8-K

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 28, 2003

ALLMERICA FINANCIAL CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	1-13754	04-3263626
(State or other jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer 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)

Item 7.    Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(c) Exhibits.

The following exhibits are furnished herewith.

Exhibit 99.1    Press Release, dated April 28, 2003, announcing the Company’s financial results for the quarter ended March 31, 2003.

Exhibit 99.2    Allmerica Financial Corporation Statistical Supplement for the quarter ended March 31, 2003.

Item 9.    Regulation FD Disclosure (Information Provided Under Item 12 – Results of Operations and Financial Condition).

The following information contained in Item 9 is being furnished under Item 12 – Results of Operations and Financial Condition in accordance with interim guidance issued by the SEC in Release No. 33-8216. Such information, including the exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.

On April 28, 2003, Allmerica Financial Corporation issued a press release announcing its financial results for the quarter ended March 31, 2003. The release is furnished as Exhibit 99.1 hereto. Additionally, on April 28, 2003, the Company made available on its website financial information contained in its Statistical Supplement for the quarter ended March 31, 2003. The supplement is furnished as Exhibit 99.2 hereto.

2

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

Registrant

By:    /s/ Edward J. Parry III

Edward J. Parry III

Executive Officer of the Chairman,

Chief Financial Officer and

Principal Accounting Officer

Date: April 28, 2003

3

Exhibit Index

Exhibit 99.1    Press Release, dated April 28, 2003, announcing the Company’s financial results for the quarter ended March 31, 2003.

Exhibit 99.2    Allmerica Financial Corporation Statistical Supplement for the quarter ended March 31, 2003.

4

EX-99.1

Exhibit 99.1

ALLMERICA FINANCIAL CORPORATION REPORTS FIRST

QUARTER NET INCOME OF $0.70 PER SHARE

WORCESTER, Mass., April 28, 2003—Allmerica Financial Corporation (NYSE: AFC) today reported net income for the first quarter of $37.1 million, or $0.70 per share, compared to $47.9 million, or $0.90 per share in the first three months of 2002.

“We are very pleased with our first quarter results,” said Edward J. Parry, III, President of Allmerica’s Asset Accumulation Company and Allmerica Financial Corporation’s Chief Financial Officer. “Our performance was in line with expectations and demonstrates the effectiveness of the restructuring plan we initiated during the fourth quarter of last year.”

Robert P. Restrepo, Jr., President of Allmerica’s Property and Casualty Companies said, “The improvement in our first quarter property and casualty earnings was the direct result of the effective execution of our operating plan. We are particularly encouraged with the ongoing improvement in commercial lines, where we continue to benefit from rate increases and improvements to our underwriting process.”

“Our financial services operation performed well in the quarter, making continued progress on the development of VeraVest Investments, Inc., our newly-formed, independent broker-dealer,” Parry said.

The following table illustrates net income and certain other items:

	Quarter Ended March 31 (In millions, except per share data)
	2003						2002
	$			Per Share			$			Per Share
Net Income	$	37.1		$	0.70		$	47.9		$	0.90
Net income includes the following items (net of taxes):
Net realized investment gains (losses)	$	8.0		$	0.14		$	(4.4	)	$	(0.08	)
Gains on derivative instruments		1.0			0.02			10.6			0.20
Restructuring costs		(2.2	)		(0.04	)		—			—
Income from the sale of universal life business		3.6			0.07			—			—
Gain from retirement of trust instruments supported by funding obligations		3.0			0.06			—			—
Cumulative effect of change in accounting principle		—			—			(3.7	)		(0.07	)
Total of included items	$	13.4		$	0.25		$	2.5		$	0.05

Segment Results

Allmerica Financial conducts business in three operating segments. These segments are Property and Casualty (formerly described as “Risk Management”), Allmerica Financial Services (including VeraVest Investments, Inc.), and Asset Management (formerly “Allmerica Asset Management”). Previously, Allmerica Financial Services and Asset Management were grouped together under the heading “Asset Accumulation”.

Property and Casualty markets property and casualty insurance products on a regional basis through The Hanover Insurance Company and Citizens Insurance Company of America. Allmerica Financial Services manages a portfolio of proprietary life insurance and annuity products previously issued through Allmerica’s two life insurance subsidiaries, and markets non-proprietary insurance and retirement savings products and services primarily to individuals

2

through VeraVest Investments, Inc., a registered broker-dealer. The Asset Management segment markets investment management services to institutions, pension funds, and other organizations through Opus Investment Management, Inc., and manages a portfolio of guaranteed investment contracts issued through Allmerica’s life insurance subsidiaries.

The following table shows segment income which is presented consistent with the manner in which management evaluates results and is in accordance with Statement of Financial Accounting Standards No. 131, “Disclosures About Segments of an Enterprise and Related Information”. Segment income represents income before income taxes and minority interests and excludes the items listed in the net income table above.

	Quarter ended March 31 (In Millions)
	2003			2002
Property and Casualty	$	44.2		$	39.0
Allmerica Financial Services		2.4			29.7
Asset Management		2.5			5.1
Corporate		(17.1	)		(16.4	)
Total Segment Income	$	32.0		$	57.4

Property and Casualty

Property and Casualty segment income was $44.2 million in the first quarter of 2003, as compared to $39.0 million in the first quarter of 2002. Earnings were higher in the quarter due to rate increases in all lines, and favorable development on prior years’ reserves in most lines. These items were partially offset by increased current year frequency of losses and poor weather, primarily in personal lines, higher policy acquisition expenses, and lower net investment income.

3

Property and Casualty highlights:

n Net premiums written were $550.5 million in the first quarter of 2003, compared to $554.9 million in the first quarter of 2002.

n Net premiums earned were $554.2 million in the first quarter of 2003, compared to $558.1 million in the first quarter of 2002.

n Pre-tax catastrophe losses were $11.2 million in both the first quarter of 2003 and the comparable period one year earlier.

n The following table summarizes the components of the statutory combined ratio for the Property and Casualty segment:

	Quarter Ended March 31
	2003		2002
Losses	64.7	%	66.7	%
Loss adjustment expenses	8.3	%	9.0	%
Policy acquisition and other underwriting expense	29.3	%	28.5	%
Policyholders’ dividends	0.2	%	0.1	%
Combined Ratio	102.5	%	104.3	%

Allmerica Financial Services

Allmerica Financial Services reported segment income of $2.4 million in the first quarter of 2003, as compared to $29.7 million in the first quarter of 2002. Income for the quarter decreased principally due to higher amortization of deferred policy acquisition costs.

4

Allmerica Financial Services highlights:

· The Risk Based Capital ratio of Allmerica Financial Life Insurance and Annuity Company, Allmerica’s lead life insurance company, increased to 266 percent at March 31, 2003, up from 244 percent at December 31, 2002.

· Total adjusted statutory capital at March 31, 2003 was approximately $472.3 million for the combined life insurance subsidiaries, compared to $481.9 million at December 31, 2002.

· In the first quarter, individual annuity redemptions were $1.0 billion, compared to $1.3 billion in the fourth quarter of 2002.

Asset Management

Asset Management’s first quarter segment income was $2.5 million, as compared to $5.1 million in the same period in the prior year. Income declined primarily due to lower earnings on guaranteed investment contracts and higher borrowing costs for AMGRO, Inc., the Company’s property and casualty premium financing business.

Corporate

Corporate segment net expenses were $17.1 million in the first quarter of 2003, compared to $16.4 million in the comparable period in 2002, principally due to a decline in net investment income.

5

Investment Results

Net investment income was $118.7 million for the first quarter of 2003, compared to $150.5 million in the same period in 2002. In the current quarter, net investment income decreased principally due to lower average outstanding assets resulting from lower spread-based assets in the guaranteed investment contract business, surrenders from the general account, and transfers to the separate accounts from the general account related to the annuity business. Additionally, invested assets in Allmerica Financial Services were lower due to the sale of the Company’s fixed universal life insurance block of business. Additionally, portfolio yields decreased due to lower prevailing fixed maturity investment rates.

