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Allmerica Financial Corporation Announces Estimated Hurricane Ivan Losses of Approximately $5 Million

September 28, 2004

WORCESTER, Mass., Sept. 28 /PRNewswire-FirstCall/ -- Allmerica Financial Corporation (NYSE: AFC) announced estimated pre-tax catastrophe losses of approximately $5 million related to Hurricane Ivan.

The company expects to cede all Hurricane Ivan losses to reinsurers, subject to a 10 percent retention, since year-to-date catastrophe losses eligible for reinsurance have exceeded the retention limit in the company's property catastrophe aggregate reinsurance treaty. This reduces the company's pre-tax estimated loss impact from Hurricane Ivan to about $0.5 million, net of reinsurance.

The company's property catastrophe aggregate reinsurance treaty protects against multiple catastrophes within a single year. The treaty provides $50 million of reinsurance coverage in excess of cumulative losses in the year of approximately $80 million. For purposes of the $80 million retention, individual events are capped at $30 million. In addition, the company retains 10% of the risk on the $50 million coverage.

Estimated year-to-date catastrophe losses eligible for reinsurance total $92 million. Under the terms of the reinsurance agreement the company has $38 million in reinsurance coverage available for eligible catastrophe losses incurred through the end of the 2004, subject to a 10 percent retention.

Estimated pre-tax catastrophe losses net of reinsurance for the quarter to date are approximately $58 million, or $0.96 per share after taxes. The anticipated charges will be reflected in the company's third quarter results. Total estimated pre-tax catastrophe losses for the year to date are at $94 million, net of reinsurance.

Allmerica Financial Corporation is scheduled to announce its third quarter financial results on Monday, October 25.

Certain statements in this release, including the Company's estimates of pre-tax catastrophe losses, 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 also available at http://www.allmerica.com under "Investor Relations".

These uncertainties include the difficulty in estimating catastrophe losses, as well as 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 underwriting activities and surrender patterns, investment impairments, heightened competition, adverse state and federal legislation or regulation, financial ratings actions, and various other factors, which include the effect of the Company's decision to close its retail broker-dealer operations as well as the anticipated impact and cost of the GMDB hedging program.

Allmerica Financial Corporation is the holding company for a group of insurance companies headquartered in Worcester, Massachusetts.

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

SOURCE  Allmerica Financial Corporation
    -0-                             09/28/2004
    /CONTACT: Investors: Sujata Mutalik, +1-508-855-3457,
smutalik@allmerica.com, or Media: Michael F. Buckley, +1-508-855-3099,
ibuckley@allmerica.com, both of Allmerica Financial Corporation/
    /Web site:  http://www.allmerica.com /

CO:  Allmerica Financial Corporation
ST:  Massachusetts, Florida

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1301 09/28/200416:11 EDThttp://www.prnewswire.com