 | |
Accounts payable and accrued expenses | 2,146 | 1,998 | |
Other liabilities | 8,922 | 8,761 | |
Consolidated investment entities | |||
Assets | |||
Cash and cash equivalents | 68 | 94 | |
Investments | 2,170 | 1,918 | |
Receivables | 18 | 16 | |
Other assets | 2 | 2 | |
Liabilities | |||
Debt, at fair value | [1] | 2,163 | 1,913 |
Other liabilities | $ 71 | $ 69 | |
[1] | The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common shares, shares authorized | 1,250,000,000 | 1,250,000,000 |
Equity: | ||
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 1,250,000,000 | 1,250,000,000 |
Common shares, shares issued | 334,347,693 | 332,390,132 |
Treasury shares | 221,950,106 | 215,624,519 |
Ameriprise Financial | ||
Assets | ||
Investments, allowance for credit losses | $ 19 | $ 52 |
Receivables, allowance for credit loss | $ 52 | $ 49 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | Common Shares | Additional Paid-In Capital | Retained Earnings | Treasury Shares | Accumulated Other Comprehensive Income (Loss) | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, AdjustmentRetained Earnings |
Beginning balance (in shares) at Dec. 31, 2019 | 123,939,234 | |||||||
Beginning balance at Dec. 31, 2019 | $ 5,729 | $ 3 | $ 8,461 | $ 14,279 | $ (17,276) | $ 262 | ||
Beginning balance (Current expected credit losses guidance) at Dec. 31, 2019 | $ (9) | $ (9) | ||||||
Comprehensive income (loss): | ||||||||
Net income (loss) | 1,357 | 1,357 | ||||||
Other comprehensive income (loss), net of tax | 254 | 254 | ||||||
Total comprehensive income (loss) | 1,611 | |||||||
Dividends to shareholders | (386) | (386) | ||||||
Repurchase of common shares (in shares) | (7,392,430) | |||||||
Repurchase of common shares | (1,135) | (1,135) | ||||||
Share-based compensation plans (in shares) | 2,084,805 | |||||||
Share-based compensation plans | 257 | 216 | 41 | |||||
Ending balance (in shares) at Sep. 30, 2020 | 118,631,609 | |||||||
Ending balance at Sep. 30, 2020 | 6,067 | $ 3 | 8,677 | 15,241 | (18,370) | 516 | ||
Beginning balance (in shares) at Jun. 30, 2020 | 120,607,501 | |||||||
Beginning balance at Jun. 30, 2020 | 6,500 | $ 3 | 8,622 | 15,510 | (18,029) | 394 | ||
Comprehensive income (loss): | ||||||||
Net income (loss) | (140) | (140) | ||||||
Other comprehensive income (loss), net of tax | 122 | 122 | ||||||
Total comprehensive income (loss) | (18) | |||||||
Dividends to shareholders | (129) | (129) | ||||||
Repurchase of common shares (in shares) | (2,215,753) | |||||||
Repurchase of common shares | (341) | (341) | ||||||
Share-based compensation plans (in shares) | 239,861 | |||||||
Share-based compensation plans | 55 | 55 | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 118,631,609 | |||||||
Ending balance at Sep. 30, 2020 | 6,067 | $ 3 | 8,677 | 15,241 | (18,370) | 516 | ||
Beginning balance (in shares) at Dec. 31, 2020 | 116,765,613 | |||||||
Beginning balance at Dec. 31, 2020 | 5,867 | $ 3 | 8,822 | 15,292 | (18,879) | 629 | ||
Comprehensive income (loss): | ||||||||
Net income (loss) | 2,059 | 2,059 | ||||||
Other comprehensive income (loss), net of tax | (530) | (530) | ||||||
Total comprehensive income (loss) | 1,529 | |||||||
Dividends to shareholders | (396) | (396) | ||||||
Repurchase of common shares (in shares) | (6,724,301) | |||||||
Repurchase of common shares | (1,624) | (1,624) | ||||||
Share-based compensation plans (in shares) | 2,356,275 | |||||||
Share-based compensation plans | 331 | 296 | 35 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 112,397,587 | |||||||
Ending balance at Sep. 30, 2021 | 5,707 | $ 3 | 9,118 | 16,955 | (20,468) | 99 | ||
Beginning balance (in shares) at Jun. 30, 2021 | 114,297,434 | |||||||
Beginning balance at Jun. 30, 2021 | 5,686 | $ 3 | 9,049 | 16,057 | (19,883) | 460 | ||
Comprehensive income (loss): | ||||||||
Net income (loss) | 1,031 | 1,031 | ||||||
Other comprehensive income (loss), net of tax | (361) | (361) | ||||||
Total comprehensive income (loss) | 670 | |||||||
Dividends to shareholders | (133) | (133) | ||||||
Repurchase of common shares (in shares) | (2,236,129) | |||||||
Repurchase of common shares | (586) | (586) | ||||||
Share-based compensation plans (in shares) | 336,282 | |||||||
Share-based compensation plans | 70 | 69 | 1 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 112,397,587 | |||||||
Ending balance at Sep. 30, 2021 | $ 5,707 | $ 3 | $ 9,118 | $ 16,955 | $ (20,468) | $ 99 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 2,059 | $ 1,357 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation, amortization and accretion, net | 95 | 150 |
Deferred income tax expense (benefit) | 63 | 198 |
Share-based compensation | 124 | 107 |
Net realized investment (gains) losses | (627) | (14) |
Net trading (gains) losses | 3 | (9) |
Loss from equity method investments | 58 | 58 |
Impairments and provision for loan losses | 2 | 19 |
Net (gains) losses of consolidated investment entities | (17) | (7) |
Changes in operating assets and liabilities: | ||
Restricted and segregated investments | (101) | |
Deferred acquisition costs | (128) | 186 |
Policyholder account balances, future policy benefits and claims, net | 1,174 | 3,252 |
Derivatives, net of collateral | (290) | 265 |
Receivables | (360) | (216) |
Brokerage deposits | (45) | 205 |
Accounts payable and accrued expenses | 146 | (94) |
Current income tax expense (benefit) | (393) | (100) |
Increase (Decrease) in Deferred Income Taxes | (112) | |
Other operating assets and liabilities of consolidated investment entities, net | 15 | 20 |
Other, net | 108 | 262 |
Net cash provided by (used in) operating activities | 1,774 | 5,639 |
Available-for-Sale securities: | ||
Proceeds from sales | 555 | 1,690 |
Maturities, sinking fund payments and calls | 8,992 | 6,568 |
Purchases | (10,047) | (10,197) |
Proceeds from sales, maturities and repayments of mortgage loans | 242 | 146 |
Funding of mortgage loans | (166) | (147) |
Proceeds from sales, maturities and collections of other investments | 155 | 139 |
Purchase of other investments | (73) | (219) |
Purchase of investments by consolidated investment entities | (1,461) | (679) |
Proceeds from sales, maturities and repayments of investments by consolidated investment entities | 850 | 454 |
Purchase of land, buildings, equipment and software | (86) | (107) |
Cash paid for written options with deferred premiums | (314) | (292) |
Cash received from written options with deferred premiums | 60 | 129 |
Cash paid for deposit receivable | (216) | (3) |
Cash received for deposit receivable | 132 | 74 |
Other, net | 4 | 23 |
Net cash provided by (used in) investing activities | (1,373) | (2,421) |
Investment certificates: | ||
Proceeds from additions | 2,004 | 3,428 |
Maturities, withdrawals and cash surrenders | (3,320) | (3,780) |
Policyholder account balances: | ||
Deposits and other additions | 1,131 | 1,202 |
Net transfers from (to) separate accounts | (206) | (63) |
Surrenders and other benefits | (1,002) | (1,035) |
Change in banking deposits, net | 2,412 | 2,532 |
Cash paid for purchased options with deferred premiums | (94) | (177) |
Cash received from purchased options with deferred premiums | 580 | 40 |
Issuance of long-term debt | 4 | 494 |
Repayments of long-term debt | (6) | (760) |
Dividends paid to shareholders | (384) | (375) |
Repurchase of common shares | (1,467) | (1,036) |
Exercise of stock options | 2 | |
Borrowings of Consolidated Investment Entities | 1,375 | 382 |
Repayments of debt by consolidated investment entities | (757) | (55) |
Other, net | (11) | (6) |
Net cash provided by (used in) financing activities | 259 | 793 |
Effect of exchange rate changes on cash | (9) | (5) |
Net increase (decrease) in cash and cash equivalents, including amounts restricted | 651 | 4,006 |
Cash and cash equivalents, including amounts restricted, at beginning of period | 8,903 | 6,213 |
Cash and cash equivalents, including amounts restricted, at end of period | $ 9,554 | $ 10,219 |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosures - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Supplemental Disclosures: | ||
Income taxes paid, net | $ 867 | $ 116 |
Leased assets obtained in exchange for operating lease liabilities | 63 | 68 |
Non-cash investing activity: | ||
Partnership commitments not yet remitted | 4 | |
Exchange of an investment that resulted in a realized gain and an increase to amortized cost | 17 | |
Investments transferred in connection with reinsurance transaction | 7,527 | |
Ameriprise Financial | ||
Supplemental Disclosures: | ||
Interest Paid | 85 | 136 |
Consolidated investment entities | ||
Supplemental Disclosures: | ||
Interest Paid | $ 73 | $ 45 |
Supplemental Cash Flow Disclo_2
Supplemental Cash Flow Disclosures - Cash Reconciliation - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Less: Restricted and segregated investments | $ (601) | $ (500) |
Total cash and cash equivalents including amounts restricted | 9,554 | 8,903 |
Ameriprise Financial | ||
Cash and cash equivalents | 7,736 | 6,751 |
Restricted and segregated cash, cash equivalents and investments | 2,351 | 2,558 |
Consolidated investment entities | ||
Cash and cash equivalents | $ 68 | $ 94 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Ameriprise Financial, Inc. is a holding company, which primarily conducts business through its subsidiaries to provide financial planning, products and services that are designed to be utilized as solutions for clients’ cash and liquidity, asset accumulation, income, protection and estate and wealth transfer needs. The foreign operations of Ameriprise Financial, Inc. are conducted primarily through TAM UK International Holdings Ltd and Ameriprise Asset Management Holdings Singapore (Pte.) Ltd and their respective subsidiaries (collectively, “Threadneedle”). The accompanying Consolidated Financial Statements include the accounts of Ameriprise Financial, Inc., companies in which it directly or indirectly has a controlling financial interest and variable interest entities (“VIEs”) in which it is the primary beneficiary (collectively, the “Company”). All intercompany transactions and balances have been eliminated in consolidation. The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for fair statement of the consolidated results of operations and financial position for the interim periods have been made. All adjustments made were of a normal recurring nature. In the first quarter of 2021, the Company recorded an unfavorable out-of-period correction of $29 million in other comprehensive income related to defined benefit plans. In the first quarter of 2020, the Company recorded an unfavorable out-of-period correction of $19 million in management and financial advice fees related to performance fees. The impact of the errors were not material to the current and prior period financial statements. The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (“SEC”) on February 24, 2021 (“2020 10-K”). On June 2, 2021, the Company filed an application to convert Ameriprise Bank, FSB to a state-chartered industrial bank regulated by the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation. The Company also filed an application to transition the FSB’s personal trust services business to a new limited purpose national trust bank regulated by the Office of the Comptroller of the Currency. During the third quarter of 2021, RiverSource Life Insurance Company (“RiverSource Life”), one of the Company’s life insurance subsidiaries, closed on a transaction with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company, effective July 1, 2021, to reinsure approximately $7.0 billion of fixed deferred and immediate annuity policies. As part of the transaction, RiverSource Life transferred $7.8 billion in consideration primarily consisting of Available-for-Sale securities, commercial mortgage loans, syndicated loans and cash. The transaction resulted in a net realized gain of approximately $532 million on investments sold. A similar previously announced transaction with RiverSource Life Insurance Co. of New York did not receive regulatory approval in time to close by September 30, 2021 and the transaction was terminated by the parties. On November 8, 2021, the Company completed its previously announced acquisition of the European-based asset management business of BMO Financial Group. At close, the consideration transferred consisted of £615 million (or $829 million) for initial price, plus an additional £103 million (or $138 million) largely associated with a customary adjustment for excess capital surplus that will be accessible over time. The overall purchase price will continue to be subject to further customary post-close adjustments. The all-cash transaction will add approximately $131 billion of assets under management in EMEA. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | Adoption of New Accounting Standards Income Taxes – Simplifying the Accounting for Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) updated the accounting standards to simplify the accounting for income taxes. The update eliminates certain exceptions to: (1) accounting principles related to intra-period tax allocation to be applied on a prospective basis, (2) deferred tax liabilities related to outside basis differences to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption, and (3) year-to-date losses in interim periods to be applied on a prospective basis. The update also amends existing guidance related to situations when an entity receives: (1) a step-up in the tax basis of goodwill to be applied on a prospective basis, (2) an allocation of income tax expense when members of a consolidated tax filing group issue separate financial statements to be applied on a retrospective basis for all periods presented, (3) interim recognition of enactment of tax laws or rate changes to be applied on a prospective basis, and (4) franchise taxes and other taxes partially based on income to be applied on a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The standard is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted the standard on January 1, 2021. The adoption of this standard had no impact on the Company’s consolidated results of operations and financial condition. Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments In June 2016, the FASB updated the accounting standards related to accounting for credit losses on certain types of financial instruments. The update replaces the current incurred loss model for estimating credit losses with a new model that requires an entity to estimate the credit losses expected over the life of the asset. At adoption, the initial estimate of the expected credit losses will be recorded through retained earnings and subsequent changes in the estimate will be reported in current period earnings and recorded through an allowance for credit losses on the balance sheet. The credit loss model for Available-for-Sale debt securities did not change; however, the credit loss calculation and subsequent recoveries are required to be recorded through an allowance. The standard is effective for interim and annual periods beginning after December 15, 2019. A modified retrospective cumulative adjustment to retained earnings should be recorded as of the first reporting period in which the guidance is effective for loans, receivables, and other financial instruments subject to the new expected credit loss model. Prospective adoption is required for establishing an allowance related to Available-for-Sale debt securities, certain beneficial interests, and financial assets purchased with a more-than-insignificant amount of credit deterioration since origination. The Company adopted the standard on January 1, 2020. The adoption of this update did not have a material impact on the Company’s consolidated results of operations or financial condition. Intangibles – Goodwill and Other – Internal-Use Software – Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB updated the accounting standards related to customer’s accounting for implementation costs incurred in a cloud computing arrangement (“CCA”) that is a service contract. The update requires implementation costs for a CCA to be evaluated for capitalization using the same approach as implementation costs associated with internal-use software. The update also addresses presentation, measurement and impairment of capitalized implementation costs in a CCA that is a service contract. The update requires new disclosures on the nature of hosting arrangements that are service contracts, significant judgements made when applying the guidance and quantitative disclosures, including amounts capitalized, amortized and impaired. The update is effective for interim and annual periods beginning after December 15, 2019, and can be applied either prospectively or retrospectively. The Company adopted the standard using a prospective approach on January 1, 2020. The adoption of this update did not have a material impact on the Company’s consolidated results of operations or financial condition. Intangibles – Goodwill and Other – Simplifying the Test for Goodwill Impairment In January 2017, the FASB updated the accounting standards to simplify the accounting for goodwill impairment. The update removes the hypothetical purchase price allocation (Step 2) of the goodwill impairment test. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value. The standard is effective for interim and annual periods beginning after December 15, 2019, and should be applied prospectively with early adoption permitted for any impairment tests performed after January 1, 2017. The Company adopted the standard on January 1, 2020. The adoption of this update did not have a material impact on the Company’s consolidated results of operations or financial condition. Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB updated the accounting standards related to disclosures for fair value measurements. The update eliminates the following disclosures: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (2) the policy of timing of transfers between levels of the fair value hierarchy, and (3) the valuation processes for Level 3 fair value measurements. The new disclosures include changes in unrealized gains and losses for the period included in other comprehensive income (“OCI”) for recurring Level 3 fair value measurements of instruments held at the end of the reporting period and the range and weighted average used to develop significant unobservable inputs and how the weighted average was calculated. The new disclosures are required on a prospective basis; all other provisions should be applied retrospectively. The update is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for the entire standard or only the provisions to eliminate or modify disclosure requirements. The Company early adopted the provisions of the standard to eliminate or modify disclosure requirements in the fourth quarter of 2018. The Company adopted the provisions of the standard to include new disclosures on January 1, 2020. The update did not have an impact on the Company’s consolidated results of operations or financial condition. Future Adoption of New Accounting Standards Reference Rate Reform – Expedients for Contract Modifications In March 2020, the FASB updated the accounting standards to provide optional expedients and exceptions for applying GAAP to contracts, hedging or other transactions that are affected by reference rate reform (i.e., the elimination of LIBOR). The following expedients are provided for modified contracts whose reference rate is changed: (1) receivables and debt contracts are accounted for prospectively by adjusting the effective interest rate, (2) leases are accounted for as a continuation of the existing contracts with no reassessments of the lease classification and discount rate or remeasurements of lease payments that otherwise would be required, and (3) an entity is not required to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract. The amendments in this update were effective upon issuance and must be elected prior to December 31, 2022. When elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions. In January 2021, FASB updated the standard to allow an entity to elect to apply the treatment under the original guidance to derivative instruments that use an interest rate for margining, discounting or contract price alignment that will be modified due to reference rate reform but did not qualify under the original guidance. The Company has not yet applied any of the optional expedients. The adoption of the standard is not expected to have an impact on the Company’s consolidated results of operations and financial condition. Financial Services – Insurance – Targeted Improvements to the Accounting for Long-Duration Contracts In August 2018, the FASB updated the accounting standard related to long-duration insurance contracts. The guidance revises key elements of the measurement models and disclosure requirements for long-duration insurance contracts issued by insurers and reinsurers. The guidance establishes a significant new category of benefit features called market risk benefits that protect the contractholder from other-than-nominal capital market risk and expose the insurer to that risk. Insurers will have to measure market risk benefits at fair value. Market risk benefits include variable annuity guaranteed benefits (i.e. guaranteed minimum death, withdrawal, withdrawal for life, accumulation and income benefits). The portion of the change in fair value attributable to a change in the instrument-specific credit risk of market risk benefits in a liability position will be recorded in OCI. Significant changes also relate to the measurement of the liability for future policy benefits for nonparticipating traditional long-duration insurance contracts and immediate annuities with a life contingent feature including the following: • Insurers will be required to review and update the cash flow assumptions used to measure the liability for future policy benefits rather than using assumptions locked in at contract inception. The review of assumptions to measure the liability for all future policy benefits will be required annually at the same time each year, or more frequently if suggested by experience. The effect of updating assumptions will be measured on a retrospective catch-up basis and presented separate from the ongoing policyholder benefit expense in the statement of operations in the period the update is made. This new unlocking process will be required for the Company’s term and whole life insurance, disability income, long term care insurance and immediate annuities with a life contingent feature. • The discount rate used to measure the liability for future policy benefits will be standardized. The current requirement to use a discount rate reflecting expected investment yields will change to an upper-medium grade (low credit risk) fixed income corporate instrument yield (generally interpreted as an “A” rating) reflecting the duration characteristics of the liability. Entities will be required to update the discount rate at each reporting date with the effect of discount rate changes reflected in OCI. • The current premium deficiency test is being replaced with a net premium ratio cap of 100%. If the net premium ratio (i.e. the ratio of the present value of total expected benefits and related expenses to the present value of total expected premiums) exceeds 100%, insurers are required to recognize a loss in the statement of operations in the period. Contracts from different issue years will no longer be permitted to be grouped to determine contracts in a loss position. In addition, the update requires deferred acquisition costs (“DAC”) and deferred sales inducement costs (“DSIC”) relating to all long-duration contracts and most investment contracts to be amortized on a straight-line basis over the expected life of the contract independent of profit emergence. Under the new guidance, interest will not accrue to the deferred balance and DAC and DSIC will not be subject to an impairment test. The update requires significant additional disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account balances, market risk benefits, DAC and DSIC, as well as qualitative and quantitative information about expected cash flows, estimates and assumptions. The standard is effective for interim and annual periods beginning after December 15, 2022, and interim periods within those years. The standard should be applied to the liability for future policy benefits and DAC and DSIC on a modified retrospective basis and applied to market risk benefits on a retrospective basis with the option to apply full retrospective transition if certain criteria are met. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its consolidated results of operations, financial condition and disclosures. |
Revenue from Contract with Cust
Revenue from Contract with Customers | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | The following tables present revenue disaggregated by segment on an adjusted operating basis with a reconciliation of segment revenues to those reported on the Consolidated Statements of Operations: Three Months Ended September 30, 2021 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 587 $ — $ — $ 587 $ — $ 587 Institutional — 143 — — 143 — 143 Advisory fees 1,189 — — — 1,189 — 1,189 Financial planning fees 91 — — — 91 — 91 Transaction and other fees 94 57 18 — 169 — 169 Total management and financial advice fees 1,374 787 18 — 2,179 — 2,179 Distribution fees: Mutual funds 219 70 — — 289 — 289 Insurance and annuity 246 50 104 — 400 — 400 Other products 96 — — — 96 — 96 Total distribution fees 561 120 104 — 785 — 785 Other revenues 46 1 — 1 48 — 48 Total revenue from contracts with customers 1,981 908 122 1 3,012 — 3,012 Revenue from other sources (1) 70 7 712 112 901 (605) 296 Total segment gross revenues 2,051 915 834 113 3,913 (605) 3,308 Banking and deposit interest expense (3) — — — (3) — (3) Total segment net revenues 2,048 915 834 113 3,910 (605) 3,305 Intersegment revenues (261) (12) (122) — (395) (7) (402) Total net revenues $ 1,787 $ 903 $ 712 $ 113 $ 3,515 $ (612) $ 2,903 Nine Months Ended September 30, 2021 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 1,685 $ — $ — $ 1,685 $ — $ 1,685 Institutional — 397 — — 397 — 397 Advisory fees 3,330 — — — 3,330 — 3,330 Financial planning fees 272 — — — 272 — 272 Transaction and other fees 276 165 52 — 493 — 493 Total management and financial advice fees 3,878 2,247 52 — 6,177 — 6,177 Distribution fees: Mutual funds 638 206 — — 844 — 844 Insurance and annuity 738 146 304 — 1,188 — 1,188 Other products 306 — — — 306 — 306 Total distribution fees 1,682 352 304 — 2,338 — 2,338 Other revenues 146 9 — 2 157 — 157 Total revenue from contracts with customers 5,706 2,608 356 2 8,672 — 8,672 Revenue from other sources (1) 211 14 2,073 370 2,668 (472) 2,196 Total segment gross revenues 5,917 2,622 2,429 372 11,340 (472) 10,868 Banking and deposit interest expense (10) — — (1) (11) — (11) Total segment net revenues 5,907 2,622 2,429 371 11,329 (472) 10,857 Intersegment revenues (777) (39) (356) (1) (1,173) (13) (1,186) Total net revenues $ 5,130 $ 2,583 $ 2,073 $ 370 $ 10,156 $ (485) $ 9,671 Three Months Ended September 30, 2020 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 466 $ — $ — $ 466 $ — $ 466 Institutional — 122 — — 122 — 122 Advisory fees 907 — — — 907 — 907 Financial planning fees 81 — — — 81 — 81 Transaction and other fees 89 47 14 — 150 — 150 Total management and financial advice fees 1,077 635 14 — 1,726 — 1,726 Distribution fees: Mutual funds 186 59 — — 245 — 245 Insurance and annuity 202 45 75 — 322 — 322 Other products 91 — — — 91 — 91 Total distribution fees 479 104 75 — 658 — 658 Other revenues 44 — 5 — 49 — 49 Total revenue from contracts with customers 1,600 739 94 — 2,433 — 2,433 Revenue from other sources (1) 77 — 687 132 896 27 923 Total segment gross revenues 1,677 739 781 132 3,329 27 3,356 Banking and deposit interest expense (10) — — — (10) — (10) Total segment net revenues 1,667 739 781 132 3,319 27 3,346 Intersegment revenues (219) (13) (110) — (342) (1) (343) Total net revenues $ 1,448 $ 726 $ 671 $ 132 $ 2,977 $ 26 $ 3,003 Nine Months Ended September 30, 2020 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 1,330 $ — $ — $ 1,330 $ — $ 1,330 Institutional — 308 — — 308 — 308 Advisory fees 2,558 — — — 2,558 — 2,558 Financial planning fees 248 — — — 248 — 248 Transaction and other fees 264 139 45 — 448 — 448 Total management and financial advice fees 3,070 1,777 45 — 4,892 — 4,892 Distribution fees: Mutual funds 540 174 — — 714 — 714 Insurance and annuity 606 129 266 — 1,001 — 1,001 Other products 334 — — — 334 — 334 Total distribution fees 1,480 303 266 — 2,049 — 2,049 Other revenues 138 2 5 3 148 — 148 Total revenue from contracts with customers 4,688 2,082 316 3 7,089 — 7,089 Revenue from other sources (1) 264 11 1,979 411 2,665 28 2,693 Total segment gross revenues 4,952 2,093 2,295 414 9,754 28 9,782 Banking and deposit interest expense (53) — — (2) (55) — (55) Total segment net revenues 4,899 2,093 2,295 412 9,699 28 9,727 Intersegment revenues (649) (39) (319) 1 (1,006) (5) (1,011) Total net revenues $ 4,250 $ 2,054 $ 1,976 $ 413 $ 8,693 $ 23 $ 8,716 (1) Revenues not included in the scope of the revenue from contracts with customers standard. The amounts primarily consist of revenue associated with insurance and annuity products or financial instruments. The following discussion describes the nature, timing, and uncertainty of revenues and cash flows arising from the Company’s contracts with customers on a consolidated basis. Management and Financial Advice Fees Asset Management Fees The Company earns revenue for performing asset management services for retail and institutional clients. The revenue is earned based on a fixed or tiered rate applied, as a percentage, to assets under management. Assets under management vary with market fluctuations and client behavior. The asset management performance obligation is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Asset management fees are accrued, invoiced and collected on a monthly or quarterly basis. The Company’s asset management contracts for Open Ended Investment Companies (“OEICs”) in the United Kingdom (“U.K.”), Société d'Investissement à Capital Variable (“SICAVs”) and other pooled investments sponsored by the Company in Europe, typically include performance obligations for asset management and fund distribution services. The amounts received for these services are reported as management and financial advice fees. The revenue recognition pattern is the same for both performance obligations as the fund distribution services revenue is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment) and not recognized until assets under management are known. The Company may also earn performance-based management fees on institutional accounts, hedge funds, collateralized loan obligations (“CLOs”), OEICs, SICAVs and property and other funds based on a percentage of account returns in excess of either a benchmark index or a contractually specified level. This revenue is variable and impacted primarily by the performance of the assets being managed compared to the benchmark index or contractually specified level. The revenue is not recognized until it is probable that a significant reversal will not occur. Performance-based management fees are invoiced on a quarterly or annual basis. Advisory Fees The Company earns revenue for performing investment advisory services for certain brokerage customers’ discretionary and non-discretionary managed accounts. The revenue is earned based on a contractual fixed rate applied, as a percentage, to the market value of assets held in the account. The investment advisory performance obligation is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Advisory fees are billed on a monthly basis on the prior month end assets. Financial Planning Fees The Company earns revenue for providing financial plans to its clients. The revenue earned for each financial plan is either a fixed fee (received monthly, quarterly or annually) or a variable fee (received monthly) based on a contractual fixed rate applied, as a percentage, to the prior month end assets held in a client’s investment advisory account. The financial planning fee is based on the complexity of a client’s financial and life situation and his or her advisor’s experience. The performance obligation is satisfied at the time the financial plan is delivered to the customer. The Company records a contract liability for the unearned revenue when cash is received before the plan is delivered. The financial plan contracts with clients are annual contracts. Amounts recorded as a contract liability are recognized as revenue when the financial plan is delivered, which occurs within the annual contract period. For fixed fee arrangements, revenue is recognized when the financial plan is delivered. The Company accrues revenue for any amounts that have not been received at the time the financial plan is delivered. For variable fee arrangements, revenue is recognized for cash that has been received when the financial plan is delivered. The amount received after the plan is delivered is variably constrained due to factors outside the Company’s control including market volatility and client behavior. The revenue is recognized when it is probable that a significant reversal will not occur that is generally each month end as the advisory account balance uncertainty is resolved. Contract liabilities for financial planning fees, which are included in other liabilities in the Consolidated Balance Sheets, were $144 million and $146 million as of September 30, 2021 and December 31, 2020, respectively. The Company pays sales commissions to advisors when a new financial planning contract is obtained or when an existing contract is renewed. The sales commissions paid to the advisors prior to financial plan delivery are considered costs to obtain a contract with a customer and are initially capitalized. When the performance obligation to deliver the financial plan is satisfied, the commission is recognized as distribution expense. Capitalized costs to obtain these contracts are reported in other assets in the Consolidated Balance Sheets and were $115 million and $117 million as of September 30, 2021 and December 31, 2020, respectively. Transaction and Other Fees The Company earns revenue for providing customer support, shareholder and administrative services (including transfer agent services) for affiliated mutual funds and networking, sub-accounting and administrative services for unaffiliated mutual funds. The Company also receives revenue for providing custodial services and account maintenance services on brokerage and retirement accounts that are not included in an advisory relationship. Transfer agent and administrative revenue is earned based on either a fixed rate applied, as a percentage, to assets under management or an annual fixed fee for each fund position. Networking and sub-accounting revenue is earned based on either an annual fixed fee for each account or an annual fixed fee for each fund position. Custodial and account maintenance revenue is generally earned based on a quarterly or annual fixed fee for each account. Each of the customer support and administrative services performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Transaction and other fees (other than custodial service fees) are invoiced or charged to brokerage accounts on a monthly or quarterly basis. Custodial service fees are invoiced or charged to brokerage accounts on an annual basis. Contract liabilities for custodial service fees, which are included in other liabilities in the Consolidated Balance Sheets, were $14 million and nil as of September 30, 2021 and December 31, 2020, respectively. The Company earns revenue for providing trade execution services to franchise advisors. The trade execution performance obligation is satisfied at the time of each trade and the revenue is primarily earned based on a fixed fee per trade. These fees are invoiced and collected on a semi-monthly basis. Distribution Fees Mutual Funds and Insurance and Annuity Products The Company earns revenue for selling affiliated and unaffiliated mutual funds, fixed and variable annuities and insurance products. The performance obligation is satisfied at the time of each individual sale. A portion of the revenue is based on a fixed rate applied, as a percentage, to amounts invested at the time of sale. The remaining revenue is recognized over the time the client owns the investment or holds the contract and is generally earned based on a fixed rate applied, as a percentage, to the net asset value of the fund, or the value of the insurance policy or annuity contract. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment, insurance policy or annuity contract). This ongoing revenue may be recognized for many years after the initial sale. The revenue will not be recognized until it is probable that a significant reversal will not occur. The Company earns revenue for providing unaffiliated partners an opportunity to educate the Company’s advisors or to support availability and distribution of their products on the Company’s platforms. These payments allow the outside parties to train and support the advisors, explain the features of their products and distribute marketing and educational materials, and support trading and operational systems necessary to enable the Company’s client servicing and production distribution efforts. The Company earns revenue for placing and maintaining unaffiliated fund partners and insurance companies’ products on the Company’s sales platform (subject to the Company’s due diligence standards). The revenue is primarily earned based on a fixed fee or a fixed rate applied, as a percentage, to the market value of assets invested. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are invoiced and collected on monthly basis. Other Products The Company earns revenue for selling unaffiliated alternative products. The performance obligation is satisfied at the time of each individual sale. A portion of the revenue is based on a fixed rate applied, as a percentage, to amounts invested at the time of sale. The remaining revenue is recognized over the time the client owns the investment and is earned generally based on a fixed rate applied, as a percentage, to the market value of the investment. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment). The revenue will not be recognized until it is probable that a significant reversal will not occur. The Company earns revenue from brokerage clients for the execution of requested trades. The performance obligation is satisfied at the time of trade execution and amounts are received on the settlement date. The revenue varies for each trade based on various factors that include the type of investment, dollar amount of the trade and how the trade is executed (online or broker assisted). The Company earns revenue for placing clients’ deposits in its brokerage sweep program with third-party banks. The amount received from the third-party banks is impacted by short-term interest rates. The performance obligation with the financial institutions that participate in the sweep program is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. The revenue is earned daily and settled monthly based on a rate applied, as a percentage, to the deposits placed. Other Revenues The Company earns revenue from fees charged to franchise advisors for providing various services the advisors need to manage and grow their practices. The primary services include: licensing of intellectual property and software, compliance supervision, insurance coverage, technology services and support, consulting and other services. The services are either provided by the Company or third- party providers. The Company controls the services provided by third parties as it has the right to direct the third parties to perform the services, is primarily responsible for performing the services and sets the prices the advisors are charged. The Company recognizes revenue for the gross amount of the fees received from the advisors. The fees are primarily collected monthly as a reduction of commission payments. Intellectual property and software licenses, along with compliance supervision, insurance coverage, and technology services and support are primarily earned based on a monthly fixed fee. These services are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. The consulting and other services performance obligations are satisfied as the services are delivered and revenue is earned based upon the level of service requested. Receivables Receivables for revenue from contracts with customers are recognized when the performance obligation is satisfied and the Company has an unconditional right to the revenue. Receivables related to revenues from contracts with customers were $500 million and $403 million as of September 30, 2021 and December 31, 2020, respectively. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2021 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | The Company provides asset management services to investment entities which are considered to be VIEs, such as CLOs, hedge funds and other private funds, property funds and certain non-U.S. series funds (such as OEICs and SICAVs) (collectively, “investment entities”), which are sponsored by the Company. In addition, the Company invests in structured investments other than CLOs and certain affordable housing partnerships which are considered VIEs. The Company consolidates certain investment entities (collectively, “consolidated investment entities”) if the Company is deemed to be the primary beneficiary. The Company has no obligation to provide financial or other support to the non-consolidated VIEs beyond its initial investment and existing future funding commitments, and the Company has not provided any other support to these entities. The Company has unfunded commitments related to consolidated CLOs of $27 million and $13 million as of September 30, 2021 and December 31, 2020, respectively. CLOs CLOs are asset backed financing entities collateralized by a pool of assets, primarily syndicated loans and, to a lesser extent, high-yield bonds. Multiple tranches of debt securities are issued by a CLO, offering investors various maturity and credit risk characteristics. The debt securities issued by the CLOs are non-recourse to the Company. The CLO’s debt holders have recourse only to the assets of the CLO. The assets of the CLOs cannot be used by the Company. Scheduled debt payments are based on the performance of the CLO’s collateral pool. The Company earns management fees from the CLOs based on the value of the CLO’s collateral pool and, in certain instances, may also receive incentive fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company has invested in a portion of the unrated, junior subordinated notes and highly rated senior notes of certain CLOs. The Company consolidates certain CLOs where it is the primary beneficiary and has the power to direct the activities that most significantly impact the economic performance of the CLO. The Company’s maximum exposure to loss with respect to non-consolidated CLOs is limited to its amortized cost, which was $2 million and $3 million as of September 30, 2021 and December 31, 2020, respectively. The Company classifies these investments as Available-for-Sale securities. See Note 5 for additional information on these investments. Property Funds The Company provides investment advice and related services to property funds, some of which are considered VIEs. For investment management services, the Company generally earns management fees based on the market value of assets under management, and in certain instances may also receive performance-based fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company does not have a significant economic interest and is not required to consolidate any of the property funds. The Company’s maximum exposure to loss with respect to its investment in these entities is limited to its carrying value. The carrying value of the Company’s investment in property funds is reflected in other investments and was $23 million as of both September 30, 2021 and December 31, 2020. Hedge Funds and other Private Funds The Company does not consolidate hedge funds and other private funds which are sponsored by the Company and considered VIEs. For investment management services, the Company earns management fees based on the market value of assets under management, and in certain instances may also receive performance-based fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services and the Company does not have a significant economic interest in any fund. The Company’s maximum exposure to loss with respect to its investment in these entities is limited to its carrying value. The carrying value of the Company’s investment in these entities is reflected in other investments and was nil as of both September 30, 2021 and December 31, 2020. Non-U.S. Series Funds The Company manages non-U.S. series funds, which are considered VIEs. For investment management services, the Company earns management fees based on the market value of assets under management, and in certain instances may also receive performance-based fees. The fee arrangement is at market and commensurate with the level of effort required to provide those services. The Company does not consolidate these funds and its maximum exposure to loss is limited to its carrying value. The carrying value of the Company’s investment in these funds is reflected in other investments and was $26 million and $20 million as of September 30, 2021 and December 31, 2020, respectively. Affordable Housing Partnerships and Other Real Estate Partnerships The Company is a limited partner in affordable housing partnerships that qualify for government-sponsored low income housing tax credit programs and partnerships that invest in multi-family residential properties that were originally developed with an affordable housing component. The Company has determined it is not the primary beneficiary and therefore does not consolidate these partnerships. A majority of the limited partnerships are VIEs. The Company’s maximum exposure to loss as a result of its investment in the VIEs is limited to the carrying value. The carrying value is reflected in other investments and was $151 million and $200 million as of September 30, 2021 and December 31, 2020, respectively. The Company had a $9 million l iability recorded as of both September 30, 2021 and December 31, 2020 related to original purchase commitments not yet remitted to the VIEs. The Company has not provided any additional support and is not contractually obligated to provide additional support to the VIEs beyond the funding commitments. Structured Investments The Company invests in structured investments which are considered VIEs for which it is not the sponsor. These structured investments typically invest in fixed income instruments and are managed by third parties and include asset backed securities, and commercial and residential mortgage backed securities. The Company classifies these investments as Available-for-Sale securities. The Company has determined that it is not the primary beneficiary of these structures due to the size of the Company’s investment in the entities and position in the capital structure of these entities. The Company’s maximum exposure to loss as a result of its investment in these structured investments is limited to its amortized cost. See Note 5 for additional information on these structured investments. Fair Value of Assets and Liabilities The Company categorizes its fair value measurements according to a three-level hierarchy. See Note 12 for the definition of the three levels of the fair value hierarchy. The following tables present the balances of assets and liabilities held by consolidated investment entities measured at fair value on a recurring basis: September 30, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets Investments: Common stocks $ — $ 2 $ — $ 2 Syndicated loans — 2,123 45 2,168 Total investments — 2,125 45 2,170 Receivables — 18 — 18 Other assets — 2 — 2 Total assets at fair value $ — $ 2,145 $ 45 $ 2,190 Liabilities Debt (1) $ — $ 2,163 $ — $ 2,163 Other liabilities — 71 — 71 Total liabilities at fair value $ — $ 2,234 $ — $ 2,234 December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets Investments: Corporate debt securities $ — $ 8 $ — $ 8 Common stocks — 1 — 1 Syndicated loans — 1,817 92 1,909 Total investments — 1,826 92 1,918 Receivables — 16 — 16 Other assets — — 2 2 Total assets at fair value $ — $ 1,842 $ 94 $ 1,936 Liabilities Debt (1) $ — $ 1,913 $ — $ 1,913 Other liabilities — 69 — 69 Total liabilities at fair value $ — $ 1,982 $ — $ 1,982 (1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. The following tables provide a summary of changes in Level 3 assets held by consolidated investment entities measured at fair value on a recurring basis: Syndicated Loans (in millions) Balance, July 1, 2021 $ 112 Purchases 7 Sales (4) Settlements (10) Transfers into Level 3 5 Transfers out of Level 3 (47) Deconsolidation of consolidated investment entities (18) Balance, September 30, 2021 $ 45 Syndicated Loans (in millions) Balance, July 1, 2020 $ 211 Total gains (losses) included in: Net income 2 (1) Purchases 35 Sales (12) Settlements (6) Transfers into Level 3 29 Transfers out of Level 3 (141) Balance, September 30, 2020 $ 118 Changes in unrealized gains (losses) included in income relating to assets held at September 30, 2020 $ 1 (1) Syndicated Loans Other Assets (in millions) Balance, January 1, 2021 $ 92 $ 2 Total gains (losses) included in: Net income 2 (1) — Purchases 88 — Sales (38) — Settlements (49) — Transfers into Level 3 90 — Transfers out of Level 3 (122) (2) Deconsolidation of consolidated investment entities (18) — Balance, September 30, 2021 $ 45 $ — Syndicated Loans (in millions) Balance, January 1, 2020 $ 143 Total gains (losses) included in: Net income (19) (1) Purchases 80 Sales (27) Settlements (32) Transfers into Level 3 379 Transfers out of Level 3 (406) Balance, September 30, 2020 $ 118 Changes in unrealized gains (losses) included in income relating to assets held at September 30, 2020 $ (2) (1) (1) Included in net investment income in the Consolidated Statements of Operations. Securities and loans transferred from Level 3 primarily represent assets with fair values that are now obtained from a third-party pricing service with observable inputs or priced in active markets. Securities and loans transferred to Level 3 represent assets with fair values that are now based on a single non-binding broker quote. All Level 3 measurements as of September 30, 2021 and December 31, 2020 were obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company. Determination of Fair Value Assets Investments The fair value of syndicated loans obtained from third-party pricing services using a market approach with observable inputs is classified as Level 2. The fair value of syndicated loans obtained from third-party pricing services with a single non-binding broker quote as the underlying valuation source is classified as Level 3. The underlying inputs used in non-binding broker quotes are not readily available to the Company. See Note 12 for a description of the Company’s determination of the fair value of corporate debt securities, common stocks and other investments. Receivables For receivables of the consolidated CLOs, the carrying value approximates fair value as the nature of these assets has historically been short term and the receivables have been collectible. The fair value of these receivables is classified as Level 2. Liabilities Debt The fair value of the CLOs’ assets, typically syndicated bank loans, is more observable than the fair value of the CLOs’ debt tranches for which market activity is limited and less transparent. As a result, the fair value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets and is classified as Level 2. Other Liabilities Other liabilities consist primarily of securities purchased but not yet settled held by consolidated CLOs. The carrying value approximates fair value as the nature of these liabilities has historically been short term. The fair value of these liabilities is classified as Level 2. Other liabilities also include accrued interest on the CLO debt. Fair Value Option The Company has elected the fair value option for the financial assets and liabilities of the consolidated CLOs. Management believes that the use of the fair value option better matches the changes in fair value of assets and liabilities related to the CLOs. The following table presents the fair value and unpaid principal balance of loans and debt for which the fair value option has been elected: September 30, 2021 December 31, 2020 (in millions) Syndicated loans Unpaid principal balance $ 2,223 $ 1,990 Excess unpaid principal over fair value (55) (81) Fair value $ 2,168 $ 1,909 Fair value of loans more than 90 days past due $ 2 $ 5 Fair value of loans in nonaccrual status 5 19 Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both 5 24 Debt Unpaid principal balance $ 2,298 $ 2,069 Excess unpaid principal over fair value (135) (156) Carrying value (1) $ 2,163 $ 1,913 (1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. During the first quarter of 2021, the Company launched two new CLOs and issued debt of $817 million. Interest income from syndicated loans, bonds and structured investments is recorded based on contractual rates in net investment income. Gains and losses related to changes in the fair value of investments and gains and losses on sales of investments are also recorded in net investment income. Interest expense on debt is recorded in interest and debt expense with gains and losses related to changes in the fair value of debt recorded in net investment income. Total net gains (losses) recognized in net investment income related to the changes in fair value of investments the Company owns in the consolidated CLOs where it has elected the fair value option and collateralized financing entity accounting were immaterial for both the three months and nine months ended September 30, 2021 and 2020. Debt of the consolidated investment entities and the stated interest rates were as follows: Carrying Value Weighted Average Interest Rate September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) Debt of consolidated CLOs due 2025-2034 $ 2,163 $ 1,913 1.7 % 2.1 % |
Investments
Investments | 9 Months Ended |
Sep. 30, 2021 | |
Investments [Abstract] | |
Investments | The following is a summary of Ameriprise Financial investments: September 30, 2021 December 31, 2020 (in millions) Available-for-Sale securities, at fair value $ 30,114 $ 36,283 Mortgage loans (allowance for credit losses: 2021, $14; 2020, $29) 1,911 2,718 Policy loans 836 846 Other investments (allowance for credit losses: 2021, $4; 2020, $12) 657 1,184 Total $ 33,518 $ 41,031 Other investments primarily reflect the Company’s interests in affordable housing partnerships, trading securities, seed money investments, syndicated loans, credit card receivables and certificates of deposit with original or remaining maturities at the time of purchase of more than 90 days. The following is a summary of net investment income: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Investment income on fixed maturities $ 202 $ 275 $ 733 $ 887 Net realized gains (losses) 546 4 627 (18) Affordable housing partnerships (20) (14) (58) (50) Other 1 13 28 58 Consolidated investment entities 44 22 98 56 Total $ 773 $ 300 $ 1,428 $ 933 Available-for-Sale securities distributed by type were as follows: September 30, 2021 Description of Securities Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Corporate debt securities $ 8,455 $ 1,301 $ (31) $ — $ 9,725 Residential mortgage backed securities 9,628 90 (19) — 9,699 Commercial mortgage backed securities 4,712 92 (9) — 4,795 Asset backed securities 3,465 31 (1) — 3,495 State and municipal obligations 857 249 (1) (1) 1,104 U.S. government and agency obligations 1,196 — — — 1,196 Foreign government bonds and obligations 82 6 (1) — 87 Other securities 13 — — — 13 Total $ 28,408 $ 1,769 $ (62) $ (1) $ 30,114 Description of Securities December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Corporate debt securities $ 11,762 $ 1,924 $ (2) $ (10) $ 13,674 Residential mortgage backed securities 9,845 188 (4) — 10,029 Commercial mortgage backed securities 5,867 242 (21) — 6,088 Asset backed securities 3,283 52 (5) (1) 3,329 State and municipal obligations 1,088 297 (1) — 1,384 U.S. government and agency obligations 1,456 — — — 1,456 Foreign government bonds and obligations 241 22 (1) — 262 Other securities 59 2 — — 61 Total $ 33,601 $ 2,727 $ (34) $ (11) $ 36,283 As of September 30, 2021 and December 31, 2020, accrued interest of $144 million and $178 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities in the tables above and is recorded in receivables on the Consolidated Balance Sheets. As of September 30, 2021 and December 31, 2020, investment securities with a fair value of $3.0 billion and $3.6 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which $403 million and $454 million, respectively, may be sold, pledged or rehypothecated by the counterparty. As of September 30, 2021 and December 31, 2020, fixed maturity securities comprised approximately 90% and 88%, respectively, of Ameriprise Financial investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings Ltd. (“Fitch”). The Company uses the median of available ratings from Moody’s, S&P and Fitch, or, if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable, the Company may utilize ratings from other NRSROs or rate the securities internally. As of September 30, 2021 and December 31, 2020, the Company’s internal analysts rated $545 million and $605 million, respectively, of securities using criteria similar to those used by NRSROs. A summary of fixed maturity securities by rating was as follows: Ratings September 30, 2021 December 31, 2020 Amortized Cost Fair Value Percent of Total Fair Value Amortized Cost Fair Value Percent of Total Fair Value (in millions, except percentages) AAA $ 18,695 $ 18,871 63 % $ 19,815 $ 20,253 56 % AA 727 903 3 1,082 1,312 3 A 1,748 2,114 7 2,953 3,534 10 BBB 6,273 7,110 23 8,271 9,542 26 Below investment grade (1) 965 1,116 4 1,480 1,642 5 Total fixed maturities $ 28,408 $ 30,114 100 % $ 33,601 $ 36,283 100 % (1) Both the amortized cost and fair value of below investment grade securities includes interest in non-consolidated CLOs managed by the Company of $2 million as of September 30, 2021, and $3 million as of December 31, 2020. These securities are not rated but are included in below investment grade due to their risk characteristics. As of September 30, 2021 and December 31, 2020, approximately 32% and 33%, respectively, of securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. No holdings of any issuer were greater than 10% of total equity. The following tables summarize the fair value and gross unrealized losses on Available-for-Sale securities, aggregated by major investment type and the length of time that individual securities have been in a continuous unrealized loss position for which no allowance for credit losses has been recorded: Description of Securities September 30, 2021 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 83 $ 1,474 $ (29) 5 $ 23 $ (2) 88 $ 1,497 $ (31) Residential mortgage backed securities 99 2,872 (18) 59 195 (1) 158 3,067 (19) Commercial mortgage backed securities 57 1,026 (8) 10 168 (1) 67 1,194 (9) Asset backed securities 12 317 (1) 7 147 — 19 464 (1) State and municipal obligations 18 49 (1) — — — 18 49 (1) Foreign government bonds and obligations 5 6 — 6 4 (1) 11 10 (1) Total 274 $ 5,744 $ (57) 87 $ 537 $ (5) 361 $ 6,281 $ (62) Description of Securities December 31, 2020 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 26 $ 228 $ (1) 11 $ 19 $ (1) 37 $ 247 $ (2) Residential mortgage backed securities 72 833 (2) 71 391 (2) 143 1,224 (4) Commercial mortgage backed securities 35 781 (11) 19 393 (10) 54 1,174 (21) Asset backed securities 17 344 (3) 13 231 (2) 30 575 (5) State and municipal obligations 2 4 — 1 4 (1) 3 8 (1) Foreign government bonds and obligations 1 3 — 7 8 (1) 8 11 (1) Total 153 $ 2,193 $ (17) 122 $ 1,046 $ (17) 275 $ 3,239 $ (34) As part of the Company’s ongoing monitoring process, management determined that the change in gross unrealized losses on its Available-for-Sale securities for which an allowance for credit losses has not been recognized during the nine months ended September 30, 2021 is primarily attributable to higher interest rates, partially offset by tighter credit spreads. The Company did not recognize these unrealized losses in earnings because it was determined that such losses were due to non-credit factors. The Company does not intend to sell these securities and does not believe that it is more likely than not that the Company will be required to sell these securities before the anticipated recovery of the remaining amortized cost basis. As of September 30, 2021 and December 31, 2020, 93% and 92%, respectively, of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade. The following tables present a rollforward of the allowance for credit losses on Available-for-Sale securities: Corporate Debt Securities Asset Backed Securities State and Municipal Obligations Total (in millions) Balance, July 1, 2021 $ — $ — $ — $ — Additions for which credit losses were not previously recorded — — 1 1 Charge-offs — — — — Balance, September 30, 2021 $ — $ — $ 1 $ 1 Balance, July 1, 2020 $ 13 $ 1 $ — $ 14 Additions for which credit losses were not previously recorded — — — — Balance, September 30, 2020 $ 13 $ 1 $ — $ 14 Balance at January 1, 2021 (1) $ 10 $ 1 $ — $ 11 Additions for which credit losses were not previously recorded — — 1 1 Charge-offs (10) (1) — (11) Balance, September 30, 2021 $ — $ — $ 1 $ 1 Balance at January 1, 2020 (1) $ — $ — $ — $ — Additions for which credit losses were not previously recorded 13 — — 13 Additional increases (decreases) on securities that had an allowance recorded in a previous period — 1 — 1 Balance at September 30, 2020 $ 13 $ 1 $ — $ 14 (1) Prior to January 1, 2020, credit losses on Available-for-Sale securities were not recorded in an allowance but were recorded as a reduction of the book value of the security if the security was other-than-temporarily impaired. Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in net investment income were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Gross realized investment gains $ 508 $ 4 $ 573 $ 17 Gross realized investment losses (5) — (6) (3) Credit losses (1) — (1) (14) Other impairments — — (13) — Total $ 502 $ 4 $ 553 $ — Credit losses for the three months and nine months ended September 30, 2021 primarily related to recording an allowance for credit losses on a state and municipal security. For the nine months ended September 30, 2020, credit losses primarily related to recording an allowance for credit losses on certain corporate debt securities, primarily in the oil and gas industry. Other impairments for the nine months ended September 30, 2021 related to Available-for-Sale securities that were impaired prior to being sold in the reinsurance transaction. See Note 1 for more information on the reinsurance transaction. See Note 15 for a rollforward of net unrealized investment gains (losses) included in AOCI. Available-for-Sale securities by contractual maturity as of September 30, 2021 were as follows: Amortized Cost Fair Value (in millions) Due within one year $ 1,728 $ 1,736 Due after one year through five years 2,183 2,324 Due after five years through 10 years 3,052 3,169 Due after 10 years 3,640 4,896 10,603 12,125 Residential mortgage backed securities 9,628 9,699 Commercial mortgage backed securities 4,712 4,795 Asset backed securities 3,465 3,495 Total $ 28,408 $ 30,114 Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities, commercial mortgage backed securities and asset backed securities are not due at a single maturity date. As such, these securities were not included in the maturities distribution. |
Financing Receivables
Financing Receivables | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Financing Receivables | Financing receivables are comprised of commercial loans, consumer loans, and the deposit receivable. Allowance for Credit Losses The following tables present a rollforward of the allowance for credit losses for the nine months ended September 30: Commercial Loans Consumer Loans Total (in millions) Balance, January 1, 2021 $ 66 $ 2 $ 68 Provisions (14) 1 (13) Charge-offs (6) (1) (7) Recoveries — 1 1 Other 2 — 2 Balance, September 30, 2021 $ 48 $ 3 $ 51 Commercial Loans Consumer Loans Total (in millions) Balance, December 31, 2019 (1) $ 51 $ — $ 51 Cumulative effect of adoption of current expected credit losses guidance 2 3 5 Balance, January 1, 2020 53 3 56 Provisions 16 3 19 Charge-offs (2) (2) (4) Balance, September 30, 2020 $ 67 $ 4 $ 71 (1) Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. The decrease in the allowance for credit losses provision for commercial loans reflects the sale of certain commercial mortgage loans and syndicated loans in conjunction with the fixed deferred and immediate annuity reinsurance transaction discussed in Note 1. Accrued interest on commercial loans was $13 million and $16 million as of September 30, 2021 and December 31, 2020, respectively, and is recorded in receivables on the Consolidated Balance Sheets and excluded from the amortized cost basis of commercial loans. Purchases and Sales During the three months and nine months ended September 30, 2021, the Company sold $746 million of commercial mortgage loans. During the three months ended September 30, 2021 and 2020, the Company purchased nil and $96 million, respectively, of syndicated loans, and sold $360 million and $5 million, respectively, of syndicated loans. During the nine months ended September 30, 2021 and 2020, the Company purchased $37 million and $165 million, respectively, of syndicated loans, and sold $368 million and $12 million, respectively, of syndicated loans. During the three months ended September 30, 2021 and 2020, the Company purchased $1 million and nil, respectively, of residential mortgage loans, and sold $3 million and nil, respectively, of residential mortgage loans. During the nine months ended September 30, 2021 and 2020, the Company purchased $7 million and $22 million, respectively, of residential mortgage loans, and sold $3 million and nil, respectively, of residential mortgage loans. The allowance for credit losses for residential mortgage loans was not material as of both September 30, 2021 and 2020. The Company has not acquired any loans with deteriorated credit quality as of the acquisition date. Credit Quality Information Nonperforming loans were $9 million and $21 million as of September 30, 2021 and December 31, 2020, respectively. All other loans were considered to be performing. Commercial Loans Commercial Mortgage Loans The Company reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Loan-to-value ratio is the primary credit quality indicator included in this review. Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates when credit risk changes. Commercial mortgage loans which management has assigned its highest risk rating were less than 1% of total commercial mortgage loans as of both September 30, 2021 and December 31, 2020. Loans with the highest risk rating represent distressed loans which the Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. Total commercial mortgage loan modifications through December 31, 2020 due to the COVID-19 pandemic consisted o f 93 loans with a total unpaid balance of $369 million . Modifications primarily consisted of short-term forbearance and interest only payments. There were no additional modifications through September 30, 2021. As of September 30, 2021, there were no loans remaining that were modified due to COVID-19 . All loans returned to their normal payment schedules. Total commercial mortgage loans past due were nil as of September 30, 2021 and December 31, 2020, respectively. The tables below present the amortized cost basis of commercial mortgage loans by the year of origination and loan-to-value ratio : September 30, 2021 Loan-to-Value Ratio 2021 2020 2019 2018 2017 Prior Total (in millions) > 100% $ — $ — $ 20 $ 10 $ — $ 30 $ 60 80% - 100% 9 14 9 6 — 37 75 60% - 80% 95 69 68 29 61 133 455 40% - 60% 23 34 95 69 60 420 701 < 40% 9 7 41 3 56 494 610 Total $ 136 $ 124 $ 233 $ 117 $ 177 $ 1,114 $ 1,901 December 31, 2020 Loan-to-Value Ratio 2020 2019 2018 2017 2016 Prior Total (in millions) > 100% $ — $ — $ 2 $ — $ — $ 10 $ 12 80% - 100% 15 16 12 3 7 15 68 60% - 80% 89 166 27 32 46 144 504 40% - 60% 23 57 74 155 113 551 973 < 40% 7 23 80 99 64 895 1,168 Total $ 134 $ 262 $ 195 $ 289 $ 230 $ 1,615 $ 2,725 Loan-to-value ratio is based on income and expense data provided by borrowers at least annually and long-term capitalization rate assumptions based on property type. In addition, the Company reviews the concentrations of credit risk by region and property type. Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows: Loans Percentage September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) East North Central $ 187 $ 259 10 % 10 % East South Central 69 115 4 4 Middle Atlantic 125 178 7 7 Mountain 124 247 6 9 New England 29 54 2 2 Pacific 608 825 32 30 South Atlantic 496 681 26 25 West North Central 140 198 7 7 West South Central 123 168 6 6 1,901 2,725 100 % 100 % Less: allowance for credit losses 14 29 Total $ 1,887 $ 2,696 Concentrations of credit risk of commercial mortgage loans by property type were as follows: Loans Percentage September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) Apartments $ 499 $ 713 26 % 26 % Hotel 15 50 1 2 Industrial 306 427 16 16 Mixed use 68 87 4 3 Office 272 372 14 14 Retail 625 881 33 32 Other 116 195 6 7 1,901 2,725 100 % 100 % Less: allowance for credit losses 14 29 Total $ 1,887 $ 2,696 Syndicated Loans The recorded investment in syndicated loans as of September 30, 2021 and December 31, 2020 were $152 million and $595 million, respectively. The Company’s syndicated loan portfolio is diversified across industries and issuers. Total syndicated loans past due were nil and $3 million as of September 30, 2021 and December 31, 2020, respectively. The Company assigns an internal risk rating to each syndicated loan in its portfolio ranging from 1 through 5, with 5 reflecting the lowest quality. The tables below present the amortized cost basis of syndicated loans by origination year and internal risk rating: September 30, 2021 Internal Risk Rating 2021 2020 2019 2018 2017 Prior Total (in millions) Risk 5 $ — $ — $ — $ — $ — $ — $ — Risk 4 — — 1 1 1 1 4 Risk 3 — — 4 4 5 9 22 Risk 2 16 5 9 11 16 9 66 Risk 1 9 3 7 9 16 16 60 Total $ 25 $ 8 $ 21 $ 25 $ 38 $ 35 $ 152 December 31, 2020 Internal Risk Rating 2020 2019 2018 2017 2016 Prior Total (in millions) Risk 5 $ — $ — $ — $ — $ — $ 3 $ 3 Risk 4 — — 4 9 — 10 23 Risk 3 — 9 8 25 13 25 80 Risk 2 30 57 62 69 14 41 273 Risk 1 17 32 47 58 22 40 216 Total $ 47 $ 98 $ 121 $ 161 $ 49 $ 119 $ 595 Financial Advisor Loans The Company offers loans to financial advisors for transitional cost assistance. Repayment of the loan is highly dependent on the retention of the financial advisor. In the event a financial advisor is no longer affiliated with the Company, any unpaid balances become immediately due. Accordingly, the primary risk factor for advisor loans is termination status. The allowance for credit losses related to loans to advisors that have terminated their relationship with the Company was $6 million and $7 million as of September 30, 2021 and December 31, 2020, respectively. The tables below present the amortized cost basis of advisor loans by origination year and termination status: September 30, 2021 Termination Status 2021 2020 2019 2018 2017 Prior Total (in millions) Active $ 104 $ 155 $ 124 $ 91 $ 119 $ 128 $ 721 Terminated 2 — — — 1 7 10 Total $ 106 $ 155 $ 124 $ 91 $ 120 $ 135 $ 731 December 31, 2020 Termination Status 2020 2019 2018 2017 2016 Prior Total (in millions) Active $ 171 $ 137 $ 101 $ 127 $ 83 $ 86 $ 705 Terminated — — — 1 1 8 10 Total $ 171 $ 137 $ 101 $ 128 $ 84 $ 94 $ 715 Consumer Loans Credit Card Receivables The credit cards are co-branded with Ameriprise Financial, Inc. and issued to the Company’s customers by a third party. FICO scores and delinquency rates are the primary credit quality indicators for the credit card portfolio. Delinquency rates are measured based on the number of days past due. Credit card receivables over 30 days past due were 1% of total credit card receivables as of both September 30, 2021 and December 31, 2020. The table below presents the amortized cost basis of credit card receivables by FICO score: September 30, 2021 December 31, 2020 (in millions) > 800 $ 27 $ 28 750 - 799 23 23 700 - 749 24 25 650 - 699 14 15 < 650 5 5 Total $ 93 $ 96 Policy Loans Policy loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy loans, there is no allowance for credit losses. Margin Loans The margin loans balance was $1.2 billion and $1.0 billion as of September 30, 2021 and December 31, 2020, respectively. The Company monitors collateral supporting margin loans and requests additional collateral when necessary in order to mitigate the risk of loss. As of both September 30, 2021 and December 31, 2020, the allowance for credit losses on margin loans was not material. Pledged Asset Lines of Credit The pledged asset lines of credit balance was $408 million and $224 million as of September 30, 2021 and December 31, 2020, respectively. The Company monitors collateral supporting pledged asset lines of credit and requests additional collateral when necessary in order to mitigate the risk of loss. As of September 30, 2021 and December 31, 2020, there w as no allowance for credit losses on pledged asset lines of credit. Deposit Receivable The deposit receivable was $8.0 billion and $1.4 billion as of September 30, 2021 and December 31, 2020, respectively. The deposit receivable is fully collateralized by the fair value of the assets held in trusts. Based on management’s evaluation of the nature of the underlying assets and the potential for changes in the collateral value, there was no allowance for credit losses for the deposit receivable as of both September 30, 2021 and December 31, 2020. The increase in the deposit receivable is primarily driven by the reinsurance transaction, effective July 1, 2021, to reinsure fixed deferred and non-life contingent immediate annuity policies. See Note 1 for more information on the fixed deferred and immediate annuity reinsurance transaction. Troubled Debt Restructurings |
Reinsurance
Reinsurance | 9 Months Ended |
Sep. 30, 2021 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | During the third quarter of 2021, RiverSource Life reinsured 100% of its insurance risk associated with its life contingent immediate annuity policies in force as of July 1, 2021 through a reinsurance agreement with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company. Policies issued after July 1, 2021 are not subject to this reinsurance agreement. See Note 1 for more information on the fixed deferred and immediate annuity reinsurance transaction. The ceded premiums associated with life contingent immediate annuity policies were $1.2 billion for the three months and nine months ended September 30, 2021. Receivables included $1.1 billion of reinsurance recoverables related to life contingent immediate annuity policies as of September 30, 2021. |
Deferred Acquisition Costs and
Deferred Acquisition Costs and Deferred Sales Inducement Costs | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Charges, Insurers [Abstract] | |
Deferred Acquisition Costs and Deferred Sales Inducement Costs | During the third quarter of the year, management updated market-related inputs and implemented model changes related to the living benefit valuation. In addition, management conducted its annual review of life insurance and annuity valuation assumptions relative to current experience and management expectations including modeling changes. These aforementioned changes are collectively referred to as unlocking. The impact of unlocking to DAC in the third quarter of 2021 primarily reflected a favorable impact from lower surrenders on variable annuities with living benefits and UL and VUL insurance products. The impact of unlocking to DAC in the third quarter of 2020 primarily reflected an unfavorable impact from updates to interest rate assumptions, partially offset by a favorable impact from lower surrenders on variable annuities with living benefit guarantees. The balances of and changes in DAC were as follows: 2021 2020 (in millions) Balance at January 1 $ 2,532 $ 2,698 Capitalization of acquisition costs 205 162 Amortization (137) (249) Amortization, impact of valuation assumptions review 60 (100) Impact of change in net unrealized (gains) losses on securities 75 (61) Balance at September 30 $ 2,735 $ 2,450 The balances of and changes in DSIC, which is included in other assets, were as follows: 2021 2020 (in millions) Balance at January 1 $ 189 $ 218 Capitalization of sales inducement costs 1 1 Amortization (15) (19) Amortization, impact of valuation assumptions review 2 (16) Impact of change in net unrealized (gains) losses on securities 11 (1) Balance at September 30 $ 188 $ 183 |
Policyholder Account Balances,
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities [Abstract] | |
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities | Policyholder account balances, future policy benefits and claims consisted of the following: September 30, 2021 December 31, 2020 (in millions) Policyholder account balances Fixed annuities (1) $ 8,229 $ 8,531 Variable annuity fixed sub-accounts 5,020 5,104 Universal life (“UL”)/variable universal life (“VUL”) insurance 3,098 3,122 Indexed universal life (“IUL”) insurance 2,461 2,269 Structured variable annuities 3,552 1,371 Other life insurance 580 605 Total policyholder account balances 22,940 21,002 Future policy benefits Variable annuity guaranteed minimum withdrawal benefits (“GMWB”) 2,256 3,049 Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (2) (14) 1 Other annuity liabilities 73 211 Fixed annuity life contingent liabilities 1,303 1,370 Life and disability income insurance 1,152 1,187 Long term care insurance 5,664 5,722 UL/VUL and other life insurance additional liabilities 1,278 1,259 Total future policy benefits 11,712 12,799 Policy claims and other policyholders’ funds 212 191 Total policyholder account balances, future policy benefits and claims $ 34,864 $ 33,992 (1) Includes fixed deferred annuities, non-life contingent fixed payout annuities and fixed deferred indexed annuity host contracts. (2) Includes the fair value of GMAB embedded derivatives that was a net asset as of September 30, 2021 reported as a contra liability. Separate account liabilities consisted of the following: September 30, 2021 December 31, 2020 (in millions) Variable annuity $ 81,063 $ 79,299 VUL insurance 8,931 8,226 Other insurance 32 31 Threadneedle investment liabilities 5,103 5,055 Total $ 95,129 $ 92,611 |
Variable Annuity and Insurance
Variable Annuity and Insurance Guarantees | 9 Months Ended |
Sep. 30, 2021 | |
Insurance [Abstract] | |
Variable Annuity and Insurance Guarantees | The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (“GMDB”) provisions. The Company also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (“GGU”) benefits. In addition, the Company offers contracts with GMWB and GMAB provisions. The Company previously offered contracts containing guaranteed minimum income benefit (“GMIB”) provisions. Certain UL policies offered by the Company provide secondary guarantee benefits. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges. The following table provides information related to variable annuity guarantees for which the Company has established additional liabilities: Variable Annuity Guarantees by Benefit Type (1) September 30, 2021 December 31, 2020 Total Contract Value Contract Value in Separate Accounts Net Amount Weighted Average Total Contract Value Contract Value in Separate Accounts Net Amount Weighted Average (in millions, except age) GMDB: Return of premium $ 68,486 $ 66,600 $ 18 69 $ 66,874 $ 64,932 $ 5 68 Five/six-year reset 8,181 5,467 13 68 8,116 5,386 6 68 One-year ratchet 6,105 5,786 40 71 6,094 5,763 8 71 Five-year ratchet 1,425 1,371 2 67 1,436 1,381 — 67 Other 1,281 1,264 46 74 1,261 1,243 45 73 Total — GMDB $ 85,478 $ 80,488 $ 119 69 $ 83,781 $ 78,705 $ 64 68 GGU death benefit $ 1,221 $ 1,166 $ 176 72 $ 1,183 $ 1,126 $ 162 71 GMIB $ 186 $ 172 $ 5 71 $ 187 $ 173 $ 6 71 GMWB: GMWB $ 1,903 $ 1,897 $ 1 75 $ 1,972 $ 1,967 $ 1 74 GMWB for life 51,275 51,226 215 69 50,142 50,057 185 69 Total — GMWB $ 53,178 $ 53,123 $ 216 69 $ 52,114 $ 52,024 $ 186 69 GMAB $ 2,037 $ 2,037 $ — 62 $ 2,291 $ 2,291 $ — 61 (1) Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table. The net amount at risk for GMDB, GGU and GMAB is defined as the current guaranteed benefit amount in excess of the current contract value. The net amount at risk for GMIB is defined as the greater of the present value of the minimum guaranteed annuity payments less the current contract value or zero. The net amount at risk for GMWB is defined as the greater of the present value of the minimum guaranteed withdrawal payments less the current contract value or zero. The following table provides information related to insurance guarantees for which the Company has established additional liabilities: September 30, 2021 December 31, 2020 Net Amount Weighted Average Attained Age Net Amount Weighted Average Attained Age (in millions, except age) UL secondary guarantees $ 6,563 68 $ 6,587 67 The net amount at risk for UL secondary guarantees is defined as the current guaranteed death benefit amount in excess of the current policyholder account balance. Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees were as follows: GMDB & GGU GMIB GMWB (1) GMAB (1) UL (in millions) Balance at January 1, 2020 $ 16 $ 7 $ 1,462 $ (39) $ 758 Incurred claims 10 1 2,219 63 172 Paid claims (6) (1) — — (34) Balance at September 30, 2020 $ 20 $ 7 $ 3,681 $ 24 $ 896 Balance at January 1, 2021 $ 24 $ 6 $ 3,049 $ 1 $ 916 Incurred claims 12 1 (793) (15) 106 Paid claims (3) (1) — — (27) Balance at September 30, 2021 $ 33 $ 6 $ 2,256 $ (14) $ 995 (1) The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims. The liabilities for guaranteed benefits are supported by general account assets. The following table summarizes the distribution of separate account balances by asset type for variable annuity contracts providing guaranteed benefits: September 30, 2021 December 31, 2020 (in millions) Mutual funds: Equity $ 47,854 $ 45,947 Bond 24,779 26,073 Other 8,067 6,911 Total mutual funds $ 80,700 $ 78,931 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | The balances and the stated interest rates of outstanding debt of Ameriprise Financial were as follows: Outstanding Balance Stated Interest Rate September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) Long-term debt: Senior notes due 2022 $ 500 $ 500 3.0 % 3.0 % Senior notes due 2023 750 750 4.0 4.0 Senior notes due 2024 550 550 3.7 3.7 Senior notes due 2025 500 500 3.0 3.0 Senior notes due 2026 500 500 2.9 2.9 Finance lease liabilities 41 44 N/A N/A Other (10) (13) N/A N/A Total long-term debt 2,831 2,831 Short-term borrowings: Federal Home Loan Bank (“FHLB”) advances 200 200 0.3 0.4 Total $ 3,031 $ 3,031 Long-Term Debt The Company’s senior notes may be redeemed, in whole or in part, at any time prior to maturity at a price equal to the greater of the principal amount and the present value of remaining scheduled payments, discounted to the redemption date, plus accrued interest. Short-term Borrowings The Company’s life insurance and bank subsidiaries are members of the FHLB of Des Moines which provides access to collateralized borrowings. The Company has pledged Available-for-Sale securities consisting of commercial mortgage backed securities and residential mortgage backed securities as collateral to access these borrowings. The fair value of the securities pledged is recorded in investments and was $1.1 billion and $1.3 billion, of commercial mortgage backed securities, and $518 million and $604 million, of residential mortgage backed securities, as of September 30, 2021 and December 31, 2020, respectively. The remaining maturity of outstanding FHLB advances was less than three months as of both September 30, 2021 and December 31, 2020. The stated interest rate of the FHLB advances is a weighted average annualized interest rate on outstanding borrowings as of the balance sheet date. |
