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): April 27, 2000
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
tion of Incorporation) I.D. 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 29 pages
Exhibit Index on page 4
Page 1
<PAGE>
Item 5. Other Events.
On April 27, 2000, Allmerica Financial Corporation announced its
financial results for first quarter 2000. A copy of the press release
and accompanying statistical supplements 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 2000 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, 1999 .
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; as well as continued compliance with state and federal regulations;
(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 general expense 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,
(including funding agreements), and other insurance products; (xix) changes
in the mix of assets comprising the Company's investment portfolio and the
fluctuation of the market value of such assets; (xx) losses resulting from
the Company's participation in certain reinsurance pools; and (xxi) adverse
results of regulatory audits related to the Company's prior years' federal
income tax filings.
Item 7. Financial Statements and Exhibits.
Exhibit 99 Press Release dated April 27, 2000, announcing Allmerica
Financial Corporation first quarter 2000 financial results.
Exhibit 99.1 Allmerica Financial Corporation First Quarter Statistical
Supplement.
Page 2
<PAGE>
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 and Chief Financial
Officer
Date: May 2, 2000
Page 3
<PAGE>
Exhibit Index
Exhibit 99 Press Release dated April 27, 2000, announcing Allmerica
Financial Corporation first quarter 2000 financial results.
Exhibit 99.1 Allmerica Financial Corporation First Quarter Statistical
Supplement.
Page 4
<PAGE>
EXHIBIT 99
ALLMERICA FINANCIAL CORPORATION REPORTS RECORD
FIRST QUARTER OPERATING EARNINGS OF $1.22 PER SHARE
WORCESTER, MASS., April 27, 2000 - Allmerica Financial Corporation
(NYSE: AFC) today reported record operating earnings from continuing
operations for the first quarter of 2000.
First quarter highlights:
Net operating income per share from continuing operations was $1.22, or
$66.4 million, an increase in earnings per share of 37.1 percent compared
to $0.89 per share, or $51.3 million in 1999. Net operating income excludes
net realized investment gains and losses and other non-recurring gains and
charges, net of taxes.
Asset Accumulation pre-tax operating earnings were $59.5 million, up 9.0
percent from $54.6 million for the same period in 1999.
Variable annuity sales were $821.1 million, up 25.7 percent over the fourth
quarter of 1999 and an increase of 14.9 percent over sales in the first
quarter of 1999.
Risk Management pre-tax operating earnings were $43.1 million, compared to
$29.8 million reported in the first quarter of 1999.
Net income was $30.2 million, or $0.56 per share compared to $154.1 million,
or $2.67 per share in 1999.
"Our variable annuity business produced strong growth in the quarter, with
sales up nearly 26 percent over the fourth quarter of last year," said
John F. O'Brien, president and chief executive officer of Allmerica Financial
Corporation. "In Risk Management, we reported higher profits and made good
progress toward our stated goals of reducing expenses and achieving premium
growth."
Segment Results
Allmerica Financial operates in two primary businesses: Asset Accumulation
and Risk Management. Asset Accumulation markets insurance and retirement
savings products and services to individual and institutional clients through
Allmerica Financial Services, and investment management services to
institutions, pension funds, and other organizations through Allmerica
Asset Management, Inc. Risk Management markets property and casualty
insurance products on a regional basis through The Hanover Insurance Company
and Citizens Insurance Company of America, with distribution channels in
Standard Markets, Sponsored Markets and Specialty Markets.
Asset Accumulation
First quarter pre-tax operating earnings for the Asset Accumulation business
increased 9.0 percent to $59.5 million from $54.6 million in 1999.
Allmerica Financial Services' pre-tax operating earnings increased to $54.4
million in the quarter, up from $48.9 million in the first quarter of 1999.
Allmerica Asset Management's pre-tax operating earnings were $5.1 million,
compared to $5.7 million in the same period of the prior year.
Asset Accumulation highlights:
Variable annuity sales were $821.1 million in 2000, up 25.7 percent over the
fourth quarter of 1999, and an increase of 14.9 percent from $714.8 million
in the first quarter of 1999.
Variable product assets increased to $18.6 billion at March 31, 2000, up 30.1
percent from March 31, 1999.
Variable product fees of $85.8 million were up 31.0 percent over the first
quarter of 1999. Increased fees are related to variable product asset growth
resulting from sales and stock market appreciation.
Variable life insurance sales were $27.2 million in the quarter, up 22.5
percent compared to the first quarter of 1999.
Risk Management
Risk Management pre-tax operating earnings were $43.1 million, compared to
$29.8 million for the first quarter of 1999.
Property and Casualty highlights:
Direct written premiums increased 8.3 percent in the first quarter to $576.3
million compared to $532.2 million in the first quarter of 1999. Pre-tax
catastrophe losses were $15.2 million versus $43.7 million in 1999.The
statutory expense ratio improved to 26.9 percent in the quarter compared to
28.4 percent for the first quarter of last year and 28.5 percent for the
full year in 1999.
Corporate
Corporate segment net expenses were $14.5 million in the first quarter of
2000, compared to $16.0 million in 1999.
Investment Results
Net investment income was $142.3 million for the first quarter of 2000,
compared to $154.3 million in the same period in 1999. This decrease is due
to lower levels of spread-based assets and the timing of share repurchases.
First quarter net realized investment losses were $46.8 million, compared
to $131.8 million of net realized investment gains in the first quarter of
In 2000, realized losses related primarily to the sale of fixed income
securities in the property and casualty portfolios to increase yields. In
1999, realized gains related principally to the sale of appreciated equities
in the property and casualty investment portfolio.
Balance Sheet
Shareholders' equity was $2.3 billion, or $42.27 per share at March 31, 2000,
compared to $2.2 billion, or $41.32 per share at December 31, 1999. Excluding
the impact of SFAS No. 115, book value was $43.13 per share at the close of
the first quarter, compared to $42.71 per share at December 31, 1999.
Total assets were $31.9 billion at March 31, 2000, up from $30.8 billion at
year-end 1999. Separate account assets increased to $18.6 billion at
March 31, 2000, up from $17.6 billion at December 31, 1999.
Additional Items
The company closed the sale of its group life and health insurance operations
to Great West Life and Annuity Insurance Company of Denver on March 1, 2000.
On March 21, 2000 Allmerica Financial announced an additional $100 million
common stock repurchase program. As of April 26, Allmerica Financial had
repurchased approximately 6.7 million shares of its common stock for an
aggregate cost of approximately $361.2 million.
Interim information is unaudited.
Allmerica Financial Corporation is the holding company for a diversified
Group of insurance and financial services companies headquartered in
Worcester, Mass.
CONTACTS: Investors Media
--------- -----
Henry P. St. Cyr Michael F. Buckley
(508) 855-2959 (508) 855-3099
E-mail:[email protected] E-mail:[email protected]
ALLMERICA FINANCIAL CORPORATION
<TABLE>
<CAPTION>
Quarter ended
March 31
(In millions, except per share data) 2000 1999
<S> <C> <C>
Net income $ 30.2 $ 154.1
Net income per share $ 0.56 $ 2.67
Weighted average shares 54.3 57.7
</TABLE>
The following is a reconciliation from net operating income to net income
per share:
<TABLE>
<CAPTION>
Quarter ended
PER SHARE DATA (DILUTED) <FN2> March 31
(In millions, except per share data) 2000 1999
<S> <C> <C>
Net operating income <FN1> $ 1.22 $ 0.89
Net realized (losses) gains on investments, net
of taxes, minority interest and amortization (0.66) 1.72
Income from operations of discontinued business,
net of taxes 0.00 0.06
-----------------
Net income $ 0.56 $ 2.67
=================
<FN>
<FN1>
Net operating income excludes net realized gains and losses and other
items which management believes are not indicative of overall operating
trends, net of taxes and minority interest.
<FN2>
Basic net income per share was $0.56 and $2.69 for the quarters ended
March 31, 2000 and 1999, respectively.
</FN>
</TABLE>
All figures reported are unaudited and are in accordance with generally
accepted accounting principles.
