Investments

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investments

The following is a summary of Ameriprise Financial investments:

	June 30, 2021		December 31, 2020
	(in millions)
Available-for-Sale securities, at fair value	$	36,146	$	36,283
Mortgage loans (allowance for credit losses: 2021, $14; 2020, $29)	1,655		2,718
Policy loans	840		846
Loans held for sale	1,388		—
Other investments (allowance for credit losses: 2021, $4; 2020, $12)	716		1,184
Total	$	40,745	$	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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in millions)
Investment income on fixed maturities	$	265	$	290	$	531	$	612
Net realized gains (losses)	11		(3)		81		(22)
Affordable housing partnerships	(23)		(22)		(38)		(36)
Other	7		23		27		45
Consolidated investment entities	18		17		54		34
Total	$	278	$	305	$	655	$	633

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

	June 30, 2021
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in millions)
Corporate debt securities	$	12,038	$	1,665	$	(27)	$	—	$	13,676
Residential mortgage backed securities	9,556		135		(9)		—		9,682
Commercial mortgage backed securities	5,995		187		(4)		—		6,178
Asset backed securities	3,603		46		(1)		—		3,648
State and municipal obligations	1,039		281		(1)		—		1,319
U.S. government and agency obligations	1,326		—		—		—		1,326
Foreign government bonds and obligations	207		17		(1)		—		223
Other securities	94		—		—		—		94
Total	$	33,858	$	2,331	$	(43)	$	—	$	36,146

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 June 30, 2021 and December 31, 2020, accrued interest of $176 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 June 30, 2021 and December 31, 2020, investment securities with a fair value of $2.9 billion and $3.6 billion, respectively, were pledged to meet contractual obligations under derivative contracts and short-term borrowings, of which $501 million and $454 million, respectively, may be sold, pledged or rehypothecated by the counterparty.

As of June 30, 2021 and December 31, 2020, fixed maturity securities comprised approximately 92% 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 June 30, 2021 and December 31, 2020, the Company’s internal analysts rated $682 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	June 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	$	19,979	$	20,320	56	%	$	19,815	$	20,253	56	%
AA	1,127		1,331		4		1,082		1,312		3
A	2,488		2,965		8		2,953		3,534		10
BBB	8,987		10,093		28		8,271		9,542		26
Below investment grade (1)	1,277		1,437		4		1,480		1,642		5
Total fixed maturities	$	33,858	$	36,146	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 $1 million as of June 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 June 30, 2021 and December 31, 2020, approximately 31% 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	June 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	67	$	1,272	$	(27)	1	$	5	$	—	68	$	1,277	$	(27)
Residential mortgage backed securities	55	1,531		(8)		65	229		(1)		120	1,760		(9)
Commercial mortgage backed securities	34	519		(3)		12	211		(1)		46	730		(4)
Asset backed securities	13	419		(1)		10	153		—		23	572		(1)
State and municipal obligations	10	32		—		2	8		(1)		12	40		(1)
Foreign government bonds and obligations	3	3		—		6	5		(1)		9	8		(1)
Total	182	$	3,776	$	(39)	96	$	611	$	(4)	278	$	4,387	$	(43)

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 six months ended June 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 both June 30, 2021 and December 31, 2020, 92% 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		Total
	(in millions)
Balance, April 1, 2021	$	—	$	—	$	—
Additional increases (decreases) on securities that had an allowance recorded in a previous period	—		—		—
Charge-offs	—		—		—
Balance, June 30, 2021	$	—	$	—	$	—
Balance, April 1, 2020	$	13	$	—	$	13
Additional increases (decreases) on securities that had an allowance recorded in a previous period	—		1		1
Balance, June 30, 2020	$	13	$	1	$	14
Balance at January 1, 2021 (1)	$	10	$	1	$	11
Charge-offs	(10)		(1)		(11)
Balance, June 30, 2021	$	—	$	—	$	—
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 June 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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in millions)
Gross realized investment gains	$	14	$	5	$	65	$	13
Gross realized investment losses	—		—		(1)		(3)
Credit losses	—		(1)		—		(14)
Other impairments	(13)		—		(13)		—
Total	$	1	$	4	$	51	$	(4)

There were no credit losses for the three months and six months ended June 30, 2021. Other impairments for the three months and six months ended June 30, 2021 relate to Available-for-Sale securities for which the Company has the intent to sell related to the reinsurance transaction. See Note 1 for more information on the reinsurance transaction. Credit losses for the three months and six months ended June 30, 2020 primarily related to recording an allowance for credit losses on certain corporate debt securities, primarily in the oil and gas industry.

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, 2021 were as follows:

	Amortized Cost		Fair Value
	(in millions)
Due within one year	$	2,534	$	2,551
Due after one year through five years	4,131		4,412
Due after five years through 10 years	3,907		4,115
Due after 10 years	4,132		5,560
	14,704		16,638
Residential mortgage backed securities	9,556		9,682
Commercial mortgage backed securities	5,995		6,178
Asset backed securities	3,603		3,648
Total	$	33,858	$	36,146

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.