Ameriprise's Insurance Subsidiary to Reinsure Fixed Annuity

RiverSource Life Insurance Company, the insurance subsidiary of Ameriprise Financial, Inc. AMP, has entered an agreement with Commonwealth Annuity and Life Insurance Company to reinsure nearly $1.7 billion of fixed annuity policies. These policies, which represent 20% of Ameriprise’s in force fixed annuity account balances, were sold through third parties.

Commonwealth Annuity and Life Insurance Company is the subsidiary of Global Atlantic Financial Group.

While the transaction was dated Mar 19, 2019, it came to effect from Jan 1, 2019.  The deal generated nearly $200 million of deployable capital. Moreover, it is expected to be accretive to Ameriprise’s adjusted operating earnings per diluted share in 2019.

Notably, the annuity contract terms will remain the same and RiverSource will continue servicing and administering annuity policies.

This transaction is part of Ameriprise’s efforts to reduce the level of capital allocated to its more capital-intensive business lines by shifting the business mix. It has been growing inorganically and restructured its business from time to time through acquisitions, sales and spin-offs, with an aim to remain profitable by focusing on its core business.

Moreover, the company constantly modifies the product and service-offering capacity to keep pace with dynamic market needs. Its efforts to launch new products and rebound in the global equity markets are expected to support top-line growth.

A few stocks from the finance space worth a look are Fifth Third Bancorp FITB, M&T Bank Corporation MTB and Credit Acceptance Corporation CACC.

Over the past 60 days, Fifth Third Bancorp has witnessed an upward earnings estimate revision for the current year. Its shares have gained more than 20% in the past three months.

M&T Bank’s earnings estimates for 2019 have been revised upward over the past 60 days. Shares of the company have gained more than 20% in the past three months.

Credit Acceptance’s share price has increased nearly 23% in the past three months. For 2019, its earnings estimates have been revised upward over the past 60 days.

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Fifth Third Bancorp (FITB) : Free Stock Analysis Report
 
M&T Bank Corporation (MTB) : Free Stock Analysis Report
 
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