Update: Phoenix Reinsures Small Life Book With Swiss Re

 

Tuesday, Nov 24,2009, 10:07:18 AM   Click:

Phoenix Cos. Inc. said it has reinsured a small block of in-force life insurance to Reassure America Life Insurance Co., a Swiss Re subsidiary.

Terms of the transaction, including the types of life insurance policies in the block, were not disclosed.

The reinsurance transaction is the first of several the company is planning to do to strengthen its capital position and risk-based capital ratio, James D. Wehr, president and chief executive officer, said in a statement. Phoenix has said previously that it is targeting a year-end risk-based capital ratio of 300. The company's estimated RBC ratio was 255 at Sept. 30, Alice S. Ericson, a spokeswoman for the company said.

The company said it is focusing on improving that ratio by looking at reinsurance options, optimizing internal capital management and reducing risk as primary ways to realize improvement.

Earlier this month, Phoenix Cos. reduced the size of its board of directors to reflect the smaller size of the company and as a way to slash expenses. The Hartford, Conn.-based life insurer said four board members stepped down voluntarily, which took effect Nov. 6. The move brought the number of directors to 11 from 15. Phoenix Cos. (NYSE: PNX) said it's smaller after the spin-off of its asset-management business, Virtus Investment Partners (BestWire, Nov. 13, 2009).

Also in November, Phoenix Cos. posted its fifth straight net loss in the third quarter, and formed a distribution company, which inked a deal with financial services firm Edward Jones to provide life insurance consulting services. With the formation of Saybrus Partners, the distribution company, Phoenix is now working with Edward Jones to help their financial advisers address clients' life insurance needs, which would be a new source of fee-based revenue for Phoenix (BestWire, Nov. 4, 2009).

Phoenix Life Insurance Co. currently has a Best's Financial Strength Rating of B++ (Good). Swiss Re America Group currently has a Best's Financial Strength Rating of A (Excellent).