NU Online News Service, Nov. 6, 11:10 a.m. – The Phoenix Companies, Inc., Hartford, today reported an operating loss of $81.8 million for the third quarter on operating income, excluding venture capital, of $7.9 million, compared with an operating loss of $27.4 million in the third quarter of 2001 on $17.9 million in operating income in the third quarter of 2001. The company also reported a GAAP net loss of $93 million in the third quarter of 2002, compared with a $21.2 million net loss in the third quarter of 2001.
The company says its latest operating loss includes a $62.3 million noncash, after-tax charge to reflect a reduction in goodwill associated with its investment management business, resulting from the decline of the equity markets in the quarter; a $14.4 million after-tax loss on venture capital investments; an $8.8 million after-tax acceleration of deferred acquisition costs related to the variable annuity business; and a $1.9 million after-tax increase in guaranteed minimum death benefit reserves for a variable annuity block of business recently acquired from CNA.
The third quarter 2002 GAAP results also include net realized investment losses of $7.6 million and a previously announced $3.6 million after-tax reserve related to management restructuring, Phoenix says.
“Solid momentum in life insurance earnings was offset by several negative developments in annuities, resulting in an operating loss before taxes of $2 million in the third quarter of 2002, compared with operating income of $11.7 million in the third quarter of 2001,” the company says in a statement.