First quarter 2003 pre-tax net realized investment gains were $13.2 million, compared to $12.3 million of pre-tax net realized investment losses in 2002. In the current quarter, pre-tax net realized investment gains were principally related to realized gains of $42.4 million on the sale of certain fixed income securities, partially offset by realized losses of $23.5 million on impairments of fixed income securities and realized losses on derivative instruments of $6.2 million. In the first quarter of 2002, pre-tax net realized investment losses were principally related to impairments of $22.4 million on fixed income securities and realized losses of $13.4 million on derivative instruments, partially offset by realized gains of $23.6 million on the sale of certain fixed income and equity securities.

6

Balance Sheet and Other

Shareholders’ equity was $2.1 billion, or $39.86 per share at March 31, 2003, compared to $2.1 billion, or $39.12 per share at December 31, 2002. Excluding accumulated other comprehensive income, book value was $40.59 per share at the close of the first quarter, compared to $39.83 per share at December 31, 2002.

Total assets were $24.4 billion at March 31, 2003, compared to $26.6 billion at year-end 2002. Separate account assets were $11.0 billion at March 31, 2003, versus $12.3 billion at December 31, 2002. The declines in total and separate account assets were principally the result of surrenders of individual variable annuities and the decline in the equity market.

Life Insurance Company Statutory Capital Position

The Risk Based Capital (RBC) ratio of Allmerica Financial Life Insurance and Annuity Company, Allmerica’s lead life insurance company, increased to 266 percent at March 31, 2003, from 244 percent at December 31, 2002 due to the more favorable risk profile of the Company’s investment portfolio. RBC is a regulatory method of measuring the minimum amount of capital appropriate for an insurance company. The first level of regulatory involvement required for life insurance companies as a result of RBC levels, the so-called “Company Action Level”, is between 100 percent and 125 percent. Regulated insurance companies with RBC ratios that fall below the Company Action Level are required to prepare and submit an RBC plan that is acceptable to the insurance commissioner in the state of domicile. Total adjusted statutory capital at March 31, 2003 declined about 2 percent to approximately $472.3 million for the combined life insurance subsidiaries, from $481.9 million at December 31, 2002, principally due to the decline in the equity market. Statutory capital is the measure of capital utilized by insurance industry regulators.

7

Chief Executive Officer Search Update

The Board of Directors is continuing its search and consideration of a President and Chief Executive Officer for the Company. In order to allow the Board sufficient time to consider candidates for this position, it is not expected that the selection will be made prior to the annual meeting of the Company.

There are several highly qualified candidates for this position, including both internal and external candidates. The Search Committee of the Board has been interviewing and evaluating these candidates, and expects to continue to do so. The Directors recognize the importance of this decision and have elected to extend the process in the interest of full and complete evaluation of all candidates.

Allmerica Financial Corporation will host a conference call to discuss the Company’s first quarter results on Tuesday, April 29^th at 10:00 a.m. Eastern Time. Interested investors and others can listen to the call through Allmerica’s web site, located at http://www.allmerica.com. Web-cast participants should go to the web site 15 minutes early to register, download, and install any necessary audio software. A re-broadcast of the conference call will be available on this web site two hours after the call for one week following its posting.

Allmerica Financial Corporation’s First Quarter Earnings Press Release and Statistical Supplement are also available in the Financial News section at http://www.allmerica.com.

8

Certain statements in this release 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 “Financial News”. These uncertainties include 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 surrender patterns, investment impairments, heightened competition, adverse state and federal legislation or regulation, financial ratings actions, and various other factors, including the effect of the Company’s restructuring actions.

Allmerica Financial Corporation is the holding company for a diversified group of insurance and financial services companies headquartered in Worcester, Massachusetts.

-30-

CONTACTS:	Investors:	Media:
	Henry P. St. Cyr	Michael F. Buckley
	(508) 855-2959	(508) 855-3099
	hstcyr@allmerica.com	mibuckley@allmerica.com

AF-

04/28/03

9

ALLMERICA FINANCIAL CORPORATION

(In millions, except per share data)

	Quarter ended March 31
	2003		2002
Net income	$	37.1	$	47.9
Net income per share (diluted) (1)	$	0.70	$	0.90
Weighted average shares		53.0		53.1

The following is a reconciliation from segment income to net income ⁽²⁾:

	Quarter ended March 31
	2003			2002
Property and Casualty	$	44.2		$	39.0
Allmerica Financial Services		2.4			29.7
Asset Management		2.5			5.1
Corporate		(17.1	)		(16.4	)
Total segment income		32.0			57.4
Federal income taxes on segment income		(4.3	)		(8.0	)
Minority interest on preferred dividends		(4.0	)		(4.0	)
Total segment income after federal income taxes and minority interest		23.7			45.4
Net realized investment gains (losses), net of taxes and amortization		8.0			(4.4	)
Income from sale of universal life business, net of taxes		3.6			—
Gain from retirement of trust instruments supported by funding obligations, net of taxes		3.0			—
Gains on derivative instruments, net of taxes		1.0			10.6
Restructuring costs, net of tax		(2.2	)		—
Cumulative effect of change in accounting principle, net of taxes		—			(3.7	)
Net income	$	37.1		$	47.9

10

(1) Basic net income per share was $0.70 and $0.91 for the quarters ended March 31, 2003 and 2002, respectively.

(2) In accordance with Statement of Financial Accounting Standards No. 131, Disclosure about Segments of an Enterprise and Related Information, the separate financial information of each segment is presented consistent with the way results are regularly evaluated by the chief operating decision makers in deciding how to allocate resources and in assessing performance. Management evaluates the results of the aforementioned segments based on a pre-tax and pre-minority interest basis. Segment income (loss) is determined by adjusting net income for net realized investment gains and losses including certain gains or losses on derivative instruments, because fluctuations in these gains and losses are determined by interest rates, financial markets and the timing of sales. Also segment income (loss) excludes net gains and losses on disposals of businesses, discontinued operations, restructuring and reorganization costs, extraordinary items, the cumulative effect of accounting changes and certain other items. Although the items excluded from segment income (loss) may be significant components in understanding and assessing each segment’s financial performance, management believes segment income (loss) enhances an investor’s understanding of the segment’s results of operations by highlighting net income (loss) attributable to the normal, recurring operations of the business, consistent with industry practice.

All figures reported are unaudited.

11

EX-99.2

Exhibit 99.2

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
Balance Sheet Highlights	5
Property and Casualty
Condensed Income Statements	6
Statutory Underwriting Profit/(Loss), reconciled to GAAP	7
Selected Statutory Product Information	8
Allmerica Financial Services
Condensed Income Statements	9
Segment Income By Product Line	10
Selected Financial Information-Variable Annuities	11
Future Policy Benefits and Account Balances	12
Asset Management
Condensed Income Statements and Supplemental Information	13
Corporate
Condensed Income Statements	14
Investment Results
Net Investment Income	15
Historical Financial Highlights	16-18
Other Information
Corporate Information	Inside back cover
Market and Dividend Information
Industry Ratings