<PAGE>
Exhibit 99.1
ALLMERICA FINANCIAL CORPORATION
STATISTICAL SUPPLEMENT
TABLE OF CONTENTS
Financial Highlights 1
Consolidated Financial Statements
Income Statements 2
Balance Sheets 3
Segment Results
Income Statement Highlights 4
Historical Income Statement Highlights 5
Risk Management
Condensed Income Statements 6
Statutory Underwriting Profit/(Loss) by
Distribution Channel, Reconciled to GAAP 7
Selected Statutory Information by Distribution Channel 8 - 9
Asset Accumulation
Allmerica Financial Services
Condensed Income Statements 10
Operating Income by Product Line 11
Premiums, Deposits and Other Income 12
Future Policy Benefits and Account Balances 13
Allmerica Asset Management
Condensed Income Statements and Supplemental Information 14
Corporate
Condensed Income Statements 15
Investment Results
Net Investment Income, Including Closed Block 16
Historical Financial Highlights 17 - 19
Other Information
Corporate Information Inside back cover
Market and Dividend Information
Industry Ratings
<PAGE>
ALLMERICA FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Quarter ended
March 31
(In millions, except %
per share data) 2000 1999 Change
<S> <C> <C> <C>
RECONCILIATION FROM NET OPERATING
INCOME TO NET INCOME
Net operating income <FN1> $ 66.4 $ 51.3 29.4
Net realized investment (losses)
gains, net of taxes, minority
interest and amortization (36.2) 99.5 N/M
----------------------------
Income from continuing operations 30.2 150.8 (80.0)
Income from operations of
discontinued business, net of taxes 0.0 3.3 N/M
----------------------------
Net income $ 30.2 $ 154.1 80.4
============================
PER SHARE DATA (DILUTED)
Net operating income <FN1> $ 1.22 $ 0.89 37.1
Net realized investment (losses)
gains, net of taxes, minority
interest and amortization (0.66) 1.72 N/M
----------------------------
Income from continuing operations 0.56 2.61 (78.5)
Income from operations of
discontinued business net of taxes 0.00 0.06 N/M
----------------------------
Net income $ 0.56 $ 2.67 (79.0)
============================
</TABLE>
<TABLE>
<CAPTION>
March 31 December 31 %
2000 1999 Change
<S> <C> <C> <C>
BALANCE SHEET:
Shareholders' equity $ 2,267.7 $ 2,240.2 1.2
Statutory surplus:
Property and casualty insurance
companies $ 1,100.2 $ 1,089.1 1.0
Life and health insurance
companies $ 580.2 $ 590.1 (1.7)
Book value per share $ 42.27 $ 41.32 2.3
Book value per share, excluding
SFAS No. 115 $ 43.13 $ 42.71 1.0
Shares outstanding <FN2> 53.7 54.2
Stock price $ 51.00 $ 55.63 (8.3)
Price/book value per share 1.2 x 1.3 x (0.1) x
Debbt/equity 8.8 % 8.9 % (0.1) pts
Debt/total capital 7.2 % 7.3 % (0.1) pts
Debt plus preferred securities of a
subsidiary trust/total capital 18.1 % 18.2 % (0.1) pts
<FN>
<FN1>
Net operating income excludes net realized gains and losses and other
items which management believes are not indicative of overall operating
trends, net of taxes and minority interest.
<FN2>
Shares outstanding do not include common stock equivalents.
</FN>
</TABLE>
N/M - Not Meaningful
Page 1
<PAGE>
ALLMERICA FINANCIAL CORPORATION
CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
Quarter ended March 31
(In millions, except per share data) 2000 1999 % Change
<S> <C> <C> <C>
REVENUES
Premiums $ 497.5 $ 458.3 8.6
Universal life and investment
product policy fees 102.5 82.9 23.6
Net investment income 142.3 154.3 (7.8)
Net realized investment (losses) gains (46.8) 131.8 N/M
Other income 36.7 28.9 27.0
----------------------------
Total revenues 732.2 856.2 (14.5)
----------------------------
BENEFITS, LOSSES AND EXPENSES
Policy benefits, claims, losses and
loss adjustment expenses 453.4 443.2 2.3
Policy acquisition expenses 117.1 92.7 26.3
Other operating expenses 120.0 117.8 1.9
----------------------------
Total benefits, losses and expenses 690.5 653.7 5.6
----------------------------
Income from continuing operations
before federal income taxes 41.7 202.5 (79.4)
Federal income tax expense 7.5 47.7 (84.3)
----------------------------
Income from continuing operations before
minority interest 34.2 154.8 (77.9)
----------------------------
Minority interest:
Distributions on mandatorily
redeemable preferred securities
of a subsidiary trust (4.0) (4.0) 0.0
----------------------------
Income from continuing operations 30.2 150.8 (80.0)
Income from operations of discontinued
business (less applicable income
taxes of $1.7 for the quarter ended
March 31, 1999) 0.0 3.3 N/M
----------------------------
Net income $ 30.2 $ 154.1 (80.4)
============================
PER SHARE DATA (DILUTED)
Income from continuing operations $ 0.56 $ 2.61 (78.5)
----------------------------
Income from operations of discontinued
business (less applicable income
taxes of $0.03 for the quarter ended
March 31, 1999) 0.00 0.06 N/M
----------------------------
Net income <FN1> $ 0.56 $ 2.67 (79.0)
============================
Dividends declared to shareholders $ 0.00 $ 0.00
======== ========
Weighted average shares outstanding 54.3 57.7
======== ========
<FN>
<FN1>
Basic net income per share was $0.56 and $2.69 for the quarters ended
March 31, 2000 and 1999, respectively.
</FN>
</TABLE>
Page 2
<PAGE>
ALLMERICA FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31 December 31 %
(In millions, except per share data) 2000 1999 Change
<S> <C> <C> <C>
ASSETS
Investments:
Debt securities, at fair value
(Amortized cost of $7,342.2
and $7,095.0) $ 7,211.8 $ 6,933.8 4.0
Equity securities, at fair value
(Cost of $40.6 and $49.5) 77.7 83.2 (6.6)
Mortgage loans 506.6 521.2 (2.8)
Policy loans 175.0 170.5 2.6
Real estate and other long-term
investments 176.6 180.0 (1.9)
-------------------------------
Total investments 8,147.7 7,888.7 3.3
-------------------------------
Cash and cash equivalents 302.7 442.2 (31.5)
Accrued investment income 126.8 134.7 (5.9)
Premiums, accounts and notes
receivable, net 602.1 583.5 3.2
Reinsurance receivable on paid and
unpaid losses, benefits and unearned
premiums 1,276.7 1,279.9 (0.3)
Deferred policy acquisition costs 1,442.2 1,386.8 4.0
Deferred federal income taxes 108.9 141.7 (23.1)
Other assets 485.8 510.2 (4.8)
Closed Block assets 765.7 772.3 (0.9)
Separate account assets 18,595.5 17,629.6 5.5
-------------------------------
Total assets $31,854.1 $30,769.6 3.5
===============================
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Policy liabilities and accruals:
Future policy benefits $ 2,726.0 $ 2,825.0 (3.5)
Outstanding claims, losses and loss
adjustment expenses 2,833.3 2,838.6 (0.2)
Unearned premiums 920.7 890.2 3.4
Contractholder deposit funds and other
policy liabilities 2,216.1 2,041.0 8.6
-------------------------------
Total policy liabilities and accruals 8,696.1 8,594.8 1.2
-------------------------------
Expenses and taxes payable 773.6 795.5 (2.8)
Reinsurance premiums payable 64.3 73.0 (11.9)
Trust instruments supported by
funding obligations 77.9 50.6 54.0
Short-term debt 48.1 45.0 6.9
Long-term debt 199.5 199.5 0.0
Closed Block liabilities 832.3 842.1 (1.2)
Separate account liabilities 18,594.6 17,628.9 5.5
-------------------------------
