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Investments
 6 Months Ended
Jun. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Investments [Text Block]
Investments
The following is a summary of Ameriprise Financial investments:
 
June 30,
2018
 
December 31,
2017
(in millions)
Available-for-Sale securities, at fair value
$
30,459

 
$
30,927

Mortgage loans, net
2,689

 
2,756

Policy and certificate loans
851

 
845

Other investments
1,298

 
1,397

Total
$
35,297

 
$
35,925


Other investments primarily reflect the Company’s interests in affordable housing partnerships, trading securities, seed money investments, syndicated loans and held-to-maturity certificates of deposit with original or remaining maturities at the time of purchase of more than 90 days but less than 12 months. As of January 1, 2018, marketable equity securities were reclassified from Available-for-Sale securities to other investments due to the adoption of a new accounting standard on the recognition and measurement of financial instruments. The carrying value of held-to-maturity certificates of deposit was $44 million and $205 million as of June 30, 2018 and December 31, 2017, respectively, which approximates fair value due to the short time between the purchase of the instrument and its expected realization.
The following is a summary of net investment income:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
2018
 
2017
 
2018
 
2017
(in millions)
Investment income on fixed maturities
$
334

 
$
335

 
$
663

 
$
672

Net realized gains (losses)
5

 
21

 
11

 
38

Affordable housing partnerships
(14
)
 
(13
)
 
(25
)
 
(25
)
Other
43

 
20

 
89

 
44

Consolidated investment entities
51

 
28

 
77

 
53

Total
$
419

 
$
391

 
$
815

 
$
782


Available-for-Sale securities distributed by type were as follows:
Description of Securities
June 30, 2018
Amortized Cost
 
Gross
Unrealized Gains
 
Gross
Unrealized Losses
 
Fair Value
 
Noncredit OTTI (1)
 
(in millions)
Corporate debt securities
$
13,710

 
$
691

 
$
(149
)
 
$
14,252

 
$
—

Residential mortgage backed securities
6,039

 
35

 
(88
)
 
5,986

 
—

Commercial mortgage backed securities
4,685

 
19

 
(120
)
 
4,584

 
—

Asset backed securities
1,554

 
31

 
(10
)
 
1,575

 
1

State and municipal obligations
2,175

 
206

 
(11
)
 
2,370

 
—

U.S. government and agencies obligations
1,423

 
1

 
—

 
1,424

 
—

Foreign government bonds and obligations
266

 
10

 
(8
)
 
268

 
—

Total
$
29,852

 
$
993

 
$
(386
)
 
$
30,459

 
$
1

Description of Securities
December 31, 2017
Amortized Cost
 
Gross
Unrealized Gains
 
Gross
Unrealized Losses
 
Fair Value
 
Noncredit OTTI (1)
 
(in millions)
Corporate debt securities
$
13,976

 
$
1,131

 
$
(32
)
 
$
15,075

 
$
—

Residential mortgage backed securities
6,585

 
63

 
(37
)
 
6,611

 
—

Commercial mortgage backed securities
4,362

 
48

 
(36
)
 
4,374

 
—

Asset backed securities
1,549

 
36

 
(5
)
 
1,580

 
1

State and municipal obligations
2,215

 
259

 
(11
)
 
2,463

 
—

U.S. government and agencies obligations
502

 
1

 
—

 
503

 
—

Foreign government bonds and obligations
298

 
20

 
(4
)
 
314

 
—

Common stocks
5

 
3

 
(1
)
 
7

 
—

Total
$
29,492

 
$
1,561

 
$
(126
)
 
$
30,927

 
$
1

(1) 
Represents the amount of other-than-temporary impairment (“OTTI”) losses in AOCI. Amount includes unrealized gains and losses on impaired securities subsequent to the initial impairment measurement date. These amounts are included in gross unrealized gains and losses as of the end of the period.
As of June 30, 2018 and December 31, 2017, investment securities with a fair value of $1.8 billion and $1.7 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which $812 million and $803 million, respectively, may be sold, pledged or rehypothecated by the counterparty.
As of both June 30, 2018 and December 31, 2017, fixed maturity securities comprised approximately 86% 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 June 30, 2018 and December 31, 2017, the Company’s internal analysts rated $903 million and $979 million, respectively, of securities using criteria similar to those used by NRSROs.
A summary of fixed maturity securities by rating was as follows:
Ratings
June 30, 2018
 