Fair Values of Assets and Liabi
Fair Values of Assets and Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair values of Assets and Liabilities | GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale. Valuation Hierarchy The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows: Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date. Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The following tables present the balances of assets and liabilities of Ameriprise Financial measured at fair value on a recurring basis: September 30, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets Cash equivalents $ 3,077 $ 3,322 $ — $ 6,399 Available-for-Sale securities: Corporate debt securities — 9,205 520 9,725 Residential mortgage backed securities — 9,699 — 9,699 Commercial mortgage backed securities — 4,795 — 4,795 Asset backed securities — 3,488 7 3,495 State and municipal obligations — 1,104 — 1,104 U.S. government and agency obligations 1,196 — — 1,196 Foreign government bonds and obligations — 87 — 87 Other securities — 13 — 13 Total Available-for-Sale securities 1,196 28,391 527 30,114 Investments at net asset value (“NAV”) 8 (1) Trading and other securities 11 22 — 33 Separate account assets at NAV 95,129 (1) Investments and cash equivalents segregated for regulatory purposes 650 — — 650 Receivables: Fixed deferred indexed annuity ceded embedded derivatives — — 56 56 Other assets: Interest rate derivative contracts 1 1,184 — 1,185 Equity derivative contracts 486 3,979 — 4,465 Credit derivative contracts — 18 — 18 Foreign exchange derivative contracts — 19 — 19 Total other assets 487 5,200 — 5,687 Total assets at fair value $ 5,421 $ 36,935 $ 583 $ 138,076 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 4 $ 54 $ 58 IUL embedded derivatives — — 917 917 GMWB and GMAB embedded derivatives — — 1,436 1,436 (2) Structured variable annuity embedded derivatives — — 217 217 Total policyholder account balances, future policy benefits and claims — 4 2,624 2,628 (3) Customer deposits — 5 — 5 Other liabilities: Interest rate derivative contracts — 476 — 476 Equity derivative contracts 169 3,450 — 3,619 Foreign exchange derivative contracts 2 17 — 19 Other 8 4 40 52 Total other liabilities 179 3,947 40 4,166 Total liabilities at fair value $ 179 $ 3,956 $ 2,664 $ 6,799 December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets Cash equivalents $ 2,935 $ 2,506 $ — $ 5,441 Available-for-Sale securities: Corporate debt securities — 12,902 772 13,674 Residential mortgage backed securities — 10,020 9 10,029 Commercial mortgage backed securities — 6,088 — 6,088 Asset backed securities — 3,297 32 3,329 State and municipal obligations — 1,384 — 1,384 U.S. government and agency obligations 1,456 — — 1,456 Foreign government bonds and obligations — 262 — 262 Other securities — 61 — 61 Total Available-for-Sale securities 1,456 34,014 813 36,283 Investments at NAV 8 (1) Trading and other securities 61 27 — 88 Separate account assets at NAV 92,611 (1) Investments and cash equivalents segregated for regulatory purposes 600 — — 600 Other assets: Interest rate derivative contracts 1 1,754 — 1,755 Equity derivative contracts 408 3,682 — 4,090 Credit derivative contracts — 2 — 2 Foreign exchange derivative contracts 1 22 — 23 Total other assets 410 5,460 — 5,870 Total assets at fair value $ 5,462 $ 42,007 $ 813 $ 140,901 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 3 $ 49 $ 52 IUL embedded derivatives — — 935 935 GMWB and GMAB embedded derivatives — — 2,316 2,316 (4) Structured variable annuity embedded derivatives — — 70 70 Total policyholder account balances, future policy benefits and claims — 3 3,370 3,373 (5) Customer deposits — 8 — 8 Other liabilities: Interest rate derivative contracts — 734 — 734 Equity derivative contracts 183 3,388 — 3,571 Credit derivative contracts — 1 — 1 Foreign exchange derivative contracts 2 4 — 6 Other 2 3 43 48 Total other liabilities 187 4,130 43 4,360 Total liabilities at fair value $ 187 $ 4,141 $ 3,413 $ 7,741 (1) Amounts are comprised of certain financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy. (2) The fair value of the GMWB and GMAB embedded derivatives included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position (recorded as a contra liability) as of September 30, 2021. (3) The Company’s adjustment for nonperformance risk resulted in a $550 million cumulative decrease to the embedded derivatives as of September 30, 2021. (4) The fair value of the GMWB and GMAB embedded derivatives included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position (recorded as a contra liability) as of December 31, 2020. (5) The Company’s adjustment for nonperformance risk resulted in a $727 million cumulative decrease to the embedded derivatives as of December 31, 2020. The following tables provide a summary of changes in Level 3 assets and liabilities of Ameriprise Financial measured at fair value on a recurring basis: Available-for-Sale Securities Receivables Corporate Debt Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, July 1, 2021 $ 391 $ 6 $ 397 $ — Total gains (losses) included in: Net income (1) 1 — (1) — Other comprehensive income (loss) (3) — (3) — Purchases 9 — 9 — Sales — (1) (1) — Issues — — — 57 (5) Settlements (44) (1) (45) (1) Transfers into Level 3 168 2 170 — Balance, September 30, 2021 $ 520 $ 7 $ 527 $ 56 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ (4) $ — Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2021 $ 54 $ 928 $ 1,373 $ 214 $ 2,569 $ 44 Total (gains) losses included in: Net income 1 (2) 14 (2) (69) (3) 17 (3) (37) (5) (4) Issues — — 95 (7) 88 5 Settlements (1) (25) 37 (7) 4 (4) Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 14 (2) $ (60) (3) $ — $ (46) $ — Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, July 1, 2020 $ 744 $ 205 $ 15 $ 964 Total gains (losses) included in: Other comprehensive income (loss) 5 — 1 6 Purchases 7 33 — 40 Settlements (14) — 1 (13) Transfers into Level 3 — — 13 13 Transfers out of Level 3 — (188) — (188) Balance, September 30, 2020 $ 742 $ 50 $ 30 $ 822 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 5 $ — $ 1 $ 6 Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2020 $ 41 $ 882 $ 3,129 $ 9 $ 4,061 $ 48 Total (gains) losses included in: Net income 3 (2) 50 (2) (296) (3) 3 (3) (240) (11) (4) Issues — 15 93 (3) 105 5 Settlements — (21) 17 — (4) (2) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 50 (2) $ (283) (3) $ — $ (233) $ — Available-for-Sale Securities Receivables Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, January 1, 2021 $ 772 $ 9 $ 32 $ 813 $ — Total gains (losses) included in: Net income (1) — — (1) (1) — Other comprehensive income (loss) (6) — — (6) — Purchases 76 78 — 154 — Sales — — (1) (1) — Issues — — — — 57 (5) Settlements (73) — (2) (75) (1) Transfers into Level 3 168 — 2 170 — Transfers out of Level 3 (416) (87) (24) (527) — Balance, September 30, 2021 $ 520 $ — $ 7 $ 527 $ 56 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2021 $ — $ — $ (1) $ (1) (1) $ — Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ — $ (4) $ — Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2021 $ 49 $ 935 $ 2,316 $ 70 $ 3,370 $ 43 Total (gains) losses included in: Net income 7 (2) 51 (2) (1,273) (3) 192 (3) (1,023) (4) (4) Issues — 4 274 (22) 256 11 Settlements (2) (73) 119 (23) 21 (10) Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 51 (2) $ (1,236) (3) $ — $ (1,185) $ — Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, January 1, 2020 $ 750 $ 17 $ 19 $ 786 Total gains (losses) included in: Net income (1) — (1) (2) (1) Other comprehensive income (loss) 13 1 (1) 13 Purchases 12 220 — 232 Settlements (32) — — (32) Transfers into Level 3 — — 13 13 Transfers out of Level 3 — (188) — (188) Balance, September 30, 2020 $ 742 $ 50 $ 30 $ 822 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2020 $ (1) $ — $ (1) $ (2) (1) Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 13 $ 1 $ (1) $ 13 Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2020 $ 43 $ 881 $ 763 $ — $ 1,687 $ 44 Total (gains) losses included in: Net income (2) (2) 53 (2) 1,900 (3) 16 (3) 1,967 (12) (4) Issues 3 53 267 (7) 316 15 Settlements — (61) 13 — (48) (7) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 53 (2) $ 1,936 (3) $ — $ 1,989 $ — (1) Included in net investment income in the Consolidated Statements of Operations. (2) Included in interest credited to fixed accounts in the Consolidated Statements of Operations. (3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations. (4) Included in general and administrative expense in the Consolidated Statements of Operations. (5) Represents the amount of ceded embedded derivatives associated with fixed deferred annuity products reinsured in the third quarter of 2021. See Note 1 for additional information on the reinsurance transaction. The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $1 million and $(123) million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual, for the three months ended September 30, 2021 and 2020, respectively. The increase (decrease) to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $(138) million and $446 million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual, for the nine months ended September 30, 2021 and 2020, respectively. Securities transferred from Level 3 primarily represent securities with fair values that are obtained from a third-party pricing service with observable inputs or fair values that were included in an observable transaction with a market participant. The following tables provide a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities: September 30, 2021 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 520 Discounted cash flow Yield/spread to U.S. Treasuries (1) 0.8 % – 2.4% 1.2% Asset backed securities $ 2 Discounted cash flow Annual short-term default rate (2) 1.4% 1.4% Annual long-term default rate (2) 3.5% 3.5 % Discount rate 12.0 % 12.0 % Constant prepayment rate 10.0 % 10.0 % Loss recovery 63.6 % 63.6 % Fixed deferred indexed annuity ceded embedded derivatives $ 56 Discounted cash flow Surrender rate (4) 0.0 % – 66.8% 1.4% IUL embedded derivatives $ 917 Discounted cash flow Nonperformance risk (3) 60 bps 60 bps Fixed deferred indexed annuity embedded derivatives $ 54 Discounted cash flow Surrender rate (4) 0.0 % – 66.8% 1.4% Nonperformance risk (3) 60 bps 60 bps GMWB and GMAB embedded derivatives $ 1,436 Discounted cash flow Utilization of guaranteed withdrawals (5) (6) 0.0 % – 48.0% 10.6% Surrender rate (4) 0.1 % – 63.4% 3.6% Market volatility (7) (8) 4.4 % – 17.6% 11.3% Nonperformance risk (3) 60 bps 60 bps Structured variable annuity embedded derivatives $ 217 Discounted cash flow Surrender rate (4) 0.8 % – 40.0% 0.9% Nonperformance risk (3) 60 bps 60 bps Contingent consideration liabilities $ 40 Discounted cash flow Discount rate (9) 0.0 % – 9.0% 2.4% December 31, 2020 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 772 Discounted cash flow Yield/spread to U.S. Treasuries (1) 1.0 % – 3.3% 1.5% Asset backed securities $ 3 Discounted cash flow Annual short-term default rate (2) 2.9 % – 3.0% 2.9% Annual long-term default rate (2) 3.5 % – 4.5% 3.8% Discount rate 13.0% 13.0% Constant prepayment rate 10.0% 10.0% Loss recovery 63.6% 63.6% IUL embedded derivatives $ 935 Discounted cash flow Nonperformance risk (3) 65 bps 65 bps Fixed deferred indexed annuity embedded derivatives $ 49 Discounted cash flow Surrender rate (4) 0.0 % – 50.0% 1.2% Nonperformance risk (3) 65 bps 65 bps GMWB and GMAB embedded derivatives $ 2,316 Discounted cash flow Utilization of guaranteed withdrawals (5) (6) 0.0 % – 48.0% 10.6% Surrender rate (4) 0.1 % – 73.5% 3.8% Market volatility (7) (8) 4.3 % – 17.1% 11.0% Nonperformance risk (3) 65 bps 65 bps Structured variable annuity embedded derivatives $ 70 Discounted cash flow Surrender rate (4) 0.8 % – 40.0% 0.9% Nonperformance risk (3) 65 bps 65 bps Contingent consideration liabilities $ 43 Discounted cash flow Discount rate (9) 0.0 % – 9.0% 3.1% (1) The weighted average for the spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. (2) The weighted average annual default rates of asset backed securities is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. (3) The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives. (4) The weighted average surrender rate is weighted based on the benefit base of each contract and represents the average assumption in the current year including the effect of a dynamic surrender formula. (5) The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year. (6) The weighted average utilization rate represents the average assumption for the current year, weighting each policy evenly. The calculation excludes policies that have already started taking withdrawals. (7) Market volatility is implied volatility of fund of funds and managed volatility funds. (8) The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit. (9) The weighted average discount rate represents the average discount rate across all contingent consideration liabilities, weighted based on the size of the contingent consideration liability. Level 3 measurements not included in the table above are obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to the Company. Uncertainty of Fair Value Measurements Significant increases (decreases) in the yield/spread to U.S. Treasuries used in the fair value measurement of Level 3 corporate debt securities in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the annual default rate and discount rate used in the fair value measurement of Level 3 asset backed securities in isolation, generally, would have resulted in a significantly lower (higher) fair value measurement and significant increases (decreases) in loss recovery in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the constant prepayment rate in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the surrender rate used in the fair value measurement of the fixed deferred indexed annuity ceded embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in nonperformance risk used in the fair value measurement of the IUL embedded derivatives in isolation would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in nonperformance risk and the surrender rate used in the fair value measurements of the fixed deferred indexed annuity embedded derivatives and structured variable annuity embedded derivatives in isolation would have resulted in a significantly lower (higher) liability value. Significant increases (decreases) in utilization and volatility used in the fair value measurement of the GMWB and GMAB embedded derivatives in isolation would have resulted in a significantly higher (lower) liability value. Significant increases (decreases) in nonperformance risk and surrender rate used in the fair value measurement of the GMWB and GMAB embedded derivatives in isolation would have resulted in a significantly lower (higher) liability value. Utilization of guaranteed withdrawals and surrender rates vary with the type of rider, the duration of the policy, the age of the contractholder, the distribution channel and whether the value of the guaranteed benefit exceeds the contract accumulation value. Significant increases (decreases) in the discount rate used in the fair value measurement of the contingent consideration liability in isolation would have resulted in a significantly lower (higher) fair value measurement. Determination of Fair Value The Company uses valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The Company’s market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The Company’s income approach uses valuation techniques to convert future projected cash flows to a single discounted present value amount. When applying either approach, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy. Assets Cash Equivalents Cash equivalents include time deposits and other highly liquid investments with original or remaining maturities at the time of purchase of 90 days or less. Actively traded money market funds are measured at their NAV and classified as Level 1. U.S. Treasuries are also classified as Level 1. The Company’s remaining cash equivalents are classified as Level 2 and measured at amortized cost, which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization. Investments (Available-for-Sale Securities, Equity Securities and Trading Securities) When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from third-party pricing services, non-binding broker quotes, or other model-based valuation techniques. Level 1 securities primarily include U.S. Treasuries. Level 2 securities primarily include corporate bonds, residential mortgage backed securities, commercial mortgage backed securities, asset backed securities, state and municipal obligations and foreign government securities. The fair value of these Level 2 securities is based on a market approach with prices obtained from third-party pricing services. Observable inputs used to value these securities can include, but are not limited to, reported trades, benchmark yields, issuer spreads and non-binding broker quotes. The fair value of securities included in an observable transaction with a market participant are also considered Level 2 when the market is not active. Level 3 securities primarily include certain corporate bonds, non-agency residential mortgage backed securities, commercial mortgage backed securities and asset backed securities with fair value typically based on a single non-binding broker quote. The underlying inputs used for some of the non-binding broker quotes are not readily available to the Company. The Company’s privately placed corporate bonds are typically based on a single non-binding broker quote. The fair value of certain asset backed securities is determined using a discounted cash flow model. Inputs used to determine the expected cash flows include assumptions about discount rates and default, prepayment and recovery rates of the underlying assets. Given the significance of the unobservable inputs to this fair value measurement, the fair value of the investment in certain asset backed securities is classified as Level 3. In consideration of the above, management is responsible for the fair values recorded on the financial statements. Prices received from third-party pricing services are subjected to exception reporting that identifies investments with significant daily price movements as well as no movements. The Company reviews the exception reporting and resolves the exceptions through reaffirmation of the price or recording an appropriate fair value estimate. The Company also performs subsequent transaction testing. The Company performs annual due diligence of third-party pricing services. The Company’s due diligence procedures include assessing the vendor’s valuation qualifications, control environment, analysis of asset-class specific valuation methodologies, and understanding of sources of market observable assumptions and unobservable assumptions, if any, employed in the valuation methodology. The Company also considers the results of its exception reporting controls and any resulting price challenges that arise. Separate Account Assets The fair value of assets held by separate accounts is determined by the NAV of the funds in which those separate accounts are invested. The NAV is used as a practical expedient for fair value and represents the exit price for the separate account. Separate account assets are excluded from classification in the fair value hierarchy. Investments and Cash Equivalents Segregated for Regulatory Purposes Investments and cash equivalents segregated for regulatory purposes includes U.S. Treasuries that are classified as Level 1. Receivables During the third quarter of 2021, the Company reinsured its fixed deferred indexed annuity products which have an indexed account that is accounted for as an embedded derivative. The Company uses discounted cash flow models including Black-Scholes calculations to determine the fair value of these ceded embedded derivatives. The fair value of fixed deferred indexed annuity ceded embedded derivatives includes significant observable interest rates, volatilities and equity index levels and significant unobservable surrender rates. Given the significance of the unobservable surrender rates, these embedded derivatives are classified as Level 3. See Note 1 for more information on the reinsurance transaction. Other Assets Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active over-the-counter (“OTC”) markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps, foreign currency forwards and the majority of options. The counterparties’ nonperformance risk associated with uncollateralized derivative assets was immaterial as of both September 30, 2021 and December 31, 2020. See Note 13 and Note 14 for further information on the credit risk of derivative instruments and related collateral. Liabilities Policyholder Account Balances, Future Policy Benefits and Claims There is no active market for the transfer of the Company’s embedded derivatives attributable to the provisions of certain variable annuity riders, fixed deferred indexed annuity, structured variable annuity and IUL products. The Company values the embedded derivatives attributable to the provisions of certain variable annuity riders using internal valuation models. These models calculate fair value as the present value of future expected benefit payments less the present value of future expected rider fees attributable to the embedded derivative feature. The projected cash flows used by these models include observable capital market assumptions and incorporate significant unobservable inputs related to implied volatility as well as contractholder behavior assumptions that include margins for risk, all of which the Company believes a market participant would expect. The fair value also reflects a current estimate of the Company’s nonperformance risk specific to these embedded derivatives. Given the significant unobservable inputs to this valuation, these measurements are classified as Level 3. The embedded derivatives attributable to these provisions are recorded in policyholder account balances, future policy benefits and claims. The Company uses a discounted cash flow model to determine the fair value of the embedded derivatives associated with the provisions of its equity index annuity product. The projected cash flows generated by this model are based on significant observable inputs related to interest rates, volatilities and equity index levels and, therefore, are classified as Level 2. The Company uses discounted cash flow models including Black-Scholes calculations to determine the fair value of the embedded derivatives associated with the provisions of its fixed deferred indexed annuity, structured variable annuity and IUL products. The structured variable annuity product is a limited flexible purchase payment annuity that offers 45 different indexed account options providing equity market exposure and a fixed account. Each indexed account includes a protection option (a buffer or a floor). If the index has a negative return, contractholder losses will be reduced by buffer or limited to a floor. The portion allocated to an indexed account is accounted for as an embedded derivative. The fair value of fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives includes significant observable interest rates, volatilities and equity index levels and significant unobservable surrender rates and the estimate of the Company’s nonperformance risk. Given the significance of the unobservable surrender rates and the nonperformance risk assumption, the fixed deferred indexed annuity, structured variable annuity and IUL embedded derivatives are classified as Level 3. The embedded derivatives attributable to these provisions are recorded in policyholder account balances, future policy benefits and claims. Customer Deposits The Company uses various Black-Scholes calculations to determine the fair value of the embedded derivative liability associated with the provisions of its stock market certificates (“SMC”). The inputs to these calculations are primarily market observable and include interest rates, volatilities and equity index levels. As a result, these measurements are classified as Level 2. Other Liabilities Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded are classified as Level 1 measurements. The variation margin on futures contracts is also classified as Level 1. The fair value of derivatives that are traded in less active OTC markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps, foreign currency forwards and the majority of options. The Company’s nonperformance risk associated with uncollateralized derivative liabilities was immaterial as of both September 30, 2021 and December 31, 2020. See Note 13 and Note 14 for further information on the credit risk of derivative instruments and related collateral. Securities sold but not yet purchased represent obligations of the Company to deliver specified securities that it does not yet own, creating a liability to purchase the security in the market at prevailing prices. When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from nationally-recognized pricing services, or other model-based valuation techniques such as the present value of cash flows. Level 1 securities sold but not yet purchased primarily include U.S Treasuries traded in active markets. Level 2 securities sold but not yet purchased primarily include corporate bonds. Contingent consideration liabilities consist of earn-outs and/or deferred payments related to the Company’s acquisitions. Contingent consideration liabilities are recorded at fair value using a discounted cash flow model using an unobservable input (discount rate). Given the use of a significant unobservable input, the fair value of contingent consideration liabilities is classified as Level 3 within the fair value hierarchy. Fair Value on a Nonrecurring Basis The Company assesses its investment in affordable housing partnerships for impairment. The investments that are determined to be impaired are written down to their fair value. The Company uses a discounted cash flow model to measure the fair value of these investments. Inputs to the discounted cash flow model are estimates of future net operating losses and tax credits available to the Company and discount rates based on market condition and the financial strength of the syndicator (general partner). The balance of affordable housing partnerships measured at fair value on a nonrecurring basis was $99 million and $101 million as of Septe |
Offsetting Assets and Liabiliti
Offsetting Assets and Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Offsetting [Abstract] | |
Offsetting Assets and Liabilities | Certain financial instruments and derivative instruments are eligible for offset in the Consolidated Balance Sheets. The Company’s derivative instruments and securities borrowing and lending agreements are subject to master netting and collateral arrangements and qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. Securities borrowed and loaned result from transactions between the Company’s broker dealer subsidiary and other financial institutions and are recorded at the amount of cash collateral advanced or received. Securities borrowed and securities loaned are primarily equity securities. The Company’s securities borrowed and securities loaned transactions generally do not have a fixed maturity date and may be terminated by either party under customary terms. The Company’s policy is to recognize amounts subject to master netting arrangements on a gross basis in the Consolidated Balance Sheets. The following tables present the gross and net information about the Company’s assets subject to master netting arrangements: September 30, 2021 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 5,310 $ — $ 5,310 $ (3,479) $ (1,369) $ (404) $ 58 OTC cleared 25 — 25 (15) — — 10 Exchange-traded 352 — 352 (110) (213) — 29 Total derivatives 5,687 — 5,687 (3,604) (1,582) (404) 97 Securities borrowed 63 — 63 (16) — (45) 2 Total $ 5,750 $ — $ 5,750 $ (3,620) $ (1,582) $ (449) $ 99 December 31, 2020 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 5,501 $ — $ 5,501 $ (3,862) $ (1,287) $ (315) $ 37 OTC cleared 58 — 58 (25) — — 33 Exchange-traded 311 — 311 (91) (165) — 55 Total derivatives 5,870 — 5,870 (3,978) (1,452) (315) 125 Securities borrowed 147 — 147 (43) — (103) 1 Total $ 6,017 $ — $ 6,017 $ (4,021) $ (1,452) $ (418) $ 126 (1) Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. The following tables present the gross and net information about the Company’s liabilities subject to master netting arrangements: September 30, 2021 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 3,987 $ — $ 3,987 $ (3,479) $ (195) $ (293) $ 20 OTC cleared 15 — 15 (15) — — — Exchange-traded 112 — 112 (110) — — 2 Total derivatives 4,114 — 4,114 (3,604) (195) (293) 22 Securities loaned 111 — 111 (16) — (91) 4 Total $ 4,225 $ — $ 4,225 $ (3,620) $ (195) $ (384) $ 26 December 31, 2020 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 4,192 $ — $ 4,192 $ (3,862) $ (1) $ (327) $ 2 OTC cleared 25 — 25 (25) — — — Exchange-traded 95 — 95 (91) — — 4 Total derivatives 4,312 — 4,312 (3,978) (1) (327) 6 Securities loaned 205 — 205 (43) — (157) 5 Total $ 4,517 $ — $ 4,517 $ (4,021) $ (1) $ (484) $ 11 (1) Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. In the tables above, the amount of assets or liabilities presented are offset first by financial instruments that have the right of offset under master netting or similar arrangements, then any remaining amount is reduced by the amount of cash and securities collateral. The actual collateral may be greater than amounts presented in the tables. When the fair value of collateral accepted by the Company is less than the amount due to the Company, there is a risk of loss if the counterparty fails to perform or provide additional collateral. To mitigate this risk, the Company monitors collateral values regularly and requires additional collateral when necessary. When the value of collateral pledged by the Company declines, it may be required to post additional collateral. Freestanding derivative instruments are reflected in other assets and other liabilities. Cash collateral pledged by the Company is reflected in other assets and cash collateral accepted by the Company is reflected in other liabilities. Securities borrowing and lending agreements are reflected in receivables and other liabilities, respectively. See Note 14 for additional disclosures related to the Company’s derivative instruments and Note 4 for information related to derivatives held by consolidated investment entities. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivative instruments enable the Company to manage its exposure to various market risks. The value of such instruments is derived from an underlying variable or multiple variables, including equity, foreign exchange and interest rate indices or prices. The Company primarily enters into derivative agreements for risk management purposes related to the Company’s products and operations. Certain of the Company’s freestanding derivative instruments are subject to master netting arrangements. The Company’s policy on the recognition of derivatives on the Consolidated Balance Sheets is to not offset fair value amounts recognized for derivatives and collateral arrangements executed with the same counterparty under the same master netting arrangement. See Note 13 for additional information regarding the estimated fair value of the Company’s freestanding derivatives after considering the effect of master netting arrangements and collateral. Generally, the Company uses derivatives as economic hedges and accounting hedges. The following table presents the notional value and gross fair value of derivative instruments, including embedded derivatives: September 30, 2021 December 31, 2020 Notional Gross Fair Value Notional Gross Fair Value Assets (1) Liabilities (2)(3) Assets (1) Liabilities (2)(3) (in millions) Derivatives designated as hedging instruments Foreign exchange contracts – net investment hedges $ 58 $ 1 $ — $ 32 $ — $ 2 Total qualifying hedges 58 1 — 32 — 2 Derivatives not designated as hedging instruments Interest rate contracts 79,350 1,185 476 77,951 1,755 734 Equity contracts 59,856 4,465 3,619 57,254 4,090 3,571 Credit contracts 1,758 18 — 2,297 2 1 Foreign exchange contracts 3,234 18 19 3,423 23 4 Total non-designated hedges 144,198 5,686 4,114 140,925 5,870 4,310 Embedded derivatives GMWB and GMAB (4) N/A — 1,436 N/A — 2,316 IUL N/A — 917 N/A — 935 Fixed deferred indexed annuities and deposit receivables N/A 56 58 N/A — 52 Structured variable annuities N/A — 217 N/A — 70 SMC N/A — 5 N/A — 8 Total embedded derivatives N/A 56 2,633 N/A — 3,381 Total derivatives $ 144,256 $ 5,743 $ 6,747 $ 140,957 $ 5,870 $ 7,693 N/A Not applicable. (1) The fair value of freestanding derivative assets is included in Other assets and the fair value of ceded embedded derivative assets related to deposit receivables is included in Receivables on the Consolidated Balance Sheets. (2) The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. The fair value of the SMC embedded derivative liability is included in Customer deposits on the Consolidated Balance Sheets. (3) The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was $2.9 billion and $3.7 billion as of September 30, 2021 and December 31, 2020, respectively. See Note 13 for additional information related to master netting arrangements and cash collateral. (4) The fair value of the GMWB and GMAB embedded derivatives as of September 30, 2021 included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2020 included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position. See Note 12 for additional information regarding the Company’s fair value measurement of derivative instruments. As of September 30, 2021 and December 31, 2020, investment securities with a fair value of $448 million and $325 million, respectively, were received as collateral to meet contractual obligations under derivative contracts, of which $448 million and $325 million, respectively, may be sold, pledged or rehypothecated by the Company. As of both September 30, 2021 and December 31, 2020, the Company had sold, pledged or rehypothecated none of these securities. In addition, as of both September 30, 2021 and December 31, 2020, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets. Derivatives Not Designated as Hedges The following tables present a summary of the impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Operations: Net Investment Income Banking and Deposit Interest Expense Distribution Expenses Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses General and Administrative Expense (in millions) Three Months Ended September 30, 2021 Interest rate contracts $ — $ — $ — $ — $ (171) $ — Equity contracts — — (13) — 1 (1) Credit contracts — — — — 2 — Foreign exchange contracts (23) — — — — — GMWB and GMAB embedded derivatives — — — — (64) — IUL embedded derivatives — — — 11 — — Fixed deferred indexed annuity and deposit receivables embedded derivatives — — — 1 — — Structured variable annuity embedded derivatives — — — — (17) — SMC embedded derivatives — — — — — — Total gain (loss) $ (23) $ — $ (13) $ 12 $ (249) $ (1) Nine Months Ended September 30, 2021 Interest rate contracts $ (23) $ — $ (1) $ — $ (1,125) $ — Equity contracts — 1 67 55 (613) 11 Credit contracts — — 1 — 41 — Foreign exchange contracts (17) — — — 6 (2) GMWB and GMAB embedded derivatives — — — — 879 — IUL embedded derivatives — — — 22 — — Fixed deferred indexed annuity and deposit receivables embedded derivatives — — — (7) — — Structured variable annuity embedded derivatives — — — — (192) — SMC embedded derivatives — (1) — — — — Total gain (loss) $ (40) $ — $ 67 $ 70 $ (1,004) $ 9 Net Investment Income Banking and Deposit Interest Expense Distribution Expenses Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses General and Administrative Expense (in millions) Three Months Ended September 30, 2020 Interest rate contracts $ — $ — $ — $ — $ (371) $ — Equity contracts — 2 41 42 (468) 6 Credit contracts — — — — (12) — Foreign exchange contracts — — — — (23) 5 GMWB and GMAB embedded derivatives — — — — 186 — IUL embedded derivatives — — — (29) — — Fixed deferred indexed annuity embedded derivatives — — — (3) — — Structured variable annuity embedded derivatives — — — — (3) — SMC embedded derivatives — (2) — — — — Total gain (loss) $ — $ — $ 41 $ 10 $ (691) $ 11 Nine Months Ended September 30, 2020 Interest rate contracts $ (1) $ — $ 2 $ — $ 2,204 $ — Equity contracts (1) — 12 (7) 58 3 Credit contracts — — — — (91) — Foreign exchange contracts — — — — 26 3 GMWB and GMAB embedded derivatives — — — — (2,180) — IUL embedded derivatives — — — 8 — — Fixed deferred indexed annuity embedded derivatives — — — 2 — — Structured variable annuity embedded derivatives — — — — (16) — SMC embedded derivatives — — — — — — Total gain (loss) $ (2) $ — $ 14 $ 3 $ 1 $ 6 The Company holds derivative instruments that either do not qualify or are not designated for hedge accounting treatment. These derivative instruments are used as economic hedges of equity, interest rate, credit and foreign currency exchange rate risk related to various products and transactions of the Company. Certain annuity contracts contain GMWB or GMAB provisions, which guarantee the right to make limited partial withdrawals each contract year regardless of the volatility inherent in the underlying investments or guarantee a minimum accumulation value of consideration received at the beginning of the contract period, after a specified holding period, respectively. The indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. The Company economically hedges the aggregate exposure related to the indexed portion of structured variable annuities and the GMAB and non-life contingent GMWB provisions using options, swaptions, swaps and futures. The deferred premium associated with certain of the above options and swaptions is paid or received semi-annually over the life of the contract or at maturity. The following is a summary of the payments the Company is scheduled to make and receive for these options and swaptions as of September 30, 2021: Premiums Payable Premiums Receivable (in millions) 2021 (1) $ 60 $ 45 2022 204 205 2023 51 43 2024 138 25 2025 125 22 2026 - 2028 262 88 Total $ 840 $ 428 (1) 2021 amounts represent the amounts payable and receivable for the period from October 1, 2021 to December 31, 2021. Actual timing and payment amounts may differ due to future settlements, modifications or exercises of the contracts prior to the full premium being paid or received. The Company has a macro hedge program to provide protection against the statutory tail scenario risk arising from variable annuity reserves on its statutory surplus and to cover some of the residual risks not covered by other hedging activities. As a means of economically hedging these risks, the Company may use a combination of futures, options, swaps and swaptions. Certain of the macro hedge derivatives may contain settlement provisions linked to both equity returns and interest rates. The Company’s macro hedge derivatives that contain settlement provisions linked to both equity returns and interest rates, if any, are shown in other contracts in the tables above. Structured variable annuity, IUL and stock market certificate products have returns tied to the performance of equity markets. As a result of fluctuations in equity markets, the obligation incurred by the Company related to structured variable annuity, IUL and stock market certificate products will positively or negatively impact earnings over the life of these products. The equity component of structured variable annuity, IUL and stock market certificate product obligations are considered embedded derivatives, which are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. As a means of economically hedging its obligations under the provisions of these products, the Company enters into index options and futures contracts. The Company enters into futures, credit default swaps and commodity swaps to manage its exposure to price risk arising from seed money investments in proprietary investment products. The Company enters into foreign currency forward contracts to economically hedge its exposure to certain foreign transactions. The Company enters into futures contracts and total return swaps to economically hedge its exposure related to compensation plans. The Company enters into interest rate swaps to offset interest rate changes on unrealized gains or losses for certain investments. Cash Flow Hedges The Company has designated derivative instruments as a cash flow hedge of interest rate exposure on forecasted debt interest payments. For derivative instruments that qualify as cash flow hedges, the gain or loss on the derivative instruments is reported in AOCI and reclassified into earnings when the hedged item or transaction impacts earnings. The amount that is reclassified into earnings is presented within the same line item as the earnings impact of the hedged item in interest and debt expense. For the three months and nine months ended September 30, 2021 and 2020, the amounts reclassified from AOCI to earnings related to cash flow hedges were immaterial. The estimated net amount recorded in AOCI as of September 30, 2021 that the Company expects to reclassify to earnings as a reduction to interest and debt expense within the next twelve months is $0.5 million. Currently, the longest period of time over which the Company is hedging exposure to the variability in future cash flows is 15 years and relates to forecasted debt interest payments. See Note 15 for a rollforward of net unrealized derivative gains (losses) included in AOCI related to cash flow hedges. Fair Value Hedges The Company entered into and designated as a fair value hedge an interest rate swap to convert senior notes due 2020 from fixed rate debt to floating rate debt. The interest rate swap related to the senior notes due March 2020 was settled during the first quarter of 2020 when the debt was repaid. The swap had identical terms as the underlying debt being hedged. The Company recognized gains and losses on the derivatives and the related hedged items within interest and debt expense. The Company has not had any fair value hedges since March 2020. The following table is a summary of the impact of derivatives designated as hedges on the Consolidated Statements of Operations: Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 (in millions) Total interest and debt expense per Consolidated Statements of Operations $ 37 $ 124 Gain (loss) on interest rate contracts designated as fair value hedges: Hedged items $ — $ 1 Derivatives designated as fair value hedges — (1) Gain (loss) on interest rate contracts designated as cash flow hedges: Amount of gain (loss) reclassified from AOCI into income $ 1 $ 1 Net Investment Hedges The Company entered into, and designated as net investment hedges in foreign operations, forward contracts to hedge a portion of the Company’s foreign currency exchange rate risk associated with its investment in Threadneedle. As the Company determined that the forward contracts are effective, the change in fair value of the derivatives is recognized in AOCI as part of the foreign currency translation adjustment. For the three months ended September 30, 2021 and 2020, the Company recognized a gain of $0.7 million and a loss of $2.5 million, respectively, in OCI. For the nine months ended September 30, 2021 and 2020, the Company recognized a loss of $0.2 million and a gain of $3 million, respectively, in OCI. Credit Risk Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. To mitigate such risk, the Company has established guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes members of senior management. Key components of this program are to require preapproval of counterparties and the use of master netting and collateral arrangements whenever practical. See Note 13 for additional information on the Company’s credit exposure related to derivative assets. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | The following tables provide the amounts related to each component of OCI: Three Months Ended September 30, 2021 2020 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ (79) $ 21 $ (58) $ 225 $ (53) $ 172 Reclassification of net (gains) losses on securities included in net income (2) (502) 105 (397) (4) 1 (3) Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables 147 (31) 116 (94) 20 (74) Net unrealized gains (losses) on securities (434) 95 (339) 127 (32) 95 Foreign currency translation (28) 6 (22) 27 — 27 Total other comprehensive income (loss) $ (462) $ 101 $ (361) $ 154 $ (32) $ 122 Nine Months Ended September 30, 2021 2020 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ (433) $ 108 $ (325) $ 562 $ (118) $ 444 Reclassification of net (gains) losses on securities included in net income (2) (553) 116 (437) — — — Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables 284 (60) 224 (223) 47 (176) Net unrealized gains (losses) on securities (702) 164 (538) 339 (71) 268 Defined benefit plans 37 (8) 29 — — — Foreign currency translation (27) 6 (21) (15) 1 (14) Total other comprehensive income (loss) $ (692) $ 162 $ (530) $ 324 $ (70) $ 254 (1) Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period. (2) Reclassification amounts are recorded in net investment income. Other comprehensive income (loss) related to net unrealized gains (losses) on securities includes three components: (i) unrealized gains (losses) that arose from changes in the fair value of securities that were held during the period; (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities and due to the reclassification of noncredit impairments to credit losses; and (iii) other adjustments primarily consisting of changes in insurance and annuity asset and liability balances, such as DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables, to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet dates. The following tables present the changes in the balances of each component of AOCI, net of tax: Net Unrealized Gains (Losses) Net Unrealized Gains (Losses) Defined Foreign Currency Translation Other Total (in millions) Balance, July 1, 2021 $ 784 $ 5 $ (175) $ (153) $ (1) $ 460 OCI before reclassifications 58 — — (22) — 36 Amounts reclassified from AOCI (397) — — — — (397) Total OCI (339) — — (22) — (361) Balance, September 30, 2021 $ 445 $ 5 $ (175) $ (175) $ (1) $ 99 Balance, January 1, 2021 $ 983 $ 5 $ (204) $ (154) $ (1) $ 629 OCI before reclassifications (101) — 29 (21) — (93) Amounts reclassified from AOCI (437) — — — — (437) Total OCI (538) — 29 (21) — (530) Balance, September 30, 2021 $ 445 $ 5 $ (175) $ (175) $ (1) $ 99 Net Unrealized Gains (Losses) Net Unrealized Gains (Losses) Defined Foreign Currency Translation Other Total (in millions) Balance, July 1, 2020 $ 749 $ 6 $ (138) $ (222) $ (1) $ 394 OCI before reclassifications 98 — — 27 — 125 Amounts reclassified from AOCI (3) — — — — (3) Total OCI 95 — — 27 — 122 Balance, September 30, 2020 $ 844 $ 6 $ (138) $ (195) $ (1) $ 516 Balance, January 1, 2020 $ 576 $ 6 $ (138) $ (181) $ (1) $ 262 OCI before reclassifications 268 — — (14) — 254 Total OCI 268 — — (14) — 254 Balance, September 30, 2020 $ 844 $ 6 $ (138) $ (195) $ (1) $ 516 For the nine months ended September 30, 2021 and 2020, the Company repurchased a total of 5.5 million shares and 6.3 million shares, respectively, of its common stock for an aggregate cost of $1.3 billion and $956 million, respectively. In August 2020, the Company’s Board of Directors authorized a repurchase of up to $2.5 billion for the repurchase of shares of the Company’s common stock through September 30, 2022. As of September 30, 2021, the Company had $932 million remaining under the share repurchase authorization. The Company may also reacquire shares of its common stock under its share-based compensation plans related to restricted stock awards and certain option exercises. The holders of restricted shares may elect to surrender a portion of their shares on the vesting date to cover their income tax obligation. These vested restricted shares are reacquired by the Company and the Company’s payment of the holders’ income tax obligations are recorded as a treasury share purchase. For the nine months ended September 30, 2021 and 2020, the Company reacquired 0.3 million shares and 0.3 million shares, respectively, of its common stock through the surrender of shares upon vesting and paid in the aggregate $69 million and $51 million, respectively, related to the holders’ income tax obligations on the vesting date. Option holders may elect to net settle their vested awards resulting in the surrender of the number of shares required to cover the strike price and tax obligation of the options exercised. These shares are reacquired by the Company and recorded as treasury shares. For the nine months ended September 30, 2021 and 2020, the Company reacquired 0.9 million shares and 0.7 million shares, respectively, of its common stock through the net settlement of options for an aggregate value of $209 million and $128 million, respectively. During the nine months ended September 30, 2021 and 2020, the Company reissued 0.4 million and 0.5 million, respectively, treasury shares for restricted stock award grants, performance share units and issuance of shares vested under advisor deferred compensation plans. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The Company’s effective tax rate was 18.8% and 23.5% for the three months ended September 30, 2021 and 2020, respectively. The Company’s effective tax rate was 17.1% and 17.4% for the nine months ended September 30, 2021 and 2020, respectively. The effective tax rate for the three months ended September 30, 2021 is lower than the statutory tax rate as a result of tax preferred items including low income housing tax credits, partially offset by state income taxes, net of federal benefit. The effective tax rate for the nine months ended September 30, 2021 is lower than the statutory tax rate as a result of tax preferred items including low income housing tax credits, incentive compensation, and the dividends received deduction, partially offset by state income taxes, net of federal benefit. The Company recorded a pretax loss for the three months ended September 30, 2020. Tax benefits applied to a pretax loss increase the effective tax rate. The effective tax rate for the three months ended September 30, 2020 is higher than the statutory tax rate due to tax benefits including low income housing tax credits and dividends received deduction. The effective tax rate for the nine months ended September 30, 2020 is lower than the statutory rate as a result of tax preferred items including low income housing tax credits and dividends received deduction, partially offset by state income taxes, net of federal benefit. The lower effective tax rate for the three months ended September 30, 2021 is the result of current period pretax income compared to the prior period pretax loss and a decrease in tax preferred items including low income housing tax credits and the dividends received deduction, increases in incentive compensation partially offset by state income taxes, net of federal benefit. Included in the Company’s deferred income tax assets are tax benefits related to state net operating losses of $16 million, net of federal benefit, which will expire beginning December 31, 2021. The Company is required to establish a valuation allowance for any portion of the deferred tax assets that management believes will not be realized. Significant judgment is required in determining if a valuation allowance should be established, and the amount of such allowance if required. Factors used in making this determination include estimates relating to the performance of the business. Consideration is given to, among other things in making this determination, (i) future taxable income exclusive of reversing temporary differences and carryforwards, (ii) future reversals of existing taxable temporary differences, (iii) taxable income in prior carryback years, and (iv) tax planning strategies. Based on analysis of the Company’s tax position, management believes it is more likely than not that the Company will not realize certain state net operating losses of $12 million, state deferred tax assets of $2 million and foreign deferred tax assets of $1 million; therefore, a valuation allowance has been established. The valuation allowance was $15 million as of both September 30, 2021 and December 31, 2020. As of September 30, 2021 and December 31, 2020, the Company had $126 million and $110 million, respectively, of gross unrecognized tax benefits. If recognized, approximately $95 million and $80 million, net of federal tax benefits, of unrecognized tax benefits as of September 30, 2021 and December 31, 2020, respectively, would affect the effective tax rate. It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. The Company estimates that the total amount of gross unrecognized tax benefits may decrease by $40 million to $50 million in the next 12 months primarily due to Internal Revenue Service (“IRS”) settlements and state exams. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized nil and a net decrease of $1 million in interest and penalties for the three and nine months ended September 30, 2021, respectively. The Company recognized a net increase of $1 million and $2 million in interest and penalties for the three and nine months ended September 30, 2020, respectively. As of September 30, 2021 and December 31, 2020, the Company had a payable of $9 million and $10 million, respectively, related to accrued interest and penalties. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company and its subsidiaries are involved in the normal course of business in legal proceedings which include regulatory inquiries, arbitration and litigation, including class actions, concerning matters arising in connection with the conduct of its activities as a diversified financial services firm. These include proceedings specific to the Company as well as proceedings generally applicable to business practices in the industries in which it operates. The Company can also be subject to legal proceedings arising out of its general business activities, such as its investments, contracts, leases and employment relationships. Uncertain economic conditions, heightened and sustained volatility in the financial markets and significant financial reform legislation may increase the likelihood that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of examinations of the Company or the financial services industry generally. As with other financial services firms, the level of regulatory activity and inquiry concerning the Company’s businesses remains elevated. From time to time, the Company receives requests for information from, and/or has been subject to examination or claims by, the SEC, the Financial Industry Regulatory Authority, the OCC, the U.K. Financial Conduct Authority, the Federal Reserve Board, state insurance and securities regulators, state attorneys general and various other domestic or foreign governmental and quasi-governmental authorities on behalf of themselves or clients concerning the Company’s business activities and practices, and the practices of the Company’s financial advisors. The Company typically has numerous pending matters which include information requests, exams or inquiries regarding certain subjects, including from time to time: sales and distribution of mutual funds, exchange traded funds, annuities, equity and fixed income securities, real estate investment trusts, insurance products, and financial advice offerings, including managed accounts; wholesaler activity; supervision of the Company’s financial advisors and other associated persons; administration of insurance and annuity claims; security of client information; trading activity and the Company’s monitoring and supervision of such activity; and transaction monitoring systems and controls. The Company has cooperated and will continue to cooperate with the applicable regulators. These legal proceedings are subject to uncertainties and, as such, it is inherently difficult to determine whether any loss is probable or even reasonably possible, or to reasonably estimate the amount of any loss. The Company cannot predict with certainty if, how or when any such proceedings will be initiated or resolved. Matters frequently need to be more developed before a loss or range of loss can be reasonably estimated for any proceeding. An adverse outcome in one or more proceedings could eventually result in adverse judgments, settlements, fines, penalties or other sanctions, in addition to further claims, examinations or adverse publicity that could have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity. In accordance with applicable accounting standards, the Company establishes an accrued liability for contingent litigation and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably estimated. The Company discloses the nature of the contingency when management believes there is at least a reasonable possibility that the outcome may be material to the Company’s consolidated financial statements and, where feasible, an estimate of the possible loss. In such cases, there still may be an exposure to loss in excess of any amounts reasonably estimated and accrued. When a loss contingency is not both probable and reasonably estimable, the Company does not establish an accrued liability, but continues to monitor, in conjunction with any outside counsel handling a matter, further developments that would make such loss contingency both probable and reasonably estimable. Once the Company establishes an accrued liability with respect to a loss contingency, the Company continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established, and any appropriate adjustments are made each quarter. Guaranty Fund Assessments RiverSource Life and RiverSource Life of NY are required by law to be a member of the guaranty fund association in every state where they are licensed to do business. In the event of insolvency of one or more unaffiliated insurance companies, the Company could be adversely affected by the requirement to pay assessments to the guaranty fund associations. The Company projects its cost of future guaranty fund assessments based on estimates of insurance company insolvencies provided by the National Organization of Life and Health Insurance Guaranty Associations and the amount of its premiums written relative to the industry-wide premium in each state. The Company accrues the estimated cost of future guaranty fund assessments when it is considered probable that an assessment will be imposed, the event obligating the Company to pay the assessment has occurred and the amount of the assessment can be reasonably estimated. The Company has a liability for estimated guaranty fund assessments and a related premium tax asset. As of both September 30, 2021 and December 31, 2020, the estimated liability was $12 million. As of both September 30, 2021 and December 31, 2020, the related premium tax asset was $10 million. The expected period over which guaranty fund assessments will be made and the related tax credits recovered is not known. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | The computations of basic and diluted earnings per share is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions, except per share amounts) Numerator: Net income $ 1,031 $ (140) $ 2,059 $ 1,357 Denominator: Basic: Weighted-average common shares outstanding 116.4 123.0 118.2 124.8 Effect of potentially dilutive nonqualified stock options and other share-based awards 2.8 1.9 2.7 1.7 Diluted: Weighted-average common shares outstanding 119.2 124.9 120.9 126.5 Earnings per share: Basic $ 8.86 $ (1.14) $ 17.42 $ 10.87 Diluted $ 8.65 $ (1.14) (1) $ 17.03 $ 10.73 (1) Diluted shares used in this calculation represent basic shares due to the net loss. Using actual diluted shares would result in anti-dilution. The calculation of diluted earnings per share excludes the incremental effect of 1.5 million options as of September 30, 2020 due to their anti-dilutive effect. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | The Company’s four reporting segments are Advice & Wealth Management, Asset Management, Retirement & Protection Solutions and Corporate & Other. The accounting policies of the segments are the same as those of the Company, except for operating adjustments defined below, the method of capital allocation, the accounting for gains (losses) from intercompany revenues and expenses and not providing for income taxes on a segment basis. Management uses segment adjusted operating measures in goal setting, as a basis for determining employee compensation and in evaluating performance on a basis comparable to that used by some securities analysts and investors. Consistent with GAAP accounting guidance for segment reporting, adjusted operating earnings is the Company’s measure of segment performance. Adjusted operating earnings should not be viewed as a substitute for GAAP pretax income. The Company believes the presentation of segment adjusted operating earnings, as the Company measures it for management purposes, enhances the understanding of its business by reflecting the underlying performance of its core operations and facilitating a more meaningful trend analysis. Management excludes mean reversion related impacts from the Company’s adjusted operating measures. The mean reversion related impact is defined as the impact on variable annuity and VUL products for the difference between assumed and updated separate account investment performance on DAC, DSIC, unearned revenue amortization, reinsurance accrual and additional insurance benefit reserves. Effective in the third quarter of 2021, management has excluded the impacts of block transfer reinsurance transactions from the adjusted operating measures. Prior periods presented were not impacted. Adjusted operating earnings is defined as adjusted operating net revenues less adjusted operating expenses. Adjusted operating net revenues and adjusted operating expenses exclude net realized investment gains or losses (net of unearned revenue amortization and the reinsurance accrual); the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the related DSIC and DAC amortization, unearned revenue amortization, and the reinsurance accrual; mean reversion related impacts (the impact on variable annuity and VUL products for the difference between assumed and updated separate account investment performance on DAC, DSIC, unearned revenue amortization, reinsurance accrual and additional insurance benefit reserves); block transfer reinsurance transaction impacts; the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments; integration and restructuring charges; and the impact of consolidating CIEs. The market impact on non-traditional long-duration products includes changes in embedded derivative values caused by changes in financial market conditions, net of changes in economic hedge values and unhedged items including the difference between assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and certain policyholder contract elections, net of related impacts on DAC and DSIC amortization. The market impact also includes certain valuation adjustments made in accordance with FASB Accounting Standards Codification 820, Fair Value Measurements and Disclosures, including the impact on embedded derivative values of discounting projected benefits to reflect a current estimate of the Company’s life insurance subsidiary’s nonperformance spread. The following tables summarize selected financial information by segment and reconciles segment totals to those reported on the consolidated financial statements: September 30, 2021 December 31, 2020 (in millions) Advice & Wealth Management $ 22,849 $ 21,266 Asset Management 9,213 8,406 Retirement & Protection Solutions 116,986 114,850 Corporate & Other 21,678 21,361 Total assets $ 170,726 $ 165,883 Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Adjusted operating net revenues: Advice & Wealth Management $ 2,048 $ 1,667 $ 5,907 $ 4,899 Asset Management 915 739 2,622 2,093 Retirement & Protection Solutions 834 781 2,429 2,295 Corporate & Other 113 132 371 412 Eliminations (1)(2) (395) (342) (1,173) (1,006) Total segment adjusted operating net revenues 3,515 2,977 10,156 8,693 Net realized gains (losses) 14 4 81 (19) Revenue attributable to consolidated investment entities 42 21 92 52 Market impact on non-traditional long-duration products, net (1) 1 25 (10) Mean reversion related impacts — — 1 — Market impact of hedges on investments (23) — (40) — Block transfer reinsurance transaction impacts (644) — (644) — Total net revenues per Consolidated Statements of Operations $ 2,903 $ 3,003 $ 9,671 $ 8,716 (1) Represents the elimination of intersegment revenues recognized for the three months ended September 30, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($261 million and $219 million, respectively); Asset Management ($12 million and $13 million, respectively); Retirement & Protection Solutions ($122 million and $110 million, respectively); and Corporate & Other (nil and nil, respectively). (2) Represents the elimination of intersegment revenues recognized for the nine months ended September 30, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($777 million and $649 million, respectively); Asset Management ($39 million and $39 million, respectively); Retirement & Protection Solutions ($356 million and $319 million, respectively); and Corporate & Other ($1 million and $(1) million, respectively). Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Adjusted operating earnings: Advice & Wealth Management $ 459 $ 320 $ 1,271 $ 969 Asset Management 285 198 766 496 Retirement & Protection Solutions 187 (89) 552 300 Corporate & Other (81) (202) (179) (309) Total segment adjusted operating earnings 850 227 2,410 1,456 Net realized gains (losses) 12 4 78 (18) Net income (loss) attributable to consolidated investment entities 2 — (1) (2) Market impact on non-traditional long-duration products, net (94) (431) (577) 239 Mean reversion related impacts 9 17 107 (30) Market impact of hedges on investments (23) — (40) — Block transfer reinsurance transaction impacts 521 — 521 — Integration and restructuring charges (7) (1) (14) (4) Pretax income per Consolidated Statements of Operations $ 1,270 $ (184) $ 2,484 $ 1,641 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregated revenue by segment | Three Months Ended September 30, 2021 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 587 $ — $ — $ 587 $ — $ 587 Institutional — 143 — — 143 — 143 Advisory fees 1,189 — — — 1,189 — 1,189 Financial planning fees 91 — — — 91 — 91 Transaction and other fees 94 57 18 — 169 — 169 Total management and financial advice fees 1,374 787 18 — 2,179 — 2,179 Distribution fees: Mutual funds 219 70 — — 289 — 289 Insurance and annuity 246 50 104 — 400 — 400 Other products 96 — — — 96 — 96 Total distribution fees 561 120 104 — 785 — 785 Other revenues 46 1 — 1 48 — 48 Total revenue from contracts with customers 1,981 908 122 1 3,012 — 3,012 Revenue from other sources (1) 70 7 712 112 901 (605) 296 Total segment gross revenues 2,051 915 834 113 3,913 (605) 3,308 Banking and deposit interest expense (3) — — — (3) — (3) Total segment net revenues 2,048 915 834 113 3,910 (605) 3,305 Intersegment revenues (261) (12) (122) — (395) (7) (402) Total net revenues $ 1,787 $ 903 $ 712 $ 113 $ 3,515 $ (612) $ 2,903 Nine Months Ended September 30, 2021 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 1,685 $ — $ — $ 1,685 $ — $ 1,685 Institutional — 397 — — 397 — 397 Advisory fees 3,330 — — — 3,330 — 3,330 Financial planning fees 272 — — — 272 — 272 Transaction and other fees 276 165 52 — 493 — 493 Total management and financial advice fees 3,878 2,247 52 — 6,177 — 6,177 Distribution fees: Mutual funds 638 206 — — 844 — 844 Insurance and annuity 738 146 304 — 1,188 — 1,188 Other products 306 — — — 306 — 306 Total distribution fees 1,682 352 304 — 2,338 — 2,338 Other revenues 146 9 — 2 157 — 157 Total revenue from contracts with customers 5,706 2,608 356 2 8,672 — 8,672 Revenue from other sources (1) 211 14 2,073 370 2,668 (472) 2,196 Total segment gross revenues 5,917 2,622 2,429 372 11,340 (472) 10,868 Banking and deposit interest expense (10) — — (1) (11) — (11) Total segment net revenues 5,907 2,622 2,429 371 11,329 (472) 10,857 Intersegment revenues (777) (39) (356) (1) (1,173) (13) (1,186) Total net revenues $ 5,130 $ 2,583 $ 2,073 $ 370 $ 10,156 $ (485) $ 9,671 Three Months Ended September 30, 2020 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 466 $ — $ — $ 466 $ — $ 466 Institutional — 122 — — 122 — 122 Advisory fees 907 — — — 907 — 907 Financial planning fees 81 — — — 81 — 81 Transaction and other fees 89 47 14 — 150 — 150 Total management and financial advice fees 1,077 635 14 — 1,726 — 1,726 Distribution fees: Mutual funds 186 59 — — 245 — 245 Insurance and annuity 202 45 75 — 322 — 322 Other products 91 — — — 91 — 91 Total distribution fees 479 104 75 — 658 — 658 Other revenues 44 — 5 — 49 — 49 Total revenue from contracts with customers 1,600 739 94 — 2,433 — 2,433 Revenue from other sources (1) 77 — 687 132 896 27 923 Total segment gross revenues 1,677 739 781 132 3,329 27 3,356 Banking and deposit interest expense (10) — — — (10) — (10) Total segment net revenues 1,667 739 781 132 3,319 27 3,346 Intersegment revenues (219) (13) (110) — (342) (1) (343) Total net revenues $ 1,448 $ 726 $ 671 $ 132 $ 2,977 $ 26 $ 3,003 Nine Months Ended September 30, 2020 Advice & Wealth Management Asset Management Retirement & Protection Solutions Corporate & Other Total Segments Non-operating Total (in millions) Management and financial advice fees: Asset management fees: Retail $ — $ 1,330 $ — $ — $ 1,330 $ — $ 1,330 Institutional — 308 — — 308 — 308 Advisory fees 2,558 — — — 2,558 — 2,558 Financial planning fees 248 — — — 248 — 248 Transaction and other fees 264 139 45 — 448 — 448 Total management and financial advice fees 3,070 1,777 45 — 4,892 — 4,892 Distribution fees: Mutual funds 540 174 — — 714 — 714 Insurance and annuity 606 129 266 — 1,001 — 1,001 Other products 334 — — — 334 — 334 Total distribution fees 1,480 303 266 — 2,049 — 2,049 Other revenues 138 2 5 3 148 — 148 Total revenue from contracts with customers 4,688 2,082 316 3 7,089 — 7,089 Revenue from other sources (1) 264 11 1,979 411 2,665 28 2,693 Total segment gross revenues 4,952 2,093 2,295 414 9,754 28 9,782 Banking and deposit interest expense (53) — — (2) (55) — (55) Total segment net revenues 4,899 2,093 2,295 412 9,699 28 9,727 Intersegment revenues (649) (39) (319) 1 (1,006) (5) (1,011) Total net revenues $ 4,250 $ 2,054 $ 1,976 $ 413 $ 8,693 $ 23 $ 8,716 (1) Revenues not included in the scope of the revenue from contracts with customers standard. The amounts primarily consist of revenue associated with insurance and annuity products or financial instruments. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) - Consolidated investment entities | 9 Months Ended |
Sep. 30, 2021 | |
Assets and liabilities measured at fair value | |
Schedule of balances of assets and liabilities measured at fair value on a recurring basis | September 30, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets Investments: Common stocks $ — $ 2 $ — $ 2 Syndicated loans — 2,123 45 2,168 Total investments — 2,125 45 2,170 Receivables — 18 — 18 Other assets — 2 — 2 Total assets at fair value $ — $ 2,145 $ 45 $ 2,190 Liabilities Debt (1) $ — $ 2,163 $ — $ 2,163 Other liabilities — 71 — 71 Total liabilities at fair value $ — $ 2,234 $ — $ 2,234 December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets Investments: Corporate debt securities $ — $ 8 $ — $ 8 Common stocks — 1 — 1 Syndicated loans — 1,817 92 1,909 Total investments — 1,826 92 1,918 Receivables — 16 — 16 Other assets — — 2 2 Total assets at fair value $ — $ 1,842 $ 94 $ 1,936 Liabilities Debt (1) $ — $ 1,913 $ — $ 1,913 Other liabilities — 69 — 69 Total liabilities at fair value $ — $ 1,982 $ — $ 1,982 (1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. |
Summary of changes in Level 3 assets measured at fair value on a recurring basis | Syndicated Loans (in millions) Balance, July 1, 2021 $ 112 Purchases 7 Sales (4) Settlements (10) Transfers into Level 3 5 Transfers out of Level 3 (47) Deconsolidation of consolidated investment entities (18) Balance, September 30, 2021 $ 45 Syndicated Loans (in millions) Balance, July 1, 2020 $ 211 Total gains (losses) included in: Net income 2 (1) Purchases 35 Sales (12) Settlements (6) Transfers into Level 3 29 Transfers out of Level 3 (141) Balance, September 30, 2020 $ 118 Changes in unrealized gains (losses) included in income relating to assets held at September 30, 2020 $ 1 (1) Syndicated Loans Other Assets (in millions) Balance, January 1, 2021 $ 92 $ 2 Total gains (losses) included in: Net income 2 (1) — Purchases 88 — Sales (38) — Settlements (49) — Transfers into Level 3 90 — Transfers out of Level 3 (122) (2) Deconsolidation of consolidated investment entities (18) — Balance, September 30, 2021 $ 45 $ — Syndicated Loans (in millions) Balance, January 1, 2020 $ 143 Total gains (losses) included in: Net income (19) (1) Purchases 80 Sales (27) Settlements (32) Transfers into Level 3 379 Transfers out of Level 3 (406) Balance, September 30, 2020 $ 118 Changes in unrealized gains (losses) included in income relating to assets held at September 30, 2020 $ (2) (1) (1) Included in net investment income in the Consolidated Statements of Operations. |
Schedule of fair value and unpaid principal balance of loans and debt for which fair value option has been elected | September 30, 2021 December 31, 2020 (in millions) Syndicated loans Unpaid principal balance $ 2,223 $ 1,990 Excess unpaid principal over fair value (55) (81) Fair value $ 2,168 $ 1,909 Fair value of loans more than 90 days past due $ 2 $ 5 Fair value of loans in nonaccrual status 5 19 Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both 5 24 Debt Unpaid principal balance $ 2,298 $ 2,069 Excess unpaid principal over fair value (135) (156) Carrying value (1) $ 2,163 $ 1,913 (1) The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. |
Schedule of debt and stated interest rates | Carrying Value Weighted Average Interest Rate September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) Debt of consolidated CLOs due 2025-2034 $ 2,163 $ 1,913 1.7 % 2.1 % |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments [Abstract] | |
Summary of investments | September 30, 2021 December 31, 2020 (in millions) Available-for-Sale securities, at fair value $ 30,114 $ 36,283 Mortgage loans (allowance for credit losses: 2021, $14; 2020, $29) 1,911 2,718 Policy loans 836 846 Other investments (allowance for credit losses: 2021, $4; 2020, $12) 657 1,184 Total $ 33,518 $ 41,031 |
Summary of net Investment income | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Investment income on fixed maturities $ 202 $ 275 $ 733 $ 887 Net realized gains (losses) 546 4 627 (18) Affordable housing partnerships (20) (14) (58) (50) Other 1 13 28 58 Consolidated investment entities 44 22 98 56 Total $ 773 $ 300 $ 1,428 $ 933 |
Schedule of Available-for-Sale securities by type | September 30, 2021 Description of Securities Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Corporate debt securities $ 8,455 $ 1,301 $ (31) $ — $ 9,725 Residential mortgage backed securities 9,628 90 (19) — 9,699 Commercial mortgage backed securities 4,712 92 (9) — 4,795 Asset backed securities 3,465 31 (1) — 3,495 State and municipal obligations 857 249 (1) (1) 1,104 U.S. government and agency obligations 1,196 — — — 1,196 Foreign government bonds and obligations 82 6 (1) — 87 Other securities 13 — — — 13 Total $ 28,408 $ 1,769 $ (62) $ (1) $ 30,114 Description of Securities December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value (in millions) Corporate debt securities $ 11,762 $ 1,924 $ (2) $ (10) $ 13,674 Residential mortgage backed securities 9,845 188 (4) — 10,029 Commercial mortgage backed securities 5,867 242 (21) — 6,088 Asset backed securities 3,283 52 (5) (1) 3,329 State and municipal obligations 1,088 297 (1) — 1,384 U.S. government and agency obligations 1,456 — — — 1,456 Foreign government bonds and obligations 241 22 (1) — 262 Other securities 59 2 — — 61 Total $ 33,601 $ 2,727 $ (34) $ (11) $ 36,283 |
Summary of fixed maturity securities by rating | Ratings September 30, 2021 December 31, 2020 Amortized Cost Fair Value Percent of Total Fair Value Amortized Cost Fair Value Percent of Total Fair Value (in millions, except percentages) AAA $ 18,695 $ 18,871 63 % $ 19,815 $ 20,253 56 % AA 727 903 3 1,082 1,312 3 A 1,748 2,114 7 2,953 3,534 10 BBB 6,273 7,110 23 8,271 9,542 26 Below investment grade (1) 965 1,116 4 1,480 1,642 5 Total fixed maturities $ 28,408 $ 30,114 100 % $ 33,601 $ 36,283 100 % (1) Both the amortized cost and fair value of below investment grade securities includes interest in non-consolidated CLOs managed by the Company of $2 million as of September 30, 2021, and $3 million as of December 31, 2020. These securities are not rated but are included in below investment grade due to their risk characteristics. |
Summary of fair value and gross unrealized losses on Available-for-Sale securities in continuous unrealized loss position | Description of Securities September 30, 2021 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 83 $ 1,474 $ (29) 5 $ 23 $ (2) 88 $ 1,497 $ (31) Residential mortgage backed securities 99 2,872 (18) 59 195 (1) 158 3,067 (19) Commercial mortgage backed securities 57 1,026 (8) 10 168 (1) 67 1,194 (9) Asset backed securities 12 317 (1) 7 147 — 19 464 (1) State and municipal obligations 18 49 (1) — — — 18 49 (1) Foreign government bonds and obligations 5 6 — 6 4 (1) 11 10 (1) Total 274 $ 5,744 $ (57) 87 $ 537 $ (5) 361 $ 6,281 $ (62) Description of Securities December 31, 2020 Less than 12 months 12 months or more Total Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses (in millions, except number of securities) Corporate debt securities 26 $ 228 $ (1) 11 $ 19 $ (1) 37 $ 247 $ (2) Residential mortgage backed securities 72 833 (2) 71 391 (2) 143 1,224 (4) Commercial mortgage backed securities 35 781 (11) 19 393 (10) 54 1,174 (21) Asset backed securities 17 344 (3) 13 231 (2) 30 575 (5) State and municipal obligations 2 4 — 1 4 (1) 3 8 (1) Foreign government bonds and obligations 1 3 — 7 8 (1) 8 11 (1) Total 153 $ 2,193 $ (17) 122 $ 1,046 $ (17) 275 $ 3,239 $ (34) |
Rollforward of allowance for credit losses on Available-for-Sale securities | Corporate Debt Securities Asset Backed Securities State and Municipal Obligations Total (in millions) Balance, July 1, 2021 $ — $ — $ — $ — Additions for which credit losses were not previously recorded — — 1 1 Charge-offs — — — — Balance, September 30, 2021 $ — $ — $ 1 $ 1 Balance, July 1, 2020 $ 13 $ 1 $ — $ 14 Additions for which credit losses were not previously recorded — — — — Balance, September 30, 2020 $ 13 $ 1 $ — $ 14 Balance at January 1, 2021 (1) $ 10 $ 1 $ — $ 11 Additions for which credit losses were not previously recorded — — 1 1 Charge-offs (10) (1) — (11) Balance, September 30, 2021 $ — $ — $ 1 $ 1 Balance at January 1, 2020 (1) $ — $ — $ — $ — Additions for which credit losses were not previously recorded 13 — — 13 Additional increases (decreases) on securities that had an allowance recorded in a previous period — 1 — 1 Balance at September 30, 2020 $ 13 $ 1 $ — $ 14 |
Schedule of net realized gains and losses on Available-for-Sale securities | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Gross realized investment gains $ 508 $ 4 $ 573 $ 17 Gross realized investment losses (5) — (6) (3) Credit losses (1) — (1) (14) Other impairments — — (13) — Total $ 502 $ 4 $ 553 $ — |
Schedule of Available-for-Sale securities by contractual maturity | Amortized Cost Fair Value (in millions) Due within one year $ 1,728 $ 1,736 Due after one year through five years 2,183 2,324 Due after five years through 10 years 3,052 3,169 Due after 10 years 3,640 4,896 10,603 12,125 Residential mortgage backed securities 9,628 9,699 Commercial mortgage backed securities 4,712 4,795 Asset backed securities 3,465 3,495 Total $ 28,408 $ 30,114 |
Financing Receivables (Tables)
Financing Receivables (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Financing Receivables | |
Rollforward of allowance for loan losses | Commercial Loans Consumer Loans Total (in millions) Balance, January 1, 2021 $ 66 $ 2 $ 68 Provisions (14) 1 (13) Charge-offs (6) (1) (7) Recoveries — 1 1 Other 2 — 2 Balance, September 30, 2021 $ 48 $ 3 $ 51 Commercial Loans Consumer Loans Total (in millions) Balance, December 31, 2019 (1) $ 51 $ — $ 51 Cumulative effect of adoption of current expected credit losses guidance 2 3 5 Balance, January 1, 2020 53 3 56 Provisions 16 3 19 Charge-offs (2) (2) (4) Balance, September 30, 2020 $ 67 $ 4 $ 71 (1) Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Schedule of concentrations of credit risk of loans by region and property type | Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows: Loans Percentage September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) East North Central $ 187 $ 259 10 % 10 % East South Central 69 115 4 4 Middle Atlantic 125 178 7 7 Mountain 124 247 6 9 New England 29 54 2 2 Pacific 608 825 32 30 South Atlantic 496 681 26 25 West North Central 140 198 7 7 West South Central 123 168 6 6 1,901 2,725 100 % 100 % Less: allowance for credit losses 14 29 Total $ 1,887 $ 2,696 Concentrations of credit risk of commercial mortgage loans by property type were as follows: Loans Percentage September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) Apartments $ 499 $ 713 26 % 26 % Hotel 15 50 1 2 Industrial 306 427 16 16 Mixed use 68 87 4 3 Office 272 372 14 14 Retail 625 881 33 32 Other 116 195 6 7 1,901 2,725 100 % 100 % Less: allowance for credit losses 14 29 Total $ 1,887 $ 2,696 |
