Phoenix Adjusts Policy Dividend Scales for 2009

HARTFORD, Conn.--(BUSINESS WIRE)--The Phoenix Companies, Inc. (NYSE: PNX) today announced that the board of directors of Phoenix Life Insurance Company voted to adjust the 2008 policy dividend scale effective January 1, 2009 for all policies. The adjustments will result in a dividend reduction for most of the life insurance policies in the closed block of business, as well as the open block.

The closed block was established to ensure that reasonable dividend expectations of policyholders are met for participating, dividend-paying policies and contracts that were in force when Phoenix demutualized in June of 2001. The change to the dividend scale is in accordance with the guidelines for managing the closed block, which were established at that time. The board of directors is required to review the dividend scale annually to ensure an adequate level of assets in the closed block as well as fair and equitable dividend payments among all classes of participating policyholders. The closed block dividend scale was last adjusted in 2006.

“Overall, Phoenix’s closed block has benefited from favorable mortality experience and strong persistency, which has partially offset the impact of a prolonged low interest rate environment. This is only the second time we have had to adjust the dividend scale since we demutualized, which speaks to the underlying strength of the business. It is important to note that only the interest component will be reduced – other components such as mortality and expense remain unchanged,” said Dona D. Young, chairman, president and chief executive officer of The Phoenix Companies, Inc.

Phoenix projects it will pay its closed block policyholders approximately $337 million in dividends in 2009. The actual impact of the dividend scale adjustment on particular policies will vary based on a number of factors, including product type, age at issue and length of time the policy has been in force.

Phoenix’s open block, consisting of business written after the June 2001 demutualization, contains a small number of participating policies. The dividend scale for these policies is managed separately from the closed block and was previously adjusted in 2002 and 2008.

With roots dating to 1851, The Phoenix Companies, Inc. (NYSE:PNX) helps individuals and institutions solve their often highly complex personal financial and business planning needs through its broad array of life insurance, annuities and investments. In 2007, Phoenix had annual revenues of $2.6 billion and total assets of $30.2 billion. For more information, visit www.phoenixwm.com.