December 31, 2017
Amortized Cost
 
Fair Value
 
Percent of Total Fair Value
Amortized Cost
 
Fair Value
 
Percent of Total Fair Value
 
(in millions, except percentages)
AAA
$
12,316

 
$
12,153

 
40
%
 
$
11,293

 
$
11,331

 
37
%
AA
1,727

 
1,887

 
6

 
1,898

 
2,114

 
7

A
4,350

 
4,611

 
15

 
4,760

 
5,243

 
17

BBB
10,428

 
10,783

 
36

 
10,317

 
10,989

 
35

Below investment grade (1)
1,031

 
1,025

 
3

 
1,219

 
1,243

 
4

Total fixed maturities
$
29,852

 
$
30,459

 
100
%
 
$
29,487

 
$
30,920

 
100
%

(1) 
The amortized cost and fair value of below investment grade securities includes interest in CLOs managed by the Company of $7 million and $8 million, respectively, at June 30, 2018, and $6 million and $7 million, respectively, at December 31, 2017. These securities are not rated but are included in below investment grade due to their risk characteristics.
As of June 30, 2018 and December 31, 2017, approximately 33% and 37%, respectively, of the securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. No holdings of any other issuer were greater than 10% of total equity.
The following tables provide information about Available-for-Sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position:
Description of Securities
June 30, 2018
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
347

 
$
5,474

 
$
(111
)
 
57

 
$
605

 
$
(38
)
 
404

 
$
6,079

 
$
(149
)
Residential mortgage backed securities
176

 
2,759

 
(47
)
 
121

 
1,258

 
(41
)
 
297

 
4,017

 
(88
)
Commercial mortgage backed securities
135

 
2,458

 
(75
)
 
58

 
779

 
(45
)
 
193

 
3,237

 
(120
)
Asset backed securities
54

 
744

 
(8
)
 
20

 
122

 
(2
)
 
74

 
866

 
(10
)
State and municipal obligations
167

 
363

 
(7
)
 
32

 
142

 
(4
)
 
199

 
505

 
(11
)
Foreign government bonds and obligations
15

 
48

 
(3
)
 
13

 
16

 
(5
)
 
28

 
64

 
(8
)
Total
894

 
$
11,846

 
$
(251
)
 
301

 
$
2,922

 
$
(135
)
 
1,195

 
$
14,768

 
$
(386
)
Description of Securities
December 31, 2017
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
150

 
$
1,791

 
$
(8
)
 
70

 
$
740

 
$
(24
)
 
220

 
$
2,531

 
$
(32
)
Residential mortgage backed securities
102

 
1,772

 
(11
)
 
130

 
1,467

 
(26
)
 
232

 
3,239

 
(37
)
Commercial mortgage backed securities
67

 
1,178

 
(12
)
 
58

 
783

 
(24
)
 
125

 
1,961

 
(36
)
Asset backed securities
36

 
424

 
(2
)
 
26

 
187

 
(3
)
 
62

 
611

 
(5
)
State and municipal obligations
76

 
141

 
(1
)
 
34

 
180

 
(10
)
 
110

 
321

 
(11
)
Foreign government bonds and obligations
3

 
6

 
—

 
15

 
23

 
(4
)
 
18

 
29

 
(4
)
Common stocks
—

 
—

 
—

 
4

 
1

 
(1
)
 
4

 
1

 
(1
)
Total
434

 
$
5,312

 
$
(34
)
 
337

 
$
3,381

 
$
(92
)
 
771

 
$
8,693

 
$
(126
)

As part of Ameriprise Financial’s ongoing monitoring process, management determined that the change in gross unrealized losses on its Available-for-Sale securities is primarily attributable to an increase in interest rates as well as widening credit spreads.
The following table presents a rollforward of the cumulative amounts recognized in the Consolidated Statements of Operations for other-than-temporary impairments related to credit losses on Available-for-Sale securities for which a portion of the securities’ total other-than-temporary impairments was recognized in OCI:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
2018
 
2017
2018
 
2017
(in millions)
Beginning balance
$
2

 
$
70

 
$
2

 
$
69

Credit losses for which an other-than-temporary impairment was previously recognized
—

 
—

 
—

 
1

Reductions for securities sold during the period (realized)
—

 
(68
)
 
—

 
(68
)
Ending balance
$
2

 
$
2

 
$
2

 
$
2


Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in earnings were as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
2018
 
2017
2018
 
2017
(in millions)
Gross realized investment gains
$
5

 
$
25

 
$
11

 
$
44

Gross realized investment losses
—

 
(4
)
 
(1
)
 
(4
)
Other-than-temporary impairments
—

 
—

 
—

 
(1
)
Total
$
5

 
$
21

 
$
10

 
$
39


Other-than-temporary impairments for the six months ended June 30, 2017 primarily related to credit losses on asset backed securities.
See Note 14 for a rollforward of net unrealized investment gains (losses) included in AOCI.
Available-for-Sale securities by contractual maturity as of June 30, 2018 were as follows:
 
Amortized Cost
 
Fair Value
(in millions)
Due within one year
$
3,033

 
$
3,053

Due after one year through five years
6,323

 
6,348

Due after five years through 10 years
3,789

 
3,762

Due after 10 years
4,429

 
5,151

 
17,574

 
18,314

Residential mortgage backed securities
6,039

 
5,986

Commercial mortgage backed securities
4,685

 
4,584

Asset backed securities
1,554

 
1,575

Total
$
29,852

 
$
30,459


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.