Commercial Loans | Commercial mortgage loans | |
Financing Receivables | |
Schedule of amortized cost basis of loans and credit quality information | September 30, 2021 Loan-to-Value Ratio 2021 2020 2019 2018 2017 Prior Total (in millions) > 100% $ — $ — $ 20 $ 10 $ — $ 30 $ 60 80% - 100% 9 14 9 6 — 37 75 60% - 80% 95 69 68 29 61 133 455 40% - 60% 23 34 95 69 60 420 701 < 40% 9 7 41 3 56 494 610 Total $ 136 $ 124 $ 233 $ 117 $ 177 $ 1,114 $ 1,901 December 31, 2020 Loan-to-Value Ratio 2020 2019 2018 2017 2016 Prior Total (in millions) > 100% $ — $ — $ 2 $ — $ — $ 10 $ 12 80% - 100% 15 16 12 3 7 15 68 60% - 80% 89 166 27 32 46 144 504 40% - 60% 23 57 74 155 113 551 973 < 40% 7 23 80 99 64 895 1,168 Total $ 134 $ 262 $ 195 $ 289 $ 230 $ 1,615 $ 2,725 |
Commercial Loans | Syndicated loans | |
Financing Receivables | |
Schedule of amortized cost basis of loans and credit quality information | September 30, 2021 Internal Risk Rating 2021 2020 2019 2018 2017 Prior Total (in millions) Risk 5 $ — $ — $ — $ — $ — $ — $ — Risk 4 — — 1 1 1 1 4 Risk 3 — — 4 4 5 9 22 Risk 2 16 5 9 11 16 9 66 Risk 1 9 3 7 9 16 16 60 Total $ 25 $ 8 $ 21 $ 25 $ 38 $ 35 $ 152 December 31, 2020 Internal Risk Rating 2020 2019 2018 2017 2016 Prior Total (in millions) Risk 5 $ — $ — $ — $ — $ — $ 3 $ 3 Risk 4 — — 4 9 — 10 23 Risk 3 — 9 8 25 13 25 80 Risk 2 30 57 62 69 14 41 273 Risk 1 17 32 47 58 22 40 216 Total $ 47 $ 98 $ 121 $ 161 $ 49 $ 119 $ 595 |
Commercial Loans | Loans to financial advisors | |
Financing Receivables | |
Schedule of amortized cost basis of loans and credit quality information | September 30, 2021 Termination Status 2021 2020 2019 2018 2017 Prior Total (in millions) Active $ 104 $ 155 $ 124 $ 91 $ 119 $ 128 $ 721 Terminated 2 — — — 1 7 10 Total $ 106 $ 155 $ 124 $ 91 $ 120 $ 135 $ 731 December 31, 2020 Termination Status 2020 2019 2018 2017 2016 Prior Total (in millions) Active $ 171 $ 137 $ 101 $ 127 $ 83 $ 86 $ 705 Terminated — — — 1 1 8 10 Total $ 171 $ 137 $ 101 $ 128 $ 84 $ 94 $ 715 |
Consumer Loans | Credit card receivables | |
Financing Receivables | |
Schedule of amortized cost basis of loans and credit quality information | September 30, 2021 December 31, 2020 (in millions) > 800 $ 27 $ 28 750 - 799 23 23 700 - 749 24 25 650 - 699 14 15 < 650 5 5 Total $ 93 $ 96 |
Deferred Acquisition Costs an_2
Deferred Acquisition Costs and Deferred Sales Inducement Costs (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Charges, Insurers [Abstract] | |
Schedule of balances of and changes in DAC | 2021 2020 (in millions) Balance at January 1 $ 2,532 $ 2,698 Capitalization of acquisition costs 205 162 Amortization (137) (249) Amortization, impact of valuation assumptions review 60 (100) Impact of change in net unrealized (gains) losses on securities 75 (61) Balance at September 30 $ 2,735 $ 2,450 |
Schedule of balances of and changes in DSIC | 2021 2020 (in millions) Balance at January 1 $ 189 $ 218 Capitalization of sales inducement costs 1 1 Amortization (15) (19) Amortization, impact of valuation assumptions review 2 (16) Impact of change in net unrealized (gains) losses on securities 11 (1) Balance at September 30 $ 188 $ 183 |
Policyholder Account Balances_2
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities [Abstract] | |
Schedule of components of policyholder account balances, future policy benefits and claims | September 30, 2021 December 31, 2020 (in millions) Policyholder account balances Fixed annuities (1) $ 8,229 $ 8,531 Variable annuity fixed sub-accounts 5,020 5,104 Universal life (“UL”)/variable universal life (“VUL”) insurance 3,098 3,122 Indexed universal life (“IUL”) insurance 2,461 2,269 Structured variable annuities 3,552 1,371 Other life insurance 580 605 Total policyholder account balances 22,940 21,002 Future policy benefits Variable annuity guaranteed minimum withdrawal benefits (“GMWB”) 2,256 3,049 Variable annuity guaranteed minimum accumulation benefits (“GMAB”) (2) (14) 1 Other annuity liabilities 73 211 Fixed annuity life contingent liabilities 1,303 1,370 Life and disability income insurance 1,152 1,187 Long term care insurance 5,664 5,722 UL/VUL and other life insurance additional liabilities 1,278 1,259 Total future policy benefits 11,712 12,799 Policy claims and other policyholders’ funds 212 191 Total policyholder account balances, future policy benefits and claims $ 34,864 $ 33,992 (1) Includes fixed deferred annuities, non-life contingent fixed payout annuities and fixed deferred indexed annuity host contracts. |
Schedule of components of separate account liabilities | September 30, 2021 December 31, 2020 (in millions) Variable annuity $ 81,063 $ 79,299 VUL insurance 8,931 8,226 Other insurance 32 31 Threadneedle investment liabilities 5,103 5,055 Total $ 95,129 $ 92,611 |
Variable Annuity and Insuranc_2
Variable Annuity and Insurance Guarantees (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Insurance [Abstract] | |
Schedule of variable annuity guarantees with additional liabilities | Variable Annuity Guarantees by Benefit Type (1) September 30, 2021 December 31, 2020 Total Contract Value Contract Value in Separate Accounts Net Amount Weighted Average Total Contract Value Contract Value in Separate Accounts Net Amount Weighted Average (in millions, except age) GMDB: Return of premium $ 68,486 $ 66,600 $ 18 69 $ 66,874 $ 64,932 $ 5 68 Five/six-year reset 8,181 5,467 13 68 8,116 5,386 6 68 One-year ratchet 6,105 5,786 40 71 6,094 5,763 8 71 Five-year ratchet 1,425 1,371 2 67 1,436 1,381 — 67 Other 1,281 1,264 46 74 1,261 1,243 45 73 Total — GMDB $ 85,478 $ 80,488 $ 119 69 $ 83,781 $ 78,705 $ 64 68 GGU death benefit $ 1,221 $ 1,166 $ 176 72 $ 1,183 $ 1,126 $ 162 71 GMIB $ 186 $ 172 $ 5 71 $ 187 $ 173 $ 6 71 GMWB: GMWB $ 1,903 $ 1,897 $ 1 75 $ 1,972 $ 1,967 $ 1 74 GMWB for life 51,275 51,226 215 69 50,142 50,057 185 69 Total — GMWB $ 53,178 $ 53,123 $ 216 69 $ 52,114 $ 52,024 $ 186 69 GMAB $ 2,037 $ 2,037 $ — 62 $ 2,291 $ 2,291 $ — 61 (1) Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table. |
Schedule insurance guarantees with additional liabilities | September 30, 2021 December 31, 2020 Net Amount Weighted Average Attained Age Net Amount Weighted Average Attained Age (in millions, except age) UL secondary guarantees $ 6,563 68 $ 6,587 67 |
Schedule of changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees | GMDB & GGU GMIB GMWB (1) GMAB (1) UL (in millions) Balance at January 1, 2020 $ 16 $ 7 $ 1,462 $ (39) $ 758 Incurred claims 10 1 2,219 63 172 Paid claims (6) (1) — — (34) Balance at September 30, 2020 $ 20 $ 7 $ 3,681 $ 24 $ 896 Balance at January 1, 2021 $ 24 $ 6 $ 3,049 $ 1 $ 916 Incurred claims 12 1 (793) (15) 106 Paid claims (3) (1) — — (27) Balance at September 30, 2021 $ 33 $ 6 $ 2,256 $ (14) $ 995 (1) The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims. |
Summary of distribution of separate account balances by asset type | September 30, 2021 December 31, 2020 (in millions) Mutual funds: Equity $ 47,854 $ 45,947 Bond 24,779 26,073 Other 8,067 6,911 Total mutual funds $ 80,700 $ 78,931 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Ameriprise Financial | |
Debt | |
Schedule of balances and stated interest rates of outstanding debt | Outstanding Balance Stated Interest Rate September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 (in millions) Long-term debt: Senior notes due 2022 $ 500 $ 500 3.0 % 3.0 % Senior notes due 2023 750 750 4.0 4.0 Senior notes due 2024 550 550 3.7 3.7 Senior notes due 2025 500 500 3.0 3.0 Senior notes due 2026 500 500 2.9 2.9 Finance lease liabilities 41 44 N/A N/A Other (10) (13) N/A N/A Total long-term debt 2,831 2,831 Short-term borrowings: Federal Home Loan Bank (“FHLB”) advances 200 200 0.3 0.4 Total $ 3,031 $ 3,031 |
Fair Values of Assets and Lia_2
Fair Values of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Values of Assets and Liabilities | |
Summary of significant unobservable inputs used in fair value measurements of Level 3 assets and liabilities | September 30, 2021 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 520 Discounted cash flow Yield/spread to U.S. Treasuries (1) 0.8 % – 2.4% 1.2% Asset backed securities $ 2 Discounted cash flow Annual short-term default rate (2) 1.4% 1.4% Annual long-term default rate (2) 3.5% 3.5 % Discount rate 12.0 % 12.0 % Constant prepayment rate 10.0 % 10.0 % Loss recovery 63.6 % 63.6 % Fixed deferred indexed annuity ceded embedded derivatives $ 56 Discounted cash flow Surrender rate (4) 0.0 % – 66.8% 1.4% IUL embedded derivatives $ 917 Discounted cash flow Nonperformance risk (3) 60 bps 60 bps Fixed deferred indexed annuity embedded derivatives $ 54 Discounted cash flow Surrender rate (4) 0.0 % – 66.8% 1.4% Nonperformance risk (3) 60 bps 60 bps GMWB and GMAB embedded derivatives $ 1,436 Discounted cash flow Utilization of guaranteed withdrawals (5) (6) 0.0 % – 48.0% 10.6% Surrender rate (4) 0.1 % – 63.4% 3.6% Market volatility (7) (8) 4.4 % – 17.6% 11.3% Nonperformance risk (3) 60 bps 60 bps Structured variable annuity embedded derivatives $ 217 Discounted cash flow Surrender rate (4) 0.8 % – 40.0% 0.9% Nonperformance risk (3) 60 bps 60 bps Contingent consideration liabilities $ 40 Discounted cash flow Discount rate (9) 0.0 % – 9.0% 2.4% December 31, 2020 Fair Value Valuation Technique Unobservable Input Range Weighted Average (in millions) Corporate debt securities (private placements) $ 772 Discounted cash flow Yield/spread to U.S. Treasuries (1) 1.0 % – 3.3% 1.5% Asset backed securities $ 3 Discounted cash flow Annual short-term default rate (2) 2.9 % – 3.0% 2.9% Annual long-term default rate (2) 3.5 % – 4.5% 3.8% Discount rate 13.0% 13.0% Constant prepayment rate 10.0% 10.0% Loss recovery 63.6% 63.6% IUL embedded derivatives $ 935 Discounted cash flow Nonperformance risk (3) 65 bps 65 bps Fixed deferred indexed annuity embedded derivatives $ 49 Discounted cash flow Surrender rate (4) 0.0 % – 50.0% 1.2% Nonperformance risk (3) 65 bps 65 bps GMWB and GMAB embedded derivatives $ 2,316 Discounted cash flow Utilization of guaranteed withdrawals (5) (6) 0.0 % – 48.0% 10.6% Surrender rate (4) 0.1 % – 73.5% 3.8% Market volatility (7) (8) 4.3 % – 17.1% 11.0% Nonperformance risk (3) 65 bps 65 bps Structured variable annuity embedded derivatives $ 70 Discounted cash flow Surrender rate (4) 0.8 % – 40.0% 0.9% Nonperformance risk (3) 65 bps 65 bps Contingent consideration liabilities $ 43 Discounted cash flow Discount rate (9) 0.0 % – 9.0% 3.1% (1) The weighted average for the spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. (2) The weighted average annual default rates of asset backed securities is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. (3) The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives. (4) The weighted average surrender rate is weighted based on the benefit base of each contract and represents the average assumption in the current year including the effect of a dynamic surrender formula. (5) The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year. (6) The weighted average utilization rate represents the average assumption for the current year, weighting each policy evenly. The calculation excludes policies that have already started taking withdrawals. (7) Market volatility is implied volatility of fund of funds and managed volatility funds. (8) The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit. |
Schedule of carrying value and estimated fair value of financial instruments not reported at fair value | September 30, 2021 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 1,911 $ — $ 24 $ 1,988 $ 2,012 Policy loans 836 — 836 — 836 Receivables 10,405 63 1,598 9,551 11,212 Restricted and segregated cash 1,701 1,701 — — 1,701 Other investments and assets 291 — 251 42 293 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 11,767 $ — $ — $ 12,845 $ 12,845 Investment certificate reserves 5,437 — — 5,434 5,434 Banking and brokerage deposits 13,257 13,257 — — 13,257 Separate account liabilities — investment contracts 5,481 — 5,481 — 5,481 Debt and other liabilities 3,118 111 3,174 9 3,294 December 31, 2020 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (in millions) Financial Assets Mortgage loans, net $ 2,718 $ — $ 22 $ 2,852 $ 2,874 Policy loans 846 — 846 — 846 Receivables 3,563 147 1,258 2,398 3,803 Restricted and segregated cash 1,958 1,958 — — 1,958 Other investments and assets 732 — 672 62 734 Financial Liabilities Policyholder account balances, future policy benefits and claims $ 9,990 $ — $ — $ 11,686 $ 11,686 Investment certificate reserves 6,752 — — 6,752 6,752 Banking and brokerage deposits 10,891 10,891 — — 10,891 Separate account liabilities — investment contracts 5,406 — 5,406 — 5,406 Debt and other liabilities 3,214 205 3,253 11 3,469 |
Ameriprise Financial | |
Fair Values of Assets and Liabilities | |
Schedule of balances of assets and liabilities measured at fair value on a recurring basis | September 30, 2021 Level 1 Level 2 Level 3 Total (in millions) Assets Cash equivalents $ 3,077 $ 3,322 $ — $ 6,399 Available-for-Sale securities: Corporate debt securities — 9,205 520 9,725 Residential mortgage backed securities — 9,699 — 9,699 Commercial mortgage backed securities — 4,795 — 4,795 Asset backed securities — 3,488 7 3,495 State and municipal obligations — 1,104 — 1,104 U.S. government and agency obligations 1,196 — — 1,196 Foreign government bonds and obligations — 87 — 87 Other securities — 13 — 13 Total Available-for-Sale securities 1,196 28,391 527 30,114 Investments at net asset value (“NAV”) 8 (1) Trading and other securities 11 22 — 33 Separate account assets at NAV 95,129 (1) Investments and cash equivalents segregated for regulatory purposes 650 — — 650 Receivables: Fixed deferred indexed annuity ceded embedded derivatives — — 56 56 Other assets: Interest rate derivative contracts 1 1,184 — 1,185 Equity derivative contracts 486 3,979 — 4,465 Credit derivative contracts — 18 — 18 Foreign exchange derivative contracts — 19 — 19 Total other assets 487 5,200 — 5,687 Total assets at fair value $ 5,421 $ 36,935 $ 583 $ 138,076 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 4 $ 54 $ 58 IUL embedded derivatives — — 917 917 GMWB and GMAB embedded derivatives — — 1,436 1,436 (2) Structured variable annuity embedded derivatives — — 217 217 Total policyholder account balances, future policy benefits and claims — 4 2,624 2,628 (3) Customer deposits — 5 — 5 Other liabilities: Interest rate derivative contracts — 476 — 476 Equity derivative contracts 169 3,450 — 3,619 Foreign exchange derivative contracts 2 17 — 19 Other 8 4 40 52 Total other liabilities 179 3,947 40 4,166 Total liabilities at fair value $ 179 $ 3,956 $ 2,664 $ 6,799 December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets Cash equivalents $ 2,935 $ 2,506 $ — $ 5,441 Available-for-Sale securities: Corporate debt securities — 12,902 772 13,674 Residential mortgage backed securities — 10,020 9 10,029 Commercial mortgage backed securities — 6,088 — 6,088 Asset backed securities — 3,297 32 3,329 State and municipal obligations — 1,384 — 1,384 U.S. government and agency obligations 1,456 — — 1,456 Foreign government bonds and obligations — 262 — 262 Other securities — 61 — 61 Total Available-for-Sale securities 1,456 34,014 813 36,283 Investments at NAV 8 (1) Trading and other securities 61 27 — 88 Separate account assets at NAV 92,611 (1) Investments and cash equivalents segregated for regulatory purposes 600 — — 600 Other assets: Interest rate derivative contracts 1 1,754 — 1,755 Equity derivative contracts 408 3,682 — 4,090 Credit derivative contracts — 2 — 2 Foreign exchange derivative contracts 1 22 — 23 Total other assets 410 5,460 — 5,870 Total assets at fair value $ 5,462 $ 42,007 $ 813 $ 140,901 Liabilities Policyholder account balances, future policy benefits and claims: Fixed deferred indexed annuity embedded derivatives $ — $ 3 $ 49 $ 52 IUL embedded derivatives — — 935 935 GMWB and GMAB embedded derivatives — — 2,316 2,316 (4) Structured variable annuity embedded derivatives — — 70 70 Total policyholder account balances, future policy benefits and claims — 3 3,370 3,373 (5) Customer deposits — 8 — 8 Other liabilities: Interest rate derivative contracts — 734 — 734 Equity derivative contracts 183 3,388 — 3,571 Credit derivative contracts — 1 — 1 Foreign exchange derivative contracts 2 4 — 6 Other 2 3 43 48 Total other liabilities 187 4,130 43 4,360 Total liabilities at fair value $ 187 $ 4,141 $ 3,413 $ 7,741 (1) Amounts are comprised of certain financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy. (2) The fair value of the GMWB and GMAB embedded derivatives included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position (recorded as a contra liability) as of September 30, 2021. (3) The Company’s adjustment for nonperformance risk resulted in a $550 million cumulative decrease to the embedded derivatives as of September 30, 2021. (4) The fair value of the GMWB and GMAB embedded derivatives included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position (recorded as a contra liability) as of December 31, 2020. (5) The Company’s adjustment for nonperformance risk resulted in a $727 million cumulative decrease to the embedded derivatives as of December 31, 2020. |
Summary of changes in Level 3 assets measured at fair value on a recurring basis | Available-for-Sale Securities Receivables Corporate Debt Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, July 1, 2021 $ 391 $ 6 $ 397 $ — Total gains (losses) included in: Net income (1) 1 — (1) — Other comprehensive income (loss) (3) — (3) — Purchases 9 — 9 — Sales — (1) (1) — Issues — — — 57 (5) Settlements (44) (1) (45) (1) Transfers into Level 3 168 2 170 — Balance, September 30, 2021 $ 520 $ 7 $ 527 $ 56 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ (4) $ — Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2021 $ 54 $ 928 $ 1,373 $ 214 $ 2,569 $ 44 Total (gains) losses included in: Net income 1 (2) 14 (2) (69) (3) 17 (3) (37) (5) (4) Issues — — 95 (7) 88 5 Settlements (1) (25) 37 (7) 4 (4) Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 14 (2) $ (60) (3) $ — $ (46) $ — Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, July 1, 2020 $ 744 $ 205 $ 15 $ 964 Total gains (losses) included in: Other comprehensive income (loss) 5 — 1 6 Purchases 7 33 — 40 Settlements (14) — 1 (13) Transfers into Level 3 — — 13 13 Transfers out of Level 3 — (188) — (188) Balance, September 30, 2020 $ 742 $ 50 $ 30 $ 822 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 5 $ — $ 1 $ 6 Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2020 $ 41 $ 882 $ 3,129 $ 9 $ 4,061 $ 48 Total (gains) losses included in: Net income 3 (2) 50 (2) (296) (3) 3 (3) (240) (11) (4) Issues — 15 93 (3) 105 5 Settlements — (21) 17 — (4) (2) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 50 (2) $ (283) (3) $ — $ (233) $ — Available-for-Sale Securities Receivables Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, January 1, 2021 $ 772 $ 9 $ 32 $ 813 $ — Total gains (losses) included in: Net income (1) — — (1) (1) — Other comprehensive income (loss) (6) — — (6) — Purchases 76 78 — 154 — Sales — — (1) (1) — Issues — — — — 57 (5) Settlements (73) — (2) (75) (1) Transfers into Level 3 168 — 2 170 — Transfers out of Level 3 (416) (87) (24) (527) — Balance, September 30, 2021 $ 520 $ — $ 7 $ 527 $ 56 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2021 $ — $ — $ (1) $ (1) (1) $ — Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ — $ (4) $ — Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2021 $ 49 $ 935 $ 2,316 $ 70 $ 3,370 $ 43 Total (gains) losses included in: Net income 7 (2) 51 (2) (1,273) (3) 192 (3) (1,023) (4) (4) Issues — 4 274 (22) 256 11 Settlements (2) (73) 119 (23) 21 (10) Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 51 (2) $ (1,236) (3) $ — $ (1,185) $ — Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, January 1, 2020 $ 750 $ 17 $ 19 $ 786 Total gains (losses) included in: Net income (1) — (1) (2) (1) Other comprehensive income (loss) 13 1 (1) 13 Purchases 12 220 — 232 Settlements (32) — — (32) Transfers into Level 3 — — 13 13 Transfers out of Level 3 — (188) — (188) Balance, September 30, 2020 $ 742 $ 50 $ 30 $ 822 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2020 $ (1) $ — $ (1) $ (2) (1) Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 13 $ 1 $ (1) $ 13 Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2020 $ 43 $ 881 $ 763 $ — $ 1,687 $ 44 Total (gains) losses included in: Net income (2) (2) 53 (2) 1,900 (3) 16 (3) 1,967 (12) (4) Issues 3 53 267 (7) 316 15 Settlements — (61) 13 — (48) (7) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 53 (2) $ 1,936 (3) $ — $ 1,989 $ — (1) Included in net investment income in the Consolidated Statements of Operations. (2) Included in interest credited to fixed accounts in the Consolidated Statements of Operations. (3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations. (4) Included in general and administrative expense in the Consolidated Statements of Operations. (5) Represents the amount of ceded embedded derivatives associated with fixed deferred annuity products reinsured in the third quarter of 2021. See Note 1 for additional information on the reinsurance transaction. |
Summary of changes in Level 3 liabilities measured at fair value on a recurring basis | Available-for-Sale Securities Receivables Corporate Debt Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, July 1, 2021 $ 391 $ 6 $ 397 $ — Total gains (losses) included in: Net income (1) 1 — (1) — Other comprehensive income (loss) (3) — (3) — Purchases 9 — 9 — Sales — (1) (1) — Issues — — — 57 (5) Settlements (44) (1) (45) (1) Transfers into Level 3 168 2 170 — Balance, September 30, 2021 $ 520 $ 7 $ 527 $ 56 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ (4) $ — Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2021 $ 54 $ 928 $ 1,373 $ 214 $ 2,569 $ 44 Total (gains) losses included in: Net income 1 (2) 14 (2) (69) (3) 17 (3) (37) (5) (4) Issues — — 95 (7) 88 5 Settlements (1) (25) 37 (7) 4 (4) Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 14 (2) $ (60) (3) $ — $ (46) $ — Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, July 1, 2020 $ 744 $ 205 $ 15 $ 964 Total gains (losses) included in: Other comprehensive income (loss) 5 — 1 6 Purchases 7 33 — 40 Settlements (14) — 1 (13) Transfers into Level 3 — — 13 13 Transfers out of Level 3 — (188) — (188) Balance, September 30, 2020 $ 742 $ 50 $ 30 $ 822 Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 5 $ — $ 1 $ 6 Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, July 1, 2020 $ 41 $ 882 $ 3,129 $ 9 $ 4,061 $ 48 Total (gains) losses included in: Net income 3 (2) 50 (2) (296) (3) 3 (3) (240) (11) (4) Issues — 15 93 (3) 105 5 Settlements — (21) 17 — (4) (2) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 50 (2) $ (283) (3) $ — $ (233) $ — Available-for-Sale Securities Receivables Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total Fixed Deferred Indexed Annuity Ceded Embedded Derivatives (in millions) Balance, January 1, 2021 $ 772 $ 9 $ 32 $ 813 $ — Total gains (losses) included in: Net income (1) — — (1) (1) — Other comprehensive income (loss) (6) — — (6) — Purchases 76 78 — 154 — Sales — — (1) (1) — Issues — — — — 57 (5) Settlements (73) — (2) (75) (1) Transfers into Level 3 168 — 2 170 — Transfers out of Level 3 (416) (87) (24) (527) — Balance, September 30, 2021 $ 520 $ — $ 7 $ 527 $ 56 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2021 $ — $ — $ (1) $ (1) (1) $ — Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2021 $ (4) $ — $ — $ (4) $ — Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Variable Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2021 $ 49 $ 935 $ 2,316 $ 70 $ 3,370 $ 43 Total (gains) losses included in: Net income 7 (2) 51 (2) (1,273) (3) 192 (3) (1,023) (4) (4) Issues — 4 274 (22) 256 11 Settlements (2) (73) 119 (23) 21 (10) Balance, September 30, 2021 $ 54 $ 917 $ 1,436 $ 217 $ 2,624 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2021 $ — $ 51 (2) $ (1,236) (3) $ — $ (1,185) $ — Available-for-Sale Securities Corporate Debt Securities Residential Mortgage Backed Securities Asset Backed Securities Total (in millions) Balance, January 1, 2020 $ 750 $ 17 $ 19 $ 786 Total gains (losses) included in: Net income (1) — (1) (2) (1) Other comprehensive income (loss) 13 1 (1) 13 Purchases 12 220 — 232 Settlements (32) — — (32) Transfers into Level 3 — — 13 13 Transfers out of Level 3 — (188) — (188) Balance, September 30, 2020 $ 742 $ 50 $ 30 $ 822 Changes in unrealized gains (losses) in net income relating to assets held at September 30, 2020 $ (1) $ — $ (1) $ (2) (1) Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at September 30, 2020 $ 13 $ 1 $ (1) $ 13 Policyholder Account Balances, Future Policy Benefits and Claims Other Liabilities Fixed Deferred Indexed Annuity Embedded Derivatives IUL Embedded Derivatives GMWB and GMAB Embedded Derivatives Structured Annuity Embedded Derivatives Total (in millions) Balance, January 1, 2020 $ 43 $ 881 $ 763 $ — $ 1,687 $ 44 Total (gains) losses included in: Net income (2) (2) 53 (2) 1,900 (3) 16 (3) 1,967 (12) (4) Issues 3 53 267 (7) 316 15 Settlements — (61) 13 — (48) (7) Balance, September 30, 2020 $ 44 $ 926 $ 2,943 $ 9 $ 3,922 $ 40 Changes in unrealized (gains) losses in net income relating to liabilities held at September 30, 2020 $ — $ 53 (2) $ 1,936 (3) $ — $ 1,989 $ — (1) Included in net investment income in the Consolidated Statements of Operations. (2) Included in interest credited to fixed accounts in the Consolidated Statements of Operations. (3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations. (4) Included in general and administrative expense in the Consolidated Statements of Operations. (5) Represents the amount of ceded embedded derivatives associated with fixed deferred annuity products reinsured in the third quarter of 2021. See Note 1 for additional information on the reinsurance transaction. |
Offsetting Assets and Liabili_2
Offsetting Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Offsetting [Abstract] | |
Schedule of gross and net information about assets subject to master netting arrangements | September 30, 2021 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 5,310 $ — $ 5,310 $ (3,479) $ (1,369) $ (404) $ 58 OTC cleared 25 — 25 (15) — — 10 Exchange-traded 352 — 352 (110) (213) — 29 Total derivatives 5,687 — 5,687 (3,604) (1,582) (404) 97 Securities borrowed 63 — 63 (16) — (45) 2 Total $ 5,750 $ — $ 5,750 $ (3,620) $ (1,582) $ (449) $ 99 December 31, 2020 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 5,501 $ — $ 5,501 $ (3,862) $ (1,287) $ (315) $ 37 OTC cleared 58 — 58 (25) — — 33 Exchange-traded 311 — 311 (91) (165) — 55 Total derivatives 5,870 — 5,870 (3,978) (1,452) (315) 125 Securities borrowed 147 — 147 (43) — (103) 1 Total $ 6,017 $ — $ 6,017 $ (4,021) $ (1,452) $ (418) $ 126 (1) Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Schedule of gross and net information about liabilities subject to master netting arrangements | September 30, 2021 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 3,987 $ — $ 3,987 $ (3,479) $ (195) $ (293) $ 20 OTC cleared 15 — 15 (15) — — — Exchange-traded 112 — 112 (110) — — 2 Total derivatives 4,114 — 4,114 (3,604) (195) (293) 22 Securities loaned 111 — 111 (16) — (91) 4 Total $ 4,225 $ — $ 4,225 $ (3,620) $ (195) $ (384) $ 26 December 31, 2020 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the Net Amount Financial Instruments (1) Cash Collateral Securities Collateral (in millions) Derivatives: OTC $ 4,192 $ — $ 4,192 $ (3,862) $ (1) $ (327) $ 2 OTC cleared 25 — 25 (25) — — — Exchange-traded 95 — 95 (91) — — 4 Total derivatives 4,312 — 4,312 (3,978) (1) (327) 6 Securities loaned 205 — 205 (43) — (157) 5 Total $ 4,517 $ — $ 4,517 $ (4,021) $ (1) $ (484) $ 11 (1) Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional value and gross fair value of derivative instruments, including embedded derivatives | September 30, 2021 December 31, 2020 Notional Gross Fair Value Notional Gross Fair Value Assets (1) Liabilities (2)(3) Assets (1) Liabilities (2)(3) (in millions) Derivatives designated as hedging instruments Foreign exchange contracts – net investment hedges $ 58 $ 1 $ — $ 32 $ — $ 2 Total qualifying hedges 58 1 — 32 — 2 Derivatives not designated as hedging instruments Interest rate contracts 79,350 1,185 476 77,951 1,755 734 Equity contracts 59,856 4,465 3,619 57,254 4,090 3,571 Credit contracts 1,758 18 — 2,297 2 1 Foreign exchange contracts 3,234 18 19 3,423 23 4 Total non-designated hedges 144,198 5,686 4,114 140,925 5,870 4,310 Embedded derivatives GMWB and GMAB (4) N/A — 1,436 N/A — 2,316 IUL N/A — 917 N/A — 935 Fixed deferred indexed annuities and deposit receivables N/A 56 58 N/A — 52 Structured variable annuities N/A — 217 N/A — 70 SMC N/A — 5 N/A — 8 Total embedded derivatives N/A 56 2,633 N/A — 3,381 Total derivatives $ 144,256 $ 5,743 $ 6,747 $ 140,957 $ 5,870 $ 7,693 N/A Not applicable. (1) The fair value of freestanding derivative assets is included in Other assets and the fair value of ceded embedded derivative assets related to deposit receivables is included in Receivables on the Consolidated Balance Sheets. (2) The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. The fair value of the SMC embedded derivative liability is included in Customer deposits on the Consolidated Balance Sheets. (3) The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was $2.9 billion and $3.7 billion as of September 30, 2021 and December 31, 2020, respectively. See Note 13 for additional information related to master netting arrangements and cash collateral. |
Summary of impact of derivatives not designated as hedging instruments, including embedded derivatives | Net Investment Income Banking and Deposit Interest Expense Distribution Expenses Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses General and Administrative Expense (in millions) Three Months Ended September 30, 2021 Interest rate contracts $ — $ — $ — $ — $ (171) $ — Equity contracts — — (13) — 1 (1) Credit contracts — — — — 2 — Foreign exchange contracts (23) — — — — — GMWB and GMAB embedded derivatives — — — — (64) — IUL embedded derivatives — — — 11 — — Fixed deferred indexed annuity and deposit receivables embedded derivatives — — — 1 — — Structured variable annuity embedded derivatives — — — — (17) — SMC embedded derivatives — — — — — — Total gain (loss) $ (23) $ — $ (13) $ 12 $ (249) $ (1) Nine Months Ended September 30, 2021 Interest rate contracts $ (23) $ — $ (1) $ — $ (1,125) $ — Equity contracts — 1 67 55 (613) 11 Credit contracts — — 1 — 41 — Foreign exchange contracts (17) — — — 6 (2) GMWB and GMAB embedded derivatives — — — — 879 — IUL embedded derivatives — — — 22 — — Fixed deferred indexed annuity and deposit receivables embedded derivatives — — — (7) — — Structured variable annuity embedded derivatives — — — — (192) — SMC embedded derivatives — (1) — — — — Total gain (loss) $ (40) $ — $ 67 $ 70 $ (1,004) $ 9 Net Investment Income Banking and Deposit Interest Expense Distribution Expenses Interest Credited to Fixed Accounts Benefits, Claims, Losses and Settlement Expenses General and Administrative Expense (in millions) Three Months Ended September 30, 2020 Interest rate contracts $ — $ — $ — $ — $ (371) $ — Equity contracts — 2 41 42 (468) 6 Credit contracts — — — — (12) — Foreign exchange contracts — — — — (23) 5 GMWB and GMAB embedded derivatives — — — — 186 — IUL embedded derivatives — — — (29) — — Fixed deferred indexed annuity embedded derivatives — — — (3) — — Structured variable annuity embedded derivatives — — — — (3) — SMC embedded derivatives — (2) — — — — Total gain (loss) $ — $ — $ 41 $ 10 $ (691) $ 11 Nine Months Ended September 30, 2020 Interest rate contracts $ (1) $ — $ 2 $ — $ 2,204 $ — Equity contracts (1) — 12 (7) 58 3 Credit contracts — — — — (91) — Foreign exchange contracts — — — — 26 3 GMWB and GMAB embedded derivatives — — — — (2,180) — IUL embedded derivatives — — — 8 — — Fixed deferred indexed annuity embedded derivatives — — — 2 — — Structured variable annuity embedded derivatives — — — — (16) — SMC embedded derivatives — — — — — — Total gain (loss) $ (2) $ — $ 14 $ 3 $ 1 $ 6 |
Summary of payments to make and receive for options and swaptions | Premiums Payable Premiums Receivable (in millions) 2021 (1) $ 60 $ 45 2022 204 205 2023 51 43 2024 138 25 2025 125 22 2026 - 2028 262 88 Total $ 840 $ 428 (1) 2021 amounts represent the amounts payable and receivable for the period from October 1, 2021 to December 31, 2021. |
Summary of impact of derivatives designated as fair value hedges | Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 (in millions) Total interest and debt expense per Consolidated Statements of Operations $ 37 $ 124 Gain (loss) on interest rate contracts designated as fair value hedges: Hedged items $ — $ 1 Derivatives designated as fair value hedges — (1) Gain (loss) on interest rate contracts designated as cash flow hedges: Amount of gain (loss) reclassified from AOCI into income $ 1 $ 1 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of amounts related to each component of OCI | Three Months Ended September 30, 2021 2020 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ (79) $ 21 $ (58) $ 225 $ (53) $ 172 Reclassification of net (gains) losses on securities included in net income (2) (502) 105 (397) (4) 1 (3) Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables 147 (31) 116 (94) 20 (74) Net unrealized gains (losses) on securities (434) 95 (339) 127 (32) 95 Foreign currency translation (28) 6 (22) 27 — 27 Total other comprehensive income (loss) $ (462) $ 101 $ (361) $ 154 $ (32) $ 122 Nine Months Ended September 30, 2021 2020 Pretax Income Tax Benefit (Expense) Net of Tax Pretax Income Tax Benefit (Expense) Net of Tax (in millions) Net unrealized gains (losses) on securities: Net unrealized gains (losses) on securities arising during the period (1) $ (433) $ 108 $ (325) $ 562 $ (118) $ 444 Reclassification of net (gains) losses on securities included in net income (2) (553) 116 (437) — — — Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables 284 (60) 224 (223) 47 (176) Net unrealized gains (losses) on securities (702) 164 (538) 339 (71) 268 Defined benefit plans 37 (8) 29 — — — Foreign currency translation (27) 6 (21) (15) 1 (14) Total other comprehensive income (loss) $ (692) $ 162 $ (530) $ 324 $ (70) $ 254 (1) Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period. (2) Reclassification amounts are recorded in net investment income. |
Schedule of changes in the balances of each component of AOCI | Net Unrealized Gains (Losses) Net Unrealized Gains (Losses) Defined Foreign Currency Translation Other Total (in millions) Balance, July 1, 2021 $ 784 $ 5 $ (175) $ (153) $ (1) $ 460 OCI before reclassifications 58 — — (22) — 36 Amounts reclassified from AOCI (397) — — — — (397) Total OCI (339) — — (22) — (361) Balance, September 30, 2021 $ 445 $ 5 $ (175) $ (175) $ (1) $ 99 Balance, January 1, 2021 $ 983 $ 5 $ (204) $ (154) $ (1) $ 629 OCI before reclassifications (101) — 29 (21) — (93) Amounts reclassified from AOCI (437) — — — — (437) Total OCI (538) — 29 (21) — (530) Balance, September 30, 2021 $ 445 $ 5 $ (175) $ (175) $ (1) $ 99 Net Unrealized Gains (Losses) Net Unrealized Gains (Losses) Defined Foreign Currency Translation Other Total (in millions) Balance, July 1, 2020 $ 749 $ 6 $ (138) $ (222) $ (1) $ 394 OCI before reclassifications 98 — — 27 — 125 Amounts reclassified from AOCI (3) — — — — (3) Total OCI 95 — — 27 — 122 Balance, September 30, 2020 $ 844 $ 6 $ (138) $ (195) $ (1) $ 516 Balance, January 1, 2020 $ 576 $ 6 $ (138) $ (181) $ (1) $ 262 OCI before reclassifications 268 — — (14) — 254 Total OCI 268 — — (14) — 254 Balance, September 30, 2020 $ 844 $ 6 $ (138) $ (195) $ (1) $ 516 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of computations of basic and diluted earnings per share | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions, except per share amounts) Numerator: Net income $ 1,031 $ (140) $ 2,059 $ 1,357 Denominator: Basic: Weighted-average common shares outstanding 116.4 123.0 118.2 124.8 Effect of potentially dilutive nonqualified stock options and other share-based awards 2.8 1.9 2.7 1.7 Diluted: Weighted-average common shares outstanding 119.2 124.9 120.9 126.5 Earnings per share: Basic $ 8.86 $ (1.14) $ 17.42 $ 10.87 Diluted $ 8.65 $ (1.14) (1) $ 17.03 $ 10.73 (1) Diluted shares used in this calculation represent basic shares due to the net loss. Using actual diluted shares would result in anti-dilution. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of selected financial information by segment and reconciliation to consolidated | September 30, 2021 December 31, 2020 (in millions) Advice & Wealth Management $ 22,849 $ 21,266 Asset Management 9,213 8,406 Retirement & Protection Solutions 116,986 114,850 Corporate & Other 21,678 21,361 Total assets $ 170,726 $ 165,883 Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Adjusted operating net revenues: Advice & Wealth Management $ 2,048 $ 1,667 $ 5,907 $ 4,899 Asset Management 915 739 2,622 2,093 Retirement & Protection Solutions 834 781 2,429 2,295 Corporate & Other 113 132 371 412 Eliminations (1)(2) (395) (342) (1,173) (1,006) Total segment adjusted operating net revenues 3,515 2,977 10,156 8,693 Net realized gains (losses) 14 4 81 (19) Revenue attributable to consolidated investment entities 42 21 92 52 Market impact on non-traditional long-duration products, net (1) 1 25 (10) Mean reversion related impacts — — 1 — Market impact of hedges on investments (23) — (40) — Block transfer reinsurance transaction impacts (644) — (644) — Total net revenues per Consolidated Statements of Operations $ 2,903 $ 3,003 $ 9,671 $ 8,716 (1) Represents the elimination of intersegment revenues recognized for the three months ended September 30, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($261 million and $219 million, respectively); Asset Management ($12 million and $13 million, respectively); Retirement & Protection Solutions ($122 million and $110 million, respectively); and Corporate & Other (nil and nil, respectively). (2) Represents the elimination of intersegment revenues recognized for the nine months ended September 30, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($777 million and $649 million, respectively); Asset Management ($39 million and $39 million, respectively); Retirement & Protection Solutions ($356 million and $319 million, respectively); and Corporate & Other ($1 million and $(1) million, respectively). Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Adjusted operating earnings: Advice & Wealth Management $ 459 $ 320 $ 1,271 $ 969 Asset Management 285 198 766 496 Retirement & Protection Solutions 187 (89) 552 300 Corporate & Other (81) (202) (179) (309) Total segment adjusted operating earnings 850 227 2,410 1,456 Net realized gains (losses) 12 4 78 (18) Net income (loss) attributable to consolidated investment entities 2 — (1) (2) Market impact on non-traditional long-duration products, net (94) (431) (577) 239 Mean reversion related impacts 9 17 107 (30) Market impact of hedges on investments (23) — (40) — Block transfer reinsurance transaction impacts 521 — 521 — Integration and restructuring charges (7) (1) (14) (4) Pretax income per Consolidated Statements of Operations $ 1,270 $ (184) $ 2,484 $ 1,641 |
Basis of Presentation - Out of
Basis of Presentation - Out of Period Correction (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Out-of-period corrections | ||||||
Other comprehensive income (loss), net of tax | $ (361) | $ 122 | $ (530) | $ 254 | ||
Management and financial advice fees | ||||||
Out-of-period corrections | ||||||
Revenue from contracts with customers | $ (2,367) | $ (1,893) | $ (6,720) | $ (5,365) | ||
Correction related to defined benefit plans | ||||||
Out-of-period corrections | ||||||
Other comprehensive income (loss), net of tax | $ 29 | |||||
Correction related to performance fees | Management and financial advice fees | ||||||
Out-of-period corrections | ||||||
Revenue from contracts with customers | $ 19 |
Basis of Presentation - Reinsur
Basis of Presentation - Reinsurance Transaction (Details) - Subsidiary - RiverSource Life Insurance Company - USD ($) $ in Millions | Jul. 01, 2021 | Sep. 30, 2021 |
Reinsurance transaction | ||
Consideration transferred in reinsurance transaction | $ 7,800 | |
Net realized gain | $ 532 | |
Fixed deferred and immediate annuity policies | ||
Reinsurance transaction | ||
Policies reinsured | $ 7,000 |
Basis of Presentation - Asset A
Basis of Presentation - Asset Acquisition (Details) - Subsequent event - European-based asset management business of BMO Financial Group £ in Millions, $ in Millions | Nov. 08, 2021GBP (£) | Nov. 08, 2021USD ($) | Oct. 31, 2021USD ($) |
Subsequent event | |||
Consideration transferred for initial price | £ 615 | $ 829 | |
Additional cash consideration for excess capital adjustment | £ 103 | $ 138 | |
Assets under management | $ 131,000 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers - Disaggregated Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||||||
Revenue disaggregated by segment | |||||||||
Total revenues | $ 2,906 | $ 3,013 | $ 9,681 | $ 8,769 | |||||
Banking and deposit interest expense | (3) | (10) | (10) | (53) | |||||
Total net revenues | 2,903 | 3,003 | 9,671 | 8,716 | |||||
Management and financial advice fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 2,367 | 1,893 | 6,720 | 5,365 | |||||
