Phoenix Companies Inc. is leading provider of wealth management products and services offered through a variety of select advisors and financial services firms to serve the accumulation preservation and transfer needs of the affluent and high net worth market businesses and institutions. The company refers to its products and services together as its wealth management solutions. The company offers a broad range of life insurance variable annuity and investment management solutions through a variety of distributors. The Phoenix Companies Inc. has a market cap of $210.4 million; its shares were traded at around $1.82 with a P/E ratio of 3.1 and P/S ratio of 0.1. Highlight of Business Operations: Interest margins. Interest on assets backing surplus was a negative $2.2 million in the second quarter of 2009, compared to $14.3 million in the second quarter of 2008. The decrease of $16.5 million was driven by lower income from our alternative investments which are reported to the Company on a one to two quarter lag basis in accordance with partnership accounting, thus the unfavorable investment income primarily reflects partnership results from the latter part of 2008. Our universal life interest margins increased to $4.8 million in the second quarter of 2009, compared to $3.3 million in the second quarter of 2008 driven by higher investment income. Our variable annuity margins remained relatively flat at $3.4 million and $3.8 million in the second quarter of 2009 and 2008, respectively.
Deferred policy acquisition cost amortization. Deferred policy cost amortization decreased by $27.5 million to $28.1 million in the second quarter of 2009, as compared to $55.6 million in the second quarter of 2008. The decrease was primarily driven by lower deferred policy cost amortization for our variable annuity products as a result of favorable fund performance.
Fees on our life and annuity products. Fee revenues decreased by $11.8 million to $23.5 million in the second quarter of 2009, as compared to $35.3 million in the second quarter of 2008. The decrease was primarily driven by lower premium-based fees on our universal life and variable universal life products driven by lower sales as well as lower asset-based fees on our variable annuity products driven by lower account balances primarily due to unfavorable equity markets.
Mortality margins in universal life decreased by $22.6 million to $23.2 million in the second quarter of 2009, compared to $45.8 million in the second quarter of 2008. Approximately $18 million was above trend mortality experience, driven by a few large claims. Mortality for other product lines was within expectations. Fluctuations in mortality are inherent in our lines of business.
Net realized investment gains or losses on our general account investments. In the second quarter of 2009, we had net realized losses of $68.8 million, as compared to net realized losses of $14.6 million in the second quarter of 2008. The realized losses in the second quarter of 2009 were primarily driven by realized losses on the embedded derivative associated with our variable annuity guarantees, $45.5 million of which is associated with the FAS 157 non-performance risk factor, partially offset by $11.1 million of hedge gains associated with those guarantees. In addition, we had $20.9 million of other-than-temporary impairment losses and $33.8 of transaction-related losses.
We carried valuation allowances of $433.7 million and $287.9 million on $687.3 million and $744.6 million of deferred tax assets at June 30, 2009 and December 31, 2008, respectively, due to uncertainties related to our ability to utilize a portion of our deferred tax assets. The amount of the valuation allowance has been determined based on our estimates of taxable income over the periods in which the deferred tax assets will be recoverable, including consideration of the expiration dates and amounts of carryforwards related to net operating losses, capital losses, foreign tax credits and general business tax credits.
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