WORCESTER, Mass., Jan. 2 /PRNewswire-FirstCall/ -- The Hanover Insurance
Group, Inc. (NYSE: THG) reported today that it has completed the previously
announced sale of its remaining run-off life insurance business, First
Allmerica Financial Life Insurance Company (FAFLIC), to Commonwealth Annuity
and Life Insurance Company, a Goldman Sachs company.
(Logo: http://www.newscom.com/cgi-bin/prnh/20051031/NEM023LOGO )
"We are very pleased to complete the divestiture of our run-off life
business, concluding a process that began in 2002," said Frederick H.
Eppinger, chief executive officer of The Hanover Insurance Group. "This
transaction significantly enhances our liquidity position and financial
flexibility. It frees capital that previously was tied up in our life business
and enables us to use that capital more effectively, further strengthening our
property and casualty business and positioning us to improve our overall
return on equity."
The company previously reported a net after-tax loss on the sale of FAFLIC
of approximately $72 million through September 30, 2008. The final purchase
price, proceeds from the sale and the net after-tax loss are subject to
adjustment as of December 31, 2008. The company currently estimates that an
additional loss of approximately $8 million will be recorded in the quarter
ended December 31, 2008, principally resulting from investment-related
purchase price adjustments. The company will provide details of the adjusted
transaction effects when it issues its fourth quarter results.
Forward-Looking Statements
All statements in this release, other than statements of historical fact,
are forward-looking statements, as that term is defined in the Private
Securities Litigation Reform Act of 1995. In addition to the risks and
uncertainties noted in this release, there are certain factors that could
cause actual results to differ materially from those anticipated by the press
release, slide presentation and statements made. These include: (1) the
statutory results of operations of FAFLIC until December 31, 2008, which will
impact the statutory surplus of FAFLIC and consequently the ultimate dividend,
purchase price, proceeds from the transaction and net after-tax loss; (2) the
uncertainties as to the gross or net proceeds to be received by THG, including
the uncertainty as to the effects of the various purchase price adjustments
and expenses incurred by THG and the impact of various tax elections and the
amount of after-tax loss; (3) the ability to realize post-closing earnings for
the property-casualty segment that are taxable and make FAFLIC's tax
attributes valuable; and (4) the impact of contingent liabilities, including
litigation and regulatory matters, assumed by the holding company in
connection with the transaction.
Forward-looking statements are not guarantees of future performance, and
actual results could well differ materially. Investors should consider these
and other risks and uncertainties in our business that may affect future
performance (including FAFLIC), and that are discussed in readily available
documents, including The Hanover's Annual Report on Form 10-K, quarterly
reports on Form 10-Q and other documents filed by Hanover with the Securities
and Exchange Commission and which are also available at http://www.hanover.com
under "Investor Relations."
About The Hanover
The Hanover Insurance Group, Inc. (NYSE: THG), based in Worcester, Mass.,
is the holding company for a group of insurers that includes The Hanover
Insurance Company, also based in Worcester; Citizens Insurance Company of
America, headquartered in Howell, Mich., and their affiliates. The Hanover
offers a wide range of property and casualty products and services to
individuals, families and businesses through an extensive network of
independent agents, and has been meeting its obligations to its agents and
their customers for more than 150 years. Taken as a group, The Hanover ranks
among the top 40 property and casualty insurers in the United States.
Contact Information
Investors: Media:
Robert P. MyronMichael F. Buckley
E-mail: [email protected] E-mail: [email protected]
1-508-855-3457 1-508-855-3099
SOURCE The Hanover Insurance Group, Inc.
Contact: Investors, Robert P. Myron, +1-508-855-3457,
[email protected], or Media, Michael F. Buckley, +1-508-855-3099,
[email protected], both of The Hanover Insurance Group, Inc.