Total liabilities 29,286.4 28,229.4 3.7
-------------------------------
MINORITY INTEREST
Mandatorily redeemable preferred
securities of a subsidiary trust 300.0 300.0 0.0
SHAREHOLDERS' EQUITY
Preferred stock, par value $.01
per share; authorized 20.0 million
shares; issued none 0.0 0.0 0.0
Common stock, par value $.01 per share;
authorized 300.0 shares;
issued 60.4 million shares 0.6 0.6 0.0
Additional paid-in capital 1,761.5 1,770.5 (0.5)
Accumulated other comprehensive income (46.2) (75.3) (38.6)
Retained earnings 909.2 882.2 3.1
Treasury stock at cost
(6.4 and 6.2 million shares) (357.4) (337.8) 5.8
-------------------------------
Total shareholders' equity 2,267.7 2,240.2 1.2
-------------------------------
Total liabilities and
shareholders' equity $31,854.1 $30,769.6 3.5
===============================
</TABLE>
Page 3
<PAGE>
ALLMERICA FINANCIAL CORPORATION
SEGMENT RESULTS
INCOME STATEMENT HIGHLIGHTS
<TABLE>
<CAPTION>
Quarter ended
March 31 %
(In millions, except per share data) 2000 1999 Change
<S> <C> <C> <C>
OPERATING REVENUES <FN1>
Risk Management $ 557.5 $ 521.3 6.9
----------------------------
Asset Accumulation
Allmerica Financial Services 192.6 168.2 14.5
Allmerica Asset Management 29.3 34.3 (14.6)
----------------------------
221.9 202.5 9.6
----------------------------
Corporate 1.0 1.2 (16.7)
Eliminations and other (1.1) (0.6) 83.3
----------------------------
Total operating revenues $ 779.3 $ 724.4 7.6
============================
NET OPERATING INCOME BEFORE TAXES
AND MINORITY INTEREST <FN2>
Risk Management $ 43.1 $ 29.8 44.6
----------------------------
Asset Accumulation
Allmerica Financial Services 54.4 48.9 11.2
Allmerica Asset Management 5.1 5.7 (10.5)
----------------------------
59.5 54.6 9.0
----------------------------
Corporate (14.5) (16.0) (9.4)
----------------------------
Total net operating income before
federal income taxes and minority
interest 88.1 68.4 28.8
Federal income taxes on operating
income (17.7) (13.1) 35.1
Minority interest:
Distributions on mandatorily
redeemable preferred securities
of a subsidiary trust (4.0) (4.0) 0.0
----------------------------
Consolidated net operating income $ 66.4 $ 51.3 29.4
============================
Consolidated net operating income
per share (diluted) $ 1.22 $ 0.89 37.1
============================
Weighted average shares outstanding
(diluted) 54.3 57.7
===================
<FN>
<FN1>
Operating revenues exclude net realized gains and losses and other items
which management believes are not indicative of overall operating trends.
<FN2>
Net operating income excludes net realized gains and losses and other
items which management believes are not indicative of overall operating
trends, net of taxes and minority interest.
</FN>
</TABLE>
Page 4
<PAGE>
ALLMERICA FINANCIAL CORPORATION
SEGMENT RESULTS
HISTORICAL INCOME STATEMENT HIGHLIGHTS
<TABLE>
<CAPTION>
Year ended December 31
(In millions, except
per share data) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES <FN1>
Risk Management $2,189.4 $2,222.1 $2,227.6 $2,160.4 $2,106.3
-------------------------------------------------
Asset Accumulation
Allmerica Financial
Services 714.8 625.6 610.0 595.0 639.5
Allmerica Asset
Management 150.5 121.7 91.1 110.5 157.6
-------------------------------------------------
865.3 747.3 701.1 705.5 797.1
-------------------------------------------------
Corporate 6.0 12.9 16.1 6.9 (2.4)
Eliminations and other (5.9) (7.6) (11.5) (12.7) (4.4)
-------------------------------------------------
Total operating revenues $3,054.8 $2,974.7 $2,933.3 $2,860.1 $2,896.6
================================================
NET OPERATING INCOME
BEFORE TAXES AND MINORITY
INTEREST <FN2>
Risk Management $ 199.6 $ 149.6 $ 174.2 $ 173.1 $ 212.0
-------------------------------------------------
Asset Accumulation
Allmerica Financial
Services 205.5 169.0 134.6 106.8 60.0
Allmerica Asset
Management 23.5 23.7 18.4 11.5 12.2
-------------------------------------------------
229.0 192.7 153.0 118.3 72.2
-------------------------------------------------
Corporate (59.3) (50.9) (48.0) (58.0) (47.8)
-------------------------------------------------
Total net operating
income before federal
income taxes and
minority interest 369.3 291.4 279.2 233.4 236.4
-------------------------------------------------
Federal income taxes on
operating income (72.4) (53.1) (63.4) (50.8) (67.4)
Minority interest:
Distributions on
mandatorily
redeemable preferred
securities of a
subsidiary trust (16.0) (16.0) (14.5) 0.0 0.0
Equity in earnings 0.0 (9.8) (37.0) (61.5) (69.2)
-------------------------------------------------
Consolidated net operating
income $ 280.9 $ 212.5 $ 164.3 $ 121.1 $ 99.8
=================================================
Consolidated net operating
income per share
(diluted) $ 5.06 $ 3.52 $ 3.00 $ 2.41 $ 1.99
=================================================
Weighted average shares
outstanding (diluted) 55.5 60.3 54.8 50.1 50.1
=================================================
<FN>
<FN1>
Operating revenues exclude net realized gains and losses and other items
which management believes are not indicative of overall operating trends.
<FN2>
Net operating income excludes net realized gains and losses and other
items which management believes are not indicative of overall operating
trends, net of taxes and minority interest.
</FN>
</TABLE>
Page 5
<PAGE>
ALLMERICA FINANCIAL CORPORATION
RISK MANAGEMENT
CONDENSED INCOME STATEMENT
<TABLE>
<CAPTION>
Quarter ended March 31
(In millions) 2000 1999 % Change
<S> <C> <C> <C>
REVENUES
Net premiums written $527.6 $477.2 10.6
Change in unearned premiums, net of
prepaid reinsurance premiums (30.6) (19.6) 56.1
------------------------
Net premiums earned 497.0 457.6 8.6
Net investment income 55.2 58.4 (5.5)
Other income 5.3 5.3 0.0
------------------------
Total operating revenue 557.5 521.3 6.9
------------------------
LOSSES AND OPERATING EXPENSES
Policy benefits, claims, losses
and loss adjustment expenses 375.5 353.7 6.2
Policy acquisition expenses 92.1 88.5 4.1
Other operating expenses 46.6 49.3 (5.5)
------------------------
Total losses and operating expenses 514.4 491.5 4.7
------------------------
Net operating income before taxes 43.1 29.8 44.6
Net realized investment (losses) gains (39.2) 112.8 N/M
------------------------
Net income before taxes $ 3.9 $142.6 (97.3)
========================
</TABLE>
The Risk Management Segment manages its products through three
distribution channels identified as Standard Markets,
Sponsored Markets, and Specialty Markets.
Standard Markets sells property & casualty insurance products through
independent agents and brokers primarily in the Northeast, Midwest and
Southeast United States maintaining a strong regional focus. Sponsored
Markets focuses on worksite distribution, which offers discounted
property & casualty (auto and homeowners) insurance through employer
sponsored programs. This distribution channel also offers products to
members of affinity groups and other organizations. Specialty Markets
offers specialty or program business nationwide.