ALLMERICA FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS

	Quarter ended March 31
(In millions, except per share data)	2003			2002			% Change
RECONCILIATION FROM SEGMENT
INCOME TO NET INCOME
Segment income (1)	$	32.0		$	57.4		(44.3	)
Federal income taxes on segment income		(4.3	)		(8.0	)	(46.3	)
Minority interest:
Distributions on mandatorily redeemable preferred securities of a subsidiary trust, net of taxes		(4.0	)		(4.0	)	—
Net realized investment gains (losses), net of taxes and amortization		8.0			(4.4	)	N/M
Gains on derivative instruments, net of taxes		1.0			10.6		(90.6	)
Restructuring costs, net of taxes		(2.2	)		—		N/M
Gain from retirement of trust instruments supported by funding obligations, net of taxes		3.0			—		N/M
Income from sale of universal life business, net of taxes		3.6			—		N/M
Income before effect of accounting change		37.1			51.6		(28.1	)
Cumulative effect of change in accounting principle, net of taxes		—			(3.7	)	N/M
Net income	$	37.1		$	47.9		(22.5	)
PER SHARE DATA (DILUTED)
Segment income (1)	$	0.60		$	1.08		(44.4	)
Federal income taxes on segment income		(0.08	)		(0.16	)	(50.0	)
Minority interest:
Distributions on mandatorily redeemable preferred securities of a subsidiary trust, net of taxes		(0.07	)		(0.07	)	—
Net realized investment gains (losses), net of taxes and amortization		0.14			(0.08	)	N/M
Gains on derivative instruments, net of taxes		0.02			0.20		(90.0	)
Restructuring costs, net of taxes		(0.04	)		—		N/M
Gain from retirement of trust instruments supported by funding obligations, net of taxes		0.06			—		N/M
Income from sale of universal life business, net of taxes		0.07			—		N/M
Income before effect of accounting change		0.70			0.97		(27.8	)
Cumulative effect of change in accounting principle, net of taxes		—			(0.07	)	N/M
Net income	$	0.70		$	0.90		(22.2	)
	March 31 2003			December 31 2002			% Change
BALANCE SHEET
Shareholders’ equity
The Hanover Insurance Company (consolidated)	$	1,447.6		$	1,400.9		3.3
Allmerica Financial Life Insurance and Annuity Company (consolidated)		1,192.9			1,197.9		(0.4	)
AFC Holding Company and other		(524.6	)		(526.6	)	(0.4	)
Total shareholders’ equity	$	2,115.9		$	2,072.2		2.1
Total adjusted statutory capital
The Hanover Insurance Company (consolidated)	$	882.8		$	830.3		6.3
Allmerica Financial Life Insurance and Annuity Company (consolidated)	$	472.3		$	481.9		(2.0	)
First Allmerica Financial Life Insurance Company	$	193.3		$	200.0		(3.4	)
Book value per share
The Hanover Insurance Company (consolidated)	$	27.27		$	26.39		3.3
Allmerica Financial Life Insurance and Annuity Company (consolidated)		22.46			22.64		(0.8	)
AFC Holding Company and other		(9.87	)		(9.91	)	(0.4	)
Total book value per share	$	39.86		$	39.12		1.9
Book value per share, excluding accumulated other comprehensive income	$	40.59		$	39.83		1.9
Shares outstanding (2)		53.1			52.9
Stock price	$	14.03		$	10.10		38.9
Price/book value per share		0.4	x		0.3	x	0.1	x
Debt/equity		9.4	%		9.6	%	(0.2	) pts
Debt/total capital		7.6	%		7.8	%	(0.2	) pts
Debt plus preferred securities of a subsidiary trust/total capital		19.1	%		19.4	%	(0.3	) pts

(1) Represents income or loss of the Company’s three operating segments: Property and Casualty, Allmerica Financial Services and Asset Management. In accordance with Statement of Financial Accounting Standards No.131, the separate financial information of each segment is presented consistent with the manner in which results are regularly evaluated by the chief operating decision makers in deciding how to allocate resources and in assessing performance. In addition, segment income or loss reflects those results related to the Corporate segment, which consists of income and expenses related to invested assets, corporate debt, preferred securities of a subsidiary trust and corporate overhead expenses. Corporate overhead expenses reflect costs not attributable to a particular segment, such as those related to certain officers and directors, technology, finance, human resources and legal.

(2) Shares outstanding do not include common stock equivalents.

1

ALLMERICA FINANCIAL CORPORATION

CONSOLIDATED INCOME STATEMENTS

	Quarter ended March 31
(In millions, except per share data)	2003			2002			% Change
REVENUES
Premiums	$	575.2		$	582.6		(1.3	)
Universal life and investment product policy fees		90.3			96.0		(5.9	)
Net investment income		118.7			150.5		(21.1	)
Net realized investment gains (losses)		13.2			(12.3	)	N/M
Other income		52.4			32.5		61.2
Total revenues		849.8			849.3		0.1
BENEFITS, LOSSES AND EXPENSES
Policy benefits, claims, losses and loss adjustment expenses		486.7			536.4		(9.3	)
Policy acquisition expenses		171.3			111.5		53.6
Gain from retirement of trust instruments supported by funding obligations		(4.7	)		—		N/M
Income from sale of universal life business		(5.5	)		—		N/M
Gains on derivative instruments		(1.5	)		(16.3	)	(90.8	)
Restructuring costs		3.3			—		N/M
Other operating expenses		151.6			152.6		(0.7	)
Total benefits, losses and expenses		801.2			784.2		2.2
Income before federal income taxes		48.6			65.1		(25.3	)
Federal income tax expense		7.5			9.5		(21.1	)
Income before minority interest and cumulative effect of change in accounting principle		41.1			55.6		(26.1	)
Minority interest:
Distributions on mandatorily redeemable preferred securities of a subsidiary trust		(4.0	)		(4.0	)	—
Income before cumulative effect of change in accounting principle		37.1			51.6		(28.1	)
Cumulative effect of change in accounting principle		—			(3.7	)	N/M
Net income	$	37.1		$	47.9		(22.5	)
PER SHARE DATA (DILUTED)
Income before cumulative effect of change in accounting principle	$	0.70		$	0.97		(27.8	)
Cumulative effect of change in accounting principle		—			(0.07	)	N/M
Net income (1)	$	0.70		$	0.90		(22.2	)
Weighted average shares outstanding		53.0			53.1

(1) Basic net income per share was $0.70 and $0.91 for the quarters ended March 31, 2003 and 2002, respectively.

2

ALLMERICA FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(In millions, except per share data)	March 31 2003			December 31 2002			% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $7,204.5 and $7,715.9)	$	7,487.9		$	8,003.1		(6.4	)
Equity securities, at fair value (cost of $49.1)		52.2			52.8		(1.1	)
Mortgage loans		242.4			259.8		(6.7	)
Policy loans		277.5			361.4		(23.2	)
Other long-term investments		112.2			129.7		(13.5	)
Total investments		8,172.2			8,806.8		(7.2	)
Cash and cash equivalents		267.7			389.8		(31.3	)
Accrued investment income		130.8			138.3		(5.4	)
Premiums, accounts, and notes receivable, net		584.5			564.7		3.5
Reinsurance receivable on paid and unpaid losses, benefits and unearned premiums		2,080.5			2,075.8		0.2
Deferred policy acquistion costs		1,180.4			1,242.2		(5.0	)
Deferred federal income tax asset		377.0			413.2		(8.8	)
Goodwill		131.2			131.2		—
Other assets		432.3			473.5		(8.7	)
Separate account assets		11,016.2			12,343.4		(10.8	)
Total assets	$	24,372.8		$	26,578.9		(8.3	)
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Policy liabilities and accruals:
Future policy benefits	$	3,737.5		$	3,900.1		(4.2	)
Outstanding claims, losses and loss adjustment expenses		3,059.4			3,066.5		(0.2	)
Unearned premiums		1,039.0			1,047.0		(0.8	)
Contractholder deposit funds and other policy liabilities		774.7			772.8		0.2
Total policy liabilities and accruals		8,610.6			8,786.4		(2.0	)
Expenses and taxes payable		797.5			1,115.5		(28.5	)
Reinsurance premiums payable		173.9			559.1		(68.9	)
Trust instruments supported by funding obligations		1,159.2			1,202.8		(3.6	)
Short-term debt		—			—		—
Long-term debt		199.5			199.5		—
Separate account liabilities		11,016.2			12,343.4		(10.8	)
Total liabilities		21,956.9			24,206.7		(9.3	)
MINORITY INTEREST
Mandatorily redeemable preferred securities of a subsidiary trust		300.0			300.0		—
SHAREHOLDERS’ EQUITY
Preferred stock, par value $.01 per share; authorized 20.0 million shares; issued none		—			—		—
Common stock, par value $.01 per share; authorized 300.0 million shares; issued 60.4 million shares		0.6			0.6		—
Additional paid-in capital		1,768.5			1,768.4		—
Accumulated other comprehensive income (loss)		(38.6	)		(37.4	)	3.2
Retained earnings		783.3			746.2		5.0
Treasury stock at cost (7.3 and 7.5 million shares)		(397.9	)		(405.6	)	(1.9	)
Total shareholders’ equity		2,115.9			2,072.2		2.1
Total liabilities and shareholders’ equity	$	24,372.8		$	26,578.9		(8.3	)

