HARTFORD, Conn.--(BUSINESS WIRE)--The Phoenix Companies, Inc. (NYSE:PNX) issued the following response regarding Standard & Poor’s (S&P) announced affirmation of Phoenix’s senior debt rating and downgrade of its life companies’ financial strength ratings:
“In light of the facts, we respectfully disagree with S&P’s opinion, as it does not reflect our progress since the agency last changed our financial strength ratings in early 2010,” said James D. Wehr, president and chief executive officer.
“By a number of meaningful metrics, including capital, Phoenix’s financial position has improved significantly, and the company continues to consistently fulfill all of our long-term promises to policyholders. We remain focused on our current priorities, including executing our middle market strategy, growing our successful distribution business, becoming a current SEC filer and remediating our financial controls,” he said.
The following are improvements to key financial strength metrics since the last financial strength ratings change by S&P in 2010.
- Improved life company capital: Phoenix Life Insurance Company statutory surplus and AVR grew 36% from $574.2 million at Dec. 31, 2009 to $780.2 million at March 31, 2014, even after declines in 2013 driven by reserve strengthening and a decrease in deferred tax assets. Risk-based capital (RBC) ratio improved from 223% to 347% in that same time period.
- Enhanced flexibility: Holding company cash and non-affiliated securities increased from $63.9 million at Dec. 31, 2009 to $175.6 million at March 31, 2014. In its news release, S&P acknowledged the holding company’s adequate liquid resources.
- Stronger investment portfolio: Impairments improved, decreasing from $108.2 million for 2009 to $12.3 million for 2013. The percentage of below investment grade bonds declined from 10.5% at Dec. 31, 2009 to 7.3% at Dec. 31, 2013, and the company’s portfolio improved from unrealized losses of $332.0 million to unrealized gains of $390.6 million in that same time period.
- Stable in force business: Life insurance surrender ratio improved from 9.8% for 2009 to 4.8% (annualized) at March 31, 2014, with the closed block improving from 9.7% to 4.7% (annualized). The annuity surrender ratio improved from 15.7% to 12.5% (annualized) in that same period. In its news release, S&P noted that it believes Phoenix’s closed block is profitable and performing in line with expectations.
- Growing businesses: Annuity deposits grew from $142.6 million in 2009 to $682.9 million in 2013 and were $170.4 million for the first quarter of 2014. Saybrus, our distribution subsidiary formed in the fourth quarter of 2009, turned profitable within two years and had $26.8 million in revenues in 2013.
“We appreciate the ongoing support of our policyholders, distributors, investors and employees and are confident they can continue to rely on our financial strength,” Mr. Wehr said.
ABOUT PHOENIX
The Phoenix Companies, Inc. (NYSE:PNX) helps financial professionals provide solutions, including income strategies and insurance protection, to families and individuals planning for or living in retirement. Founded as a life insurance company in 1851, Phoenix offers products and services designed to meet financial needs in the middle income and mass affluent markets. Its distribution subsidiary, Saybrus Partners, Inc. offers solutions-based sales support to financial professionals and represents Phoenix’s products among key distributors, including independent marketing organizations and brokerage general agencies. Phoenix is headquartered in Hartford, Connecticut, and its principal operating subsidiary, Phoenix Life Insurance Company, has its statutory home office in East Greenbush, New York. For more information, visit www.phoenixwm.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The foregoing contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We intend for these forward-looking statements to be covered by the safe harbor provisions of the federal securities laws relating to forward-looking statements. These forward-looking statements include statements relating to, or representing management’s beliefs about, future events, transactions, strategies, operations and financial results, including, without limitation, our expectation to provide information within anticipated timeframes and in accordance with the amended administrative order entered by the SEC with respect to the Company and its wholly owned subsidiary, PHL Variable Insurance Company (“PHL Variable”), and otherwise in accordance with law, the outcome of litigation and claims as well as regulatory examinations, investigations, proceedings and orders arising out of the restatement and the failure by the Company and PHL Variable to file SEC reports on a timely basis, potential penalties that may result from failure to timely file statutory financial statements with state insurance regulators, and the Company’s ability to satisfy its requirements under, and maintain the listing of its shares on, the NYSE. Such forward-looking statements often contain words such as “will,” “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “is targeting,” “may,” “should” and other similar words or expressions. Forward-looking statements are made based upon management’s current expectations and beliefs and are not guarantees of future performance. Our ability to resume a timely filing schedule with respect to our SEC filings is subject to a number of contingencies, including but not limited to, whether existing systems and processes can be timely updated, supplemented or replaced, and whether additional filings may be necessary in connection with the restatement. Our actual business, financial condition or results of operations may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others, those risks and uncertainties described in any of our other filings with the SEC. Certain other factors which may impact our business, financial condition or results of operations or which may cause actual results to differ from such forward-looking statements are discussed or included in our periodic reports filed with the SEC and are available on our website at www.phoenixwm.com under “Investor Relations.” You are urged to carefully consider all such factors. We do not undertake or plan to update or revise forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections, or other circumstances occurring after the date of this news release, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. If we make any future public statements or disclosures which modify or impact any of the forward-looking statements contained in or accompanying this news release, such statements or disclosures will be deemed to modify or supersede such statements in this news release.