Page 6
<PAGE>
ALLMERICA FINANCIAL CORPORATION
RISK MANAGEMENT
STATUTORY UNDERWRITING PROFIT/(LOSS) BY DISTRIBUTION CHANNEL,
RECONCILED TO GAAP
<TABLE>
<CAPTION>
(In millions) Quarter ended March 31, 2000
Standard Sponsored Specialty
Markets Markets Markets Other Total
<FN1>
<S> <C> <C> <C> <C> <C>
Net premiums earned $349.7 $140.1 $ 6.6 $ 0.4 $496.8
Policy benefits,
claims, losses
and loss adjustment
expenses 261.9 101.8 6.4 2.3 372.4
Policy acquisition
and other underwriting
expenses 103.3 36.3 1.5 0.5 141.6
Policyholders'
dividends 2.8 0.0 0.0 0.0 2.8
-----------------------------------------------------
Underwriting (loss)
profit $(18.3) $ 2.0 $ (1.3) $ (2.4) (20.0)
-----------------------------------------------------
Net investment income 55.2
Other income and
expenses, net 2.6
Net deferred
acquisition costs 4.1
Other Statutory to
GAAP adjustments 1.2
-------
Net operating
income before
taxes and minority
interest -
GAAP Basis $ 43.1
=======
PRETAX CATASTROPHE
LOSSES $ 14.7 $ 0.5 $ 0.0 $ 0.0 $ 15.2
=====================================================
<FN>
<FN1>
Includes results from certain property and casualty business which the
Company has exited.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Quarter ended March 31, 1999
Standard Sponsored Specialty
Markets Markets Markets Other Total
<FN1>
<S> <C> <C> <C> <C> <C>
Net premiums
earned $319.0 $121.8 $ 14.1 $ 2.9 $457.8
Policy benefits,
claims, losses
and loss adjustment
expenses 240.9 94.7 9.6 4.0 349.2
Policy acquisition
and other underwriting
expenses 98.9 32.2 4.6 0.0 135.7
Policyholders'
dividends 1.9 0.0 0.0 0.0 1.9
------------------------------------------------------
Underwriting loss $(22.7) $ (5.1) $ (0.1) $ (1.1) (29.0)
------------------------------------------------------
Net investment income 58.4
Other income and
expenses, net 1.9
Net deferred
acquisition costs (0.7)
Other Statutory to
GAAP adjustments (0.8)
-------
Net operating income
before taxes and
minority interest -
GAAP Basis $ 29.8
=======
PRETAX CATASTROPHE
LOSSES $ 24.5 $ 19.2 $ 0.0 $ 0.0 $ 43.7
======================================================
<FN>
<FN1>
Includes results from certain property and casualty business which the
Company has exited.
</FN>
</TABLE>
Page 7
<PAGE>
ALLMERICA FINANCIAL CORPORATION
RISK MANAGEMENT
SELECTED STATUTORY INFORMATION BY DISTRIBUTION CHANNEL
<TABLE>
<CAPTION>
(In millions, except ratios) Quarter ended March 31, 2000
Standard Sponsored Specialty
Markets Markets Markets Other Total
<S> <C> <C> <C> <C> <C>
NET PREMIUMS WRITTEN
Personal automobile $ 127.7 $ 128.5 $ 0.0 $ 0.1 $ 256.3
Homeowners 33.8 21.1 0.0 (0.2) 54.7
Workers' compensation 54.1 0.0 0.4 0.0 54.5
Commercial automobile 52.7 0.0 1.1 0.0 53.8
Commercial multiple
peril 75.2 0.0 1.8 (0.1) 76.9
Other property &
casualty 25.7 2.0 3.1 0.5 31.3
--------------------------------------------------
Total $ 369.2 $ 151.6 $ 6.4 $ 0.3 $ 527.5
==================================================
NET PREMIUMS EARNED
Personal automobile $ 110.6 $ 109.7 $ 0.0 $ 0.1 $ 220.4
Homeowners 39.1 27.8 0.0 (0.1) 66.8
Workers' compensation 50.3 0.0 0.8 0.0 51.1
Commercial automobile 50.1 0.0 0.6 (0.1) 50.6
Commercial multiple
peril 71.9 0.0 1.4 (0.1) 73.2
Other property
& casualty 27.7 2.6 3.8 0.6 34.7
--------------------------------------------------
Total $ 349.7 $ 140.1 $ 6.6 $ 0.4 $ 496.8
==================================================
POLICY BENEFITS, CLAIMS
AND LOSSES
Personal automobile $ 72.5 $ 70.8 $ 0.0 $ (0.5) $ 142.8
Homeowners 29.0 21.9 0.0 (0.4) 50.5
Workers' compensation 36.9 0.0 0.9 0.4 38.2
Commercial automobile 29.9 0.0 2.3 (0.2) 32.0
Commercial multiple
peril 49.0 0.0 1.4 1.3 51.7
Other property &
casualty 11.4 1.1 0.2 1.3 14.0
--------------------------------------------------
Total $ 228.7 $ 93.8 $ 4.8 $ 1.9 $ 329.2
==================================================
LOSS ADJUSTMENT EXPENSES $ 33.2 $ 8.0 $ 1.6 $ 0.4 $ 43.2
==================================================
RATIOS
LOSSES
Personal automobile 65.6 % 64.5 % 0.0 % N/M 64.8 %
Homeowners 74.2 % 78.8 % 0.0 % N/M 75.6 %
Workers' compensation 73.4 % 0.0 % 112.5 % N/M 74.8 %
Commercial automobile 59.7 % 0.0 % N/M N/M 63.2 %
Commercial multiple
peril 68.2 % 0.0 % 100.0 % N/M 70.6 %
Other property &
casualty 41.2 % 42.3 % 5.3 % N/M 40.3 %
--------------------------------------------------
Total 65.4 % 67.0 % 72.7 % N/M 66.3 %
LOSS ADJUSTMENT EXPENSES 9.5 % 5.7 % 24.2 % N/M 8.7 %
POLICY ACQUISITION AND
OTHER UNDERWRITING
EXPENSES 28.0 % 23.9 % 23.4 % N/M 26.9 %
POLICYHOLDERS'
DIVIDENDS 0.8 % 0.0 % 0.0 % N/M 0.6 %
--------------------------------------------------
COMBINED 103.7 % 96.6 % 120.3 % N/M 102.5 %
==================================================
</TABLE>
Page 8
<PAGE>
ALLMERICA FINANCIAL CORPORATION
RISK MANAGEMENT
SELECTED STATUTORY INFORMATION BY DISTRIBUTION CHANNEL
<TABLE>
<CAPTION>
(In millions, except ratios) Quarter ended March 31, 1999
Standard Sponsored Specialty
Markets Markets Markets Other Total
<S> <C> <C> <C> <C> <C>
NET PREMIUMS WRITTEN
Personal automobile $ 127.0 $ 120.5 $ 0.0 $ (0.2) $ 247.3
Homeowners 24.6 7.0 0.0 0.2 31.8
Workers' compensation 49.9 0.0 2.6 (0.3) 52.2
Commercial automobile 46.9 0.0 2.4 (0.1) 49.2
Commercial multiple
peril 63.9 0.0 3.0 0.0 66.9
Other property
& casualty 25.8 0.2 3.4 0.8 30.2
-------------------------------------------------
Total $ 338.1 $ 127.7 $ 11.4 $ 0.4 $ 477.6
=================================================
NET PREMIUMS EARNED
Personal automobile $ 112.7 $ 108.0 $ 0.0 $ 0.9 $ 221.6
Homeowners 33.6 11.6 0.0 0.6 45.8
Workers' compensation 43.6 0.0 1.9 0.0 45.5
Commercial automobile 44.3 0.0 2.7 0.3 47.3
Commercial multiple
peril 59.3 0.0 4.0 0.3 63.6
Other property
& casualty 25.5 2.2 5.5 0.8 34.0
-------------------------------------------------