3

ALLMERICA FINANCIAL CORPORATION

SEGMENT RESULTS

INCOME STATEMENT HIGHLIGHTS

	Quarter ended March 31
(In millions)	2003			2002			% Change
SEGMENT REVENUES (1)
Property and Casualty	$	609.0		$	614.7			(0.9	)
Allmerica Financial Services		208.0			214.9			(3.2	)
Asset Management		22.1			32.2			(31.4	)
Corporate		0.5			1.7			(70.6	)
Eliminations and other		(3.0	)		(1.9	)		57.9
Total segment revenues	$	836.6		$	861.6			(2.9	)
SEGMENT INCOME (2)
Property and Casualty	$	44.2		$	39.0			13.3
Allmerica Financial Services		2.4			29.7			(91.9	)
Asset Management		2.5			5.1			(51.0	)
Corporate		(17.1	)		(16.4	)		4.3
Total segment income before federal income taxes and minority interest	$	32.0		$	57.4			(44.3	)
	Year ended December 31
(In millions)	2002			2001			2000			1999			1998
SEGMENT REVENUES (1)
Property and Casualty	$	2,498.7		$	2,454.8		$	2,307.7		$	2,189.4		$	2,222.1
Allmerica Financial Services		854.7			826.5			867.2			808.3			725.6
Asset Management		127.2			155.2			149.2			150.5			121.7
Corporate		5.0			6.7			6.3			6.0			12.9
Eliminations and other		(10.3	)		(7.5	)		(7.0	)		(5.9	)		(7.6	)
Total segment revenues	$	3,475.3		$	3,435.7		$	3,323.4		$	3,148.3		$	3,074.7
SEGMENT INCOME (2)
Property and Casualty	$	184.3		$	93.5		$	190.0		$	199.6		$	149.6
Allmerica Financial Services		(625.0	)		143.0			222.8			205.5			169.0
Asset Management		24.4			20.7			22.5			23.5			23.7
Corporate		(63.5	)		(63.8	)		(60.8	)		(59.3	)		(50.9	)
Total segment income before federal income taxes and minority interest	$	(479.8	)	$	193.4		$	374.5		$	369.3		$	291.4

(1) Represents revenues generated by the Company’s three operating segments, as well as the Corporate segment.

(2) Represents income or loss of the Company’s three operating segments: Property and Casualty, Allmerica Financial Services and Asset Management. In accordance with Statement of Financial Accounting Standards No. 131, the separate financial information of each segment is presented consistent with the manner in which results are regularly evaluated by the chief operating decision makers in deciding how to allocate resources and in assessing performance. In addition, segment income or loss reflects those results related to the Corporate segment, which consists of income and expenses related to invested assets, corporate debt, preferred securities of a subsidiary trust and corporate overhead expenses. Corporate overhead expenses reflect costs not attributable to a particular segment, such as those related to certain officers and directors, technology, finance, human resources and legal.

4

ALLMERICA FINANCIAL CORPORATION

SEGMENT RESULTS

BALANCE SHEET HIGHLIGHTS

(In millions)	March 31, 2003
	Property and Casualty		Allmerica Financial Services		Asset Management		Corporate(1)			Total
Cash and investments	$	3,578.9	$	3,516.9	$	1,310.3	$	33.8		$	8,439.9
Reinsurance receivables		1,123.3		957.2		—		—			2,080.5
Deferred policy acquistion costs		215.4		965.0		—		—			1,180.4
Separate account assets		—		11,016.2		—		—			11,016.2
Other assets		1,134.9		424.0		199.3		(102.4	)		1,655.8
Total assets	$	6,052.5	$	16,879.3	$	1,509.6	$	(68.6	)	$	24,372.8
Policy liabilities and accruals:
Future policy benefits	$	111.8	$	3,625.7	$	—	$	—		$	3,737.5
Outstanding claims, losses and loss adjustment expenses		3,038.5		20.9		—		—			3,059.4
Unearned premiums		1,037.2		1.8		—		—			1,039.0
Contractholder deposit funds and other policy liabilities		13.5		556.7		204.5		—			774.7
Total policy liabilities and accruals	$	4,201.0	$	4,205.1	$	204.5	$	—		$	8,610.6
Trust instruments supported by funding obligations	$	—	$	—	$	1,159.2	$	—		$	1,159.2
Separate account liabilities	$	—	$	11,016.2	$	—	$	—		$	11,016.2
	December 31 2002
	Property and Casualty		Allmerica Financial Services		Asset Management		Corporate(1)			Total
Cash and investments	$	3,604.7	$	4,160.2	$	1,368.3	$	63.4		$	9,196.6
Reinsurance receivables		1,101.0		974.8		—		—			2,075.8
Deferred policy acquistion costs		215.1		1,027.1		—		—			1,242.2
Separate account assets		—		12,343.4		—		—			12,343.4
Other assets		1,135.3		466.1		191.5		(72.0	)		1,720.9
Total assets	$	6,056.1	$	18,971.6	$	1,559.8	$	(8.6	)	$	26,578.9
Policy liabilities and accruals:
Future policy benefits	$	106.5	$	3,793.6	$	—	$	—		$	3,900.1
Outstanding claims, losses and loss adjustment expenses		3,035.9		30.6		—		—			3,066.5
Unearned premiums		1,045.2		1.8		—		—			1,047.0
Contractholder deposit funds and other policy liabilities		14.2		550.5		208.1		—			772.8
Total policy liabilities and accruals	$	4,201.8	$	4,376.5	$	208.1	$	—		$	8,786.4
Trust instruments supported by funding obligations	$	—	$	—	$	1,202.8	$	—		$	1,202.8
Separate account liabilities	$	—	$	12,343.4	$	—	$	—		$	12,343.4

(1) Total assets include corporate eliminations of $(106.6) millionand $(78.9) million at March 31, 2003 and December 31, 2002,

5

ALLMERICA FINANCIAL CORPORATION

PROPERTY AND CASUALTY

CONDENSED INCOME STATEMENT

	Quarter ended March 31
(In millions)	2003		2002		% Change
REVENUES
Net premiums written	$	550.5	$	554.9	(0.8	)
Change in unearned premiums, net of prepaid reinsurance premiums		3.7		3.2	15.6
Net premiums earned		554.2		558.1	(0.7	)
Net investment income		45.3		51.8	(12.5	)
Other income		9.5		4.8	97.9
Total segment revenue		609.0		614.7	(0.9	)
LOSSES AND OPERATING EXPENSES
Policy benefits, claims, losses and loss adjustment expenses		405.2		421.1	(3.8	)
Policy acquisition expenses		111.8		104.6	6.9
Other operating expenses		47.8		50.0	(4.4	)
Total losses and operating expenses		564.8		575.7	(1.9	)
Segment income before federal income taxes	$	44.2	$	39.0	13.3

