WORCESTER, Mass., Sept. 23 /PRNewswire-FirstCall/ -- Allmerica Financial
Corporation (NYSE: AFC) announced estimated pre-tax catastrophe losses of
approximately $20 million related to Hurricane Frances.
Estimated losses from Hurricane Frances combined with other catastrophe
losses eligible for reinsurance under the company's property catastrophe
aggregate reinsurance treaty now total $87 million for the year to date.
Under this treaty the company retains approximately $80 million of cumulative
catastrophe losses for the year and can expect to cede approximately $7
million of Hurricane Frances losses to the reinsurers, subject to a 10 percent
retention. The net benefit to the company is expected to be about $6 million,
lowering the pre-tax loss impact from Hurricane Frances to $14 million, net of
reinsurance.
Under the terms of the reinsurance agreement, eligible catastrophe losses
for the remainder of 2004, up to a maximum of $43 million, will be covered by
the aggregate treaty subject to a 10 percent retention by the company.
Estimated pre-tax catastrophe losses net of reinsurance for the quarter to
date are approximately $57 million, or $0.95 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 $93
million, net of reinsurance.
The company estimates that approximately 56% of the Hurricane Frances
losses were in its personal lines business, with the balance coming from
commercial lines.
The company's property catastrophe aggregate reinsurance treaty protects
against multiple catastrophes within a 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.
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.
SOURCE Allmerica Financial Corporation
-0- 09/23/2004
/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/
(AFC)
CO: Allmerica Financial Corporation
ST: Massachusetts
IN: FIN INS
SU:
CP-NJ
-- NETH027 --
6200 09/23/200417:02 EDThttp://www.prnewswire.com