Minneapolis-based financial services firm Ameriprise Financial may soon leverage a significant reinsurance deal to reduce its exposure to risks associated with life insurance and annuities, a new report has revealed.

A Think Advisor report suggested the development was hinted at by Walter Berman, the company’s chief financial officer, at a recent conference call with securities analysts.

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During the call, an analyst inquired about Ameriprise’s progress in securing a reinsurance agreement for its Retirement and Protection Solutions Division, which deals in life insurance and annuities. This query arises in the context of several life insurers in recent years having successfully reinsured blocks of in-force life and annuity policies, consequently freeing up substantial amounts of cash.

Berman acknowledged the company’s awareness of these trends. He pointed out that the current environment of relatively high-interest rates is narrowing the gap between what Ameriprise is willing to pay for reinsurance and the rates sought by reinsurers. This convergence, according to Berman, presents a potential opportunity for the company.

This potential move by Ameriprise reflects a broader industry trend where insurers are increasingly shifting towards selling life insurance policies and annuities that offer limited benefit guarantees.

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