Total $ 319.0 $ 121.8 $ 14.1 $ 2.9 $ 457.8
=================================================
POLICY BENEFITS, CLAIMS
AND LOSSES
Personal automobile $ 78.7 $ 75.1 $ 0.0 $ (0.2) $ 153.6
Homeowners 22.4 12.3 0.0 0.0 34.7
Workers' compensation 28.4 0.0 (0.8) 1.0 28.6
Commercial automobile 32.5 0.0 2.4 0.1 35.0
Commercial multiple
peril 42.7 0.0 2.2 1.2 46.1
Other property
& casualty 6.9 1.2 3.9 1.7 13.7
-------------------------------------------------
Total $ 211.6 $ 88.6 $ 7.7 $ 3.8 $ 311.7
=================================================
LOSS ADJUSTMENT EXPENSES $ 29.3 $ 6.1 $ 1.9 $ 0.2 $ 37.5
=================================================
RATIOS
LOSSES
Personal automobile 69.8 % 69.5 % 0.0 % N/M 69.4 %
Homeowners 66.7 % 106.0 % 0.0 % N/M 76.1 %
Workers' compensation 65.1 % 0.0 % N/M N/M 63.4 %
Commercial automobile 73.4 % 0.0 % 88.9 % N/M 74.0 %
Commercial multiple
peril 72.0 % 0.0 % 55.0 % N/M 72.3 %
Other property
& casualty 27.1 % 50.0 % 70.9 % N/M 39.2 %
-------------------------------------------------
Total 66.3 % 72.6 % 54.6 % N/M 68.1 %
LOSS ADJUSTMENT EXPENSES 9.2 % 5.1 % 13.5 % N/M 8.2 %
POLICY ACQUISITION AND
OTHER UNDERWRITING
EXPENSES 29.3 % 25.2 % 40.4 % N/M 28.4 %
POLICYHOLDERS' DIVIDENDS 0.6 % 0.0 % 0.0 % N/M 0.4 %
-------------------------------------------------
COMBINED 105.4 % 102.9 % 108.5 % N/M 105.1 %
=================================================
</TABLE>
Page 9
<PAGE>
ALLMERICA FINANCIAL CORPORATION
ALLMERICA FINANCIAL SERVICES
CONDENSED INCOME STATEMENT
<TABLE>
Quarter ended March 31
(In millions) 2000 1999 % Change
<S> <C> <C> <C>
REVENUES
Premiums $ 0.5 $ 0.7 (28.6)
Universal life and investment product
policy fees 102.5 82.9 23.6
Net investment income 59.8 63.5 (5.8)
Other income 26.3 17.3 52.0
Operating contribution from the Closed Block 3.5 3.8 (7.9)
--------------------------
Total operating revenue 192.6 168.2 14.5
--------------------------
POLICY BENEFITS, CLAIMS AND
OPERATING EXPENSES
Policy benefits, claims and losses 55.9 62.9 (11.1)
Policy acquisition expenses 25.7 5.6 N/M
Other operating expenses 56.6 50.8 11.4
--------------------------
Total policy benefits, claims and
operating expenses 138.2 119.3 15.8
--------------------------
Net operating income before taxes 54.4 48.9 11.2
Net realized investment (losses) gains,
net of amortization (4.6) 22.0 N/M
--------------------------
Net income before taxes $ 49.8 $ 70.9 (29.8)
==========================
</TABLE>
Page 10
<PAGE>
ALLMERICA FINANCIAL CORPORATION
ALLMERICA FINANCIAL SERVICES
OPERATING INCOME BY PRODUCT LINE
<TABLE>
<CAPTION>
(In millions) Quarter ended March 31, 2000
Variable Group
Individual Universal Universal Closed Retirement All
Annuities Life Life Block Products Others Total
<FN1> <FN2>
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Premiums $ 0.0 $ 0.0 $ 0.0 $ 26.0 $ 0.0 $ 0.5 $ 26.5
Universal life
and investment
product policy
fees 57.5 20.6 16.7 0.0 7.7 0.0 102.5
Net investment
income 15.5 0.9 19.0 13.2 18.8 5.6 73.0
Other income 9.3 1.4 0.2 0.0 1.6 13.8 26.3
------------------------------------------------------------------
Total
operating
revenue 82.3 22.9 35.9 39.2 28.1 19.9 228.3
------------------------------------------------------------------
POLICY BENEFITS,
CLAIMS AND
OPERATING EXPENSES
Policy benefits,
claims and
losses 18.1 6.8 17.9 34.8 12.3 0.8 90.7
Policy acquisition
expenses 18.5 1.5 5.1 0.6 0.6 0.0 26.3
-------------------------------------------------------------------
Total policy
benefits,
claims, and
policy
acquisition
expenses 36.6 8.3 23.0 35.4 12.9 0.8 117.0
------------------------------------------------------------------
Operating income
before other
operating
expenses $ 45.7 $ 14.6 $ 12.9 $ 3.8 $ 15.2 $ 19.1 111.3
==========================================================
Other operating
expenses <FN3> 56.9
--------
Net operating
income before
taxes $ 54.4
=========
<FN>
<FN1>
Includes defined benefit and defined contribution plan products and services.
<FN2>
Includes non-insurance activities and products in runoff (e.g.YRT,DI).
<FN3>
Includes other operating expenses from the Closed Block of approximately
$0.3 million for the quarter ended March 31, 2000.
</FN>
</TABLE>
<TABLE>
<CAPTION>
(In millions) Quarter ended March 31, 1999
Variable Group
Individual Universal Universal Closed Retirement All
Annuities Life Life Block Products Others Total
<FN1> <FN2>
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Premiums $ 0.0 $ 0.0 $ 0.0 $ 27.2 $ 0.0 $ 0.7 $ 27.9
Universal life
and investment
product policy
fees 42.0 17.7 17.4 0.0 5.8 0.0 82.9
Net investment
income 16.8 0.2 18.6 13.1 20.3 7.6 76.6
Other income 7.1 1.0 0.3 0.0 1.8 7.1 17.3
------------------------------------------------------------------
Total
operating
revenue 65.9 18.9 36.3 40.3 27.9 15.4 204.7
------------------------------------------------------------------
POLICY BENEFITS,
CLAIMS AND
OPERATING EXPENSES
Policy benefits,
claims and
losses 23.4 6.2 18.9 35.5 12.9 1.5 98.4
Policy acquisition
expenses (1.7) 2.1 4.3 0.5 0.9 0.0 6.1
-------------------------------------------------------------------
Total policy
benefits,
claims, and
policy
acquisition
expenses 21.7 8.3 23.2 36.0 13.8 1.5 104.5
------------------------------------------------------------------
Operating income
before other
operating
expenses $ 44.2 $ 10.6 $ 13.1 $ 4.3 $ 14.1 $ 13.9 100.2
==========================================================
Other operating
expenses <FN3> 51.3
--------
Net operating
income before
taxes $ 48.9
=========
<FN>
<FN1>
Includes defined benefit and defined contribution plan products and services.
<FN2>
Includes non-insurance activities and products in runoff (e.g.YRT,DI).
<FN3>
Includes other operating expenses from the Closed Block of approximately
$0.5 million for the quarter ended March 31, 1999.
