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Ameriprise's (AMP) Ratings Reaffirmed by A.M. Best

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A.M. Best Co. has reiterated its ratings for Ameriprise Financial, Inc.AMP and its insurance units. 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 a 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 reaffirmed a stable outlook.

The affirmation of the ratings indicates Ameriprise's steady capital strength to meet financial commitments, remarkable operating results and strong hedging programs. However, these factors are subject to market risks and volatility. 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.

A.M. Best's affirmation has also catered to Ameriprise's huge network of financial advisors and the company's well established enterprise risk management (ERM) program. Though recently advisors' number remained flat, the strong retention rates of skilled advisors acts as a tailwind for the company. Moreover, the company's financial leverage of about 25% along with strong interest coverage has helped A.M. Best reaffirm the ratings.

Per A.M. Best, the company's earnings pertain to the interest rate scenario and equity markets movement, which results in volatility. However, the company's strong ERM programs offset this concern to an extent. Notably, 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.

Apart from 2014, Ameriprise has recorded huge outflows in its annuity and asset management businesses over the past few years including the first-half of 2015. Though market appreciation and cost control measures have positively driven earnings of the company, downward movement in equity markets might impact the overall earnings, according to A.M. Best.

Ameriprise currently carries a Zacks Rank #4 (Sell). Some better performing financial stocks include Silvercrest Asset Management Group Inc. SAMG , Monroe Capital Corporation MRCC and PennantPark Floating Rate Capital Ltd. PFLT . All three carry a Zack Rank #2 (Buy).

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AMERIPRISE FINL (AMP): Free Stock Analysis Report

SILVERCREST AM (SAMG): Free Stock Analysis Report

PENNANTPARK FRC (PFLT): Free Stock Analysis Report

MONROE CAPITAL (MRCC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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