6

ALLMERICA FINANCIAL CORPORATION

PROPERTY AND CASUALTY

STATUTORY UNDERWRITING PROFIT/(LOSS), RECONCILED TO GAAP

	Quarter ended March 31
(In millions)	2003			2002			% Change
Net premiums earned	$	553.9		$	557.4		(0.6	)
Policy benefits, claims, losses and loss adjustment expenses		404.1			422.0		(4.2	)
Policy acquisition and other underwriting expenses		161.3			158.1		2.0
Policyholders’ dividends		1.1			0.6		83.3
Underwriting loss	$	(12.6	)	$	(23.3	)	(45.9	)
Net investment income		45.3			51.8		(12.5	)
Other income and expenses, net		8.1			3.4		138.2
Net deferred acquisition costs		0.3			2.2		(86.4	)
Other Statutory to GAAP adjustments		3.1			4.9		(36.7	)
Segment income before federal income taxes—GAAP Basis	$	44.2		$	39.0		13.3
PRETAX CATASTROPHE LOSSES	$	11.2		$	11.2		—

7

ALLMERICA FINANCIAL CORPORATION

PROPERTY AND CASUALTY

SELECTED STATUTORY PRODUCT INFORMATION

(In millions, except ratios)	Quarter ended March 31
	2003			2002			% Change
NET PREMIUMS WRITTEN
Personal automobile	$	283.4		$	285.2		(0.6	)
Homeowners		70.5			65.5		7.6
Other personal		8.2			8.6		(4.7	)
Total personal lines		362.1			359.3		0.8
Workers’ compensation		39.0			42.0		(7.1	)
Commercial automobile		44.2			51.5		(14.2	)
Commercial multiple peril		83.4			79.7		4.6
Other commercial		21.5			21.7		(0.9	)
Total commercial lines		188.1			194.9		(3.5	)
Total	$	550.2		$	554.2		(0.7	)
NET PREMIUMS EARNED
Personal automobile	$	271.1		$	254.5		6.5
Homeowners		85.7			78.4		9.3
Other personal		10.6			10.9		(2.8	)
Total personal lines		367.4			343.8		6.9
Workers’ compensation		36.5			45.9		(20.5	)
Commercial automobile		46.1			57.3		(19.5	)
Commercial multiple peril		79.7			84.6		(5.8	)
Other commercial		24.2			25.8		(6.2	)
Total commercial lines		186.5			213.6		(12.7	)
Total	$	553.9		$	557.4		(0.6	)
POLICY BENEFITS, CLAIMS AND LOSSES
Personal automobile	$	209.4		$	185.5		12.9
Homeowners		55.0			51.5		6.8
Other personal		3.6			5.7		(36.8	)
Total personal lines		268.0			242.7		10.4
Workers’ compensation		24.6			34.7		(29.1	)
Commercial automobile		23.1			35.6		(35.1	)
Commercial multiple peril		39.4			52.1		(24.4	)
Other commercial		3.2			6.9		(53.6	)
Total commercial lines		90.3			129.3		(30.2	)
Total	$	358.3		$	372.0		(3.7	)
LOSS ADJUSTMENT EXPENSES	$	45.8		$	50.0		(8.4	)
RATIOS
LOSSES
Personal automobile		77.2	%		72.9	%	4.3	pts
Homeowners		64.2	%		65.7	%	(1.5	) pts
Other personal		34.0	%		52.3	%	(18.3	) pts
Total personal lines		72.9	%		70.6	%	2.3	pts
Workers’ compensation		67.4	%		75.6	%	(8.2	) pts
Commercial automobile		50.1	%		62.1	%	(12.0	) pts
Commercial multiple peril		49.4	%		61.6	%	(12.2	) pts
Other commercial		13.2	%		26.7	%	(13.5	) pts
Total commercial lines		48.4	%		60.5	%	(12.1	) pts
Total		64.7	%		66.7	%	(2.0	) pts
LOSS ADJUSTMENT EXPENSES		8.3	%		9.0	%	(0.7	) pts
POLICY ACQUISITION AND OTHER UNDERWRITING EXPENSES		29.3	%		28.5	%	0.8	pts
POLICYHOLDERS’ DIVIDENDS		0.2	%		0.1	%	0.1	pts
COMBINED		102.5	%		104.3	%	(1.8	) pts

8

ALLMERICA FINANCIAL CORPORATION

ALLMERICA FINANCIAL SERVICES

CONDENSED INCOME STATEMENTS

	Quarter ended March 31
(In millions)	2003		2002		% Change
REVENUES
Premiums	$	21.0	$	24.5	(14.3	)
Fees:
Fees from surrenders		26.4		7.0	N/M
Other proprietary product fees		63.9		89.0	(28.2	)
Net investment income		53.2		70.7	(24.8	)
Brokerage and investment management income (1)		32.5		18.1	79.6
Other income		11.0		5.6	96.4
Total segment revenue		208.0		214.9	(3.2	)
POLICY BENEFITS, CLAIMS AND OPERATING EXPENSES
Policy benefits, claims and losses		74.4		107.2	(30.6	)
Policy acquisition expenses		59.8		11.6	N/M
Brokerage and investment management variable expenses (1)		22.2		11.8	—
Other operating expenses		49.2		54.6	(9.9	)
Total policy benefits, claims and operating expenses		205.6		185.2	11.0
Segment income before federal income taxes	$	2.4	$	29.7	(91.9	)

(1) Brokerage and investment management income primarily reflects fees earned from the distribution and management of non-proprietary insurance and investment products. Variable expenses related to this business primarily consists of commissions.

9

ALLMERICA FINANCIAL CORPORATION

ALLMERICA FINANCIAL SERVICES

SEGMENT INCOME BY PRODUCT LINE

(In millions)	Quarter ended March 31, 2003
	Individual Annuities			Variable Universal Life (2)		Other Insurance(3)			Total Insurance		VeraVest Distribution		Total
REVENUES
Premiums	$	—		$	—	$	21.0		$	21.0	$	—	$	21.0
Fees:
Fees from surrenders		22.3			4.1		—			26.4		—		26.4
Other proprietary product fees		38.4			24.3		1.2			63.9		—		63.9
Net investment income		16.4			3.8		33.0			53.2		—		53.2
Brokerage and investment management income (1)		5.3			1.1		0.1			6.5		26.0		32.5
Other income		2.1			2.5		5.3			9.9		1.1		11.0
Total segment revenue		84.5			35.8		60.6			180.9		27.1		208.0
POLICY BENEFITS, CLAIMS AND OPERATING EXPENSES
Policy benefits, claims and losses		27.6			9.4		37.4			74.4		—		74.4
Policy acquisition expenses		52.8			7.3		(0.3	)		59.8		—		59.8
Variable operating expenses		7.6			1.3		0.5			9.4		19.2		28.6
		88.0			18.0		37.6			143.6		19.2		162.8
Segment income before other operating expenses	$	(3.5	)	$	17.8	$	23.0		$	37.3	$	7.9		45.2
Other operating expenses (4)														42.8
Segment income before federal income taxes													$	2.4
	Quarter ended March 31, 2002
	Individual Annuities			Variable Universal Life (2)		Other Insurance(3)			Total Insurance		VeraVest Distribution		Total
REVENUES
Premiums	$	—		$	—	$	24.5		$	24.5	$	—	$	24.5
Fees:
Fees from surrenders		5.0			1.8		0.2			7.0		—		7.0
Other proprietary product fees		46.9			25.6		16.5			89.0		—		89.0
Net investment income		20.6			2.6		47.4			70.6		0.1		70.7
Brokerage and investment management income (1)		7.5			1.3		0.5			9.3		8.8		18.1
Other income		1.0			0.1		3.5			4.6		1.0		5.6
Total segment revenue		81.0			31.4		92.6			205.0		9.9		214.9
POLICY BENEFITS, CLAIMS AND OPERATING EXPENSES
Policy benefits, claims and losses		35.8			12.1		59.3			107.2		—		107.2
Policy acquisition expenses		5.5			3.1		3.0			11.6		—		11.6
Variable operating expenses		9.7			2.8		0.7			13.2		7.7		20.9
		51.0			18.0		63.0			132.0		7.7		139.7
Segment income before other operating expenses	$	30.0		$	13.4	$	29.6		$	73.0	$	2.2		75.2
Other operating expenses (4)														45.5
Segment income before federal income taxes													$	29.7

(1) Brokerage and investment management income primarily reflects fees earned from the distribution and management of non-proprietary insurance and investment products. Variable expenses related to this business primarily consists of commissions.