</FN>
</TABLE>
Page 11
<PAGE>
ALLMERICA FINANCIAL CORPORATION
ALLMERICA FINANCIAL SERVICES
PREMIUMS, DEPOSITS AND OTHER INCOME
<TABLE>
<CAPTION>
Quarter ended March 31
(In millions) 2000 1999 % Change
<S> <C> <C> <C>
STATUTORY PREMIUMS AND DEPOSITS
SUMMARY
Insurance
Traditional life $ 29.8 $ 31.4 (5.1)
Universal life 17.9 16.7 7.2
Variable universal life 51.2 45.3 13.0
Individual health 0.1 0.1 0.0
Group variable universal life 11.5 10.4 10.6
----------------------------
Total insurance 110.5 103.9 6.4
----------------------------
Annuities
Separate account annuities 678.9 498.6 36.2
General account annuities 138.7 210.3 (34.1)
Retirement investment accounts 3.5 5.9 (40.7)
----------------------------
Total individual annuities 821.1 714.8 14.9
Group annuities 168.6 82.1 N/M
----------------------------
Total annuities 989.7 796.9 24.2
----------------------------
Total premiums and deposits $1,100.2 $ 900.8 22.1
============================
COMPONENTS
Insurance
Traditional life
New business premium $ 9.7 $ 9.7 0.0
Renewal premium and deposits 20.1 21.7 (7.4)
----------------------------
$ 29.8 $ 31.4 (5.1)
============================
Universal life
New business premium $ 0.1 $ 0.2 (50.0)
Renewal premium and deposits 17.8 16.5 7.9
----------------------------
$ 17.9 $ 16.7 7.2
============================
Variable universal life
New business premium $ 27.2 $ 22.2 22.5
Renewal premium and deposits 24.0 23.1 3.9
----------------------------
$ 51.2 $ 45.3 13.0
============================
Individual annuities by distribution channel
Agency $ 239.9 $ 209.6 14.4
Select 218.8 153.6 42.4
Kemper 262.5 168.8 55.5
Pioneer 50.0 95.3 (47.5)
Delaware 45.9 74.3 (38.2)
Fulcrum 0.5 7.3 (93.2)
Retirement investment accounts 3.5 5.9 (40.7)
----------------------------
$ 821.1 $ 714.8 14.9
============================
GAAP OTHER INCOME
(Excluding Closed Block)
Investment management fees $ 11.3 $ 8.8 28.4
Brokerage income 9.9 4.8 N/M
Other 5.1 3.7 37.8
----------------------------
$ 26.3 $ 17.3 52.0
============================
</TABLE>
Page 12
<PAGE>
ALLMERICA FINANCIAL CORPORATION
ALLMERICA FINANCIAL SERVICES
FUTURE POLICY BENEFITS AND ACCOUNT BALANCES
<TABLE>
<CAPTION>
March 31 December 31
(In millions) 2000 1999 % Change
<S> <C> <C> <C>
GENERAL ACCOUNT RESERVES
Insurance
Traditional life, excluding Closed Block $ 37.1 $ 37.7 (1.6)
Universal life 802.5 816.1 (1.7)
Variable universal life 140.9 136.3 3.4
Individual health 271.7 273.0 (0.5)
Group variable universal life 8.7 10.0 (13.0)
----------------------------
Total insurance 1,260.9 1,273.1 (1.0)
----------------------------
Annuities
Individual annuities 1,128.1 1,218.9 (7.4)
Group annuities 824.4 870.9 (5.3)
----------------------------
Total annuities 1,952.5 2,089.8 (6.6)
----------------------------
Total general account reserves $ 3,213.4 $ 3,362.9 (4.4)
============================
SEPARATE ACCOUNT LIABILITIES
Variable individual life $ 1,307.1 $ 1,244.8 5.0
Variable individual annuities 14,682.9 13,872.6 5.8
----------------------------
Total individual 15,990.0 15,117.4 5.8
Group variable universal life 275.7 260.5 5.8
Group annuities 2,328.9 2,251.0 3.5
----------------------------
Total group 2,604.6 2,511.5 3.7
----------------------------
Total separate account liabilities $18,594.6 $17,628.9 5.5
============================
</TABLE>
Page 13
<PAGE>
ALLMERICA FINANCIAL CORPORATION
ALLMERICA ASSET MANAGEMENT
CONDENSED INCOME STATEMENTS AND SUPPLEMENTAL INFORMATION
<TABLE>
<CAPTION>
Quarter ended March 31
(In millions) 2000 1999 % Change
<S> <C> <C> <C>
INTEREST MARGINS ON GICS
Net investment income $ 26.4 $ 31.4 (15.9)
Interest credited 22.4 26.6 (15.8)
------------------------------
Net interest margin 4.0 4.8 (16.7)
------------------------------
OTHER INCOME AND EXPENSES
External fees and other income 1.6 1.4 14.3
Internal fees and other income 1.3 1.5 (13.3)
Other operating expenses 1.8 2.0 (10.0)
------------------------------
Net operating income before taxes 5.1 5.7 (10.5)
Net realized investment losses (3.3) (2.5) 32.0
------------------------------
Net income before taxes $ 1.8 $ 3.2 (43.8)
==============================
</TABLE>
<TABLE>
<CAPTION>
Quarter ended March 31
2000 1999 % Change
<S> <C> <C> <C>
GIC DEPOSITS
Outstanding GIC deposits, beginning of
period $ 1,366.6 $ 1,791.8 (23.7)
Withdrawals during the period (96.0) (212.1) (54.7)
Deposits during the period 331.3 <FN1> 560.0 (40.8)
Interest credited during the period 22.4 26.6 (15.8)
----------------------------------
Outstanding GIC deposits, end of period $ 1,624.3 $ 2,166.3 (25.0)
==================================
<FN>
<FN1>
Includes $2.0 million of traditional GIC deposits for the quarter ended
March 31, 2000.
</FN>
</TABLE>
<TABLE>
<CAPTION>
March 31
2000 1999
<S> <C> <C>
GIC SCHEDULED MATURITIES
1999 $ 0.0 $ 202.3
2000 64.5 79.7
2001 120.0 26.2
2002 231.2 32.9
2003+ 134.6 100.2
------------------------------
550.3 <FN2> 441.3 <FN2>
Short term funding agreement balances 1,074.0 1,725.0
--------------------------
$ 1,624.3 $ 2,166.3
==========================
<FN>
<FN2>
Includes $422.9 million and $100.2 million of long term funding agreement
balances for the quarters ended March 31, 2000 and 1999, respectively.
</FN>
</TABLE>
Page 14
<PAGE>
ALLMERICA FINANCIAL CORPORATION
CORPORATE
CONDENSED INCOME STATEMENTS
<TABLE>
<CAPTION>
Quarter ended March 31
(In millions) 2000 1999 % Change
<S> <C> <C> <C>
REVENUES
Net investment income $ 1.0 $ 1.2 (16.7)
---------------------------
OPERATING EXPENSES
Interest expense 3.8 3.8 0.0
Other operating expenses 11.7 13.4 (12.7)
---------------------------
Total operating expenses 15.5 17.2 (9.9)
---------------------------
Net operating loss before taxes and
minority interest (14.5) (16.0) (9.4)
Net realized investment losses (0.1) (0.9) (88.9)
---------------------------
Net loss before taxes and minority interest $ (14.6) $(16.9) (13.6)
===========================
</TABLE>
Page 15
<PAGE>
ALLMERICA FINANCIAL CORPORATION
NET INVESTMENT INCOME, INCLUDING CLOSED BLOCK
<TABLE>
<CAPTION>
(In millions, except yields) Quarter ended March 31, 2000
Allmerica Allmerica
Risk Financial Asset
Management Yield Services Yield Management Yield Corporate Yield Total Yield
<FN1> <FN2>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed
maturities $ 54.4 6.69% $ 55.5 8.06% $ 21.4 6.92% $ 0.4 7.65% $131.7 7.25%
Equity
securities 0.3 3.78% 0.0 0.00% 0.0 0.00% 0.0 0.00% 0.3 1.36%
Mortgages 0.0 0.00% 9.4 7.98% 3.5 8.28% 0.0 0.00% 12.9 8.06%
All other 1.4 0.00% 10.5 0.00% 2.0 0.00% 0.4 0.00% 14.3 0.00%
Investment
expenses (0.9) 0.00% (2.4) 0.00% (0.4) 0.00% 0.0 0.00% (3.7)0.00%
------------------------------------------------------------------------------------
Total $ 55.2 6.55% $ 73.0 7.33% $ 26.5 7.34% $ 0.8 5.23% $155.5 7.02%
=====================================================================================
<FN>
<FN1>
Includes purchase accounting adjustments of $1.1 million for the quarter ended March 31, 2000.
<FN2>
Includes corporate eliminations of $0.2 million for the quarter ended March 31, 2000.
</FN>
</TABLE>
<TABLE>
<CAPTION>
(In millions, except yields) Quarter ended March 31, 1999
Allmerica Allmerica
Risk Financial Asset
Management Yield Services Yield Management Yield Corporate Yield Total Yield
<FN1> <FN2>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed
maturities $ 56.0 6.59% $ 55.2 8.21% $ 26.8 6.21% $ 0.4 5.78% $138.4 7.06%
Equity
securities 0.5 1.70% 0.2 1.43% 0.0 0.00% 0.0 0.00% 0.7 1.59%
Mortgages 0.0 0.00% 10.6 8.28% 3.7 8.71% 0.0 0.00% 14.3 8.38%
All other 2.9 0.00% 12.7 0.00% 1.4 0.00% 0.6 0.00% 17.6 0.00%
Investment
expenses (1.0) 0.00% (2.1) 0.00% (0.5) 0.00% 0.0 0.00% (3.6)0.00%
-----------------------------------------------------------------------------------
Total $ 58.4 6.29% $ 76.6 7.71% $ 31.4 6.51% $ 1.0 3.58% $167.4 6.88%
====================================================================================
<FN>
<FN1>
Includes purchase accounting adjustments of $1.1 million for the quarter ended March 31, 1999.