Distribution fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 458 | 400 | 1,368 | 1,239 | |||||
Advice and Wealth Management Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | 1,787 | 1,448 | 5,130 | 4,250 | |||||
Asset Management Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | 903 | 726 | 2,583 | 2,054 | |||||
Retirement and Protection Solutions Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | 712 | 671 | 2,073 | 1,976 | |||||
Corporate and Other Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | 113 | 132 | 370 | 413 | |||||
Reportable segments | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 3,012 | 2,433 | 8,672 | 7,089 | |||||
Revenue from other sources | [1] | 901 | 896 | 2,668 | 2,665 | ||||
Total revenues | 3,913 | 3,329 | 11,340 | 9,754 | |||||
Banking and deposit interest expense | (3) | (10) | (11) | (55) | |||||
Total net revenues | 3,910 | 3,319 | 11,329 | 9,699 | |||||
Reportable segments | Management and financial advice fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 2,179 | 1,726 | 6,177 | 4,892 | |||||
Reportable segments | Asset Management: Retail | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 587 | 466 | 1,685 | 1,330 | |||||
Reportable segments | Asset Management: Institutional | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 143 | 122 | 397 | 308 | |||||
Reportable segments | Advisory fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 1,189 | 907 | 3,330 | 2,558 | |||||
Reportable segments | Financial planning fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 91 | 81 | 272 | 248 | |||||
Reportable segments | Transaction and other fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 169 | 150 | 493 | 448 | |||||
Reportable segments | Distribution fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 785 | 658 | 2,338 | 2,049 | |||||
Reportable segments | Mutual funds | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 289 | 245 | 844 | 714 | |||||
Reportable segments | Insurance and annuity | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 400 | 322 | 1,188 | 1,001 | |||||
Reportable segments | Other products | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 96 | 91 | 306 | 334 | |||||
Reportable segments | Other revenues | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 48 | 49 | 157 | 148 | |||||
Reportable segments | Advice and Wealth Management Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 1,981 | 1,600 | 5,706 | 4,688 | |||||
Revenue from other sources | [1] | 70 | 77 | 211 | 264 | ||||
Total revenues | 2,051 | 1,677 | 5,917 | 4,952 | |||||
Banking and deposit interest expense | (3) | (10) | (10) | (53) | |||||
Total net revenues | 2,048 | 1,667 | 5,907 | 4,899 | |||||
Reportable segments | Advice and Wealth Management Segment | Management and financial advice fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 1,374 | 1,077 | 3,878 | 3,070 | |||||
Reportable segments | Advice and Wealth Management Segment | Advisory fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 1,189 | 907 | 3,330 | 2,558 | |||||
Reportable segments | Advice and Wealth Management Segment | Financial planning fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 91 | 81 | 272 | 248 | |||||
Reportable segments | Advice and Wealth Management Segment | Transaction and other fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 94 | 89 | 276 | 264 | |||||
Reportable segments | Advice and Wealth Management Segment | Distribution fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 561 | 479 | 1,682 | 1,480 | |||||
Reportable segments | Advice and Wealth Management Segment | Mutual funds | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 219 | 186 | 638 | 540 | |||||
Reportable segments | Advice and Wealth Management Segment | Insurance and annuity | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 246 | 202 | 738 | 606 | |||||
Reportable segments | Advice and Wealth Management Segment | Other products | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 96 | 91 | 306 | 334 | |||||
Reportable segments | Advice and Wealth Management Segment | Other revenues | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 46 | 44 | 146 | 138 | |||||
Reportable segments | Asset Management Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 908 | 739 | 2,608 | 2,082 | |||||
Revenue from other sources | [1] | 7 | 14 | 11 | |||||
Total revenues | 915 | 739 | 2,622 | 2,093 | |||||
Total net revenues | 915 | 739 | 2,622 | 2,093 | |||||
Reportable segments | Asset Management Segment | Management and financial advice fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 787 | 635 | 2,247 | 1,777 | |||||
Reportable segments | Asset Management Segment | Asset Management: Retail | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 587 | 466 | 1,685 | 1,330 | |||||
Reportable segments | Asset Management Segment | Asset Management: Institutional | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 143 | 122 | 397 | 308 | |||||
Reportable segments | Asset Management Segment | Transaction and other fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 57 | 47 | 165 | 139 | |||||
Reportable segments | Asset Management Segment | Distribution fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 120 | 104 | 352 | 303 | |||||
Reportable segments | Asset Management Segment | Mutual funds | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 70 | 59 | 206 | 174 | |||||
Reportable segments | Asset Management Segment | Insurance and annuity | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 50 | 45 | 146 | 129 | |||||
Reportable segments | Asset Management Segment | Other revenues | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 1 | 9 | 2 | ||||||
Reportable segments | Retirement and Protection Solutions Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 122 | 94 | 356 | 316 | |||||
Revenue from other sources | [1] | 712 | 687 | 2,073 | 1,979 | ||||
Total revenues | 834 | 781 | 2,429 | 2,295 | |||||
Total net revenues | 834 | 781 | 2,429 | 2,295 | |||||
Reportable segments | Retirement and Protection Solutions Segment | Management and financial advice fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 18 | 14 | 52 | 45 | |||||
Reportable segments | Retirement and Protection Solutions Segment | Transaction and other fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 18 | 14 | 52 | 45 | |||||
Reportable segments | Retirement and Protection Solutions Segment | Distribution fees | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 104 | 75 | 304 | 266 | |||||
Reportable segments | Retirement and Protection Solutions Segment | Insurance and annuity | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 104 | 75 | 304 | 266 | |||||
Reportable segments | Corporate and Other Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 1 | 2 | 3 | ||||||
Revenue from other sources | [1] | 112 | 132 | 370 | 411 | ||||
Total revenues | 113 | 132 | 372 | 414 | |||||
Banking and deposit interest expense | (1) | (2) | |||||||
Total net revenues | 113 | 132 | 371 | 412 | |||||
Reportable segments | Corporate and Other Segment | Other revenues | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from contracts with customers | 1 | 2 | 3 | ||||||
Intersegment eliminations | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | (395) | [2] | (342) | [2] | (1,173) | [3] | (1,006) | [3] | |
Intersegment eliminations | Advice and Wealth Management Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | (261) | (219) | (777) | (649) | |||||
Intersegment eliminations | Asset Management Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | (12) | (13) | (39) | (39) | |||||
Intersegment eliminations | Retirement and Protection Solutions Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | (122) | (110) | (356) | (319) | |||||
Intersegment eliminations | Corporate and Other Segment | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | 0 | 0 | (1) | 1 | |||||
Segment reconciling items | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | (612) | 26 | (485) | 23 | |||||
Non-operating | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from other sources | [1] | (605) | 27 | (472) | 28 | ||||
Total revenues | (605) | 27 | (472) | 28 | |||||
Total net revenues | (605) | 27 | (472) | 28 | |||||
Total | |||||||||
Revenue disaggregated by segment | |||||||||
Revenue from other sources | [1] | 296 | 923 | 2,196 | 2,693 | ||||
Total revenues | 3,308 | 3,356 | 10,868 | 9,782 | |||||
Banking and deposit interest expense | (3) | (10) | (11) | (55) | |||||
Total net revenues | 3,305 | 3,346 | 10,857 | 9,727 | |||||
Eliminations | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | (402) | (343) | (1,186) | (1,011) | |||||
Total Segments after intersegment eliminations | Reportable segments | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | 3,515 | 2,977 | 10,156 | 8,693 | |||||
Non-operating | Eliminations | |||||||||
Revenue disaggregated by segment | |||||||||
Total net revenues | $ (7) | $ (1) | $ (13) | $ (5) | |||||
[1] | Revenues not included in the scope of the revenue from contracts with customers standard. The amounts primarily consist of revenue associated with insurance and annuity products or financial instruments. | ||||||||
[2] | Represents the elimination of intersegment revenues recognized for the three months ended September 30, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($261 million and $219 million, respectively); Asset Management ($12 million and $13 million, respectively); Retirement & Protection Solutions ($122 million and $110 million, respectively); and Corporate & Other (nil and nil, respectively). | ||||||||
[3] | Represents the elimination of intersegment revenues recognized for the nine months ended September 30, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($777 million and $649 million, respectively); Asset Management ($39 million and $39 million, respectively); Retirement & Protection Solutions ($356 million and $319 million, respectively); and Corporate & Other ($1 million and $(1) million, respectively). |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Contract Liabilities, Capitalized Costs and Receivables (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Revenue disaggregated by segment | ||
Receivables for revenue from contracts with customers | $ 500 | $ 403 |
Financial planning fees | ||
Revenue disaggregated by segment | ||
Contract liabilities | 144 | 146 |
Capitalized contract costs | 115 | 117 |
Transaction and other fees | ||
Revenue disaggregated by segment | ||
Contract liabilities | $ 14 | $ 0 |
Variable Interest Entities - In
Variable Interest Entities - Investment Entities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
VIEs, not primary beneficiary | ||
Variable interest entities | ||
Obligation to provide financial or other support to VIEs | $ 0 | |
VIEs, not primary beneficiary | CLOs | ||
Variable interest entities | ||
Maximum loss exposure | 2 | $ 3 |
Available-for-Sale securities, amortized cost | 2 | 3 |
VIEs, not primary beneficiary | Property Funds | ||
Variable interest entities | ||
Maximum loss exposure | 23 | 23 |
Other investments | 23 | 23 |
VIEs, not primary beneficiary | Hedge Funds and other Private Funds | ||
Variable interest entities | ||
Maximum loss exposure | 0 | 0 |
Other investments | 0 | 0 |
VIEs, not primary beneficiary | Non-U.S. Series Funds | ||
Variable interest entities | ||
Maximum loss exposure | 26 | 20 |
Other investments | 26 | 20 |
VIEs, not primary beneficiary | Affordable Housing Partnerships and Other Real Estate Partnerships | ||
Variable interest entities | ||
Maximum loss exposure | 151 | 200 |
Other investments | 151 | 200 |
Liability related to original purchase commitments not yet remitted | 9 | 9 |
Consolidated investment entities | Unfunded commitments | ||
Variable interest entities | ||
Loans | $ 27 | $ 13 |
Variable Interest Entities - Fa
Variable Interest Entities - Fair Value of Assets and Liabilities (Details) - Consolidated investment entities - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Liabilities | |||
Debt | [1] | $ 2,163 | $ 1,913 |
Recurring basis | |||
Assets | |||
Investments | 2,170 | 1,918 | |
Receivables | 18 | 16 | |
Other assets | 2 | 2 | |
Total assets at fair value | 2,190 | 1,936 | |
Liabilities | |||
Debt | [1] | 2,163 | 1,913 |
Other liabilities | 71 | 69 | |
Total liabilities at fair value | 2,234 | 1,982 | |
Recurring basis | Corporate debt securities | |||
Assets | |||
Investments | 8 | ||
Recurring basis | Common stocks | |||
Assets | |||
Investments | 2 | 1 | |
Recurring basis | Syndicated loans | |||
Assets | |||
Investments | 2,168 | 1,909 | |
Recurring basis | Level 2 | |||
Assets | |||
Investments | 2,125 | 1,826 | |
Receivables | 18 | 16 | |
Other assets | 2 | ||
Total assets at fair value | 2,145 | 1,842 | |
Liabilities | |||
Debt | [1] | 2,163 | 1,913 |
Other liabilities | 71 | 69 | |
Total liabilities at fair value | 2,234 | 1,982 | |
Recurring basis | Level 2 | Corporate debt securities | |||
Assets | |||
Investments | 8 | ||
Recurring basis | Level 2 | Common stocks | |||
Assets | |||
Investments | 2 | 1 | |
Recurring basis | Level 2 | Syndicated loans | |||
Assets | |||
Investments | 2,123 | 1,817 | |
Recurring basis | Level 3 | |||
Assets | |||
Investments | 45 | 92 | |
Other assets | 2 | ||
Total assets at fair value | 45 | 94 | |
Recurring basis | Level 3 | Syndicated loans | |||
Assets | |||
Investments | 45 | 92 | |
CLOs | |||
Liabilities | |||
Debt | $ 2,200 | $ 2,000 | |
[1] | The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. |
Variable Interest Entities - Ch
Variable Interest Entities - Changes in Level 3 Assets (Details) - Consolidated investment entities - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Syndicated loans | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | $ 112 | $ 211 | $ 92 | $ 143 | |
Total gains (losses) included in net income | [1] | 2 | 2 | (19) | |
Purchases | 7 | 35 | 88 | 80 | |
Sales | (4) | (12) | (38) | (27) | |
Settlements | (10) | (6) | (49) | (32) | |
Transfers into Level 3 | 5 | 29 | 90 | 379 | |
Transfers out of Level 3 | (47) | (141) | (122) | (406) | |
Deconsolidation of consolidated investment entities | (18) | (18) | |||
Balance, ending | 45 | 118 | 45 | 118 | |
Changes in unrealized gains (losses) included in income relating to assets held at end of period | [1] | $ 1 | $ (2) | ||
Other assets | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | 2 | ||||
Transfers out of Level 3 | (2) | ||||
Balance, ending | $ 0 | $ 0 | |||
[1] | Included in net investment income in the Consolidated Statements of Operations. |
Variable Interest Entities - _2
Variable Interest Entities - Fair Value Option (Details) - Consolidated investment entities - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | ||
Loans | ||||
Unpaid principal balance | $ 2,223 | $ 1,990 | ||
Excess unpaid principal over fair value | (55) | (81) | ||
Fair value | 2,168 | 1,909 | ||
Fair value of loans more than 90 days past due | 2 | 5 | ||
Fair value of loans in nonaccrual status | 5 | 19 | ||
Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both | 5 | 24 | ||
Debt | ||||
Unpaid principal balance | 2,298 | 2,069 | ||
Excess unpaid principal over fair value | (135) | (156) | ||
Debt | [1] | 2,163 | 1,913 | |
Debt issued | $ 817 | |||
CLOs | ||||
Debt | ||||
Debt | $ 2,200 | $ 2,000 | ||
[1] | The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. |
Variable Interest Entities - De
Variable Interest Entities - Debt and Stated Interest Rates (Details) - Consolidated investment entities - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Debt | |||
Debt | [1] | $ 2,163 | $ 1,913 |
Weighted average interest rate | 1.70% | 2.10% | |
Minimum | |||
Debt | |||
Interest rates | 0.00% | ||
Maximum | |||
Debt | |||
Interest rates | 8.80% | ||
[1] | The carrying value of the CLOs’ debt is set equal to the fair value of the CLOs’ assets. The estimated fair value of the CLOs’ debt was $2.2 billion and $2.0 billion as of September 30, 2021 and December 31, 2020, respectively. |
Investments - Summary (Details)
Investments - Summary (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | [1] |
Summary of investments | |||||
Allowance for credit losses | $ 51 | $ 68 | $ 71 | $ 51 | |
Ameriprise Financial | |||||
Summary of investments | |||||
Available-for-Sale: Fixed maturities, at fair value | 30,114 | 36,283 | |||
Mortgage loans, net | 1,911 | 2,718 | |||
Policy loans | 836 | 846 | |||
Other investments | 657 | 1,184 | |||
Investments | 33,518 | 41,031 | |||
Ameriprise Financial | Mortgage loans | |||||
Summary of investments | |||||
Allowance for credit losses | 14 | 29 | |||
Ameriprise Financial | Other investments | |||||
Summary of investments | |||||
Allowance for credit losses | $ 4 | $ 12 | |||
[1] | Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Investments - Summary of Net In
Investments - Summary of Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Summary of net investment income | ||||
Net investment income | $ 773 | $ 300 | $ 1,428 | $ 933 |
Ameriprise Financial | ||||
Summary of net investment income | ||||
Investment income on fixed maturities | 202 | 275 | 733 | 887 |
Net realized gains (losses) | 546 | 4 | 627 | (18) |
Affordable housing partnerships | (20) | (14) | (58) | (50) |
Other | 1 | 13 | 28 | 58 |
Consolidated investment entities | ||||
Summary of net investment income | ||||
Net investment income | $ 44 | $ 22 | $ 98 | $ 56 |
Investments - Available-for-Sal
Investments - Available-for-Sale Securities by Type (Details) - Ameriprise Financial - USD ($) $ in Millions | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | [1] | |
Investments | ||||||||
Amortized cost | $ 28,408 | $ 33,601 | ||||||
Gross unrealized gains | 1,769 | 2,727 | ||||||
Gross unrealized losses | (62) | (34) | ||||||
Allowance for Credit Loss | (1) | $ 0 | (11) | [1] | $ (14) | $ (14) | $ 0 | |
Fair value | 30,114 | 36,283 | ||||||
Accrued interest excluded from amortized cost basis | 144 | 178 | ||||||
Fair value of investment securities pledged to meet contractual obligations | 3,000 | 3,600 | ||||||
Fair value of investment securities pledged that may be sold, pledged or rehypothecated by the counterparty | 403 | 454 | ||||||
Corporate debt securities | ||||||||
Investments | ||||||||
Amortized cost | 8,455 | 11,762 | ||||||
Gross unrealized gains | 1,301 | 1,924 | ||||||
Gross unrealized losses | (31) | (2) | ||||||
Allowance for Credit Loss | 0 | 0 | (10) | [1] | (13) | (13) | 0 | |
Fair value | 9,725 | 13,674 | ||||||
Residential mortgage backed securities | ||||||||
Investments | ||||||||
Amortized cost | 9,628 | 9,845 | ||||||
Gross unrealized gains | 90 | 188 | ||||||
Gross unrealized losses | (19) | (4) | ||||||
Fair value | 9,699 | 10,029 | ||||||
Commercial mortgage backed securities | ||||||||
Investments | ||||||||
Amortized cost | 4,712 | 5,867 | ||||||
Gross unrealized gains | 92 | 242 | ||||||
Gross unrealized losses | (9) | (21) | ||||||
Fair value | 4,795 | 6,088 | ||||||
Asset backed securities | ||||||||
Investments | ||||||||
Amortized cost | 3,465 | 3,283 | ||||||
Gross unrealized gains | 31 | 52 | ||||||
Gross unrealized losses | (1) | (5) | ||||||
Allowance for Credit Loss | 0 | 0 | (1) | [1] | $ (1) | $ (1) | $ 0 | |
Fair value | 3,495 | 3,329 | ||||||
State and municipal obligations | ||||||||
Investments | ||||||||
Amortized cost | 857 | 1,088 | ||||||
Gross unrealized gains | 249 | 297 | ||||||
Gross unrealized losses | (1) | (1) | ||||||
Allowance for Credit Loss | (1) | $ 0 | 0 | |||||
Fair value | 1,104 | 1,384 | ||||||
U.S. government and agencies obligations | ||||||||
Investments | ||||||||
Amortized cost | 1,196 | 1,456 | ||||||
Fair value | 1,196 | 1,456 | ||||||
Foreign government bonds and obligations | ||||||||
Investments | ||||||||
Amortized cost | 82 | 241 | ||||||
Gross unrealized gains | 6 | 22 | ||||||
Gross unrealized losses | (1) | (1) | ||||||
Fair value | 87 | 262 | ||||||
Other securities | ||||||||
Investments | ||||||||
Amortized cost | 13 | 59 | ||||||
Gross unrealized gains | 2 | |||||||
Fair value | $ 13 | $ 61 | ||||||
[1] | Prior to January 1, 2020, credit losses on Available-for-Sale securities were not recorded in an allowance but were recorded as a reduction of the book value of the security if the security was other-than-temporarily impaired. |
Investments - Summary of Fixed
Investments - Summary of Fixed Maturity Securities by Rating (Details) - Ameriprise Financial - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | ||
Investments | |||
Fixed maturity securities rated internally | $ 545 | $ 605 | |
Amortized cost | 28,408 | 33,601 | |
Fair value | 30,114 | 36,283 | |
Holdings of single issuer greater than 10% of equity | 0 | 0 | |
AAA | |||
Investments | |||
Amortized cost | 18,695 | 19,815 | |
Fair value | 18,871 | 20,253 | |
AA | |||
Investments | |||
Amortized cost | 727 | 1,082 | |
Fair value | 903 | 1,312 | |
A | |||
Investments | |||
Amortized cost | 1,748 | 2,953 | |
Fair value | 2,114 | 3,534 | |
BBB | |||
Investments | |||
Amortized cost | 6,273 | 8,271 | |
Fair value | 7,110 | 9,542 | |
Below investment grade | |||
Investments | |||
Amortized cost | [1] | 965 | 1,480 |
Fair value | [1] | 1,116 | 1,642 |
CLOs | Below investment grade | |||
Investments | |||
Amortized cost | 2 | 3 | |
Fair value | $ 2 | $ 3 | |
Total investments | Credit concentration risk | Fixed maturity securities | |||
Investments | |||
Percentage of total | 90.00% | 88.00% | |
Fixed maturity securities | Credit concentration risk | |||
Investments | |||
Percentage of total | 100.00% | 100.00% | |
Fixed maturity securities | Credit concentration risk | AAA | |||
Investments | |||
Percentage of total | 63.00% | 56.00% | |
Fixed maturity securities | Credit concentration risk | AA | |||
Investments | |||
Percentage of total | 3.00% | 3.00% | |
Fixed maturity securities | Credit concentration risk | A | |||
Investments | |||
Percentage of total | 7.00% | 10.00% | |
Fixed maturity securities | Credit concentration risk | BBB | |||
Investments | |||
Percentage of total | 23.00% | 26.00% | |
Fixed maturity securities | Credit concentration risk | Below investment grade | |||
Investments | |||
Percentage of total | 4.00% | 5.00% | |
Fixed maturity securities | Credit concentration risk | GNMA, FNMA and FHLMC mortgage backed securities. | AAA | |||
Investments | |||
Percentage of total | 32.00% | 33.00% | |
[1] | Both the amortized cost and fair value of below investment grade securities includes interest in non-consolidated CLOs managed by the Company of $2 million as of September 30, 2021, and $3 million as of December 31, 2020. These securities are not rated but are included in below investment grade due to their risk characteristics. |
Investments - Available-for Sal
Investments - Available-for Sale Securities in Continuous Unrealized Loss Position (Details) - Ameriprise Financial $ in Millions | Sep. 30, 2021USD ($)Positions | Dec. 31, 2020USD ($)Positions |
Number of securities | ||
Less than 12 months | Positions | 274 | 153 |
12 months or more | Positions | 87 | 122 |
Total | Positions | 361 | 275 |
Fair Value | ||
Less than 12 months | $ 5,744 | $ 2,193 |
12 months or more | 537 | 1,046 |
Total | 6,281 | 3,239 |
Unrealized Losses | ||
Less than 12 months | (57) | (17) |
12 months or more | (5) | (17) |
Total | $ (62) | $ (34) |
Available -for-Sale Securities with gross unrealized losses considered investment grade (as a percent) | 93.00% | 92000000.00% |
Corporate debt securities | ||
Number of securities | ||
Less than 12 months | Positions | 83 | 26 |
12 months or more | Positions | 5 | 11 |
Total | Positions | 88 | 37 |
Fair Value | ||
Less than 12 months | $ 1,474 | $ 228 |
12 months or more | 23 | 19 |
Total | 1,497 | 247 |
Unrealized Losses | ||
Less than 12 months | (29) | (1) |
12 months or more | (2) | (1) |
Total | $ (31) | $ (2) |
Residential mortgage backed securities | ||
Number of securities | ||
Less than 12 months | Positions | 99 | 72 |
12 months or more | Positions | 59 | 71 |
Total | Positions | 158 | 143 |
Fair Value | ||
Less than 12 months | $ 2,872 | $ 833 |
12 months or more | 195 | 391 |
Total | 3,067 | 1,224 |
Unrealized Losses | ||
Less than 12 months | (18) | (2) |
12 months or more | (1) | (2) |
Total | $ (19) | $ (4) |
Commercial mortgage backed securities | ||
Number of securities | ||
Less than 12 months | Positions | 57 | 35 |
12 months or more | Positions | 10 | 19 |
Total | Positions | 67 | 54 |
Fair Value | ||
Less than 12 months | $ 1,026 | $ 781 |
12 months or more | 168 | 393 |
Total | 1,194 | 1,174 |
Unrealized Losses | ||
Less than 12 months | (8) | (11) |
12 months or more | (1) | (10) |
Total | $ (9) | $ (21) |
Asset backed securities | ||
Number of securities | ||
Less than 12 months | Positions | 12 | 17 |
12 months or more | Positions | 7 | 13 |
Total | Positions | 19 | 30 |
Fair Value | ||
Less than 12 months | $ 317 | $ 344 |
12 months or more | 147 | 231 |
Total | 464 | 575 |
Unrealized Losses | ||
Less than 12 months | (1) | (3) |
12 months or more | (2) | |
Total | $ (1) | $ (5) |
State and municipal obligations | ||
Number of securities | ||
Less than 12 months | Positions | 18 | 2 |
12 months or more | Positions | 1 | |
Total | Positions | 18 | 3 |
Fair Value | ||
Less than 12 months | $ 49 | $ 4 |
12 months or more | 4 | |
Total | 49 | 8 |
Unrealized Losses | ||
Less than 12 months | (1) | |
12 months or more | (1) | |
Total | $ (1) | $ (1) |
Foreign government bonds and obligations | ||
Number of securities | ||
Less than 12 months | Positions | 5 | 1 |
12 months or more | Positions | 6 | 7 |
Total | Positions | 11 | 8 |
Fair Value | ||
Less than 12 months | $ 6 | $ 3 |
12 months or more | 4 | 8 |
Total | 10 | 11 |
Unrealized Losses | ||
12 months or more | (1) | (1) |
Total | $ (1) | $ (1) |
Investments - Rollforward of Al
Investments - Rollforward of Allowance for Credit Losses (Details) - Ameriprise Financial - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |||
Rollforward of available-for-Sale securities allowance for credit losses | ||||||
Beginning Balance | $ 0 | $ 14 | $ 11 | [1] | $ 0 | [1] |
Additions for which credit losses were not previously recorded | 1 | 0 | 1 | 13 | ||
Additional increases (decreases) on securities that had an allowance recorded in a previous period | 1 | |||||
Charge-offs | (11) | |||||
Ending Balance | 1 | 14 | 1 | 14 | ||
Corporate debt securities | ||||||
Rollforward of available-for-Sale securities allowance for credit losses | ||||||
Beginning Balance | 0 | 13 | 10 | [1] | 0 | [1] |
Additions for which credit losses were not previously recorded | 0 | 13 | ||||
Charge-offs | 0 | (10) | ||||
Ending Balance | 0 | 13 | 0 | 13 | ||
Asset backed securities | ||||||
Rollforward of available-for-Sale securities allowance for credit losses | ||||||
Beginning Balance | 0 | 1 | 1 | [1] | 0 | [1] |
Additions for which credit losses were not previously recorded | 0 | |||||
Additional increases (decreases) on securities that had an allowance recorded in a previous period | 1 | |||||
Charge-offs | 0 | (1) | ||||
Ending Balance | 0 | $ 1 | 0 | $ 1 | ||
State and municipal obligations | ||||||
Rollforward of available-for-Sale securities allowance for credit losses | ||||||
Beginning Balance | 0 | 0 | ||||
Additions for which credit losses were not previously recorded | 1 | 1 | ||||
Ending Balance | $ 1 | $ 1 | ||||
[1] | Prior to January 1, 2020, credit losses on Available-for-Sale securities were not recorded in an allowance but were recorded as a reduction of the book value of the security if the security was other-than-temporarily impaired. |
Investments - Net Realized Gain
Investments - Net Realized Gains and Losses on Available-for-Sale Securities (Details) - Ameriprise Financial - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Investments | ||||
Gross realized gains | $ 508 | $ 4 | $ 573 | $ 17 |
Gross realized losses | (5) | (6) | (3) | |
Credit losses | (1) | (1) | (14) | |
Other impairments | (13) | |||
Total | $ 502 | $ 4 | $ 553 | $ 0 |
Investments - Available-for-S_2
Investments - Available-for-Sale Securities by Contractual Maturity (Details) - Ameriprise Financial - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Amortized cost | ||
Due within one year | $ 1,728 | |
Due after one year through five years | 2,183 | |
Due after five years through 10 years | 3,052 | |
Due after 10 years | 3,640 | |
Total having single maturity dates | 10,603 | |
Amortized cost | 28,408 | $ 33,601 |
Fair value | ||
Due within one year | 1,736 | |
Due after one year through five years | 2,324 | |
Due after five years through 10 years | 3,169 | |
Due after 10 years | 4,896 | |
Total having single maturity dates | 12,125 | |
Fair value | 30,114 | 36,283 |
Residential mortgage backed securities | ||
Amortized cost | ||
Without single maturity dates | 9,628 | |
Amortized cost | 9,628 | 9,845 |
Fair value | ||
Without single maturity dates | 9,699 | |
Fair value | 9,699 | 10,029 |
Commercial mortgage backed securities | ||
Amortized cost | ||
Without single maturity dates | 4,712 | |
Amortized cost | 4,712 | 5,867 |
Fair value | ||
Without single maturity dates | 4,795 | |
Fair value | 4,795 | 6,088 |
Asset backed securities | ||
Amortized cost | ||
Without single maturity dates | 3,465 | |
Amortized cost | 3,465 | 3,283 |
Fair value | ||
Without single maturity dates | 3,495 | |
Fair value | $ 3,495 | $ 3,329 |
Financing Receivables - Allowan
Financing Receivables - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | ||
Rollforward of allowance for credit losses | ||||
Beginning balance | $ 68 | $ 51 | [1] | |
Provisions | (13) | 19 | ||
Charge-offs | (7) | (4) | ||
Recoveries | 1 | |||
Other | 2 | |||
Ending balance | 51 | 71 | ||
Commercial Loans | ||||
Rollforward of allowance for credit losses | ||||
Beginning balance | 66 | 51 | [1] | |
Provisions | (14) | 16 | ||
Charge-offs | (6) | (2) | ||
Other | 2 | |||
Ending balance | 48 | 67 | ||
Financing receivables | ||||
Accrued interest on loans | 13 | $ 16 | ||
Consumer Loans | ||||
Rollforward of allowance for credit losses | ||||
Beginning balance | 2 | 0 | [1] | |
Provisions | 1 | 3 | ||
Charge-offs | (1) | (2) | ||
Recoveries | 1 | |||
Ending balance | $ 3 | 4 | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||
Rollforward of allowance for credit losses | ||||
Beginning balance | 5 | |||
Cumulative Effect, Period of Adoption, Adjustment | Commercial Loans | ||||
Rollforward of allowance for credit losses | ||||
Beginning balance | 2 | |||
Cumulative Effect, Period of Adoption, Adjustment | Consumer Loans | ||||
Rollforward of allowance for credit losses | ||||
Beginning balance | 3 | |||
Cumulative Effect, Period of Adoption, Adjusted Balance | ||||
Rollforward of allowance for credit losses | ||||
Beginning balance | 56 | |||
Cumulative Effect, Period of Adoption, Adjusted Balance | Commercial Loans | ||||
Rollforward of allowance for credit losses | ||||
Beginning balance | 53 | |||
Cumulative Effect, Period of Adoption, Adjusted Balance | Consumer Loans | ||||
Rollforward of allowance for credit losses | ||||
Beginning balance | $ 3 | |||
[1] | Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Financing Receivables - Purchas
Financing Receivables - Purchases, Sales and Nonperforming (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Nonperforming | |||||
Financing Receivables | |||||
Loans | $ 9 | $ 9 | $ 21 | ||
Commercial Loans | Commercial mortgage loans | |||||
Financing Receivables | |||||
Loans sold | 746 | 746 | |||
Loans | 1,901 | 1,901 | 2,725 | ||
Commercial Loans | Syndicated loans | |||||
Financing Receivables | |||||
Loans purchased | 0 | $ 96 | 37 | $ 165 | |
Loans sold | 360 | 5 | 368 | 12 | |
Loans | 152 | 152 | $ 595 | ||
Consumer Loans | Residential mortgage loans | |||||
Financing Receivables | |||||
Loans purchased | 1 | 0 | 7 | 22 | |
Loans sold | $ 3 | $ 0 | $ 3 | $ 0 |
Financing Receivables - General
Financing Receivables - General Credit Quality Information - Commercial Mortgage Loans (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | |
Commercial Loans | Commercial mortgage loans | ||
Financing Receivables | ||
Loans | $ 1,901 | $ 2,725 |
Commercial Loans | Commercial mortgage loans | Past due | ||
Financing Receivables | ||
Loans | $ 0 | $ 0 |
Commercial Loans | Commercial mortgage loans | COVID 19 loan modifications | ||
Financing Receivables | ||
Total number of loan modifications | loan | 93 | |
Total unpaid principal balance of loan modifications | $ 369 | |
Number of modified loans remaining | loan | 0 | |
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | ||
Financing Receivables | ||
Percentage of total | 100.00% | 100.00% |
Total commercial mortgage loans | Credit concentration risk | Highest credit risk rating | Maximum | ||
Financing Receivables | ||
Percentage of total | 1.00% | 1.00% |
Financing Receivables - Credit
Financing Receivables - Credit Quality - Commercial Mortgage Loans by LTV Ratio and Year of Origination (Details) - Commercial Loans - Commercial mortgage loans - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | $ 136 | $ 134 |
Originated in Fiscal Year before Latest Fiscal Year | 124 | 262 |
Originated Two Years before Latest Fiscal Year | 233 | 195 |
Originated Three Years before Latest Fiscal Year | 117 | 289 |
Originated Four Years before Latest Fiscal Year | 177 | 230 |
Originated Five or More Years before Latest Fiscal Year | 1,114 | 1,615 |
Total amortized cost basis | 1,901 | 2,725 |
Greater than 100 Percent | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated Two Years before Latest Fiscal Year | 20 | 2 |
Originated Three Years before Latest Fiscal Year | 10 | |
Originated Five or More Years before Latest Fiscal Year | 30 | 10 |
Total amortized cost basis | 60 | 12 |
80 to 100 Percent | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 9 | 15 |
Originated in Fiscal Year before Latest Fiscal Year | 14 | 16 |
Originated Two Years before Latest Fiscal Year | 9 | 12 |
Originated Three Years before Latest Fiscal Year | 6 | 3 |
Originated Four Years before Latest Fiscal Year | 7 | |
Originated Five or More Years before Latest Fiscal Year | 37 | 15 |
Total amortized cost basis | 75 | 68 |
60 to 80 Percent | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 95 | 89 |
Originated in Fiscal Year before Latest Fiscal Year | 69 | 166 |
Originated Two Years before Latest Fiscal Year | 68 | 27 |
Originated Three Years before Latest Fiscal Year | 29 | 32 |
Originated Four Years before Latest Fiscal Year | 61 | 46 |
Originated Five or More Years before Latest Fiscal Year | 133 | 144 |
Total amortized cost basis | 455 | 504 |
40 to 60 Percent | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 23 | 23 |
Originated in Fiscal Year before Latest Fiscal Year | 34 | 57 |
Originated Two Years before Latest Fiscal Year | 95 | 74 |
Originated Three Years before Latest Fiscal Year | 69 | 155 |
Originated Four Years before Latest Fiscal Year | 60 | 113 |
Originated Five or More Years before Latest Fiscal Year | 420 | 551 |
Total amortized cost basis | 701 | 973 |
Less than 40 Percent | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 9 | 7 |
Originated in Fiscal Year before Latest Fiscal Year | 7 | 23 |
Originated Two Years before Latest Fiscal Year | 41 | 80 |
Originated Three Years before Latest Fiscal Year | 3 | 99 |
Originated Four Years before Latest Fiscal Year | 56 | 64 |
Originated Five or More Years before Latest Fiscal Year | 494 | 895 |
Total amortized cost basis | $ 610 | $ 1,168 |
Financing Receivables - Credi_2
Financing Receivables - Credit Quality - Commercial Mortgage Loans by Region (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | [1] | |
Financing receivables - credit quality information | |||||
Less: allowance for loan losses | $ 51 | $ 68 | $ 71 | $ 51 | |
Commercial Loans | |||||
Financing receivables - credit quality information | |||||
Less: allowance for loan losses | 48 | 66 | $ 67 | $ 51 | |
Commercial Loans | Commercial mortgage loans | |||||
Financing receivables - credit quality information | |||||
Loans | 1,901 | 2,725 | |||
Less: allowance for loan losses | 14 | 29 | |||
Total loans | 1,887 | 2,696 | |||
Commercial Loans | Commercial mortgage loans | East North Central | |||||
Financing receivables - credit quality information | |||||
Loans | 187 | 259 | |||
Commercial Loans | Commercial mortgage loans | East South Central | |||||
Financing receivables - credit quality information | |||||
Loans | 69 | 115 | |||
Commercial Loans | Commercial mortgage loans | Middle Atlantic | |||||
Financing receivables - credit quality information | |||||
Loans | 125 | 178 | |||
Commercial Loans | Commercial mortgage loans | Mountain | |||||
Financing receivables - credit quality information | |||||
Loans | 124 | 247 | |||
Commercial Loans | Commercial mortgage loans | New England | |||||
Financing receivables - credit quality information | |||||
Loans | 29 | 54 | |||
Commercial Loans | Commercial mortgage loans | Pacific | |||||
Financing receivables - credit quality information | |||||
Loans | 608 | 825 | |||
Commercial Loans | Commercial mortgage loans | South Atlantic | |||||
Financing receivables - credit quality information | |||||
Loans | 496 | 681 | |||
Commercial Loans | Commercial mortgage loans | West North Central | |||||
Financing receivables - credit quality information | |||||
Loans | 140 | 198 | |||
Commercial Loans | Commercial mortgage loans | West South Central | |||||
Financing receivables - credit quality information | |||||
Loans | $ 123 | $ 168 | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 100.00% | 100.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | East North Central | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 10.00% | 10.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | East South Central | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 4.00% | 4.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | Middle Atlantic | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 7.00% | 7.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | Mountain | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 6.00% | 9.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | New England | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 2.00% | 2.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | Pacific | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 32.00% | 30.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | South Atlantic | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 26.00% | 25.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | West North Central | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 7.00% | 7.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | West South Central | |||||
Financing receivables - credit quality information | |||||
Percentage of total | 6.00% | 6.00% | |||
[1] | Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Financing Receivables - Credi_3
Financing Receivables - Credit Quality - Commercial Mortgage Loans by Property Type (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | [1] | |
Concentrations of credit risk by property type | |||||
Less: allowance for loan losses | $ 51 | $ 68 | $ 71 | $ 51 | |
Commercial Loans | |||||
Concentrations of credit risk by property type | |||||
Less: allowance for loan losses | 48 | 66 | $ 67 | $ 51 | |
Commercial Loans | Commercial mortgage loans | |||||
Concentrations of credit risk by property type | |||||
Loans | 1,901 | 2,725 | |||
Less: allowance for loan losses | 14 | 29 | |||
Total loans | 1,887 | 2,696 | |||
Commercial Loans | Commercial mortgage loans | Apartment Building | |||||
Concentrations of credit risk by property type | |||||
Loans | 499 | 713 | |||
Commercial Loans | Commercial mortgage loans | Hotel | |||||
Concentrations of credit risk by property type | |||||
Loans | 15 | 50 | |||
Commercial Loans | Commercial mortgage loans | Industrial | |||||
Concentrations of credit risk by property type | |||||
Loans | 306 | 427 | |||
Commercial Loans | Commercial mortgage loans | Mixed use | |||||
Concentrations of credit risk by property type | |||||
Loans | 68 | 87 | |||
Commercial Loans | Commercial mortgage loans | Office | |||||
Concentrations of credit risk by property type | |||||
Loans | 272 | 372 | |||
Commercial Loans | Commercial mortgage loans | Retail | |||||
Concentrations of credit risk by property type | |||||
Loans | 625 | 881 | |||
Commercial Loans | Commercial mortgage loans | Other | |||||
Concentrations of credit risk by property type | |||||
Loans | $ 116 | $ 195 | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | |||||
Concentrations of credit risk by property type | |||||
Percentage of total | 100.00% | 100.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | Apartment Building | |||||
Concentrations of credit risk by property type | |||||
Percentage of total | 26.00% | 26.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | Hotel | |||||
Concentrations of credit risk by property type | |||||
Percentage of total | 1.00% | 2.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | Industrial | |||||
Concentrations of credit risk by property type | |||||
Percentage of total | 16.00% | 16.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | Mixed use | |||||
Concentrations of credit risk by property type | |||||
Percentage of total | 4.00% | 3.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | Office | |||||
Concentrations of credit risk by property type | |||||
Percentage of total | 14.00% | 14.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | Retail | |||||
Concentrations of credit risk by property type | |||||
Percentage of total | 33.00% | 32.00% | |||
Total commercial mortgage loans | Credit concentration risk | Commercial Loans | Commercial mortgage loans | Other | |||||
Concentrations of credit risk by property type | |||||
Percentage of total | 6.00% | 7.00% | |||
