Ameriprise Increases Variable Annuity Sales 3%
Low interest rates hurt fixed annuity sales, and fixed annuity account balances fell 7%.
The third quarter was pretty good for Ameriprise Financial Inc., but not that great for the company’s annuity operations.
The Minneapolis-based financial services company is reporting $503 million in net income for the quarter on $3.3 billion in revenue, compared with $507 million in net income on $3 billion in revenue for the third quarter of 2017.
(Related: Ameriprise Execs Describe Ideal Annuity and LTCI Suitors)
Revenue at the company’s advice and wealth management unit increased 11%, to $1.6 billion, and pretax operating earnings there increased 19%, to $355 million.
The annuities unit is reporting $153 million in pretax operating earnings on $89 billion in annuity account balances, compared with $281 million in pretax operating earnings on $89 billion in annuity account balances.
Variable annuity sales increased 3%, and that helped increase variable annuity account balances 1%, to $79 billion, but limited new sales of fixed annuities and contract lapses led fixed annuity account balances to fall 7%, to $8.9 billion.
Life and health operating earnings, which include life insurance and disability insurance, increased to $60 million on $759 million in allocated capital, from $48 million on $769 million in allocated capital.
- Sales of universal life and variable universal life increased to $76 million in the latest quarter, from $72 million in the year-earlier quarter.
- Term and whole life sales held steady at $2 million.
- Disability insurance sales held steady at $1 million.
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