<FN2>
Includes corporate eliminations of $0.2 million for the quarter ended March 31, 1999.
</FN>
</TABLE>
Page 16
<PAGE>
ALLMERICA FINANCIAL CORPORATION
HISTORICAL FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(In millions, except
per share data) Q1 00 1999 Q4 99 Q3 99 Q2 99 Q1 99
<S> <C> <C> <C> <C> <C> <C>
NET OPERATING
INCOME BEFORE
TAXES AND MINORITY
INTEREST <FN1>
Risk
Management $ 43.1 $ 199.6 $ 65.0 $ 49.5 $ 55.3 $ 29.8
------------------------------------------------------------
Asset
Accumulation
Allmerica
Financial
Services 54.4 205.5 54.2 54.7 47.7 48.9
Allmerica Asset
Management 5.1 23.5 5.3 5.7 6.8 5.7
------------------------------------------------------------
59.5 $ 229.0 59.5 60.4 54.5 54.6
------------------------------------------------------------
Corporate (14.5)$ (59.3) (16.1) (13.7) (13.5) (16.0)
------------------------------------------------------------
Total net
operating income
before federal
income taxes and
minority interest 88.1 369.3 108.4 96.2 96.3 68.4
Federal income
taxes on
operating income (17.7) (72.4) (23.6) (16.4) (19.3) (13.1)
Minority interest:
Distributions on
mandatorily
redeemable
preferred
securities of a
subsidiary
trust (4.0) (16.0) (4.0) (4.0) (4.0) (4.0)
-----------------------------------------------------------
Consolidated net
operating income $ 66.4 $ 280.9 $ 80.8 $ 75.8 $ 73.0 $ 51.3
============================================================
INCOME FROM
CONTINUING
OPERATIONS $ 30.2 $ 345.1 $ 68.4 $ 59.1 $ 66.8 $ 150.8
============================================================
NET INCOME $ 30.2 $ 295.8 $ 68.4 $ 13.1 $ 60.2 $ 154.1
===========================================================
PER SHARE DATA
(DILUTED)
NET OPERATING
INCOME $ 1.22 $ 5.06 $ 1.48 $ 1.39 $ 1.32 $ 0.89
INCOME FROM
CONTINUING
OPERATIONS $ 0.56 $ 6.21 $ 1.25 $ 1.08 $ 1.21 $ 2.61
NET INCOME $ 0.56 $ 5.33 $ 1.25 $ 0.24 $ 1.09 $ 2.67
DIVIDENDS $ 0.00 $ 0.25 $ 0.00 $ 0.25 $ 0.00 $ 0.00
WEIGHTED AVERAGE
SHARES OUTSTANDING
(DILUTED) 54.3 55.5 54.6 54.7 55.1 57.7
BALANCE SHEET
Total investments $ 8,147.7 $ 7,888.7 $ 8,265.7 $ 9,043.7 $ 9,163.1
Separate account
assets $18,595.5 $17,629.6 $15,102.1 $15,635.9 $14,329.4
Total assets $31,854.1 $30,769.6 $29,080.0 $29,826.4 $28,461.2
Total shareholders'
equity $ 2,267.7 $ 2,240.2 $ 2,213.2 $ 2,248.7 $ 2,387.5
Book value per
share $ 42.27 $ 41.32 $ 40.86 $ 41.49 $ 42.30
Book value per
share,
excluding
SFAS No.115 $ 43.13 $ 42.71 $ 41.76 $ 41.45 $ 40.97
<FN>
<FN1>
Net operating income excludes net realized gains (losses) and other non-
operating items, net of taxes and minority interest.
</FN>
</TABLE>
PAGE 17
<PAGE>
ALLMERICA FINANCIAL CORPORATION
HISTORICAL FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(In millions, except
per share data) 1998 Q4 98 Q3 98 Q2 98 Q1 98 1997 Q4 97 Q3 97 Q2 97 Q1 97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET OPERATING
INCOME BEFORE
TAXES AND
MINORITY
INTEREST <FN1>
Risk
Management $ 149.6 $ 52.4 $ 24.6 $ 34.9 $ 37.7 $ 174.2 $ 54.7 $ 36.1 $ 45.6 $ 37.8
-------------------------------------------------------------------------------------------------
Asset
Accumulation
Allmerica
Financial
Services 169.0 43.5 39.1 44.2 42.2 134.6 35.0 37.8 32.0 29.8
Allmerica
Asset
Management 23.7 6.7 6.9 6.2 3.9 18.4 4.6 5.2 5.4 3.2
-------------------------------------------------------------------------------------------------
192.7 50.2 46.0 50.4 46.1 153.0 39.6 43.0 37.4 33.0
-------------------------------------------------------------------------------------------------
Corporate (50.9) (15.3) (10.6) (12.7) (12.3) (48.0) (17.2) (11.8) (8.0) (11.0)
-------------------------------------------------------------------------------------------------
Total net
operating income
before federal
income taxes and
minority interest 291.4 87.3 60.0 72.6 71.5 279.2 77.1 67.3 75.0 59.8
Federal income
taxes on
operating income (53.1) (13.8) (10.7) (12.2) (16.4) (63.4) (16.7) (16.0) (18.9) (11.8)
Minority interest:
Distributions
on mandatorily
redeemable
preferred
securities of
a subsidiary
trust (16.0) (4.0) (4.0) (4.0) (4.0) (14.5) (4.0) (4.1) (4.0) (2.4)
Equity in earnings (9.8) (2.4) (1.9) (1.7) (3.8) (37.0) (5.4) (0.5) (16.5) (14.6)
-------------------------------------------------------------------------------------------------
Consolidated net
operating income $ 212.5 $ 67.1 $ 43.4 $ 54.7 $ 47.3 $ 164.3 $ 51.0 $ 46.7 $ 35.6 $ 31.0
=================================================================================================
INCOME FROM
CONTINUING
OPERATIONS $ 214.7 $ 67.7 $ 24.3 $ 59.2 $ 63.5 $ 192.6 $ 89.6 $ 55.6 $ 33.9 $ 13.5
================================================================================================
NET INCOME $ 201.2 $ 65.9 $ 8.2 $ 60.3 $ 66.8 $ 209.2 $ 94.9 $ 60.7 $ 37.7 $ 15.9
================================================================================================
PER SHARE DATA
(DILUTED)
NET OPERATING
INCOME $ 3.52 $ 1.12 $ 0.71$ 0.91 $ 0.78 $ 3.00 $ 0.85 $ 0.80 $ 0.71 $ 0.62
INCOME FROM
CONTINUING
OPERATIONS $ 3.56 $ 1.13 $ 0.40 $ 0.98 $ 1.05 $ 3.52 $ 1.49 $ 0.95 $ 0.67 $ 0.27
NET INCOME $ 3.33 $ 1.10 $ 0.13 $ 1.00 $ 1.11 $ 3.82 $ 1.58 $ 1.04 $ 0.75 $ 0.32
DIVIDENDS $ 0.15 $ 0.00 $ 0.05 $ 0.05 $ 0.05 $ 0.20 $ 0.05 $ 0.05 $ 0.05 $ 0.05
WEIGHTED AVERAGE
SHARES
OUTSTANDING
(DILUTED) 60.3 59.9 60.6 60.5 60.3 54.8 60.2 58.4 50.3 50.2
BALANCE SHEET
Total investments $ 9,057.6 $ 9,169.0 $ 9,274.0 $ 8,923.8 $ 8,700.7 $ 8,741.1 $ 8,808.4 $ 8,758.3
Separate account
assets $13,697.7 $11,424.9 $12,260.5 $11,425.4 $ 9,755.4 $ 9,233.6 $ 8,036.3 $ 6,705.8
Total assets $27,653.1 $25,233.5 $25,816.4 $24,511.8 $22,549.0 $21,967.2 $20,963.5 $19,625.6
Total shareholders'
equity $ 2,458.6 $ 2,480.3 $ 2,539.4 $ 2,468.8 $ 2,381.3 $ 2,263.4 $ 1,782.5 $ 1,672.0
Book value
per share $ 41.95 $ 41.02 $ 42.04 $ 40.94 $ 39.71$ 37.74 $ 35.47 $ 33.35
Book value
per share,
excluding
SFAS No.115 $ 38.87 $ 38.08 $ 38.01 $ 37.07 $ 36.08 $ 34.54 $ 32.66 $ 31.97
<FN>
<FN1>
Net operating income excludes net realized gains (losses) and other non-
operating items, net of taxes and minority interest.