[1] | Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Financing Receivables - Credi_4
Financing Receivables - Credit Quality Information - Syndicated Loans (Details) - Commercial Loans - Syndicated loans - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Financing receivables - credit quality information | ||
Recorded investment | $ 152 | $ 595 |
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 25 | 47 |
Originated in Fiscal Year before Latest Fiscal Year | 8 | 98 |
Originated Two Years before Latest Fiscal Year | 21 | 121 |
Originated Three Years before Latest Fiscal Year | 25 | 161 |
Originated Four Years before Latest Fiscal Year | 38 | 49 |
Originated Five or More Years before Latest Fiscal Year | 35 | 119 |
Total amortized cost basis | 152 | 595 |
Risk 5 | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated Five or More Years before Latest Fiscal Year | 3 | |
Total amortized cost basis | 3 | |
Risk 4 | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated Two Years before Latest Fiscal Year | 1 | 4 |
Originated Three Years before Latest Fiscal Year | 1 | 9 |
Originated Four Years before Latest Fiscal Year | 1 | |
Originated Five or More Years before Latest Fiscal Year | 1 | 10 |
Total amortized cost basis | 4 | 23 |
Risk 3 | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Fiscal Year before Latest Fiscal Year | 9 | |
Originated Two Years before Latest Fiscal Year | 4 | 8 |
Originated Three Years before Latest Fiscal Year | 4 | 25 |
Originated Four Years before Latest Fiscal Year | 5 | 13 |
Originated Five or More Years before Latest Fiscal Year | 9 | 25 |
Total amortized cost basis | 22 | 80 |
Risk 2 | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 16 | 30 |
Originated in Fiscal Year before Latest Fiscal Year | 5 | 57 |
Originated Two Years before Latest Fiscal Year | 9 | 62 |
Originated Three Years before Latest Fiscal Year | 11 | 69 |
Originated Four Years before Latest Fiscal Year | 16 | 14 |
Originated Five or More Years before Latest Fiscal Year | 9 | 41 |
Total amortized cost basis | 66 | 273 |
Risk 1 | ||
Amortized cost basis by year of origination and loan-to-value ratio | ||
Originated in Current Fiscal Year | 9 | 17 |
Originated in Fiscal Year before Latest Fiscal Year | 3 | 32 |
Originated Two Years before Latest Fiscal Year | 7 | 47 |
Originated Three Years before Latest Fiscal Year | 9 | 58 |
Originated Four Years before Latest Fiscal Year | 16 | 22 |
Originated Five or More Years before Latest Fiscal Year | 16 | 40 |
Total amortized cost basis | 60 | 216 |
Past due | ||
Financing receivables - credit quality information | ||
Recorded investment | $ 0 | $ 3 |
Financing Receivables - Credi_5
Financing Receivables - Credit Quality Information - Financial Advisor Loans (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | [1] |
Financing receivables - credit quality information | |||||
Allowance for credit losses | $ 51 | $ 68 | $ 71 | $ 51 | |
Commercial Loans | |||||
Financing receivables - credit quality information | |||||
Allowance for credit losses | 48 | 66 | $ 67 | $ 51 | |
Commercial Loans | Loans to financial advisors | |||||
Amortized cost basis by year of origination and loan-to-value ratio | |||||
Originated in Current Fiscal Year | 106 | 171 | |||
Originated in Fiscal Year before Latest Fiscal Year | 155 | 137 | |||
Originated Two Years before Latest Fiscal Year | 124 | 101 | |||
Originated Three Years before Latest Fiscal Year | 91 | 128 | |||
Originated Four Years before Latest Fiscal Year | 120 | 84 | |||
Originated Five or More Years before Latest Fiscal Year | 135 | 94 | |||
Total amortized cost basis | 731 | 715 | |||
Commercial Loans | Loans to financial advisors | Active | |||||
Amortized cost basis by year of origination and loan-to-value ratio | |||||
Originated in Current Fiscal Year | 104 | 171 | |||
Originated in Fiscal Year before Latest Fiscal Year | 155 | 137 | |||
Originated Two Years before Latest Fiscal Year | 124 | 101 | |||
Originated Three Years before Latest Fiscal Year | 91 | 127 | |||
Originated Four Years before Latest Fiscal Year | 119 | 83 | |||
Originated Five or More Years before Latest Fiscal Year | 128 | 86 | |||
Total amortized cost basis | 721 | 705 | |||
Commercial Loans | Loans to financial advisors | Terminated | |||||
Financing receivables - credit quality information | |||||
Allowance for credit losses | 6 | 7 | |||
Amortized cost basis by year of origination and loan-to-value ratio | |||||
Originated in Current Fiscal Year | 2 | ||||
Originated Three Years before Latest Fiscal Year | 1 | ||||
Originated Four Years before Latest Fiscal Year | 1 | 1 | |||
Originated Five or More Years before Latest Fiscal Year | 7 | 8 | |||
Total amortized cost basis | $ 10 | $ 10 | |||
[1] | Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Financing Receivables - Credi_6
Financing Receivables - Credit Quality Information - Credit Card Receivables (Details) - Consumer Loans - Credit card receivables - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Financing receivables - credit quality information | ||
Percentage of receivables past due | 1.00% | 1.00% |
Loans | $ 93 | $ 96 |
FICO Score, Greater than 800 | ||
Financing receivables - credit quality information | ||
Loans | 27 | 28 |
FICO Score, 750-799 | ||
Financing receivables - credit quality information | ||
Loans | 23 | 23 |
FICO Score, 700-749 | ||
Financing receivables - credit quality information | ||
Loans | 24 | 25 |
FICO Score. 650 to 699 | ||
Financing receivables - credit quality information | ||
Loans | 14 | 15 |
FICO Score, Less than 650 | ||
Financing receivables - credit quality information | ||
Loans | $ 5 | $ 5 |
Financing Receivables -Credit Q
Financing Receivables -Credit Quality Information - Other Loans and Deposit Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | [1] |
Financing Receivables | |||||
Allowance for credit losses | $ 51 | $ 68 | $ 71 | $ 51 | |
Receivable | |||||
Reinsurance deposit receivable | 8,000 | 1,400 | |||
Deposit Receivable | |||||
Receivable | |||||
Allowance for credit losses | 0 | 0 | |||
Consumer Loans | |||||
Financing Receivables | |||||
Allowance for credit losses | 3 | 2 | $ 4 | $ 0 | |
Consumer Loans | Policy Loans | |||||
Financing Receivables | |||||
Allowance for credit losses | 0 | 0 | |||
Consumer Loans | Margin Loans | |||||
Financing Receivables | |||||
Loans | 1,200 | 1,000 | |||
Consumer Loans | Pledged Asset Line of Credit | |||||
Financing Receivables | |||||
Lines of credit balance | 408 | 224 | |||
Allowance for credit losses | $ 0 | $ 0 | |||
[1] | Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset. |
Financing Receivables - Trouble
Financing Receivables - Troubled Debt Restructurings (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)loan | Sep. 30, 2020loan | Sep. 30, 2021USD ($)loan | Sep. 30, 2020loan | |
Troubled Debt Restructurings | ||||
Loans accounted for as troubled debt restructuring | loan | 0 | 0 | 0 | 0 |
Commitments to lend additional funds to borrowers whose loans have been restructured | $ | $ 0 | $ 0 |
Reinsurance (Details)
Reinsurance (Details) $ in Billions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | |
Fixed deferred and immediate annuity policies | ||
Reinsurance transaction | ||
Ceded premiums | $ 1.2 | $ 1.2 |
Reinsurance recoverables | $ 1.1 | $ 1.1 |
Subsidiary | RiverSource Life Insurance Company | Fixed deferred and immediate annuity policies | ||
Reinsurance transaction | ||
Percentage of risk reinsured | 100.00% |
Deferred Acquisition Costs an_3
Deferred Acquisition Costs and Deferred Sales Inducement Costs (Details) - Ameriprise Financial - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Balances of and changes in DAC | ||
Balance, at the beginning of the period | $ 2,532 | $ 2,698 |
Capitalization of acquisition costs | 205 | 162 |
Amortization, excluding the impact of valuation assumptions review | (137) | (249) |
Amortization, impact of valuation assumptions review | 60 | (100) |
Impact of change in net unrealized (gains) losses on securities | 75 | (61) |
Balance, at the end of the period | 2,735 | 2,450 |
Balances of and changes in DSIC | ||
Balance at the beginning of the period | 189 | 218 |
Capitalization of acquisition costs | 1 | 1 |
Amortization, excluding the impact of valuation assumptions review | (15) | (19) |
Amortization, impact of valuation assumptions review | 2 | (16) |
Impact of change in net unrealized (gains) losses on securities | 11 | (1) |
Balance at the end of the period | $ 188 | $ 183 |
Policyholder Account Balances_3
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities - Balances by product (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | $ 22,940 | $ 21,002 | |
Future policy benefits | 11,712 | 12,799 | |
Policy claims and other policyholders' funds | 212 | 191 | |
Policyholder account balances, future policy benefits and claims | 34,864 | 33,992 | |
Fixed annuities | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | [1] | 8,229 | 8,531 |
Variable annuity fixed sub-accounts | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | 5,020 | 5,104 | |
UL/VUL insurance | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | 3,098 | 3,122 | |
IUL insurance | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | 2,461 | 2,269 | |
Structured variable annuities | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | 3,552 | 1,371 | |
Other life insurance | |||
Policyholder account balances, future policy benefits and claims | |||
Policyholder account balances | 580 | 605 | |
Variable annuity GMWB | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | 2,256 | 3,049 | |
Variable annuity GMAB | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | [2] | (14) | 1 |
Other annuity liabilities | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | 73 | 211 | |
Fixed annuity life contingent liabilities | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | 1,303 | 1,370 | |
Life and disability income insurance | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | 1,152 | 1,187 | |
Long term care insurance | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | 5,664 | 5,722 | |
UL/VUL and other life insurance additional liabilities | |||
Policyholder account balances, future policy benefits and claims | |||
Future policy benefits | $ 1,278 | $ 1,259 | |
[1] | Includes fixed deferred annuities, non-life contingent fixed payout annuities and fixed deferred indexed annuity host contracts. | ||
[2] | Includes the fair value of GMAB embedded derivatives that was a net asset as of September 30, 2021 reported as a contra liability. |
Policyholder Account Balances_4
Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities - Components of Separate Account Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Separate account liabilities | ||
Variable annuity | $ 81,063 | $ 79,299 |
VUL insurance | 8,931 | 8,226 |
Other insurance | 32 | 31 |
Threadneedle investment liabilities | 5,103 | 5,055 |
Separate account liabilities | $ 95,129 | $ 92,611 |
Variable Annuity and Insuranc_3
Variable Annuity and Insurance Guarantees - VA Guarantees (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | ||
GMDB | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 85,478 | $ 83,781 |
Contract value in separate accounts | [1] | 80,488 | 78,705 |
Net amount at risk | [1] | $ 119 | $ 64 |
Weighted average attained age | [1] | 69 years | 68 years |
GMDB | Return of premium | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 68,486 | $ 66,874 |
Contract value in separate accounts | [1] | 66,600 | 64,932 |
Net amount at risk | [1] | $ 18 | $ 5 |
Weighted average attained age | [1] | 69 years | 68 years |
GMDB | Five/six-year reset | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 8,181 | $ 8,116 |
Contract value in separate accounts | [1] | 5,467 | 5,386 |
Net amount at risk | [1] | $ 13 | $ 6 |
Weighted average attained age | [1] | 68 years | 68 years |
GMDB | One-year ratchet | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 6,105 | $ 6,094 |
Contract value in separate accounts | [1] | 5,786 | 5,763 |
Net amount at risk | [1] | $ 40 | $ 8 |
Weighted average attained age | [1] | 71 years | 71 years |
GMDB | Five-year ratchet | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 1,425 | $ 1,436 |
Contract value in separate accounts | [1] | 1,371 | $ 1,381 |
Net amount at risk | [1] | $ 2 | |
Weighted average attained age | [1] | 67 years | 67 years |
GMDB | Other | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 1,281 | $ 1,261 |
Contract value in separate accounts | [1] | 1,264 | 1,243 |
Net amount at risk | [1] | $ 46 | $ 45 |
Weighted average attained age | [1] | 74 years | 73 years |
GGU death benefit | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 1,221 | $ 1,183 |
Contract value in separate accounts | [1] | 1,166 | 1,126 |
Net amount at risk | [1] | $ 176 | $ 162 |
Weighted average attained age | [1] | 72 years | 71 years |
GMIB | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 186 | $ 187 |
Contract value in separate accounts | [1] | 172 | 173 |
Net amount at risk | [1] | $ 5 | $ 6 |
Weighted average attained age | [1] | 71 years | 71 years |
GMWB | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 53,178 | $ 52,114 |
Contract value in separate accounts | [1] | 53,123 | 52,024 |
Net amount at risk | [1] | $ 216 | $ 186 |
Weighted average attained age | [1] | 69 years | 69 years |
GMWB | GMWB standard benefit | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 1,903 | $ 1,972 |
Contract value in separate accounts | [1] | 1,897 | 1,967 |
Net amount at risk | [1] | $ 1 | $ 1 |
Weighted average attained age | [1] | 75 years | 74 years |
GMWB | GMWB for life | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 51,275 | $ 50,142 |
Contract value in separate accounts | [1] | 51,226 | 50,057 |
Net amount at risk | [1] | $ 215 | $ 185 |
Weighted average attained age | [1] | 69 years | 69 years |
GMAB | |||
Information related to variable annuity guarantees | |||
Total contract value | [1] | $ 2,037 | $ 2,291 |
Contract value in separate accounts | [1] | $ 2,037 | $ 2,291 |
Weighted average attained age | [1] | 62 years | 61 years |
[1] | Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table. |
Variable Annuity and Insuranc_4
Variable Annuity and Insurance Guarantees - UL Secondary Guarantees (Details) - UL secondary guarantees - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Insurance guarantees | ||
Net amount at risk | $ 6,563 | $ 6,587 |
Weighted average attained age | 68 years | 67 years |
Variable Annuity and Insuranc_5
Variable Annuity and Insurance Guarantees - Liability Rollforward (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
GMDB and GGU | |||
Changes in additional liabilities for variable annuity and insurance guarantees | |||
Beginning Balance | $ 24 | $ 16 | |
Incurred claims | 12 | 10 | |
Paid claims | (3) | (6) | |
Ending Balance | 33 | 20 | |
GMIB | |||
Changes in additional liabilities for variable annuity and insurance guarantees | |||
Beginning Balance | 6 | 7 | |
Incurred claims | 1 | 1 | |
Paid claims | (1) | (1) | |
Ending Balance | 6 | 7 | |
GMWB | |||
Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees | |||
Beginning balance | [1] | 3,049 | 1,462 |
Incurred claims | [1] | (793) | 2,219 |
Ending balance | [1] | 2,256 | 3,681 |
GMAB | |||
Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees | |||
Beginning balance | [1] | 1 | (39) |
Incurred claims | [1] | (15) | 63 |
Ending balance | [1] | (14) | 24 |
UL | |||
Changes in additional liabilities for variable annuity and insurance guarantees | |||
Beginning Balance | 916 | 758 | |
Incurred claims | 106 | 172 | |
Paid claims | (27) | (34) | |
Ending Balance | $ 995 | $ 896 | |
[1] | The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims. |
Variable Annuity and Insuranc_6
Variable Annuity and Insurance Guarantees - Separate Account Balances by Type (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Mutual funds | ||
Variable Annuity and Insurance Guarantees | ||
Separate account balances | $ 80,700 | $ 78,931 |
Equity | ||
Variable Annuity and Insurance Guarantees | ||
Separate account balances | 47,854 | 45,947 |
Bond | ||
Variable Annuity and Insurance Guarantees | ||
Separate account balances | 24,779 | 26,073 |
Other | ||
Variable Annuity and Insurance Guarantees | ||
Separate account balances | $ 8,067 | $ 6,911 |
Debt - Balances and Stated Inte
Debt - Balances and Stated Interest Rates (Details) - Ameriprise Financial - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Debt and stated interest rates | ||
Finance lease liabilities | $ 41 | $ 44 |
Other | (10) | (13) |
Total long-term debt | 2,831 | 2,831 |
Short-term borrowings | 200 | 200 |
Total | $ 3,031 | $ 3,031 |
Weighted Average | ||
Debt and stated interest rates | ||
FHLB advances, Stated interest rate (as a percent) | 0.30% | 0.40% |
Senior notes due 2022 | ||
Debt and stated interest rates | ||
Long-term debt | $ 500 | $ 500 |
Stated interest rate long-term debt (as a percent) | 3.00% | 3.00% |
Senior notes due 2023 | ||
Debt and stated interest rates | ||
Long-term debt | $ 750 | $ 750 |
Stated interest rate long-term debt (as a percent) | 4.00% | 4.00% |
Senior notes due 2024 | ||
Debt and stated interest rates | ||
Long-term debt | $ 550 | $ 550 |
Stated interest rate long-term debt (as a percent) | 3.70% | 3.70% |
Senior Notes 2025 | ||
Debt and stated interest rates | ||
Long-term debt | $ 500 | $ 500 |
Stated interest rate long-term debt (as a percent) | 3.00% | 3.00% |
Senior notes due 2026 | ||
Debt and stated interest rates | ||
Long-term debt | $ 500 | $ 500 |
Stated interest rate long-term debt (as a percent) | 2.90% | 2.90% |
Debt - Short-term Borrowings (D
Debt - Short-term Borrowings (Details) - Ameriprise Financial - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commercial mortgage backed securities | ||
Short-term borrowings | ||
FHLB advances, securities pledged as collateral | $ 1,100 | $ 1,300 |
Residential mortgage backed securities | ||
Short-term borrowings | ||
FHLB advances, securities pledged as collateral | $ 518 | $ 604 |
Federal Home Loan Bank borrowings | Maximum | ||
Short-term borrowings | ||
Term | 3 months | 3 months |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Current borrowing capacity for line of credit facility | $ 1,000 | |
Maximum borrowing capacity for line of credit facility | 1,250 | |
Line of credit borrowings outstanding | 0 | $ 0 |
Outstanding letters of credit issued against line of credit facility | $ 1.1 | $ 1.1 |
Fair Values of Assets and Lia_3
Fair Values of Assets and Liabilities - Recurring Basis (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Dec. 31, 2020 | ||||
Liabilities | |||||
Liabilities embedded derivatives, net | [1],[2] | $ 2,633 | $ 3,381 | ||
GMWB and GMAB embedded derivatives | |||||
Assets | |||||
Receivables: embedded derivatives | 142 | 67 | |||
Liabilities | |||||
Liabilities embedded derivatives | 1,600 | 2,400 | |||
Ameriprise Financial | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 30,114 | 36,283 | |||
Separate account assets at NAV | 95,129 | 92,611 | |||
Investments and cash equivalents segregated for regulatory purposes | 2,351 | 2,558 | |||
Ameriprise Financial | Corporate debt securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 9,725 | 13,674 | |||
Ameriprise Financial | Residential mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 9,699 | 10,029 | |||
Ameriprise Financial | Commercial mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 4,795 | 6,088 | |||
Ameriprise Financial | Asset backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 3,495 | 3,329 | |||
Ameriprise Financial | State and municipal obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1,104 | 1,384 | |||
Ameriprise Financial | U.S. government and agencies obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1,196 | 1,456 | |||
Ameriprise Financial | Foreign government bonds and obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 87 | 262 | |||
Ameriprise Financial | Other securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 13 | 61 | |||
Ameriprise Financial | Policyholder account balances, future policy benefits and claims embedded derivatives | |||||
Liabilities | |||||
Cumulative increase (decrease) in embedded derivatives of adjustment for nonperformance risk | (550) | 727 | |||
Ameriprise Financial | Level 3 | Corporate debt securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 520 | 772 | |||
Ameriprise Financial | Level 3 | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | |||||
Assets | |||||
Receivables: embedded derivatives | 56 | ||||
Ameriprise Financial | Level 3 | Fixed deferred indexed annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 54 | 49 | |||
Ameriprise Financial | Level 3 | IUL embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 917 | 935 | |||
Ameriprise Financial | Level 3 | GMWB and GMAB embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 1,436 | 2,316 | |||
Ameriprise Financial | Level 3 | Structured variable annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 217 | 70 | |||
Ameriprise Financial | Recurring basis | |||||
Assets | |||||
Cash equivalents | 6,399 | 5,441 | |||
Available-for-Sale: Fixed maturities, at fair value | 30,114 | 36,283 | |||
Investments at NAV | [3] | 8 | 8 | ||
Trading and other securities | 33 | 88 | |||
Separate account assets at NAV | [3] | 95,129 | 92,611 | ||
Investments and cash equivalents segregated for regulatory purposes | 650 | 600 | |||
Other assets: derivative contracts | 5,687 | 5,870 | |||
Total assets at fair value | 138,076 | 140,901 | |||
Liabilities | |||||
Other | 52 | 48 | |||
Other liabilities | 4,166 | 4,360 | |||
Total liabilities at fair value | 6,799 | 7,741 | |||
Ameriprise Financial | Recurring basis | Corporate debt securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 9,725 | 13,674 | |||
Ameriprise Financial | Recurring basis | Residential mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 9,699 | 10,029 | |||
Ameriprise Financial | Recurring basis | Commercial mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 4,795 | 6,088 | |||
Ameriprise Financial | Recurring basis | Asset backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 3,495 | 3,329 | |||
Ameriprise Financial | Recurring basis | State and municipal obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1,104 | 1,384 | |||
Ameriprise Financial | Recurring basis | U.S. government and agencies obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1,196 | 1,456 | |||
Ameriprise Financial | Recurring basis | Foreign government bonds and obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 87 | 262 | |||
Ameriprise Financial | Recurring basis | Other securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 13 | 61 | |||
Ameriprise Financial | Recurring basis | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | |||||
Assets | |||||
Receivables: embedded derivatives | 56 | ||||
Ameriprise Financial | Recurring basis | Policyholder account balances, future policy benefits and claims embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 2,628 | [4] | 3,373 | [5] | |
Ameriprise Financial | Recurring basis | Fixed deferred indexed annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 58 | 52 | |||
Ameriprise Financial | Recurring basis | IUL embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 917 | 935 | |||
Ameriprise Financial | Recurring basis | GMWB and GMAB embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 1,436 | [6] | 2,316 | [7] | |
Ameriprise Financial | Recurring basis | Structured variable annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 217 | 70 | |||
Ameriprise Financial | Recurring basis | Customer deposits - SMC embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 5 | 8 | |||
Ameriprise Financial | Recurring basis | Interest rate derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 1,185 | 1,755 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 476 | 734 | |||
Ameriprise Financial | Recurring basis | Equity derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 4,465 | 4,090 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 3,619 | 3,571 | |||
Ameriprise Financial | Recurring basis | Credit derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 18 | 2 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 1 | ||||
Ameriprise Financial | Recurring basis | Foreign exchange derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 19 | 23 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 19 | 6 | |||
Ameriprise Financial | Recurring basis | Level 1 | |||||
Assets | |||||
Cash equivalents | 3,077 | 2,935 | |||
Available-for-Sale: Fixed maturities, at fair value | 1,196 | 1,456 | |||
Trading and other securities | 11 | 61 | |||
Investments and cash equivalents segregated for regulatory purposes | 650 | 600 | |||
Other assets: derivative contracts | 487 | 410 | |||
Total assets at fair value | 5,421 | 5,462 | |||
Liabilities | |||||
Other | 8 | 2 | |||
Other liabilities | 179 | 187 | |||
Total liabilities at fair value | 179 | 187 | |||
Ameriprise Financial | Recurring basis | Level 1 | U.S. government and agencies obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1,196 | 1,456 | |||
Ameriprise Financial | Recurring basis | Level 1 | Interest rate derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 1 | 1 | |||
Ameriprise Financial | Recurring basis | Level 1 | Equity derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 486 | 408 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 169 | 183 | |||
Ameriprise Financial | Recurring basis | Level 1 | Foreign exchange derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 1 | ||||
Liabilities | |||||
Other liabilities: derivative contracts | 2 | 2 | |||
Ameriprise Financial | Recurring basis | Level 2 | |||||
Assets | |||||
Cash equivalents | 3,322 | 2,506 | |||
Available-for-Sale: Fixed maturities, at fair value | 28,391 | 34,014 | |||
Trading and other securities | 22 | 27 | |||
Other assets: derivative contracts | 5,200 | 5,460 | |||
Total assets at fair value | 36,935 | 42,007 | |||
Liabilities | |||||
Other | 4 | 3 | |||
Other liabilities | 3,947 | 4,130 | |||
Total liabilities at fair value | 3,956 | 4,141 | |||
Ameriprise Financial | Recurring basis | Level 2 | Corporate debt securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 9,205 | 12,902 | |||
Ameriprise Financial | Recurring basis | Level 2 | Residential mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 9,699 | 10,020 | |||
Ameriprise Financial | Recurring basis | Level 2 | Commercial mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 4,795 | 6,088 | |||
Ameriprise Financial | Recurring basis | Level 2 | Asset backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 3,488 | 3,297 | |||
Ameriprise Financial | Recurring basis | Level 2 | State and municipal obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 1,104 | 1,384 | |||
Ameriprise Financial | Recurring basis | Level 2 | Foreign government bonds and obligations | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 87 | 262 | |||
Ameriprise Financial | Recurring basis | Level 2 | Other securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 13 | 61 | |||
Ameriprise Financial | Recurring basis | Level 2 | Policyholder account balances, future policy benefits and claims embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 4 | 3 | |||
Ameriprise Financial | Recurring basis | Level 2 | Fixed deferred indexed annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 4 | 3 | |||
Ameriprise Financial | Recurring basis | Level 2 | Customer deposits - SMC embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 5 | 8 | |||
Ameriprise Financial | Recurring basis | Level 2 | Interest rate derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 1,184 | 1,754 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 476 | 734 | |||
Ameriprise Financial | Recurring basis | Level 2 | Equity derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 3,979 | 3,682 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 3,450 | 3,388 | |||
Ameriprise Financial | Recurring basis | Level 2 | Credit derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 18 | 2 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 1 | ||||
Ameriprise Financial | Recurring basis | Level 2 | Foreign exchange derivative contracts | |||||
Assets | |||||
Other assets: derivative contracts | 19 | 22 | |||
Liabilities | |||||
Other liabilities: derivative contracts | 17 | 4 | |||
Ameriprise Financial | Recurring basis | Level 3 | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 527 | 813 | |||
Total assets at fair value | 583 | 813 | |||
Liabilities | |||||
Other | 40 | 43 | |||
Other liabilities | 40 | 43 | |||
Total liabilities at fair value | 2,664 | 3,413 | |||
Ameriprise Financial | Recurring basis | Level 3 | Corporate debt securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 520 | 772 | |||
Ameriprise Financial | Recurring basis | Level 3 | Residential mortgage backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 9 | ||||
Ameriprise Financial | Recurring basis | Level 3 | Asset backed securities | |||||
Assets | |||||
Available-for-Sale: Fixed maturities, at fair value | 7 | 32 | |||
Ameriprise Financial | Recurring basis | Level 3 | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | |||||
Assets | |||||
Receivables: embedded derivatives | 56 | ||||
Ameriprise Financial | Recurring basis | Level 3 | Policyholder account balances, future policy benefits and claims embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 2,624 | 3,370 | |||
Ameriprise Financial | Recurring basis | Level 3 | Fixed deferred indexed annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 54 | 49 | |||
Ameriprise Financial | Recurring basis | Level 3 | IUL embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | 917 | [1],[2] | 935 | ||
Ameriprise Financial | Recurring basis | Level 3 | GMWB and GMAB embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives, net | 1,436 | 2,316 | |||
Ameriprise Financial | Recurring basis | Level 3 | Structured variable annuity embedded derivatives | |||||
Liabilities | |||||
Liabilities embedded derivatives | $ 217 | $ 70 | |||
[1] | The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. The fair value of the SMC embedded derivative liability is included in Customer deposits on the Consolidated Balance Sheets. | ||||
[2] | The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was $2.9 billion and $3.7 billion as of September 30, 2021 and December 31, 2020, respectively. See Note 13 for additional information related to master netting arrangements and cash collateral. | ||||
[3] | Amounts are comprised of certain financial instruments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient and have not been classified in the fair value hierarchy. | ||||
[4] | The Company’s adjustment for nonperformance risk resulted in a $550 million cumulative decrease to the embedded derivatives as of September 30, 2021. | ||||
[5] | The Company’s adjustment for nonperformance risk resulted in a $727 million cumulative decrease to the embedded derivatives as of December 31, 2020. | ||||
[6] | The fair value of the GMWB and GMAB embedded derivatives included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position (recorded as a contra liability) as of September 30, 2021. | ||||
[7] | The fair value of the GMWB and GMAB embedded derivatives included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position (recorded as a contra liability) as of December 31, 2020. |
Fair Values of Assets and Lia_4
Fair Values of Assets and Liabilities - Changes in Level 3 Assets (Details) - Ameriprise Financial - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Available-for-Sale securities | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | $ 397 | $ 964 | $ 813 | $ 786 | |
Total gains (losses) included in net income | [1] | (1) | (2) | ||
Total gains (losses) included in other comprehensive income (loss) | (3) | 6 | (6) | 13 | |
Purchases | 9 | 40 | 154 | 232 | |
Sales | (1) | (1) | |||
Settlements | (45) | (13) | (75) | (32) | |
Transfers into Level 3 | 170 | 13 | 170 | 13 | |
Transfers out of Level 3 | (188) | (527) | (188) | ||
Balance, ending | 527 | 822 | 527 | 822 | |
Changes in unrealized gains (losses) included in income relating to assets held at end of period | [1] | (1) | (2) | ||
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at end of period | (4) | 6 | (4) | 13 | |
Corporate debt securities | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | 391 | 744 | 772 | 750 | |
Total gains (losses) included in net income | (1) | (1) | (1) | ||
Total gains (losses) included in other comprehensive income (loss) | (3) | 5 | (6) | 13 | |
Purchases | 9 | 7 | 76 | 12 | |
Settlements | (44) | (14) | (73) | (32) | |
Transfers into Level 3 | 168 | 168 | |||
Transfers out of Level 3 | (416) | ||||
Balance, ending | 520 | 742 | 520 | 742 | |
Changes in unrealized gains (losses) included in income relating to assets held at end of period | (1) | ||||
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at end of period | (4) | 5 | (4) | 13 | |
Residential mortgage backed securities | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | 205 | 9 | 17 | ||
Total gains (losses) included in other comprehensive income (loss) | 1 | ||||
Purchases | 33 | 78 | 220 | ||
Transfers out of Level 3 | (188) | (87) | (188) | ||
Balance, ending | 0 | 50 | 0 | 50 | |
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at end of period | 1 | ||||
Asset backed securities | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | 6 | 15 | 32 | 19 | |
Total gains (losses) included in net income | 1 | (1) | |||
Total gains (losses) included in other comprehensive income (loss) | 1 | (1) | |||
Sales | (1) | (1) | |||
Settlements | (1) | 1 | (2) | ||
Transfers into Level 3 | 2 | 13 | 2 | 13 | |
Transfers out of Level 3 | (24) | ||||
Balance, ending | 7 | 30 | 7 | 30 | |
Changes in unrealized gains (losses) included in income relating to assets held at end of period | (1) | (1) | |||
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at end of period | $ 1 | $ (1) | |||
Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | |||||
Summary of changes in Level 3 assets measured at fair value on a recurring basis | |||||
Balance, beginning | 0 | 0 | |||
Issues | [2] | 57 | 57 | ||
Settlements | (1) | (1) | |||
Balance, ending | $ 56 | $ 56 | |||
[1] | Included in net investment income in the Consolidated Statements of Operations. | ||||
[2] | Represents the amount of ceded embedded derivatives associated with fixed deferred annuity products reinsured in the third quarter of 2021. See Note 1 for additional information on the reinsurance transaction. |
Fair Values of Assets and Lia_5
Fair Values of Assets and Liabilities - Changes in Level 3 Liabilities (Details) - Ameriprise Financial - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Net increase (decrease) to pretax income from adjustment for nonperformance risk on the fair value of embedded derivatives | $ 1 | $ (123) | $ (138) | $ 446 | |
Policyholder account balances, future policy benefits and claims embedded derivatives | |||||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Balance, beginning | 2,569 | 4,061 | 3,370 | 1,687 | |
Total gains (losses) included in net income | (37) | (240) | (1,023) | 1,967 | |
Issues | 88 | 105 | 256 | 316 | |
Settlements | 4 | (4) | 21 | (48) | |
Balance, ending | 2,624 | 3,922 | 2,624 | 3,922 | |
Changes in unrealized (gains) losses in net income relating to liabilities held at end of period | (46) | (233) | (1,185) | 1,989 | |
Fixed deferred indexed annuity embedded derivatives | |||||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Balance, beginning | 54 | 41 | 49 | 43 | |
Total gains (losses) included in net income | [1] | 1 | 3 | 7 | (2) |
Issues | 3 | ||||
Settlements | (1) | (2) | |||
Balance, ending | 54 | 44 | 54 | 44 | |
IUL embedded derivatives | |||||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Balance, beginning | 928 | 882 | 935 | 881 | |
Total gains (losses) included in net income | [1] | 14 | 50 | 51 | 53 |
Issues | 15 | 4 | 53 | ||
Settlements | (25) | (21) | (73) | (61) | |
Balance, ending | 917 | 926 | 917 | 926 | |
Changes in unrealized (gains) losses in net income relating to liabilities held at end of period | [1] | 14 | 50 | 51 | 53 |
GMWB and GMAB embedded derivatives | |||||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Balance, beginning | 1,373 | 3,129 | 2,316 | 763 | |
Total gains (losses) included in net income | [2] | (69) | (296) | (1,273) | 1,900 |
Issues | 95 | 93 | 274 | 267 | |
Settlements | 37 | 17 | 119 | 13 | |
Balance, ending | 1,436 | 2,943 | 1,436 | 2,943 | |
Changes in unrealized (gains) losses in net income relating to liabilities held at end of period | [2] | (60) | (283) | (1,236) | 1,936 |
Structured variable annuity embedded derivatives | |||||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Balance, beginning | 214 | 9 | 70 | 0 | |
Total gains (losses) included in net income | [2] | 17 | 3 | 192 | 16 |
Issues | (7) | (3) | (22) | (7) | |
Settlements | (7) | (23) | |||
Balance, ending | 217 | 9 | 217 | 9 | |
Contingent consideration liabilities | |||||
Changes in Level 3 liabilities measured at fair value on a recurring basis | |||||
Balance, beginning | 44 | 48 | 43 | 44 | |
Total gains (losses) included in net income | [3] | (5) | (11) | (4) | (12) |
Issues | 5 | 5 | 11 | 15 | |
Settlements | (4) | (2) | (10) | (7) | |
Balance, ending | $ 40 | $ 40 | $ 40 | $ 40 | |
[1] | Included in interest credited to fixed accounts in the Consolidated Statements of Operations. | ||||
[2] | Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations. | ||||
[3] | Included in general and administrative expense in the Consolidated Statements of Operations. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities - Significant Unobservable inputs (Details) $ in Millions | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
Significant unobservable inputs used in fair value measurements | |||
Fair Value, embedded derivatives, net | [1],[2] | $ 2,633 | $ 3,381 |
Ameriprise Financial | |||
Significant unobservable inputs used in fair value measurements | |||
Available-for-Sale: Fixed maturities, at fair value | 30,114 | 36,283 | |
Ameriprise Financial | Corporate debt securities | |||
Significant unobservable inputs used in fair value measurements | |||
Available-for-Sale: Fixed maturities, at fair value | 9,725 | 13,674 | |
Ameriprise Financial | Asset backed securities | |||
Significant unobservable inputs used in fair value measurements | |||
Available-for-Sale: Fixed maturities, at fair value | 3,495 | 3,329 | |
Ameriprise Financial | Level 3 | Corporate debt securities | |||
Significant unobservable inputs used in fair value measurements | |||
Available-for-Sale: Fixed maturities, at fair value | 520 | 772 | |
Ameriprise Financial | Level 3 | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | |||
Significant unobservable inputs used in fair value measurements | |||
Receivables: embedded derivatives | 56 | ||
Ameriprise Financial | Level 3 | IUL embedded derivatives | |||
Significant unobservable inputs used in fair value measurements | |||
Gross Fair Value Liabilities, embedded derivatives | 917 | 935 | |
Ameriprise Financial | Level 3 | Fixed deferred indexed annuity embedded derivatives | |||
Significant unobservable inputs used in fair value measurements | |||
Gross Fair Value Liabilities, embedded derivatives | 54 | 49 | |
Ameriprise Financial | Level 3 | GMWB and GMAB embedded derivatives | |||
Significant unobservable inputs used in fair value measurements | |||
Fair Value, embedded derivatives, net | 1,436 | 2,316 | |
Ameriprise Financial | Level 3 | Structured variable annuity embedded derivatives | |||
Significant unobservable inputs used in fair value measurements | |||
Gross Fair Value Liabilities, embedded derivatives | 217 | 70 | |
Ameriprise Financial | Level 3 | Contingent consideration liabilities | |||
Significant unobservable inputs used in fair value measurements | |||
Other liabilities, fair value | $ 40 | $ 43 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Corporate debt securities | Minimum | Yield/spread to U.S. Treasuries | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.008 | 0.010 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Corporate debt securities | Maximum | Yield/spread to U.S. Treasuries | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.024 | 0.033 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Corporate debt securities | Weighted Average | Yield/spread to U.S. Treasuries | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | [3] | 0.012 | 0.015 |
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | |||
Significant unobservable inputs used in fair value measurements | |||
Available-for-Sale: Fixed maturities, at fair value | $ 2 | $ 3 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Annual short-term default rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.014 | ||
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Annual long-term default rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.035 | ||
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Discount rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.120 | 0.130 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Constant prepayment rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.100 | 0.100 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Loss recovery | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.636 | 0.636 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Minimum | Annual short-term default rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.029 | ||
