Standard & Poor’s on Tuesday lowered its ratings on the financial strength of both Phoenix Life Insurance Co. and PHL Variable Insurance Co. from BB- to B+.
The standard double-B, or BB, rating means a company is not so vulnerable in the near future, but it faces major ongoing uncertainties to adverse business, financial and economic conditions. A plus or minus sign added to a rating indicates a company is slightly better or worse than the standard.
A standard, single-B rating by S&P means a company is “more vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments.”
S&P held and affirmed its B- rating of the parent company, The Phoenix Cos.
“We believe Phoenix, with $130 million excess liquid resources at the holding company, has adequate resources to meet its debt obligations in the next 12 months. … The outlook is negative, reflecting our belief that there is still uncertainty relating to Phoenix’s ability to file its required regulatory statements on time or to meet our earnings and capital expectations,” S&P wrote in its ratings report.
S&P removed the ratings from CreditWatch negative and assigned a negative outlook to the parent company and the two subsidiaries, Phoenix Life Insurance Co. and PHL Variable Insurance Co. A negative CreditWatch is the expectation that its credit rating could be lowered in the future.
Phoenix CEO and President James D. Wehr disagreed with S&P’s ratings.
“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,” Wehr said in a statement.
Phoenix cited improvements in recent years: growth in capital for the life insurance company, a stronger investment portfolio, stability in the company’s ability to keep life-insurance customers, and growth in annuity deposits.
Last month the Reuters news agency, citing anonymous sources, reported that The Phoenix Cos. has hired investment banks Goldman Sachs Group Inc. and Sandler O’Neill and Partners to explore a sale of the company.
