Investments

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Investments [Text Block]

Investments

The following is a summary of investments:

	December 31,
	2020		2019
	(in millions)
Available-for-Sale securities, at fair value	$	36,283	$	33,129
Mortgage loans, net (net of allowance for credit losses: 2020, $29; 2019, $19)	2,718		2,778
Policy loans	846		868
Other investments, net (net of allowance for credit losses: 2020, $12; 2019, $5)	1,184		1,140
Total	$	41,031	$	37,915

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:

	Years Ended December 31,
	2020			2019		2018
	(in millions)
Investment income on fixed maturities	$	1,161		$	1,378	$	1,353
Net realized gains (losses)	(10)		(1)	(8)		10
Affordable housing partnerships	(66)			(98)		(58)
Other	89			97		154
Consolidated investment entities	77			94		137
Total	$	1,251		$	1,463	$	1,596

(1) Includes the change in the allowance for credit losses of $(27) million for the year ended December 31, 2020.

Available-for-Sale securities distributed by type were as follows:

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

Description of Securities	December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Corporate debt securities	$	10,847	$	1,344	$	(4)	$	12,187
Residential mortgage backed securities	9,954		94		(19)		10,029
Commercial mortgage backed securities	5,473		96		(6)		5,563
Asset backed securities	1,968		42		(4)		2,006
State and municipal obligations	1,131		238		(2)		1,367
U.S. government and agency obligations	1,679		1		—		1,680
Foreign government bonds and obligations	254		19		(2)		271
Other securities	26		—		—		26
Total	$	31,332	$	1,834	$	(37)	$	33,129

As of December 31, 2020 and 2019, accrued interest of $178 million and $177 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 December 31, 2020 and 2019, investment securities with a fair value of $3.6 billion and $2.2 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which $454 million and $576 million, respectively, may be sold, pledged or rehypothecated by the counterparty.

As of December 31, 2020 and 2019, fixed maturity securities comprised approximately 88% and 87%, 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 December 31, 2020 and 2019, the Company’s internal analysts rated $605 million and $624 million, respectively, of securities using criteria similar to those used by NRSROs.

A summary of fixed maturity securities by rating was as follows:

Ratings	December 31, 2020						December 31, 2019
	Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value
	(in millions, except percentages)
AAA	$	19,815	$	20,253	56	%	$	18,256	$	18,437	56	%
AA	1,082		1,312		3		1,113		1,304		4
A	2,953		3,534		10		3,008		3,474		10
BBB	8,271		9,542		26		8,178		9,102		28
Below investment grade (1)	1,480		1,642		5		777		812		2
Total fixed maturities	$	33,601	$	36,283	100	%	$	31,332	$	33,129	100	%

(1) The amortized cost and fair value of below investment grade securities includes interest in CLOs managed by the Company of $3 million, as of December 31, 2020, and $5 million and $6 million, respectively, as of December 31, 2019. These securities are not rated but are included in below investment grade due to their risk characteristics.

As of December 31, 2020 and 2019, approximately 33% and 45%, 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	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)

Description of Securities	December 31, 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	13	$	66	$	(1)	23	$	173	$	(3)	36	$	239	$	(4)
Residential mortgage backed securities	150	4,328		(10)		118	1,164		(9)		268	5,492		(19)
Commercial mortgage backed securities	52	1,622		(3)		31	314		(3)		83	1,936		(6)
Asset backed securities	34	598		(3)		16	213		(1)		50	811		(4)
State and municipal obligations	5	23		—		4	57		(2)		9	80		(2)
Foreign government bonds and obligations	1	—		—		10	15		(2)		11	15		(2)
Total	255	$	6,637	$	(17)	202	$	1,936	$	(20)	457	$	8,573	$	(37)

As part of the Company’s ongoing monitoring process, management determined that the change in gross unrealized losses on its Available-for-Sale securities during the twelve months ended December 31, 2020 is primarily attributable to lower interest rates as well as credit spread tightening. Consistent with the accounting policy described in Note 2, the Company did not recognize any of the total 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 December 31, 2020, 92% of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade.

The following table presents a rollforward of the allowance for credit losses on Available-for-Sale securities:

	Corporate Debt Securities		Asset Backed Securities		Total
	(in millions)
Balance, January 1, 2020 (1)	$	—	$	—	$	—
Additions for which credit losses were not previously recorded	13		1		14
Additional increases (decreases) on securities that had an allowance recorded in a previous period	(3)		—		(3)
Balance, December 31, 2020	$	10	$	1	$	11

(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. There is no adoption impact due to the prospective transition for Available-for-Sale securities.

Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in earnings were as follows:

	Years Ended December 31,
	2020		2019		2018
	(in millions)
Gross realized investment gains	$	25	$	30	$	18
Gross realized investment losses	(3)		(14)		(9)
Credit losses	(11)		(22)		—
Total	$	11	$	(6)	$	9

Credit losses for the year ended December 31, 2020 primarily related to credit losses on corporate debt securities, primarily in the oil and gas industry. Other-than-temporary impairments for the year ended December 31, 2019 primarily related to corporate debt securities and investments held by AAH. The Company recognized an impairment of $5 million in the first quarter of 2019 on investments held by AAH as the Company no longer intended to hold the securities until the recovery of fair value to book value.

See Note 21 for a rollforward of net unrealized investment gains (losses) included in AOCI.

Available-for-Sale securities by contractual maturity as of December 31, 2020 were as follows:

	Amortized Cost		Fair Value
	(in millions)
Due within one year	$	2,569	$	2,584
Due after one year through five years	4,717		5,057
Due after five years through 10 years	2,908		3,213
Due after 10 years	4,412		5,983
	14,606		16,837
Residential mortgage backed securities	9,845		10,029
Commercial mortgage backed securities	5,867		6,088
Asset backed securities	3,283		3,329
Total	$	33,601	$	36,283

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.