Ameriprise Financial, Inc. (NYSE:AMP) Q4 2022 Earnings Call Transcript

Operator: Your next question is from the line of John Barnidge with Piper Sandler. Please go ahead.

John Barnidge: Good morning. Thank you very much for the opportunity. My question was on long-term care. I know third-party claims administration accelerated the pace of terminations. Is that anticipated to persist? And how should we think of run rate within that now?

Walter Berman: Sure. So yes, in the quarter, we had a combination of basically, as you indicated, a strong continued claims performance, along with basically the effects of our benefit programs and basically a premium increases. And — but there was this one-time catch-up because a vendor did get behind. But that was not — that was about half of it, but we are seeing good trends as it relates to the claims. And it’s typical to forecast, but we think we have all the foundational elements in there. It’s been within our expectations for multiple years. And so we are feeling that comfortable where it is, and we do again get the continued benefits of the programs that we have in place to basically contain and manage that effectively.

James Cracchiolo: And we’ve been able to now start investing out, which is garnering a higher spread for the portfolio, which is good.

John Barnidge: That’s very helpful. Thank you. And then my follow-up question. There’s been lots of G&A restraint across the franchise this year. But is there an optionality for Asset Management expense reductions, given the lower AUM. There were some other reductions that asset managers announced this morning.

James Cracchiolo: Yes. So as you saw in our Asset Management business, we have brought expenses down, and we will continue to really manage expenses tightly there. Now we are making good investments in certain areas. We see opportunity like in some of our real estate and other areas and responsible investing. But we have tightened the range a bit based on the appreciation of the markets. And we feel that is necessarily inappropriate. Now on the other side, like the Advice & Wealth as we build up more capabilities in the bank, we’re making some investments. But overall, for the company, we’ve managed expenses quite tightly, not just the current year but over the years, and it is actually favorable. Now we’re going to have merit increases, other things, et cetera, but we’re going to look at areas of opportunity to tighten if necessary, based on the market conditions. But Asset Management is one of those areas that we will be a bit more disciplined then.

John Barnidge: Thank you.