UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to
Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 16, 1998
ALLMERICA FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-13754 04-3263626
(State or other jurisdic- Commission File Number) (I.R.S. Employer I.D.
tion of Incorporation) Number)
440 Lincoln Street, Worcester, Massachusetts 01653
(Address of Principal Executive Offices)
(Zip Code)
(508) 855-1000
(Registrant's Telephone Number including area code)
Page 1 of 5 pages
Exhibit Index on page 4
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Item 5. Other Events.
On October 15, 1998, Allmerica Financial Corporation announced that
third quarter operating earnings will be impacted by an estimated $0.25
to $0.30 per share as a result of losses relating to increased frequency
of catastrophes and lower investment income.
Pretax catastrophe losses in the property and casualty segment in the
third quarter totaled $28.7 million. Catastrophe losses incurred by
Hanover Insurance and Citizens Corporation, primary operating subsidiaries
of Allmerica Financial Corporation, stemmed from six events totaling
$10.1 million and two events totaling nearly $18.6 million, respectively.
Pretax net investment income includes a $11.7 million loss related to
three limited partnerships that primarily engaged in fixed income
arbitrage. In addition, the Company has incurred realized losses of
$18.5 million related to reducing the carrying value of these assets.
A copy of the press release is attached as Exhibit 99 and is incorporated
by reference herein.
Item 7. Financial Statements and Exhibits.
Exhibit 99
Press Release dated October 15, 1998, announcing Allmerica
Financial Corporation, expects $0.25 to $0.30 per share
decrease in third quarter earnings as a result of losses.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
ALLMERICA FINANCIAL CORPORATION
By: /s/ Edward J. Parry III
Edward J. Parry III
Vice President, Chief Financial
Officer, and Treasurer
Date: October 16, 1998
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Exhibit Index
Exhibit 99 Press Release dated October 15, 1998, announcing Allmerica
Financial Corporation, expects $0.25 to $0.30 per share
decrease in third quarter for operating earnings adverse
items.
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EXHIBIT 99
ALLMERICA FINANCIAL AND CITIZENS CORPORATION ANNOUNCE
THIRD QUARTER OPERATING EARNINGS ADVERSE ITEMS
WORCESTER, Mass., October 15, 1998 - Allmerica Financial Corporation
(NYSE:AFC) today said it expects third quarter operating earnings to
be adversely impacted by $0.25 to $0.30 per share of unusual losses
related to increased frequency of catastrophes and lower investment
income. The two unusual items are expected to result in 1998 third
quarter operating earnings falling below both analysts' estimates and
the $0.90 per share Allmerica Financial reported in the third quarter
of 1997.
John F. O'Brien, president and chief executive officer said, "While
we continue to gain market share in the variable products business
and we are making good progress on expense reductions in the Risk
Management operation, we had unusual items in the quarter which
impacted current earnings."
Pretax catastrophe losses in the property and casualty segment in
the third quarter totaled $28.7 million. Catastrophe losses stemmed
from six events totaling $10.1 million at Hanover Insurance and two
events totaling nearly $18.6 million at Citizens Corporation (NYSE:CZC.
For Allmerica Financial's property and casualty operation in total,
year-to-date pretax catastrophe losses stand at $82.6 million, more
than double the average catastrophe experience for Allmerica
Financial's property and casualty operation over the past five years.
Pretax net investment income includes a $11.7 million loss related to
three limited partnerships that primarily engaged in fixed
income arbitrage. In addition to operating losses from these
investments, Allmerica Financial has incurred realized losses
of $18.5 million related to reducing the carrying value of
these assets.
Allmerica Financial Corporation is the holding company for a
diversified group of insurance and financial services companies
headquartered in Worcester, Mass.
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AF-34
10/15/1998
Contacts: Investors: Media:
Jean Peters Mike Buckley
508)855-3599 (508)855-3099
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