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Minimum | Annual long-term default rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.035 | ||
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Maximum | Annual short-term default rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.030 | ||
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Maximum | Annual long-term default rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.045 | ||
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Weighted Average | Annual short-term default rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | [4] | 0.014 | 0.029 |
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Weighted Average | Annual long-term default rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | [4] | 0.035 | 0.038 |
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Weighted Average | Discount rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.120 | 0.130 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Weighted Average | Constant prepayment rate | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.100 | 0.100 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Asset backed securities | Weighted Average | Loss recovery | |||
Significant unobservable inputs used in fair value measurements | |||
Availabe-for-sale securities, measurement inputs | 0.636 | 0.636 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | Minimum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative asset, measurement input | 0 | ||
Ameriprise Financial | Level 3 | Discounted cash flow | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | Maximum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative asset, measurement input | 0.668 | ||
Ameriprise Financial | Level 3 | Discounted cash flow | Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | Weighted Average | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative asset, measurement input | [5] | 0.014 | |
Ameriprise Financial | Level 3 | Discounted cash flow | IUL embedded derivatives | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [6] | 0.60 | 0.65 |
Ameriprise Financial | Level 3 | Discounted cash flow | IUL embedded derivatives | Weighted Average | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [6] | 0.60 | 0.65 |
Ameriprise Financial | Level 3 | Discounted cash flow | Fixed deferred indexed annuity embedded derivatives | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [6] | 0.60 | 0.65 |
Ameriprise Financial | Level 3 | Discounted cash flow | Fixed deferred indexed annuity embedded derivatives | Minimum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | 0 | 0 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Fixed deferred indexed annuity embedded derivatives | Maximum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | 0.668 | 0.500 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Fixed deferred indexed annuity embedded derivatives | Weighted Average | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [5] | 0.014 | 0.012 |
Ameriprise Financial | Level 3 | Discounted cash flow | Fixed deferred indexed annuity embedded derivatives | Weighted Average | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [6] | 0.60 | 0.65 |
Ameriprise Financial | Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [6] | 0.60 | 0.65 |
Ameriprise Financial | Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Minimum | Utilization of guaranteed withdrawals | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [7] | 0 | 0 |
Ameriprise Financial | Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Minimum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | 0.001 | 0.001 | |
Ameriprise Financial | Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Minimum | Market volatility | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [8] | 0.044 | 0.043 |
Ameriprise Financial | Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Maximum | Utilization of guaranteed withdrawals | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [7] | 0.480 | 0.480 |
Ameriprise Financial | Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Maximum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | 0.634 | 0.735 | |
Ameriprise Financial | Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Maximum | Market volatility | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [8] | 0.176 | 0.171 |
Ameriprise Financial | Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Weighted Average | Utilization of guaranteed withdrawals | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [7],[9] | 0.106 | 0.106 |
Ameriprise Financial | Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Weighted Average | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [5] | 0.036 | 0.038 |
Ameriprise Financial | Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Weighted Average | Market volatility | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [8],[10] | 0.113 | 0.110 |
Ameriprise Financial | Level 3 | Discounted cash flow | GMWB and GMAB embedded derivatives | Weighted Average | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [6] | 0.60 | 0.65 |
Ameriprise Financial | Level 3 | Discounted cash flow | Structured variable annuity embedded derivatives | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [6] | 0.60 | 0.65 |
Ameriprise Financial | Level 3 | Discounted cash flow | Structured variable annuity embedded derivatives | Minimum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | 0.008 | 0.008 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Structured variable annuity embedded derivatives | Maximum | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | 0.400 | 0.400 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Structured variable annuity embedded derivatives | Weighted Average | Surrender rate | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [5] | 0.009 | 0.009 |
Ameriprise Financial | Level 3 | Discounted cash flow | Structured variable annuity embedded derivatives | Weighted Average | Nonperformance risk | |||
Significant unobservable inputs used in fair value measurements | |||
Embedded derivative liability, measurement input | [6] | 0.60 | 0.65 |
Ameriprise Financial | Level 3 | Discounted cash flow | Contingent consideration liabilities | Minimum | Discount rate | |||
Significant unobservable inputs used in fair value measurements | |||
Other liabilities, measurement input | 0 | 0 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Contingent consideration liabilities | Maximum | Discount rate | |||
Significant unobservable inputs used in fair value measurements | |||
Other liabilities, measurement input | 0.090 | 0.090 | |
Ameriprise Financial | Level 3 | Discounted cash flow | Contingent consideration liabilities | Weighted Average | Discount rate | |||
Significant unobservable inputs used in fair value measurements | |||
Other liabilities, measurement input | [11] | 0.024 | 0.031 |
[1] | The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. The fair value of the SMC embedded derivative liability is included in Customer deposits on the Consolidated Balance Sheets. | ||
[2] | The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was $2.9 billion and $3.7 billion as of September 30, 2021 and December 31, 2020, respectively. See Note 13 for additional information related to master netting arrangements and cash collateral. | ||
[3] | The weighted average for the spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. | ||
[4] | The weighted average annual default rates of asset backed securities is weighted based on the security’s market value as a percentage of the aggregate market value of the securities. | ||
[5] | The weighted average surrender rate is weighted based on the benefit base of each contract and represents the average assumption in the current year including the effect of a dynamic surrender formula. | ||
[6] | The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives. | ||
[7] | The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year. | ||
[8] | Market volatility is implied volatility of fund of funds and managed volatility funds. | ||
[9] | The weighted average utilization rate represents the average assumption for the current year, weighting each policy evenly. The calculation excludes policies that have already started taking withdrawals. | ||
[10] | The weighted average market volatility represents the average volatility across all contracts, weighted by the size of the guaranteed benefit. | ||
[11] | The weighted average discount rate represents the average discount rate across all contingent consideration liabilities, weighted based on the size of the contingent consideration liability. |
Fair Values of Assets and Lia_6
Fair Values of Assets and Liabilities - Non-Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
VIEs, not primary beneficiary | Affordable Housing Partnerships | Non-recurring basis | Level 3 | ||
Assets and liabilities measured at fair value | ||
Investment balance | $ 99 | $ 101 |
Fair Values of Assets and Lia_7
Fair Values of Assets and Liabilities - Financial Instruments Not Reported at Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Financial Liabilities | ||
Separate account liabilities - investment contracts | $ 95,129 | $ 92,611 |
Ameriprise Financial | ||
Financial Assets | ||
Mortgage loans, net | 1,911 | 2,718 |
Policy loans | 836 | 846 |
Financial Liabilities | ||
Separate account liabilities - investment contracts | 95,129 | 92,611 |
Ameriprise Financial | Carrying Value | ||
Financial Assets | ||
Mortgage loans, net | 1,911 | 2,718 |
Policy loans | 836 | 846 |
Receivables | 10,405 | 3,563 |
Restricted and segregated cash | 1,701 | 1,958 |
Other investments and assets | 291 | 732 |
Financial Liabilities | ||
Policyholder account balances, future policy benefits and claims | 11,767 | 9,990 |
Investment certificate reserves | 5,437 | 6,752 |
Banking and brokerage deposits | 13,257 | 10,891 |
Separate account liabilities - investment contracts | 5,481 | 5,406 |
Debt and other liabilities | 3,118 | 3,214 |
Ameriprise Financial | Fair Value | ||
Financial Assets | ||
Mortgage loans, net | 2,012 | 2,874 |
Policy loans | 836 | 846 |
Receivables | 11,212 | 3,803 |
Restricted and segregated cash | 1,701 | 1,958 |
Other investments and assets | 293 | 734 |
Financial Liabilities | ||
Policyholder account balances, future policy benefits and claims | 12,845 | 11,686 |
Investment certificate reserves | 5,434 | 6,752 |
Banking and brokerage deposits | 13,257 | 10,891 |
Separate account liabilities - investment contracts | 5,481 | 5,406 |
Debt and other liabilities | 3,294 | 3,469 |
Ameriprise Financial | Level 1 | Fair Value | ||
Financial Assets | ||
Receivables | 63 | 147 |
Restricted and segregated cash | 1,701 | 1,958 |
Financial Liabilities | ||
Banking and brokerage deposits | 13,257 | 10,891 |
Debt and other liabilities | 111 | 205 |
Ameriprise Financial | Level 2 | Fair Value | ||
Financial Assets | ||
Mortgage loans, net | 24 | 22 |
Policy loans | 836 | 846 |
Receivables | 1,598 | 1,258 |
Other investments and assets | 251 | 672 |
Financial Liabilities | ||
Separate account liabilities - investment contracts | 5,481 | 5,406 |
Debt and other liabilities | 3,174 | 3,253 |
Ameriprise Financial | Level 3 | Fair Value | ||
Financial Assets | ||
Mortgage loans, net | 1,988 | 2,852 |
Receivables | 9,551 | 2,398 |
Other investments and assets | 42 | 62 |
Financial Liabilities | ||
Policyholder account balances, future policy benefits and claims | 12,845 | 11,686 |
Investment certificate reserves | 5,434 | 6,752 |
Debt and other liabilities | $ 9 | $ 11 |
Offsetting Assets and Liabili_3
Offsetting Assets and Liabilities - Assets (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Derivatives: | |||
Gross Amounts of Recognized Assets | $ 5,687 | $ 5,870 | |
Amounts of Assets Presented in the Consolidated Balance Sheets | 5,687 | 5,870 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (3,604) | (3,978) |
Cash Collateral | (1,582) | (1,452) | |
Securities Collateral | (404) | (315) | |
Net Amount | 97 | 125 | |
Securities borrowed | |||
Gross Amounts of Recognized Assets | 63 | 147 | |
Amounts of Assets Presented in the Consolidated Balance Sheets | 63 | 147 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (16) | (43) |
Securities Collateral | (45) | (103) | |
Net Amount | 2 | 1 | |
Total | |||
Gross Amounts of Recognized Assets | 5,750 | 6,017 | |
Amounts of Assets Presented in the Consolidated Balance Sheets | 5,750 | 6,017 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (3,620) | (4,021) |
Cash Collateral | (1,582) | (1,452) | |
Securities Collateral | (449) | (418) | |
Net Amount | 99 | 126 | |
OTC | |||
Derivatives: | |||
Gross Amounts of Recognized Assets | 5,310 | 5,501 | |
Amounts of Assets Presented in the Consolidated Balance Sheets | 5,310 | 5,501 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (3,479) | (3,862) |
Cash Collateral | (1,369) | (1,287) | |
Securities Collateral | (404) | (315) | |
Net Amount | 58 | 37 | |
OTC cleared | |||
Derivatives: | |||
Gross Amounts of Recognized Assets | 25 | 58 | |
Amounts of Assets Presented in the Consolidated Balance Sheets | 25 | 58 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (15) | (25) |
Net Amount | 10 | 33 | |
Exchange-traded | |||
Derivatives: | |||
Gross Amounts of Recognized Assets | 352 | 311 | |
Amounts of Assets Presented in the Consolidated Balance Sheets | 352 | 311 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (110) | (91) |
Cash Collateral | (213) | (165) | |
Net Amount | $ 29 | $ 55 | |
[1] | Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Offsetting Assets and Liabili_4
Offsetting Assets and Liabilities - Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Derivatives: | |||
Gross Amounts of Recognized Liabilities | $ 4,114 | $ 4,312 | |
Amounts of Liabilities Presented in the Consolidated Balance Sheets | 4,114 | 4,312 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (3,604) | (3,978) |
Cash Collateral | (195) | (1) | |
Securities Collateral | (293) | (327) | |
Net Amount | 22 | 6 | |
Securities loaned | |||
Gross Amounts of Recognized Liabilities | 111 | 205 | |
Amounts of Liabilities Presented in the Consolidated Balance Sheets | 111 | 205 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (16) | (43) |
Securities Collateral | (91) | (157) | |
Net Amount | 4 | 5 | |
Total | |||
Gross Amounts of Recognized Liabilities | 4,225 | 4,517 | |
Amounts of Liabilities Presented in the Consolidated Balance Sheets | 4,225 | 4,517 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (3,620) | (4,021) |
Cash Collateral | (195) | (1) | |
Securities Collateral | (384) | (484) | |
Net Amount | 26 | 11 | |
OTC | |||
Derivatives: | |||
Gross Amounts of Recognized Liabilities | 3,987 | 4,192 | |
Amounts of Liabilities Presented in the Consolidated Balance Sheets | 3,987 | 4,192 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (3,479) | (3,862) |
Cash Collateral | (195) | (1) | |
Securities Collateral | (293) | (327) | |
Net Amount | 20 | 2 | |
OTC cleared | |||
Derivatives: | |||
Gross Amounts of Recognized Liabilities | 15 | 25 | |
Amounts of Liabilities Presented in the Consolidated Balance Sheets | 15 | 25 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (15) | (25) |
Exchange-traded | |||
Derivatives: | |||
Gross Amounts of Recognized Liabilities | 112 | 95 | |
Amounts of Liabilities Presented in the Consolidated Balance Sheets | 112 | 95 | |
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||
Financial Instruments | [1] | (110) | (91) |
Net Amount | $ 2 | $ 4 | |
[1] | Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets. |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities - Notional Value and Gross Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | |
Derivatives and Hedging Activities | |||
Notional | $ 144,256 | $ 140,957 | |
Gross Fair Value Assets, freestanding derivatives | 5,687 | 5,870 | |
Gross Fair Value Liabilities, freestanding derivatives | 4,114 | 4,312 | |
Liabilities embedded derivatives, net | [1],[2] | 2,633 | 3,381 |
Total Gross Fair Value, derivative assets | [3] | 5,743 | 5,870 |
Total Gross Fair Value, derivative liabilities | [1],[2] | 6,747 | 7,693 |
Derivative liability after application of master netting arrangements and cash collateral including embedded derivative liabilities | 2,900 | 3,700 | |
Fair value of investment securities received as collateral | 448 | 325 | |
Fair value of investment securities received as collateral that can be repledged | 448 | 325 | |
Fair value of investment securities received as collateral that were repledged | 0 | 0 | |
Receivables | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, Embedded Derivatives | [3] | 56 | |
GMWB and GMAB embedded derivatives | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, Embedded Derivatives | 142 | 67 | |
Gross Fair Value Liabilities, embedded derivatives | 1,600 | 2,400 | |
GMWB and GMAB embedded derivatives | Policyholder account balances, future policy benefits and claims | |||
Derivatives and Hedging Activities | |||
Liabilities embedded derivatives, net | [1],[2],[4] | 1,436 | 2,316 |
IUL embedded derivatives | Policyholder account balances, future policy benefits and claims | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, embedded derivatives | [1],[2] | 917 | 935 |
Fixed Deferred Indexed Annuity Ceded Embedded Derivatives | Receivables | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, Embedded Derivatives | [3] | 56 | |
Fixed deferred indexed annuity embedded derivatives | Policyholder account balances, future policy benefits and claims | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, embedded derivatives | [1],[2] | 58 | 52 |
Structured variable annuity embedded derivatives | Policyholder account balances, future policy benefits and claims | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, embedded derivatives | [1],[2] | 217 | 70 |
Customer deposits - SMC embedded derivatives | Customer deposits | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, embedded derivatives | [1],[2] | 5 | 8 |
Designated as hedging instruments | |||
Derivatives and Hedging Activities | |||
Notional | 58 | 32 | |
Designated as hedging instruments | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [3] | 1 | |
Designated as hedging instruments | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [1],[2] | 2 | |
Designated as hedging instruments | Foreign exchange contracts | |||
Derivatives and Hedging Activities | |||
Notional | 58 | 32 | |
Designated as hedging instruments | Foreign exchange contracts | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [3] | 1 | |
Designated as hedging instruments | Foreign exchange contracts | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [1],[2] | 2 | |
Not designated as hedging instruments | |||
Derivatives and Hedging Activities | |||
Notional | 144,198 | 140,925 | |
Not designated as hedging instruments | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [3] | 5,686 | 5,870 |
Not designated as hedging instruments | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [1],[2] | 4,114 | 4,310 |
Not designated as hedging instruments | Interest rate contracts | |||
Derivatives and Hedging Activities | |||
Notional | 79,350 | 77,951 | |
Not designated as hedging instruments | Interest rate contracts | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [3] | 1,185 | 1,755 |
Not designated as hedging instruments | Interest rate contracts | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [1],[2] | 476 | 734 |
Not designated as hedging instruments | Equity contracts | |||
Derivatives and Hedging Activities | |||
Notional | 59,856 | 57,254 | |
Not designated as hedging instruments | Equity contracts | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [3] | 4,465 | 4,090 |
Not designated as hedging instruments | Equity contracts | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [1],[2] | 3,619 | 3,571 |
Not designated as hedging instruments | Credit contracts | |||
Derivatives and Hedging Activities | |||
Notional | 1,758 | 2,297 | |
Not designated as hedging instruments | Credit contracts | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [3] | 18 | 2 |
Not designated as hedging instruments | Credit contracts | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [1],[2] | 1 | |
Not designated as hedging instruments | Foreign exchange contracts | |||
Derivatives and Hedging Activities | |||
Notional | 3,234 | 3,423 | |
Not designated as hedging instruments | Foreign exchange contracts | Other assets | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Assets, freestanding derivatives | [3] | 18 | 23 |
Not designated as hedging instruments | Foreign exchange contracts | Other liabilities | |||
Derivatives and Hedging Activities | |||
Gross Fair Value Liabilities, freestanding derivatives | [1],[2] | $ 19 | $ 4 |
[1] | The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, fixed deferred indexed annuity and structured variable annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. The fair value of the SMC embedded derivative liability is included in Customer deposits on the Consolidated Balance Sheets. | ||
[2] | The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was $2.9 billion and $3.7 billion as of September 30, 2021 and December 31, 2020, respectively. See Note 13 for additional information related to master netting arrangements and cash collateral. | ||
[3] | The fair value of freestanding derivative assets is included in Other assets and the fair value of ceded embedded derivative assets related to deposit receivables is included in Receivables on the Consolidated Balance Sheets. | ||
[4] | The fair value of the GMWB and GMAB embedded derivatives as of September 30, 2021 included $1.6 billion of individual contracts in a liability position and $142 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2020 included $2.4 billion of individual contracts in a liability position and $67 million of individual contracts in an asset position. |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities - Derivatives Not Designated as Hedges Impact (Details) - Not designated as hedging instruments - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Investment Income | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | $ (23) | $ (40) | $ (2) | |
Net Investment Income | Interest rate contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (23) | (1) | ||
Net Investment Income | Equity contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (1) | |||
Net Investment Income | Foreign exchange contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (23) | (17) | ||
Banking and Deposit Interest Expense | Equity contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | $ 2 | 1 | ||
Banking and Deposit Interest Expense | Customer deposits - SMC embedded derivatives | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (2) | (1) | ||
Distribution Expenses | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (13) | 41 | 67 | 14 |
Distribution Expenses | Interest rate contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (1) | 2 | ||
Distribution Expenses | Equity contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (13) | 41 | 67 | 12 |
Distribution Expenses | Credit contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 1 | |||
Interest Credited to Fixed Accounts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 12 | 10 | 70 | 3 |
Interest Credited to Fixed Accounts | Equity contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 42 | 55 | (7) | |
Interest Credited to Fixed Accounts | IUL embedded derivatives | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 11 | (29) | 22 | 8 |
Interest Credited to Fixed Accounts | Fixed deferred indexed annuity and deposit receivables embedded derivatives | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 1 | (7) | ||
Interest Credited to Fixed Accounts | Fixed deferred indexed annuity embedded derivatives | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (3) | 2 | ||
Benefits, Claims, Losses and Settlement Expenses | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (249) | (691) | (1,004) | 1 |
Benefits, Claims, Losses and Settlement Expenses | Interest rate contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (171) | (371) | (1,125) | 2,204 |
Benefits, Claims, Losses and Settlement Expenses | Equity contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 1 | (468) | (613) | 58 |
Benefits, Claims, Losses and Settlement Expenses | Credit contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | 2 | (12) | 41 | (91) |
Benefits, Claims, Losses and Settlement Expenses | Foreign exchange contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (23) | 6 | 26 | |
Benefits, Claims, Losses and Settlement Expenses | GMWB and GMAB embedded derivatives | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (64) | 186 | 879 | (2,180) |
Benefits, Claims, Losses and Settlement Expenses | Structured variable annuity embedded derivatives | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (17) | (3) | (192) | (16) |
General and Administrative Expense | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | (1) | 11 | 9 | 6 |
General and Administrative Expense | Equity contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | $ (1) | 6 | 11 | 3 |
General and Administrative Expense | Foreign exchange contracts | ||||
Impact of derivatives not designated as hedging instruments | ||||
Total gain (loss) | $ 5 | $ (2) | $ 3 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities - Deferred Premium, Options and Swaptions (Details) $ in Millions | Sep. 30, 2021USD ($) | |
Summary of Option Premiums Payable and Receivable | ||
Premiums payable | $ 840 | |
Premiums receivable | 428 | |
2021 | ||
Summary of Option Premiums Payable and Receivable | ||
Premiums payable | 60 | [1] |
Premiums receivable | 45 | [1] |
2022 | ||
Summary of Option Premiums Payable and Receivable | ||
Premiums payable | 204 | |
Premiums receivable | 205 | |
2023 | ||
Summary of Option Premiums Payable and Receivable | ||
Premiums payable | 51 | |
Premiums receivable | 43 | |
2024 | ||
Summary of Option Premiums Payable and Receivable | ||
Premiums payable | 138 | |
Premiums receivable | 25 | |
2025 | ||
Summary of Option Premiums Payable and Receivable | ||
Premiums payable | 125 | |
Premiums receivable | 22 | |
2026-2028 | ||
Summary of Option Premiums Payable and Receivable | ||
Premiums payable | 262 | |
Premiums receivable | $ 88 | |
[1] | 2021 amounts represent the amounts payable and receivable for the period from October 1, 2021 to December 31, 2021. |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities - Hedges and Credit Risk (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Cash Flow Hedges | |||||
Expected net amount related to cash flow hedges in AOCI that will be reclassified to earnings as a reduction to interest and debt expense within next twelve months | $ 0.5 | ||||
Longest period of time over which the entity hedges exposure to the variability in future cash flows | 15 years | ||||
Summary of the impact of interest rate derivatives | |||||
Interest and debt expense | $ 64 | $ 37 | $ 149 | $ 124 | |
Gain (loss) on interest rate contracts designated as fair value hedges: Hedged items | 1 | ||||
Gain (loss) on interest rate contracts designated as fair value hedges: Derivatives designated as fair value hedges | (1) | ||||
Amount of gain (loss) reclassified from AOCI into income: Amount of gain (loss) reclassified from AOCI into income | 1 | 1 | |||
Net Investment Hedges | |||||
Gain (loss) on net investment hedges recognized in OCI | 0.7 | $ (2.5) | (0.2) | $ 3 | |
Credit Risk | |||||
Aggregate fair value of derivative contracts in net liability position containing credit contingent provisions | 382 | 382 | $ 326 | ||
Aggregate fair value of assets posted as collateral | 378 | 378 | 324 | ||
Aggregate fair value of additional assets required to be posted or needed to settle | $ 4 | $ 4 | $ 2 |
Shareholders' Equity - OCI Comp
Shareholders' Equity - OCI Components (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Pretax | |||||
Total other comprehensive income (loss) | $ (462) | $ 154 | $ (692) | $ 324 | |
Income Tax Benefit (Expense) | |||||
Total other comprehensive income (loss) | 101 | (32) | 162 | (70) | |
Net of Tax | |||||
Total other comprehensive income (loss), net of tax | (361) | 122 | (530) | 254 | |
Net Unrealized Gains (Losses) on Securities | |||||
Pretax | |||||
Reclassification to net income | [1] | (502) | (4) | (553) | |
Total other comprehensive income (loss) | (434) | 127 | (702) | 339 | |
Income Tax Benefit (Expense) | |||||
Reclassification to net income | [1] | 105 | 1 | 116 | |
Total other comprehensive income (loss) | 95 | (32) | 164 | (71) | |
Net of Tax | |||||
Arising during the period | 58 | 98 | (101) | 268 | |
Reclassification to net income | [1] | (397) | (3) | (437) | |
Total other comprehensive income (loss), net of tax | (339) | 95 | (538) | 268 | |
Net unrealized gains (losses) on securities, excluding insurance related impact | |||||
Pretax | |||||
Arising during the period | [2] | (79) | 225 | (433) | 562 |
Income Tax Benefit (Expense) | |||||
Arising during the period | [2] | 21 | (53) | 108 | (118) |
Net of Tax | |||||
Arising during the period | [2] | (58) | 172 | (325) | 444 |
Impact of DAC, DSIC, unearned revenue, benefit reserves and reinsurance recoverables | |||||
Pretax | |||||
Arising during the period | 147 | (94) | 284 | (223) | |
Income Tax Benefit (Expense) | |||||
Arising during the period | (31) | 20 | (60) | 47 | |
Net of Tax | |||||
Arising during the period | 116 | (74) | 224 | (176) | |
Net Unrealized Gains (Losses) on Derivatives | |||||
Net of Tax | |||||
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 | |
Defined Benefit Plans | |||||
Pretax | |||||
Total other comprehensive income (loss) | 37 | ||||
Income Tax Benefit (Expense) | |||||
Total other comprehensive income (loss) | (8) | ||||
Net of Tax | |||||
Arising during the period | 29 | ||||
Total other comprehensive income (loss), net of tax | 0 | 0 | 29 | 0 | |
Foreign Currency Translation | |||||
Pretax | |||||
Total other comprehensive income (loss) | (28) | 27 | (27) | (15) | |
Income Tax Benefit (Expense) | |||||
Total other comprehensive income (loss) | 6 | 6 | 1 | ||
Net of Tax | |||||
Arising during the period | (22) | 27 | (21) | (14) | |
Total other comprehensive income (loss), net of tax | $ (22) | $ 27 | $ (21) | $ (14) | |
[1] | Reclassification amounts are recorded in net investment income. | ||||
[2] | Includes impairments on Available-for-Sale securities related to factors other than credit that were recognized in OCI during the period. |
Shareholder's Equity - Changes
Shareholder's Equity - Changes in AOCI Components (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Changes in balances of each component of AOCI, net of tax | |||||
Beginning balance | $ 5,686 | $ 6,500 | $ 5,867 | $ 5,729 | |
Total other comprehensive income (loss), net of tax | (361) | 122 | (530) | 254 | |
Ending balance | 5,707 | 6,067 | 5,707 | 6,067 | |
Total AOCI | |||||
Changes in balances of each component of AOCI, net of tax | |||||
Beginning balance | 460 | 394 | 629 | 262 | |
OCI before reclassifications | 36 | 125 | (93) | 254 | |
Amounts reclassified from AOCI | (397) | (3) | (437) | ||
Total other comprehensive income (loss), net of tax | (361) | 122 | (530) | 254 | |
Ending balance | 99 | 516 | 99 | 516 | |
Net Unrealized Gains (Losses) on Securities | |||||
Changes in balances of each component of AOCI, net of tax | |||||
Beginning balance | 784 | 749 | 983 | 576 | |
OCI before reclassifications | 58 | 98 | (101) | 268 | |
Amounts reclassified from AOCI | [1] | (397) | (3) | (437) | |
Total other comprehensive income (loss), net of tax | (339) | 95 | (538) | 268 | |
Ending balance | 445 | 844 | 445 | 844 | |
Net Unrealized Gains (Losses) on Derivatives | |||||
Changes in balances of each component of AOCI, net of tax | |||||
Beginning balance | 5 | 6 | 5 | 6 | |
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 | |
Ending balance | 5 | 6 | 5 | 6 | |
Defined Benefit Plans | |||||
Changes in balances of each component of AOCI, net of tax | |||||
Beginning balance | (175) | (138) | (204) | (138) | |
OCI before reclassifications | 29 | ||||
Total other comprehensive income (loss), net of tax | 0 | 0 | 29 | 0 | |
Ending balance | (175) | (138) | (175) | (138) | |
Foreign Currency Translation | |||||
Changes in balances of each component of AOCI, net of tax | |||||
Beginning balance | (153) | (222) | (154) | (181) | |
OCI before reclassifications | (22) | 27 | (21) | (14) | |
Total other comprehensive income (loss), net of tax | (22) | 27 | (21) | (14) | |
Ending balance | (175) | (195) | (175) | (195) | |
Other | |||||
Changes in balances of each component of AOCI, net of tax | |||||
Beginning balance | (1) | (1) | (1) | (1) | |
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 | |
Ending balance | $ (1) | $ (1) | $ (1) | $ (1) | |
[1] | Reclassification amounts are recorded in net investment income. |
Shareholders' Equity - Shares R
Shareholders' Equity - Shares Repurchased and Reissued (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Aug. 31, 2020 | |
Share repurchases | |||||
Repurchase of common shares | $ 586 | $ 341 | $ 1,624 | $ 1,135 | |
Stock repurchase program, authorized amount | $ 2,500 | ||||
Remaining balance under stock repurchase program | $ 932 | $ 932 | |||
Shares surrendered upon vesting for income tax obligation | 0.3 | 0.3 | |||
Income tax obligations paid on vesting date | $ 69 | $ 51 | |||
Number of shares reacquired through net settlement options | 0.9 | 0.7 | |||
Aggregate value of shares reacquired through net settlement options | $ 209 | $ 128 | |||
Treasury shares reissued for restricted stock award grants, performance share units and issuance of shares vested under advisor deferred compensation plans | 0.4 | 0.5 | |||
Share repurchase authorization | |||||
Share repurchases | |||||
Repurchase of common shares (in shares) | 5.5 | 6.3 | |||
Repurchase of common shares | $ 1,300 | $ 956 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income taxes | |||||
Effective tax rate on income from continuing operations (as a percent) | 18.80% | 23.50% | 17.10% | 17.40% | |
Valuation allowance | $ 15 | $ 15 | $ 15 | ||
Gross unrecognized tax benefits | 126 | 126 | 110 | ||
Unrecognized tax benefits, net of federal tax benefits, that would affect the effective tax rate if recognized | 95 | 95 | 80 | ||
Increase in interest and penalties | 0 | $ 1 | $ 2 | ||
Decrease in interest and penalties | 1 | ||||
Payable related to accrued interest and penalties | 9 | 9 | $ 10 | ||
Minimum | |||||
Income taxes | |||||
Amount of decrease in unrecognized tax benefits reasonably possible within next 12 months | 40 | 40 | |||
Maximum | |||||
Income taxes | |||||
Amount of decrease in unrecognized tax benefits reasonably possible within next 12 months | 50 | 50 | |||
State | |||||
Income taxes | |||||
Deferred tax assets, loss carryforwards | 16 | 16 | |||
Valuation allowance, net operating losses | 12 | 12 | |||
Valuation allowance | 2 | 2 | |||
Foreign | |||||
Income taxes | |||||
Valuation allowance | $ 1 | $ 1 |
Contingencies (Details)
Contingencies (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Estimated liability related to guaranty fund assessments | $ 12 | $ 12 |
Related premium tax asset | $ 10 | $ 10 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Numerator: | |||||
Net income | $ 1,031 | $ (140) | $ 2,059 | $ 1,357 | |
Denominator: | |||||
Basic: Weighted-average common shares outstanding | 116.4 | 123 | 118.2 | 124.8 | |
Effect of potentially dilutive nonqualified stock options and other share-based awards (in shares) | 2.8 | 1.9 | 2.7 | 1.7 | |
Diluted: Weighted-average common shares outstanding | 119.2 | 124.9 | 120.9 | 126.5 | |
Basic: | |||||
Net income (in dollars per share) | $ 8.86 | $ (1.14) | $ 17.42 | $ 10.87 | |
Diluted: | |||||
Net income (in dollars per share) | $ 8.65 | $ (1.14) | [1] | $ 17.03 | $ 10.73 |
Options excluded from earnings per share calculation due to their anti-dilutive effect (in shares) | 1.5 | ||||
[1] | Diluted shares used in this calculation represent basic shares due to the net loss. Using actual diluted shares would result in anti-dilution. |
Segment Information - Reportabl
Segment Information - Reportable Segments and Total Assets (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2021USD ($)segement | Dec. 31, 2020USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segement | 4 | |
Summary of assets by segment | ||
Total assets | $ 170,726 | $ 165,883 |
Reportable segments | Advice and Wealth Management Segment | ||
Summary of assets by segment | ||
Total assets | 22,849 | 21,266 |
Reportable segments | Asset Management Segment | ||
Summary of assets by segment | ||
Total assets | 9,213 | 8,406 |
Reportable segments | Retirement and Protection Solutions Segment | ||
Summary of assets by segment | ||
Total assets | 116,986 | 114,850 |
Reportable segments | Nonsegment | ||
Summary of assets by segment | ||
Total assets | $ 21,678 | $ 21,361 |
Segment Information - Net reven
Segment Information - Net revenues and Operating Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |||||
Net revenues | ||||||||
Total net revenues | $ 2,903 | $ 3,003 | $ 9,671 | $ 8,716 | ||||
Operating earnings | ||||||||
Pretax income (loss) | 1,270 | (184) | 2,484 | 1,641 | ||||
Advice and Wealth Management Segment | ||||||||
Net revenues | ||||||||
Total net revenues | 1,787 | 1,448 | 5,130 | 4,250 | ||||
Asset Management Segment | ||||||||
Net revenues | ||||||||
Total net revenues | 903 | 726 | 2,583 | 2,054 | ||||
Retirement and Protection Solutions Segment | ||||||||
Net revenues | ||||||||
Total net revenues | 712 | 671 | 2,073 | 1,976 | ||||
Corporate and Other Segment | ||||||||
Net revenues | ||||||||
Total net revenues | 113 | 132 | 370 | 413 | ||||
Reportable segments | ||||||||
Net revenues | ||||||||
Total net revenues | 3,910 | 3,319 | 11,329 | 9,699 | ||||
Operating earnings | ||||||||
Pretax income (loss) | 850 | 227 | 2,410 | 1,456 | ||||
Reportable segments | Advice and Wealth Management Segment | ||||||||
Net revenues | ||||||||
Total net revenues | 2,048 | 1,667 | 5,907 | 4,899 | ||||
Operating earnings | ||||||||
Pretax income (loss) | 459 | 320 | 1,271 | 969 | ||||
Reportable segments | Asset Management Segment | ||||||||
Net revenues | ||||||||
Total net revenues | 915 | 739 | 2,622 | 2,093 | ||||
Operating earnings | ||||||||
Pretax income (loss) | 285 | 198 | 766 | 496 | ||||
Reportable segments | Retirement and Protection Solutions Segment | ||||||||
Net revenues | ||||||||
Total net revenues | 834 | 781 | 2,429 | 2,295 | ||||
Operating earnings | ||||||||
Pretax income (loss) | 187 | (89) | 552 | 300 | ||||
Reportable segments | Corporate and Other Segment | ||||||||
Net revenues | ||||||||
Total net revenues | 113 | 132 | 371 | 412 | ||||
Operating earnings | ||||||||
Pretax income (loss) | (81) | (202) | (179) | (309) | ||||
Intersegment eliminations | ||||||||
Net revenues | ||||||||
Total net revenues | (395) | [1] | (342) | [1] | (1,173) | [2] | (1,006) | [2] |
Intersegment eliminations | Advice and Wealth Management Segment | ||||||||
Net revenues | ||||||||
Total net revenues | (261) | (219) | (777) | (649) | ||||
Intersegment eliminations | Asset Management Segment | ||||||||
Net revenues | ||||||||
Total net revenues | (12) | (13) | (39) | (39) | ||||
Intersegment eliminations | Retirement and Protection Solutions Segment | ||||||||
Net revenues | ||||||||
Total net revenues | (122) | (110) | (356) | (319) | ||||
Intersegment eliminations | Corporate and Other Segment | ||||||||
Net revenues | ||||||||
Total net revenues | 0 | 0 | (1) | 1 | ||||
Segment reconciling items | ||||||||
Net revenues | ||||||||
Net realized gains (losses) | 14 | 4 | 81 | (19) | ||||
Revenue attributable to CIEs | 42 | 21 | 92 | 52 | ||||
Market impact on non-traditional long-duration products, net (revenues) | (1) | 1 | 25 | (10) | ||||
Mean reversion related impacts, net revenue | 1 | |||||||
Market impact on hedges on investments | (23) | (40) | ||||||
Block transfer reinsurance transaction impacts | (644) | (644) | ||||||
Total net revenues | (612) | 26 | (485) | 23 | ||||
Operating earnings | ||||||||
Net realized gains (losses | 12 | 4 | 78 | (18) | ||||
Net income (loss) attributable to consolidated investment entities | 2 | (1) | (2) | |||||
Market impact on non-traditional long-duration products, net | (94) | (431) | (577) | 239 | ||||
Mean reversion related impacts | 9 | 17 | 107 | (30) | ||||
Market impact of hedges on investments | (23) | (40) | ||||||
Block transfer reinsurance transaction impacts | 521 | 521 | ||||||
Integration and restructuring charges | (7) | (1) | (14) | (4) | ||||
Total Segments after intersegment eliminations | Reportable segments | ||||||||
Net revenues | ||||||||
Total net revenues | $ 3,515 | $ 2,977 | $ 10,156 | $ 8,693 | ||||
[1] | Represents the elimination of intersegment revenues recognized for the three months ended September 30, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($261 million and $219 million, respectively); Asset Management ($12 million and $13 million, respectively); Retirement & Protection Solutions ($122 million and $110 million, respectively); and Corporate & Other (nil and nil, respectively). | |||||||
[2] | Represents the elimination of intersegment revenues recognized for the nine months ended September 30, 2021 and 2020 in each segment as follows: Advice & Wealth Management ($777 million and $649 million, respectively); Asset Management ($39 million and $39 million, respectively); Retirement & Protection Solutions ($356 million and $319 million, respectively); and Corporate & Other ($1 million and $(1) million, respectively). |