Challenged to place its products, Phoenix creates own distributor

The Phoenix Cos. Inc., following a series of ratings downgrades earlier this year that halted sales of its life insurance and annuity products by major outside distributors, today announced the creation of a distribution company, Saybrus Partners Inc., and a consulting agreement with Edward Jones & Co. LP. Saybrus will provide life insurance consulting services to other companies and support Phoenix's products inside of its own distribution channels, according to a news release. The company's wealth management consultants also will work with Edward Jones' 11,700 financial advisers as part of a three-year agreement, focusing on two new carriers inside of Edward Jones' retail distribution network, John Hancock Life Insurance Co. (USA) and Pacific Life Insurance Co. Phoenix has been working on establishing new distribution relationships after a series of ratings downgrades earlier this hurt its relationships with major distributors, such as State Farm Mutual Automobile Insurance Co. Edward W. Cassidy, executive vice president of distribution at Phoenix, was also named Saybrus' managing principal. “Phoenix has the ability to leverage its reputation and track record of wholesaling expertise and support,” said Mr. Cassidy, in an interview. As a wholly-owned subsidiary of Phoenix, Saybrus won't have a beneficial impact in the insurer's sales, but it will push the earnings it generates back to the parent company, he added. “Saybrus's purposes are twofold: Wholesaling in the marketplace and assisted sales to institutional clients—intermediaries who aren't necessarily life insurance specialists but have other lines of expertise,” Mr. Cassidy said. Phoenix posted a loss of $26.6 million for the third quarter, compared with a loss of $339.5 million for the year-earlier period. Life insurance sales and annuity deposits were both down drastically year over year. Third-quarter annualized insurance premiums fell to $4.5 million from $55.8 million in the third quarter of 2008, while annuity deposits dropped to $12.6 million from $157.1 million.