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Investments
 6 Months Ended
Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Investments [Text Block] Investments
The following is a summary of Ameriprise Financial investments:
 
June 30,
2019
 
December 31,
2018
(in millions)
Available-for-Sale securities, at fair value
$
30,642

 
$
31,058

Mortgage loans, net
2,662

 
2,696

Policy and certificate loans
861

 
861

Other investments
1,135

 
1,210

Total
$
35,300

 
$
35,825


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. The carrying value of held-to-maturity certificates of deposit was $15 million and $7 million as of June 30, 2019 and December 31, 2018, respectively, which approximates fair value due to the short time between the purchase of the instrument and its expected maturity.
The following is a summary of net investment income:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
2019
 
2018
 
2019
 
2018
(in millions)
Investment income on fixed maturities
$
344

 
$
334

 
$
697

 
$
663

Net realized gains (losses) (1)
—

 
5

 
4

 
11

Affordable housing partnerships
(17
)
 
(14
)
 
(32
)
 
(25
)
Other
16

 
43

 
48

 
89

Consolidated investment entities
25

 
51

 
48

 
77

Total
$
368

 
$
419

 
$
765

 
$
815


(1) 
Net realized gains for the six months ended June 30, 2019 included other-than-temporary impairments (“OTTI”) on investments held by AAH, which were classified as held for sale on the Consolidated Balance Sheet as of June 30, 2019. See Note 15 for additional information.
Available-for-Sale securities distributed by type were as follows:
Description of Securities
June 30, 2019
Amortized Cost
 
Gross
Unrealized Gains
 
Gross
Unrealized Losses
 
Fair Value
 
Noncredit OTTI (1)
 
(in millions)
Corporate debt securities
$
11,562

 
$
1,127

 
$
(29
)
 
$
12,660

 
$
(2
)
Residential mortgage backed securities
7,697

 
90

 
(17
)
 
7,770

 
—

Commercial mortgage backed securities
5,071

 
95

 
(8
)
 
5,158

 
—

Asset backed securities
1,509

 
51

 
(1
)
 
1,559

 
1

State and municipal obligations
1,214

 
234

 
(5
)
 
1,443

 
—

U.S. government and agencies obligations
1,762

 
1

 
—

 
1,763

 
—

Foreign government bonds and obligations
276

 
16

 
(3
)
 
289

 
—

Total
$
29,091

 
$
1,614

 
$
(63
)
 
$
30,642

 
$
(1
)
Description of Securities
December 31, 2018
Amortized Cost
 
Gross
Unrealized Gains
 
Gross
Unrealized Losses
 
Fair Value
 
Noncredit OTTI (1)
 
(in millions)
Corporate debt securities
$
13,741

 
$
555

 
$
(230
)
 
$
14,066

 
$
—

Residential mortgage backed securities
6,373

 
34

 
(78
)
 
6,329

 
—

Commercial mortgage backed securities
4,975

 
18

 
(116
)
 
4,877

 
—

Asset backed securities
1,373

 
36

 
(11
)
 
1,398

 
1

State and municipal obligations
2,166

 
192

 
(13
)
 
2,345

 
—

U.S. government and agencies obligations
1,745

 
—

 
—

 
1,745

 
—

Foreign government bonds and obligations
298

 
9

 
(9
)
 
298

 
—

Total
$
30,671

 
$
844

 
$
(457
)
 
$
31,058

 
$
1

(1) 
Represents the amount of 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, 2019 and December 31, 2018, investment securities with a fair value of $2.0 billion and $1.5 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which $810 million and $510 million, respectively, may be sold, pledged or rehypothecated by the counterparty.
As of both June 30, 2019 and December 31, 2018, fixed maturity securities comprised approximately 87% 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, 2019 and December 31, 2018, the Company’s internal analysts rated $632 million and $755 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, 2019
 
