The Phoenix loses $26.6M; gains partner

Hartford life insurer The Phoenix Cos. today reported a third-quarter loss of $26.6 million, and announced that it has formed a new entity to provide life insurance consulting services to make up for the loss of similar business with State Farm and others.

The 23 cents per share loss for the quarter ended Sept. 30, was not nearly as severe as the $339.5 million loss the company posted in the year-ago period, as The Phoenix continues to cut costs in the face of the recession.

Results for the quarter were driven largely by declining revenues from lower sales, premiums and net investment income, as well as other "unusual" expenses, including $12.7 million in severance and non-deferred sales-related costs, Phoenix said.

During the quarter, the company also completed its previously announced layoff of more than a third of its workforce -- key to its plan to cut $110 million from annual expenses.

Life insurance sales fell sharply during the quarter to $4.5 million from $55.8 million a year earlier.

Phoenix CEO James D. Wehr, who took over that post earlier this year, said other results indicate that The Phoenix has "turned the corner."

"Core operating fundamentals were stronger this quarter, with improved investment performance," Wehr said. "Expense reductions began to have an impact, and surrenders remained at manageable levels.

"Our investment portfolio continues to be a strong contributor to improving Phoenix's balance sheet and stabilizing statutory surplus," he said. "It clearly weathered the past year's storm and is showing a positive trajectory in 2009, with lower impairments, substantially decreased unrealized losses, and a turnaround in alternative asset classes."

The new distribution entity, Saybrus Partners, will provide wealth management consultant services, and has secured its first consulting agreement with financial services firm Edward Jones.

Under the deal, Saybrus' wealth management consultants will work with more than 11,700 Edward Jones financial advisors, helping them match insurance products to meet their clients' needs.

The initial three-year agreement focuses Saybrus' consultants on two new insurance carriers in the Edward Jones retail distribution network, John Hancock Life Insurance Co. and Pacific Life Insurance Co., both of which have sales contracts with Edward Jones, the company said.

Edward W. Cassidy, Phoenix's executive vice president of distribution, will be the managing principal of Saybrus.

Wehr said the company continues to seek new relationships with distributors, including independent marketing organizations. That would help fill a void created earlier this year when State Farm, and other major Phoenix distributors suspended sales of the insurer's products after it sustained a series of ratings downgrades.