WORCESTER, Mass., June 3 /PRNewswire-FirstCall/ --
Allmerica Financial Corporation (NYSE: AFC) announced today that it will
record a pre-tax charge of approximately $23 million in the second quarter of
2003 resulting from a recent adverse arbitration decision related to an
insurance pool in which its subsidiary, The Hanover Insurance Company
("Hanover"), was formerly a participant.
Allmerica said the arbitration decision relates to a single large property
and casualty insurance business interruption claim loss caused by a fire which
occurred in 1995. The charge represents Hanover's share of the claim, net of
previously recorded reserves and payments. Hanover was a 4.864 percent
participant in the pool with more than thirty other companies, but has not
been a participant in the pool since 1995.
Robert P. Restrepo, Jr., President of Allmerica's Property and Casualty
Companies, stated, "We are disappointed and surprised by the arbitration
decision, as are many other pool participants. Nonetheless, we look forward to
resolving this dispute and putting this outstanding claim behind us."
Certain statements in this release may be considered to be forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995.
Use of the words "believes," "anticipates," "expects" and similar expressions
is intended to identify forward-looking statements. The Company cautions
investors that any such forward-looking statements are not guarantees of
future performance, and actual results could differ materially. Investors are
directed to consider the risks and uncertainties in our business that may
affect future performance and that are discussed in readily available
documents, including the Company's annual report and other documents filed by
Allmerica with the Securities and Exchange Commission and which are available
at http://www.allmerica.com/ under "Financial News." These uncertainties
include the possibility of adverse catastrophe experience and severe weather,
adverse loss development and adverse trends in mortality and morbidity,
changes in the stock and financial markets, changes from assumed surrender
activities and assumed stock market returns, adverse selection in surrender
patterns, investment impairments, heightened competition, adverse state and
federal legislation or regulation, financial ratings actions, and various
other factors, including the effect of the Company's restructuring actions.
Allmerica Financial Corporation is the holding company for a diversified
group of insurance and financial services companies headquartered in
Worcester, Massachusetts.
SOURCE Allmerica Financial Corporation
-0- 06/03/2003
/CONTACT: Investors: Henry P. St. Cyr, +1-508-855-2959,
hstcyr@allmerica.com, or Media: Michael F. Buckley, +1-508-855-3099,
mibuckley@allmerica.com, both of Allmerica/
/Web site: http://www.allmerica.com/
(AFC)
CO: Allmerica Financial Corporation; The Hanover Insurance Company
ST: Massachusetts
IN: FIN INS
SU:
CP-EO
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5009 06/03/200316:25 EDThttp://www.prnewswire.com