Ameriprise captive has ratings affirmed
AM Best has affirmed the financial strength rating (FSR) of A+ and the long-term issuer credit ratings (long-term ICR) of “aa-” of RiverSource Life Insurance Company and its wholly owned subsidiary, RiverSource Life Insurance Co. of New York. These companies represent the key life/health (L/H) insurance subsidiaries of Ameriprise Financial and are collectively known as Ameriprise Financial Group.
Concurrently, AM Best has affirmed the FSR of A (Excellent) and the long-term ICR of “a+” of Ameriprise Captive Insurance Company, a property/casualty (P/C) subsidiary of Ameriprise. In addition, AM Best has affirmed the long-term ICR of “a-” (Excellent) and the existing long-term issue credit ratings (Long-Term IRs) of Ameriprise. The outlook of all these ratings is stable.
The ratings of Ameriprise Financial Group reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management (ERM).
The balance sheet strength metrics for the RiverSource L/H grouped companies remain supportive of the very strong balance sheet strength assessment. On an enterprise level, the L/H group has taken various steps to de-risk the balance sheet from interest rate volatility, and this has been accomplished through reinsurance, reducing interest sensitive products and offering third-party alternatives for those products. AM Best views the capabilities of Ameriprise’s mature risk management program as being supportive of this strategy. The L/H group’s operating metrics include continued positive operating net income, growth in premiums, and a return-on-equity ratio well above industry averages (40%). Distribution capabilities are robust throughout the group’s adviser channel, leaning on an innovative delivery process and achieving operating efficiencies through its investments in technology. Ameriprise’s life and annuity business is complemented by the enterprise’s larger asset management businesses in the United St
The ratings of ACIC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate ERM. ACIC benefits from rating enhancement due to its strategic importance as a single-parent captive insurance provider.
AM Best assesses ACIC’s business profile as limited due to its narrow market focus as a single-parent captive serving just one customer (its parent) for a limited amount of exposure. ACIC provides various coverages to Ameriprise in the form of errors and omissions policies, a workers’ compensation deductible reimbursement policy, fidelity bonds and property terrorism (nuclear, biological, chemical or radiological). The captive has generated strong operating performance as demonstrated by its five-year average pre-tax return on revenue and equity ratios, which compare favourably with the averages for AM Best’s commercial casualty composite. Additionally, ACIC benefits from a very low expense ratio.
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