WORCESTER, Mass., Sept. 2 /PRNewswire-FirstCall/ -- Allmerica Financial
Corporation (NYSE: AFC) increased its estimate of pre-tax catastrophe losses
related to Hurricane Charley to approximately $40 million.
The company increased its initial estimate by $10 million in its
commercial lines business, based on additional inspections of the damaged
properties and more complete information provided by policyholders. These
estimates may be subject to further revisions in the wake of Hurricane
Frances, which could cause further damage to already impacted properties or
escalate repair costs.
The revised estimate for Hurricane Charley brings the company's total
estimated pre-tax catastrophe losses to approximately $42 million for the
quarter to date, or $0.69 per share after taxes. The anticipated charges will
be reflected in the company's third quarter results. The estimated total pre-
tax catastrophe losses for the year to date are now at $78 million.
The company maintains a property catastrophe aggregate reinsurance treaty
that 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.
The company estimates that approximately $67 million of the year-to-date
catastrophe losses can be applied against the $80 million retention held on
this aggregate treaty.
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.
CONTACTS:
Investors: Media:
Sujata Mutalik Michael F. Buckley
(508) 855-3457 (508) 855-3099
smutalik@allmerica.commibuckley@allmerica.com
SOURCE Allmerica Financial Corporation
-0- 09/02/2004
/CONTACT: Sujata Mutalik, +1-508-855-3457, smutalik@allmerica.com, or
Michael F. Buckley, +1-508-855-3099, mibuckley@allmerica.com both of Allmerica
Financial Corporation/
/Web site: http://www.allmerica.com/
(AFC)
CO: Allmerica Financial Corporation
ST: Massachusetts
IN: FIN INS
SU:
EO-CP
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3088 09/02/200417:18 EDThttp://www.prnewswire.com