(2) Variable universal life includes group variable universal life business.

(3) Other insurance includes results from the closed block, the universal life, traditional life, yearly renewable term life, individual health and other insurance and group retirement products.

(4) Includes insurance and VeraVest distribution operating expenses.

10

ALLMERICA FINANCIAL CORPORATION

ALLMERICA FINANCIAL SERVICES

SELECTED FINANCIAL INFORMATION-VARIABLE ANNUITIES

	Quarter ended
(In millions)	March 31 2003		December 31 2002		% Change
VARIABLE INDIVIDUAL ANNUITIES— REDEMPTIONS BY DISTRIBUTION CHANNEL (1)
Agency	$	430.4	$	415.3	3.6
Select		267.8		441.3	(39.3	)
Partner		292.2		426.8	(31.5	)
	$	990.4	$	1,283.4	(22.8	)
	March 31 2003		December 31 2002		% Change
VARIABLE INDIVIDUAL ANNUITIES— ACCCOUNT VALUES BY DISTRIBUTION CHANNEL
Agency	$	4,098.3	$	4,623.6	(11.4	)
Select		2,671.5		2,995.3	(10.8	)
Partner		4,117.0		4,507.2	(8.7	)
	$	10,886.8	$	12,126.1	(10.2	)
NET AMOUNT AT RISK BY DISTRIBUTION CHANNEL
Agency	$	1,868.6	$	1,854.8	0.7
Select		1,045.3		1,037.3	0.8
Partner		1,764.7		1,720.3	2.6
	$	4,678.6	$	4,612.4	1.4
VARIABLE ANNUITY DEFERRED ACQUISITION COST ASSET BY DISTRIBUTION CHANNEL
Agency	$	270.0	$	290.7	(7.1	)
Select		250.1		270.1	(7.4	)
Partner		202.9		217.4	(6.7	)
	$	723.0	$	778.2	(7.1	)

(1) Includes both full policy and partial policy surrenders, withdrawals and death benefits (to the extent equal to account value).

11

ALLMERICA FINANCIAL CORPORATION

ALLMERICA FINANCIAL SERVICES

FUTURE POLICY BENEFITS AND ACCOUNT BALANCES

(In millions)	March 31 2003			December 31 2002			% Change
GENERAL ACCOUNT RESERVES
Insurance
Traditional life	$	847.4		$	854.2		(0.8	)
Universal life (1)		693.1			703.0		(1.4	)
Variable universal life (2)		215.8			222.9		(3.2	)
Individual health (3)		265.8			265.4		0.2
Total insurance		2,022.1			2,045.5		(1.1	)
Annuities
Individual annuities		1,563.1			1,716.0		(8.9	)
Group annuities		619.9			615.0		0.8
Total annuities		2,183.0			2,331.0		(6.3	)
Total general account reserves	$	4,205.1		$	4,376.5		(3.9	)
SEPARATE ACCOUNT LIABILITIES
Variable individual life	$	868.9		$	977.9		(11.1	)
Variable individual annuities		9,520.8			10,611.9		(10.3	)
Total individual		10,389.7			11,589.8		(10.4	)
Group variable universal life		248.0			349.7		(29.1	)
Group annuities		378.5			403.9		(6.3	)
Total group		626.5			753.6		(16.9	)
Total separate account liabilities	$	11,016.2		$	12,343.4		(10.8	)
	Quarter ended
	March 31 2003			December 31 2002			% Change
SEPARATE ACCOUNT INDIVIDUAL ANNUITIES
Balance at beginning of period	$	10,611.9		$	12,834.5		(17.3	)
Direct premiums and deposits		24.8			577.8		(95.7	)
Redemptions		(794.6	)		(417.4	)	90.4
Market (depreciation) appreciation		(270.2	)		20.5		N/M
Transfers and other		(51.1	)		14.5		N/M
Balance at end of period	$	9,520.8		$	13,029.9		(26.9	)

(1) Universal life reserves include reinsured balances of $663.3 million and $681.7 million at March 31, 2003 and December 31, 2002, respectively.

(2) Variable universal life reserves include group variable universal life reserves of $10.3 million and $11.8 million at March 31, 2003 and December 31, 2002, respectively.

(3) Individual health reserves include reinsured balances of $264.6 million and $264.0 million at March 31, 2003 and December 31, 2002, respectively.

12

ALLMERICA FINANCIAL CORPORATION

ASSET MANAGEMENT

CONDENSED INCOME STATEMENTS AND SUPPLEMENTAL INFORMATION

	Quarter ended March 31
(In millions)	2003			2002			% Change
INTEREST MARGINS ON GICS
Net investment income	$	19.9		$	26.5		(24.9	)
Interest credited		(18.6	)		(23.6	)	(21.2	)
Net interest margin		1.3			2.9		(55.2	)
PREMIUM FINANCING BUSINESS
Fees		3.0			2.7		11.1
Operating expenses		(2.9	)		(1.7	)	70.6
Net premium financing business		0.1			1.0		(90.0	)
FEES AND OTHER INCOME
External fees		2.2			1.9		15.8
Internal fees		1.1			1.3		(15.4	)
Other operating expenses		(2.2	)		(2.0	)	10.0
Segment income before federal income taxes	$	2.5		$	5.1		(51.0	)
	Quarter ended March 31
	2003			2002			% Change
GIC DEPOSITS
Outstanding GIC deposits, beginning of period	$	1,410.0		$	2,689.7		(47.6	)
Withdrawals during the period		(64.9	)		(526.0	)	(87.7	)
Deposits during the period		—			127.1		N/M
Interest credited during the period		18.6			23.6		(21.2	)
Outstanding GIC deposits, end of period	$	1,363.7		$	2,314.4		(41.1	)
	March 31
	2003			2002
GIC SCHEDULED MATURITIES
2002	$	—		$	132.2
2003		75.5			137.7
2004		123.2			162.6
2005		654.0			770.2
2006+		511.0			633.3
		1,363.7	(1)		1,836.0	(1)
Short term funding agreement balances		—			478.4
	$	1,363.7		$	2,314.4

(1) Includes $3.9 million and $37.9 million of traditional GIC balances for the three months ended March 31, 2003 and 2002, respectively.