</FN>
</TABLE>
PAGE 18
<PAGE>
ALLMERICA FINANCIAL CORPORATION
HISTORICAL FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(In millions, except
per share data) 1996 Q4 96 Q3 96 Q2 96 Q1 96 1995 Q4 95 Q3 95 Q2 95 Q1 95
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET OPERATING
INCOME BEFORE
TAXES AND
MINORITY
INTEREST <FN1>
Risk
Management $ 173.1 $ 43.6 $ 63.0 $ 40.0 $ 26.5 $ 212.0 $ 54.6 $ 58.0 $ 51.4 $ 48.0
-------------------------------------------------------------------------------------------------
Asset
Accumulation
Allmerica
Financial
Services 106.8 28.2 27.4 28.0 23.2 60.0 15.4 16.0 11.4 17.2
Allmerica
Asset
Management 11.5 5.4 2.8 2.1 1.2 12.2 3.5 2.5 3.8 2.4
-------------------------------------------------------------------------------------------------
118.3 33.6 30.2 30.1 24.4 72.2 18.9 18.5 15.2 19.6
-------------------------------------------------------------------------------------------------
Corporate (58.0) (21.8) (10.4) (11.5) (14.3) (47.8) (15.4) (11.7) (9.6) (11.1)
-------------------------------------------------------------------------------------------------
Total net
operating income
before federal
income taxes and
minority interest 233.4 55.4 82.8 58.6 36.6 236.4 58.1 64.8 57.0 56.5
Federal income
taxes on
operating income (50.8) (11.2) (21.5) (14.8) (3.3) (67.4) (20.2) (17.8) (14.1) (15.3)
Minority interest:
Distributions
on mandatorily
redeemable
preferred
securities of
a subsidiary
trust 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Equity in earnings (61.5) (14.9) (21.7) (13.3) (11.6) (69.2) (15.4) (19.4) (18.3) (16.1)
-------------------------------------------------------------------------------------------------
Consolidated net
operating income $ 121.1 $ 29.3 $ 39.6 $ 30.5 $ 21.7 $ 99.8 $ 22.5 $ 27.6 $ 24.6 $ 25.1
================================================================================================
INCOME FROM
CONTINUING
OPERATIONS $ 164.4 $ 37.4 $ 43.6 $ 39.7 $ 43.7 $ 117.9 $ 34.2 $ 25.6 $ 24.2 $ 33.9
================================================================================================
NET INCOME $ 181.9 $ 45.3 $ 46.7 $ 42.6 $ 47.3 $ 133.9 $ 40.7 $ 30.1 $ 26.4 $ 36.7
================================================================================================
PER SHARE DATA
(DILUTED)
NET OPERATING
INCOME $ 2.41 $ 0.58 $ 0.79 $ 0.61 $ 0.43 $ 1.99 $ 0.45 $ 0.55 $ 0.49 $ 0.50
INCOME FROM
CONTINUING
OPERATIONS $ 3.29 $ 0.76 $ 0.87 $ 0.79 $ 0.87 $ 2.35 $ 0.68 $ 0.51 $ 0.48 $ 0.68
NET INCOME $ 3.63 $ 0.91 $ 0.93 $ 0.85 $ 0.94 $ 2.67 $ 0.81 $ 0.60 $ 0.53 $ 0.73
DIVIDENDS $ 0.20 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.00 $ 0.00 $ 0.00
WEIGHTED AVERAGE
SHARES
OUTSTANDING
(DILUTED) 50.1 50.1 50.1 50.1 50.1 50.1 50.1 50.1 50.1 50.1
BALANCE SHEET
Total investments $ 8,993.4 $ 9,247.2 $ 9,439.6 $ 9,479.2 $ 9,430.7 $ 9,898.1 $ 9,9,41.5 $ -
Separate account
Assets $ 6,233.0 $ 5,586.8 $ 5,197.9 $ 4,761.6 $ 4,348.8 $ 4,076.7 $ 3,659.2 $ -
Total assets $18,970.3 $18,728.5 $18,506.1 $18,162.7 $17,757.7 $17,163.8 $16,798.7 $ -
Total shareholders'
equity $ 1,724.7 $ 1,633.0 $ 1,563.5 $ 1,555.9 $ 1,574.2 $ 1,255.5 $ 1,230.1 $ -
Book value per
share $ 34.40 $ 32.57 $ 31.20 $ 31.03 $ 31.40 $ 25.04 $ 24.54 $ -
Book value per
share, excluding
SFAS No.115 $ 31.78 $ 30.92 $ 30.04 $ 29.24 $ 28.35 $ 23.23 $ 22.63 $ -
<FN>
<FN1>
Net operating income excludes net realized gains (losses) and other non-
operating items, net of taxes and minority interest.
</FN>
</TABLE>
PAGE 19
<PAGE>
CORPORATE OFFICES AND PRINCIPAL SUBSIDIARIES
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
The Hanover Insurance Company
100 North Parkway
Worcester, MA 01605
Citizens Insurance Company of America
645 West Grand River
Howell, MI 48843
MARKET AND DIVIDEND INFORMATION
The following information shows trading activity for the Company for the
periods indicated:
<TABLE>
<CAPTION>
Quarter Ended 2000
Price Range Dividends
High Low Per Share
<S> <C> <C> <C>
March 31 $53.50 $35.31 $0.00
June 30
September 30
December 31
</TABLE>
<TABLE>
<CAPTION>
Quarter Ended 1999
Price Range Dividends
High Low Per Share
<S> <C> <C> <C>
March 31 $57.88 $50.19 $0.00
June 30 $62.25 $54.50 $0.00
September 30 $64.44 $47.56 $0.25
December 31 $59.69 $46.50 $0.00
</TABLE>
INDUSTRY RATINGS
A.M. Standard Duff &
Claims Paying Best & Poors Moody's Phelps
- -----------------------------------------------------------------------------
First Allmerica Financial
Life Insurance Company A AA- A1 AA
- -----------------------------------------------------------------------------
Allmerica Financial Life
Insurance and Annuity Company A AA- A1 AA
- -----------------------------------------------------------------------------
The Hanover Insurance Company A AA- A1 -
- -----------------------------------------------------------------------------
Citizens Insurance Company
of America A - - -
- -----------------------------------------------------------------------------
Standard Duff &
Debt Ratings & Poors Moody's Phelps
- -----------------------------------------------------------------------------
Allmerica Financial Corporation
Senior Debt A- A2 A+
- -----------------------------------------------------------------------------
Allmerica Financial Corporation
Capital Securities BBB A2 -
- -----------------------------------------------------------------------------
Allmerica Financial Corporation
Short Term Debt A1+ P1 -
- -----------------------------------------------------------------------------
First Allmerica Financial
Life Insurance Company
Short Term Debt A1+ P1 -
- -----------------------------------------------------------------------------
First Allmerica Financial Life
Insurance Company Short Term
Insurance Financial Strength Rating - P1 -
- -----------------------------------------------------------------------------
TRANSFER AGENT
First Chicago Trust Company of New York
A Division of EquiServe, LP
525 Washington Boulevard
Jersey City, NJ 07303-2512
1-800-317-4454
COMMON STOCK
Common stock of Allmerica Financial Corporation is traded on the New York
Stock Exchange under the symbol "AFC".
INQUIRIES
Henry P. St. Cyr, CFA
Vice President, Investor Relations
(508) 855-2959
[email protected]
William J. Steglitz, CPA
Manager, Investor Relations
(508) 855-3883
[email protected]
INVESTOR INFORMATION LINE
Dial 1-800-407-5222 to receive additional printed information, fax-on-demand
services or other prerecorded messages.
Please visit our internet site at www.Allmerica.com
<PAGE>
