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The Phoenix Companies, Inc. (NYSE:PNX) Provides Third Quarter 2014 Unaudited Statutory Results for Phoenix Life Insurance Company (PLIC) and Estimated Operating Metrics

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The Phoenix Companies, Inc. (NYSE:PNX) today provided third quarter 2014 unaudited statutory results for its principal operating subsidiary, Phoenix Life Insurance Company (PLIC), and estimated operating metrics for the same period.

“PLIC had strong statutory results in the third quarter, with continued improvement in capital,” said James D. Wehr, president and chief executive officer. “Phoenix’s key operating metrics for the third quarter also were solid, with well over $200 million in annuity deposits, favorable mortality, very low life surrender rates and record quarterly revenues generated by Saybrus.”

Mr. Wehr added, “Phoenix remains on track to file its third quarter 2014 Form 10-Q and return to current SEC filer status no later than Dec. 5.”

THIRD QUARTER 2014 STATUTORY RESULTS FOR PHOENIX LIFE INSURANCE COMPANY

PLIC today filed its unaudited statutory financial statements for the quarter ended Sept. 30, 2014 with the New York State Department of Financial Services on time. The following are highlights from that filing:

  • PLIC’s statutory surplus and asset valuation reserve was $774.9 million at Sept. 30, 2014 and $735.2 million at Dec. 31, 2013. The $39.7 million increase reflects earnings in the first nine months of the year, partially offset by $41.3 million in dividends PLIC paid to the parent holding company during that same period.
  • PLIC’s estimated risk-based capital ratio was 353% at Sept. 30, 2014, compared with 337% at Dec. 31, 2013. The increase was largely driven by the increase in surplus.
  • PLIC reported a statutory net gain from operations of $36.1 million and statutory net income of $41.5 million for the quarter ended Sept. 30, 2014, compared with a statutory net loss from operations of $4.5 million and a statutory net loss of $4.1 million for the quarter ended June 30, 2014. The change was driven by higher net investment income and more favorable mortality, partially offset by higher expenses. Year-to-date through Sept. 30, 2014, PLIC had a statutory net gain from operations of $75.3 million and statutory net income of $85.0 million.
  • PLIC reported statutory net investment income of $165.7 million for the quarter ended Sept. 30, 2014, compared with $147.7 million for the quarter ended June 30, 2014. The increase was driven primarily by strong alternative investment distributions.

The Phoenix Companies, Inc. noted that statutory results of its insurance company subsidiaries are not indicative of, and are not a replacement for, its consolidated GAAP results. Because of the differences between statutory and GAAP accounting principles, variances between the statutory financial results of its insurance company subsidiaries and their or The Phoenix Companies, Inc.’s GAAP financial information are likely to be material.

THIRD QUARTER 2014 ESTIMATED OPERATING METRICS FOR THE PHOENIX COMPANIES, INC.

The following are currently estimated operating metrics for the third quarter of 2014 for The Phoenix Companies, Inc.:

  • Annuity deposits of $221.7 million for the third quarter of 2014.
  • Net annuity flows (deposits less surrenders) of $64.6 million for the third quarter of 2014.
  • Annuity funds under management of $5.6 billion at Sept. 30, 2014.
  • Life insurance annualized premium of $1.1 million for the third quarter of 2014.
  • Gross life insurance in-force of $99.2 billion at Sept. 30, 2014.
  • Third quarter 2014 mortality favorable compared with expectations, with favorable results in both the open and closed blocks; year-to-date mortality for both the open and closed blocks also favorable compared with expectations.
  • Third quarter 2014 total individual life surrenders at an annualized rate of 3.8%, and closed block life policies at an annualized rate of 3.7%.
  • Third quarter 2014 annuity surrenders at an annualized rate of 11.2%.
  • Holding company cash and non-affiliated securities totaled $152.0 million at Sept. 30, 2014, including $14.8 million in dividends paid from PLIC in the third quarter of 2014. At Sept. 30, 2014, PLIC had remaining dividend capacity for 2014 of $17.4 million.
  • Saybrus Partners had EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of $2.4 million and total revenues of $10.3 million for the third quarter of 2014.

SEC FILINGS

Phoenix expects to return to current SEC filer status with the filing of The Phoenix Companies, Inc. third quarter 2014 Form 10-Q with the SEC no later than Dec. 5, 2014. The company expects its subsidiary, PHL Variable Insurance Company, to return to current SEC filer status with the filing of its third quarter 2014 Form 10-Q with the SEC no later than Dec. 12, 2014.

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. PHL Variable Insurance Company has its statutory home office in Hartford, Connecticut, and files annual and other periodic reports under the Securities Exchange Act of 1934. 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 Phoenix 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 Phoenix 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 Phoenix’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.

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