13

ALLMERICA FINANCIAL CORPORATION

CORPORATE

CONDENSED INCOME STATEMENTS

	Quarter ended March 31
(In millions)	2003			2002			% Change
REVENUES
Net investment income	$	0.5		$	1.7		(70.6	)
OPERATING EXPENSES
Interest expense		3.8			3.8		—
Other operating expenses		13.8			14.3		(3.5	)
Total operating expenses		17.6			18.1		(2.8	)
Net segment loss before federal income taxes and minority interest	$	(17.1	)	$	(16.4	)	4.3

14

ALLMERICA FINANCIAL CORPORATION

NET INVESTMENT INCOME

(In millions, except yields)	Quarter ended March 31, 2003
	Property and Casualty (1)			Yield		Allmerica Financial Services			Yield		Asset Management			Yield		Corporate(2)			Yield		Total			Yield
Fixed maturities	$	47.5		6.23	%	$	44.0		6.09	%	$	19.7		6.67	%	$	0.3		4.87	%	$	111.5		6.24	%
Equity securities		0.2		3.85	%		0.1		1.17	%		—		—			—		—			0.3		2.02	%
Mortgages		1.5		7.30	%		1.9		7.97	%		1.9		10.41	%		0.1		—			5.4		8.72	%
All other		(3.1	)	—			8.0		—			(1.4	)	—			(0.1	)	—			3.4		—
Investment expenses		(0.8	)	—			(0.8	)	—			(0.3	)	—			—		—			(1.9	)	—
Total	$	45.3		5.67	%	$	53.2		5.89	%	$	19.9		6.32	%	$	0.3		2.92	%	$	118.7		5.85	%
	Quarter ended March 31, 2002
	Property and Casualty (1)			Yield		Allmerica Financial Services			Yield		Asset Management			Yield		Corporate(2)			Yield		Total			Yield
Fixed maturities	$	51.2		6.47	%	$	58.4		7.30	%	$	39.9		6.87	%	$	1.5		5.38	%	$	151.0		6.86	%
Equity securities		0.2		3.48	%		0.1		1.48	%		—		—			—		—			0.3		2.25	%
Mortgages		1.9		7.24	%		2.5		7.98	%		1.7		6.87	%		—		—			6.1		7.67	%
All other		(0.6	)	—			12.4		—			(14.6	)	—			—		—			(2.8	)	—
Investment expenses		(0.9	)	—			(2.7	)	—			(0.5	)	—			—		—			(4.1	)	—
Total	$	51.8		6.12	%	$	70.7		6.80	%	$	26.5		4.34	%	$	1.5		4.82	%	$	150.5		5.95	%

(1) Includes purchase accounting adjustments of $0.8 million and $1.0 million for the quarters ended March 31, 2003 and 2002, respectively.

(2) Includes corporate eliminations of $0.2 million for the quarters ended March 31, 2003 and 2002.

15

ALLMERICA FINANCIAL CORPORATION

HISTORICAL FINANCIAL HIGHLIGHTS

(In millions, except per share data)	Q1 03			2002			Q4 02			Q3 02			Q2 02			Q1 02
SEGMENT INCOME (LOSS) (1)
Property and Casualty	$	44.2		$	184.3		$	35.2		$	58.5		$	51.6		$	39.0
Allmerica Financial Services		2.4			(625.0	)		(0.7	)		(540.2	)		(113.8	)		29.7
Asset Management		2.5			24.4			8.5			5.7			5.1			5.1
Corporate		(17.1	)		(63.5	)		(14.4	)		(17.5	)		(15.2	)		(16.4	)
Total segment income (loss) before federal income taxes and minority interest	$	32.0		$	(479.8	)	$	28.6		$	(493.5	)	$	(72.3	)	$	57.4
Federal income tax benefit (expense) on segment income (loss)		(4.3	)		220.4			(2.7	)		182.5			48.6			(8.0	)
Minority interest
Distributions on mandatorily redeemable preferred securities of a subsidiary trust		(4.0	)		(16.0	)		(4.0	)		(4.0	)		(4.0	)		(4.0	)
Total segment income (loss) after federal income taxes and minority interest		23.7			(275.4	)		21.9			(315.0	)		(27.7	)		45.4
Net realized investment gains (losses), net of amortization and taxes		8.0			(89.4	)		(45.8	)		(0.7	)		(38.5	)		(4.4	)
Gain from retirement of trust instruments supported by funding obligations, net of taxes		3.0			66.7			66.7			—			—			—
Gain (loss) from sale of universal life business, net of taxes		3.6			(20.3	)		(20.3	)		—			—			—
Gains (losses) on derivative instruments, net of taxes		1.0			26.2			6.5			—			9.1			10.6
Restructuring costs, net of taxes		(2.2	)		(9.6	)		(9.6	)		—			—			—
Other items, net of taxes		—			(0.6	)		(4.5	)		2.3			1.6			—
(Loss) income before cumulative effect of accounting change		37.1			(302.4	)		14.9			(313.4	)		(55.5	)		51.6
Cumulative effect of change in accounting principle, net of taxes		—			(3.7	)		—			—			—			(3.7	)
NET INCOME (LOSS)	$	37.1		$	(306.1	)	$	14.9		$	(313.4	)	$	(55.5	)	$	47.9
PER SHARE DATA (DILUTED)
NET INCOME (LOSS)	$	0.70		$	(5.79	)	$	0.28		$	(5.93	)	$	(1.05	)	$	0.90
WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED) (2)		53.0			52.9			52.9			52.9			52.9			53.1
BALANCE SHEET
Total investments	$	8,172.2					$	8,806.8		$	9,816.0		$	9,844.9		$	9,977.2
Separate account assets	$	11,016.2					$	12,343.4		$	12,152.9		$	14,054.3		$	15,085.9
Total assets	$	24,372.8					$	26,578.9		$	27,528.6		$	29,157.3		$	30,292.2
Total shareholders' equity	$	2,115.9					$	2,072.2		$	2,105.4		$	2,391.7		$	2,384.8
Book value per share	$	39.86					$	39.12		$	39.69		$	45.07		$	44.98
Book value per share, excluding accumulated other comprehensive income	$	40.59					$	39.83		$	39.47		$	45.32		$	46.32

(1) Represents income or loss of the Company's three operating segments: Property and Casualty, Allmerica Financial Services and Asset Management. In accordance with Statement of Financial Accounting Standards No.131, the separate financial information of each segment is presented consistent with the manner in which results are regularly evaluated by the chief operating decision makers in deciding how to allocate resources and in assessing performance. In addition, segment income or loss reflects those results related to the Corporate segment, which consists of income and expenses related to invested assets, corporate debt, preferred securities of a subsidiary trust and corporate overhead expenses. Corporate overhead expenses reflect costs not attributable to a particular segment, such as those related to certain officers and directors, technology, finance, human resources and legal.

(2) Excludes 0.2 million shares for the year ended December 31, 2002 and 0.1 million shares for the quarters ended September 30, 2002 and June 30, 2002 due to antidilution.

