The head of a large insurer says a recent ratings downgrade was unwarranted and failed to reflect the company’s healthy liquidity level.
James Wehr, president of the Phoenix Companies Inc., Hartford, has put out a statement objecting to a move by Standard & Poor’s Ratings Services to cut its ratings.
S&P, New York, lowered the parent company’s counterparty credit rating to B minus, from B plus, and it has lowered the financial strength ratings of the insurance operating subsidiaries to BB, from BBB minus.
Liquidity at the holding company is improving, and Phoenix is reducing expenses and forming a new distribution operation, S&P acknowledges in a discussion of the downgrades.
Phoenix’s closed block has been profitable, and the company has the ability to cash in on the embedded value of the closed block, S&P says.
“The ratings also reflect a strong investment portfolio and strong operating liquidity,” and executing reinsurance treaties could help the company get capital or reduce capital requirements, S&P says.