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A.M. Best Upgrades Allmerica's Ratings; Cites Companies' Strong Financial Position


WORCESTER, Mass., Jan. 21 /PRNewswire-FirstCall/ -- Allmerica Financial Corporation (NYSE: AFC) today announced that the A.M. Best Company upgraded the financial strength ratings of its property and casualty and life insurance subsidiaries. The rating upgrades affirm the effectiveness of a successful restructuring effort launched during the fourth quarter of 2002.

Earlier today, Best upgraded the financial strength ratings assigned to Allmerica's property and casualty companies, Citizens Insurance Company of America and The Hanover Insurance Company, to A- (Excellent) from B++ (Very Good), and its life insurance companies, Allmerica Financial Life Insurance and Annuity Company, and First Allmerica Life Insurance Company of America, to B+ (Very Good) from B- (Fair).

In 2002, Best lowered the financial strength ratings of Allmerica's life insurance companies and consequently reduced the ratings of its property and casualty companies based on concerns that Citizens and Hanover might need to make capital contributions to support the life companies.

Since then, Allmerica implemented a broad corporate restructuring plan, dramatically enhancing the capital position of its operating companies, including Citizens Insurance Company of America, The Hanover Insurance Company, Allmerica Financial Life Insurance and Annuity Company and First Allmerica Financial Life Insurance Company, effectively addressing rating agency concerns.

"This rating upgrade reflects the confidence A.M. Best has in the overall financial condition of our companies and the strong market position of our property and casualty companies," said Frederick H. Eppinger, Jr., President and Chief Executive Officer of Allmerica Financial Corporation.

"It also better positions us to further our goal to become a world class company committed to partnering with winning agents to meet their customers' insurance needs and to profitably grow their business over the long-term," Eppinger said. "We are committed to maintaining a financially solid company, creating even deeper partnerships with our independent agent partners, building the very best underwriting and product capabilities in our markets, and providing responsive service. We believe our ratings affirm our ability to achieve these goals."

Worcester, Massachusetts-based Allmerica Financial Corporation is the holding company for a group of insurance and financial services companies, led by Citizens Insurance Company of America and The Hanover Insurance Company. Howell, Michigan-based Citizens, founded in 1915, and Worcester, Massachusetts-based Hanover, founded in 1852, are leading regional property and casualty insurance companies. Citizens and Hanover offer a wide range of commercial and personal lines products through independent agents located predominantly in the Northeast, South and Midwest.

     Investors:                              Media:
     Sujata Mutalik                          Michael F. Buckley
     (508) 855-3457                          (508) 855-3099

SOURCE  Allmerica Financial Corporation
    -0-                             01/21/2004
    /CONTACT: Investors, Sujata Mutalik, +1-508-855-3457,
smutalik@allmerica.com, or Media, Michael F. Buckley, +1-508-855-3099,
mibuckley@allmerica.com, both of Allmerica Financial Corporation    /

CO:  Allmerica Financial Corporation; A.M. Best Company
ST:  Massachusetts

-- NEW041 --
7012 01/21/200416:11 ESThttp://www.prnewswire.com

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