A.M. Best Co. has reiterated its ratings for Ameriprise Financial, Inc. (AMP) and its insurance wings. The rating agency has maintained the issuer credit ratings (:ICR) of “a-” and reaffirmed the company’s existing debt ratings.
The agency has also reaffirmed the ratings for Ameriprise’s insurance divisions and their subsidiaries. While the ratings of RiverSource Life Insurance Company were reaffirmed with financial strength rating (:FSR) of A+ and ICR of “aa-”, the ratings of IDS Property Casualty Insurance Company (:IDS) were maintained at FSR of A and ICRs of “a+”. All the ratings were reaffirmed a stable outlook.
The affirmation of the ratings indicates Ameriprise’s steady capital strength to meet financial commitments; however, it is subject to market risks and volatility. Going forward, the improvement in the interest rate scenario appears to be blurred with the Federal Reserve continuing with its bond purchase plan. Nevertheless, per A.M. Best, the impact of sluggish economy on Ameriprise’s annuity and insurance business will be partially offset as a major portion matures in the near future and therefore can be assigned revised rates.
Though Ameriprise’s statutory premiums from annuity and life and health unit have been declining over the time, particularly due to a drop in its sales, this setback has been counteracted by a change in product mix indicated by a surge in ordinary life insurance sales. Ameriprise has always taken measures to predict and mitigate risks, formulated strategies to hedge GAAP income and economic risk, thereby, resulting in positive statutory operating results.
Ameriprise currently carries a Zacks Rank #4 (Sell). Some better performing financial institutions include GAMCO Investors, Inc. (GBL), Affiliated Managers Group Inc. (AMG) and The Blackstone Group L.P. (BX). While GAMCO Investors carries a Zacks Rank #1 (Strong Buy), Affiliated Managers Group and The Blackstone Group carry a Zack Rank #2 (Buy).
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