December 31, 2018
Amortized Cost
 
Fair Value
 
Percent of Total Fair Value
Amortized Cost
 
Fair Value
 
Percent of Total Fair Value
 
(in millions, except percentages)
AAA
$
15,184

 
$
15,361

 
50
%
 
$
13,399

 
$
13,252

 
43
%
AA
1,124

 
1,310

 
4

 
1,571

 
1,723

 
5

A
3,050

 
3,472

 
12

 
3,667

 
3,899

 
13

BBB
8,791

 
9,552

 
31

 
11,102

 
11,290

 
36

Below investment grade (1)
942

 
947

 
3

 
932

 
894

 
3

Total fixed maturities
$
29,091

 
$
30,642

 
100
%
 
$
30,671

 
$
31,058

 
100
%

(1) 
The amortized cost and fair value of below investment grade securities includes interest in CLOs managed by the Company of $4 million and $6 million, respectively, at June 30, 2019, and $5 million and $6 million, respectively, at December 31, 2018. These securities are not rated but are included in below investment grade due to their risk characteristics.
As of June 30, 2019 and December 31, 2018, approximately 42% and 36%, 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 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, 2019
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
17

 
$
69

 
$
(1
)
 
79

 
$
946

 
$
(28
)
 
96

 
$
1,015

 
$
(29
)
Residential mortgage backed securities
84

 
1,742

 
(4
)
 
128

 
1,440

 
(13
)
 
212

 
3,182

 
(17
)
Commercial mortgage backed securities
25

 
642

 
(2
)
 
45

 
519

 
(6
)
 
70

 
1,161

 
(8
)
Asset backed securities
15

 
306

 
—

 
19

 
152

 
(1
)
 
34

 
458

 
(1
)
State and municipal obligations
1

 
16

 
—

 
11

 
109

 
(5
)
 
12

 
125

 
(5
)
Foreign government bonds and obligations
2

 
10

 
—

 
14

 
31

 
(3
)
 
16

 
41

 
(3
)
Total
144

 
$
2,785

 
$
(7
)
 
296

 
$
3,197

 
$
(56
)
 
440

 
$
5,982

 
$
(63
)
Description of Securities
December 31, 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
345

 
$
5,522

 
$
(152
)
 
148

 
$
1,717

 
$
(78
)
 
493

 
$
7,239

 
$
(230
)
Residential mortgage backed securities
142

 
2,029

 
(18
)
 
175

 
2,132

 
(60
)
 
317

 
4,161

 
(78
)
Commercial mortgage backed securities
104

 
2,062

 
(30
)
 
112

 
1,806

 
(86
)
 
216

 
3,868

 
(116
)
Asset backed securities
38

 
491

 
(6
)
 
35

 
396

 
(5
)
 
73

 
887

 
(11
)
State and municipal obligations
81

 
255

 
(4
)
 
100

 
254

 
(9
)
 
181

 
509

 
(13
)
Foreign government bonds and obligations
17

 
86

 
(4
)
 
14

 
17

 
(5
)
 
31

 
103

 
(9
)
Total
727

 
$
10,445

 
$
(214
)
 
584

 
$
6,322

 
$
(243
)
 
1,311

 
$
16,767

 
$
(457
)

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 attributable to lower interest rates as well as tighter credit spreads.
The following table presents a rollforward of the cumulative amounts recognized in the Consolidated Statements of Operations for OTTI related to credit losses on Available-for-Sale securities for which a portion of the securities’ total OTTI was recognized in OCI:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
2019
 
2018
2019
 
2018
(in millions)
Beginning balance
$
2

 
$
2

 
$
2

 
$
2

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

 
—

 
—

 
—

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,
2019
 
2018
2019
 
2018
(in millions)
Gross realized investment gains
$
3

 
$
5

 
$
22

 
$
11

Gross realized investment losses
(3
)
 
—

 
(12
)
 
(1
)
Other-than-temporary impairments
—

 
—

 
(5
)
 
—

Total
$
—

 
$
5

 
$
5

 
$
10


Other-than-temporary impairments for the six months ended June 30, 2019 primarily related to investments held by AAH, which were classified as held for sale on the Consolidated Balance Sheet as of June 30, 2019. See Note 15 for additional information.
See Note 16 for a rollforward of net unrealized investment gains (losses) included in AOCI.
Available-for-Sale securities by contractual maturity as of June 30, 2019 were as follows:
 
Amortized Cost
 
Fair Value
(in millions)
Due within one year
$
2,880

 
$
2,885

Due after one year through five years
4,800

 
4,937

Due after five years through 10 years
2,940

 
3,133

Due after 10 years
4,194

 
5,200

 
14,814

 
16,155

Residential mortgage backed securities
7,697

 
7,770

Commercial mortgage backed securities
5,071

 
5,158

Asset backed securities
1,509

 
1,559

Total
$
29,091

 
$
30,642


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.