Fitch Ratings has downgraded its financial-strength evaluations for Phoenix Life Insurance Company and other life subsidiaries of the Phoenix Companies Inc., Hartford.
Fitch, New York, lowered the companies' ratings to BBB from BBB+, removed their ratings from rating watch negative, and assigned them a negative outlook.
The agency says it based its negative outlook for Phoenix primarily on weak operating earnings, limited financial flexibility, and anticipated further weakening of the company's capital position due to credit losses.
"This action by Fitch was not unexpected, given the continuing challenges in the economic environment," says a Phoenix spokeswoman, Alice S. Ericson. "It's important to note that we no longer actively participate in the Fitch rating process, so this action was based only on public information."
Fitch attributes Phoenix's problems primarily to declines in its investments, increases in reserves due to unfavorable mortality in Phoenix's universal life block as well as its terminated accident and health reinsurance business and losses in its variable annuity reserves.
