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 7, 1999
ALLMERICA FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-13754 04-3263626
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) I.D. Number)
Incorporation)
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 6 pages
Exhibit Index on page 4
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Item 5. Other Events.
On October 7, 1999, Allmerica Financial Corporation announced that it has
reached an agreement to sell its group life and health insurance business
to Great-West Life & Annuity Insurance Company of Denver. A copy of the
press release is attached as Exhibit 99 and is incorporated by reference
herein.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE `SAFE HARBOR' PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Forward-Looking Statements
The Company wishes to caution readers that the following important factors,
among others, in some cases have affected and in the future could affect,
the Company's actual results and could cause the Company's actual results
for 1998 and beyond to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company. When used
in the attached press release, words such as "believes", "anticipated",
"expects" and similar expressions are intended to identify forward looking
statements. See "Important Factors Regarding Forward-Looking Statements"
filed as Exhibit 99-2 to the Company's Annual Report on Form 10-K for
the period ended December 31, 1998.
Factors that may cause actual results to differ materially from those
contemplated or projected, forecast, estimated or budgeted in such forward
looking statements include among others, the following possibilities:
(i) adverse catastrophe experience and severe weather; (ii) adverse loss
development for events the Company insured in prior years or adverse trends
in mortality and morbidity; (iii) heightened competition, including the
intensification of price competition, the entry of new competitors, and the
introduction of new products by new and existing competitors; (iv) adverse
state and federal legislation or regulation, including decreases in rates,
limitations on premium levels, increases in minimum capital and reserve
requirements, benefit mandates, limitations on the ability to manage care
and utilization, and tax treatment of insurance and annuity products;
(v) changes in interest rates causing a reduction of investment income or
in the market value of interest rate sensitive investments; (vi) failure to
obtain new customers, retain existing customers or reductions in policies
in force by existing customers; (vii) higher service, administrative, or
generalexpense due to the need for additional advertising, marketing,
administrative or management information systems expenditures; (viii) loss
or retirement of key executives; (ix) increases in medical costs, including
increases in utilization, costs of medical services, pharmaceuticals,
durable medical equipment and other covered items; (x) termination of
provider contracts or renegotiations at less cost-effective rates or terms
of payment; (xi) changes in the Company's liquidity due to changes in asset
and liability matching; (xii) restrictions on insurance underwriting, based
on genetic testing and other criteria; (xiii) adverse changes in the ratings
obtained from independent rating agencies, such as Moody's, Standard and
Poor's, A.M. Best, and Duff & Phelps; (xiv) lower appreciation on and
decline in value of managed investments, resulting in reduced variable
products, assets and related fees; (xv) possible claims relating to sales
practices for insurance products; (xvi) uncertainty related to the Year 2000
issue; (xvii) failure of a reinsurer of the Company's policies to pay its
liabilities under reinsurance contracts; (xviii) earlier than expected
withdrawals from the Company's general account annuities, GICs, and other
insurance products; and (xix) changes in the mix of assets comprising the
Company's investment portfolio and the fluctuation of the market value of
such assets.
Item 7. Financial Statements and Exhibits.
Exhibit 99 Press Release dated October 7, 1999, announcing that Allmerica
Financial Corporation has reached an agreement to sell its group
life and health insurance business to Great-West Life & Annuity
Insurance Company of Denver.
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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 8, 1999
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Exhibit Index
Exhibit 99 Press Release dated October 7, 1999, announcing that Allmerica
Financial Corporation has reached an agreement to sell its group
life and health insurance business to Great-West Life & Annuity
Insurance Company of Denver.
Page 4 of 6
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EXHIBIT 99
Allmerica Financial Announces Sale of Group Life and Health Business
Worcester, Mass., October 7, 1999--Allmerica Financial Corporation
(NYSE: AFC) today announced that it has reached an agreement to sell its
group life and health insurance business to Great-West Life & Annuity
Insurance Company of Denver.
The companies have signed a purchase and sale agreement and they have
scheduled to close the sale on March 1, 2000. Transition of the business
from Allmerica to Great-West will begin immediately after the closing and
will be completed in 12 to 18 months.
Allmerica President and Chief Executive Officer John F. O'Brien said the
transaction serves the interests of Allmerica's clients, the company and
its shareholders.
"Our clients will benefit from Great-West's commitment to the group life
and health business, its strong financial ratings, experience and quality
customer service," O'Brien said. "We at Allmerica will continue to provide
quality service to our insureds and work closely with Great-West to assure
a smooth transition of the business.
"The sale of our group life and health operation enables us to concentrate
our focus on the profitable growth of our two core businesses-asset
accumulation and property and casualty insurance," O'Brien said. "This
focus, which is a key element of our long-term business strategy, positions
us to manage our capital more efficiently and to maximize returns for our
shareholders."
Allmerica's group life and health business serves over 400,000 medical
members at more than 2,500 small to medium-sized organizations, and
generated some $300 million in annual revenue last year. Allmerica has
provided group life and health insurance for more than 50 years.
Allmerica Financial Corporation is the holding company for a diversified
group of insurance and financial services companies headquartered in
Worcester, Mass. Allmerica markets retirement, investment, employee
benefits and property and casualty insurance products and services to
individual and institutional clients. Allmerica is among the 20 largest
providers of variable annuities and variable life insurance and the 30
largest providers of property and casualty insurance coverage in the country.
Great-West Life & Annuity Insurance Company, an A++ rated company with
6,800 employees provides a full range of group life, health and financial
products to 3.6 million Americans. The company also is a leader in
administering tax-qualified annuities for public/non-profit pension
customers. As of year-end 1998, the company's total assets were
$25.1 billion.
Great-West Life & Annuity Insurance Company is an indirect subsidiary of
Great-West Lifeco Inc., a member of the Power Financial Corporation group
of companies. Great-West Lifeco Inc. is a financial services holding
company with interests in the life insurance, health insurance, retirement
savings, reinsurance and general insurance businesses, primarily in
Canada and the United States. The Great-West Life Assurance Company serves
the financial security needs of more than 13 million people through its
Canadian operations and London Insurance Group in Canada, and through
Great-West Life & Annuity Insurance Company in the United States.
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Contacts
Investors Media
Henry St. Cyr Michael F. Buckley
Vice President- Investor Relations Director- Public Information
(508) 855-2959 (508) 855-3099
AF-16
10/7/99
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