16

ALLMERICA FINANCIAL CORPORATION

HISTORICAL FINANCIAL HIGHLIGHTS

(In millions, except per share data)	2001			Q4 01			Q3 01			Q2 01			Q1 01			2000			Q4 00			Q3 00			Q2 00			Q1 00
SEGMENT INCOME (LOSS) (1)
Property and Casualty	$	93.5		$	29.0		$	6.8		$	41.5		$	16.2		$	190.0		$	33.6		$	59.4		$	53.9		$	43.1
Allmerica Financial Services		143.0			21.7			34.4			42.6			44.3			222.8			56.2			56.7			55.5			54.4
Asset Management		20.7			4.2			6.1			4.4			6.0			22.5			7.0			5.8			4.6			5.1
Corporate		(63.8	)		(16.3	)		(15.7	)		(15.6	)		(16.2	)		(60.8	)		(20.4	)		(13.7	)		(12.2	)		(14.5	)
Total segment income before federal income taxes and minority interest	$	193.4		$	38.6		$	31.6		$	72.9		$	50.3		$	374.5		$	76.4		$	108.2		$	101.8		$	88.1
Federal income tax benefit (expense) on segment income		(12.9	)		(0.6	)		6.8			(10.0	)		(9.1	)		(57.3	)		8.0			(24.3	)		(23.3	)		(17.7	)
Minority interest
Distributions on mandatorily redeemable preferred securities of a subsidiary trust		(16.0	)		(4.0	)		(4.0	)		(4.0	)		(4.0	)		(16.0	)		(4.0	)		(4.0	)		(4.0	)		(4.0	)
Total segment income after federal income taxes and minority interest		164.5			34.0			34.4			58.9			37.2			301.2			80.4			79.9			74.5			66.4
Net realized investment losses, net of amortization and taxes		(78.8	)		(12.6	)		(2.8	)		(51.0	)		(12.4	)		(87.8	)		(20.5	)		(17.4	)		(13.7	)		(36.2	)
(Losses) gains on derivative instruments, net of taxes		(22.9	)		(24.4	)		(0.4	)		0.3			1.6			—			—			—			—			—
Loss from selected property and casualty exited agencies, policies, groups and programs, net of taxes		(44.4	)		(44.4	)		—			—			—			—			—			—			—			—
Voluntary pool environmental losses, net of taxes		(21.5	)		(21.5	)		—			—			—			—			—			—			—			—
Restructuring costs, net of taxes		(1.8	)		(1.8	)		—			—			—			(13.5	)		(0.3	)		—			(13.2	)		—
Other items, net of taxes		5.0			—			—			5.0			—			—			—			—			—			—
Income (loss) before cumulative effect of accounting change		0.1			(70.7	)		31.2			13.2			26.4			199.9			59.6			62.5			47.6			30.2
Cumulative effect of change in accounting principle, net of taxes		(3.2	)		—			—			—			(3.2	)		—			—			—			—			—
NET (LOSS) INCOME	$	(3.1	)	$	(70.7	)	$	31.2		$	13.2		$	23.2		$	199.9		$	59.6		$	62.5		$	47.6		$	30.2
PER SHARE DATA (DILUTED)
NET (LOSS) INCOME	$	(0.06	)	$	(1.33	)	$	0.59		$	0.25		$	0.44		$	3.70		$	1.11		$	1.16		$	0.88		$	0.56
DIVIDENDS	$	0.25		$	0.25		$	—		$	—		$	—		$	0.25		$	—		$	0.25		$	—		$	—
WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED)		53.1			52.7			53.1			53.1			53.1			54.0			53.8			53.9			54.1			54.3
BALANCE SHEET
Total investments				$	10,326.2		$	10,367.2		$	10,222.1		$	9,676.8					$	9,395.6		$	9,312.5		$	9,043.1		$	8,871.5
Separate account assets				$	14,838.4		$	13,367.0		$	16,095.1		$	15,594.4					$	17,437.4		$	18,660.1		$	18,477.5		$	18,595.5
Total assets				$	30,336.1		$	28,913.8		$	31,437.5		$	30,556.4					$	31,588.0		$	32,634.8		$	32,088.6		$	31,854.1
Total shareholders' equity				$	2,391.1		$	2,529.8		$	2,502.7		$	2,502.5					$	2,409.1		$	2,357.3		$	2,288.6		$	2,267.7
Book value per share				$	45.19		$	47.83		$	47.39		$	47.44					$	45.74		$	44.24		$	42.98		$	42.27
Book value per share, excluding accumulated other comprehensive income				$	45.44		$	46.98		$	46.52		$	46.23					$	45.84		$	44.92		$	44.17		$	43.13

(1) Represents income or loss of the Company's three operating segments: Property and Casualty, Allmerica Financial Services and Asset Management. In accordance with Statement of Financial Accounting Standards No.131, the separate financial information of each segment is presented consistent with the manner in which results are regularly evaluated by the chief operating decision makers in deciding how to allocate resources and in assessing performance. In addition, segment income or loss reflects those results related to the Corporate segment, which consists of income and expenses related to invested assets, corporate debt, preferred securities of a subsidiary trust and corporate overhead expenses. Corporate overhead expenses reflect costs not attributable to a particular segment, such as those related to certain officers and directors, technology, finance, human resources and legal.

17

ALLMERICA FINANCIAL CORPORATION

HISTORICAL FINANCIAL HIGHLIGHTS

(In millions, except per share data)	1999			Q4 99			Q3 99			Q2 99			Q1 99			1998			Q4 98			Q3 98			Q2 98			Q1 98
SEGMENT INCOME (LOSS) (1)
Property and Casualty	$	199.6		$	65.0		$	49.5		$	55.3		$	29.8		$	149.6		$	52.4		$	24.6		$	34.9		$	37.7
Allmerica Financial Services		205.5			54.2			54.7			47.7			48.9			169.0			43.5			39.1			44.2			42.2
Asset Management		23.5			5.3			5.7			6.8			5.7			23.7			6.7			6.9			6.2			3.9
Corporate		(59.3	)		(16.1	)		(13.7	)		(13.5	)		(16.0	)		(50.9	)		(15.3	)		(10.6	)		(12.7	)		(12.3	)
Total segment income before federal income taxes and minority interest	$	369.3		$	108.4		$	96.2		$	96.3		$	68.4		$	291.4		$	87.3		$	60.0		$	72.6		$	71.5
Federal income tax expense on segment income		(72.4	)		(23.6	)		(16.4	)		(19.3	)		(13.1	)		(53.1	)		(13.8	)		(10.7	)		(12.2	)		(16.4	)
Minority interest
Distributions on mandatorily redeemable preferred securities of a subsidiary trust		(16.0	)		(4.0	)		(4.0	)		(4.0	)		(4.0	)		(16.0	)		(4.0	)		(4.0	)		(4.0	)		(4.0	)
Equity in earnings		—			—			—			—			—			(9.8	)		(2.4	)		(1.9	)		(1.7	)		(3.8	)
Total segment income after federal
Income taxes and minority interest		280.9			80.8			75.8			73.0			51.3			212.5			67.1			43.4			54.7			47.3
Net realized investment gains (losses), net of amortization and taxes		63.0			(13.6	)		(16.7	)		(6.2	)		99.5			28.8			6.4			1.1			4.5			16.8
Sales practice litigation, net of taxes		—			—			—			—			—			(20.2	)		—			(20.2	)		—			—
Restructuring costs, net of taxes		1.2			1.2			—			—			—			(5.8	)		(5.8	)		—			—			—
Other items, net of taxes		—			—			—			—			—			(0.6	)		—			—			—			(0.6	)
Income from continuing operations		345.1			68.4			59.1			66.8			150.8			214.7			67.7			24.3			59.2			63.5
Discontinued operations
Loss from operations of discontinued group life and health business, net of taxes		(18.8	)		—			(15.5	)		(6.6	)		3.3			(13.5	)		(1.8	)		(16.1	)		1.1			3.3
Loss on disposal of group life and health business, net of taxes		(30.5	)		—			(30.5	)		—			—			—			—			—			—			—
NET INCOME	$	295.8		$	68.4		$	13.1		$	60.2		$	154.1		$	201.2		$	65.9		$	8.2		$	60.3		$	66.8
PER SHARE DATA (DILUTED)
INCOME FROM CONTINUING OPERATIONS (2)	$	6.21		$	1.25		$	1.08		$	1.21		$	2.61		$	3.56		$	1.13		$	0.40		$	0.98		$	1.05
NET INCOME	$	5.33		$	1.25		$	0.24		$	1.09		$	2.67		$	3.33		$	1.10		$	0.13		$	1.00		$	1.11
DIVIDENDS	$	0.25		$	—		$	0.25		$	—		$	—		$	0.15		$	—		$	0.05		$	0.05		$	0.05
WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED)		55.5			54.6			54.7			55.1			57.7			60.3			59.9			60.6			60.5			60.3
BALANCE SHEET
Total investments				$	8,599.0		$	9,004.6		$	9,792.4		$	9,922.1					$	9,818.7		$	9,936.0		$	10,029.0		$	9,684.2
Separate account assets				$	17,629.6		$	15,102.9		$	15,635.9		$	14,329.4					$	13,697.7		$	11,424.9		$	12,260.5		$	11,425.4
Total assets				$	30,769.6		$	29,080.0		$	29,826.4		$	28,461.2					$	27,653.1		$	25,233.5		$	25,816.4		$	24,511.8
Total shareholders' equity				$	2,240.2		$	2,199.7		$	2,248.7		$	2,387.5					$	2,458.6		$	2,480.3		$	2,539.4		$	2,468.8
Book value per share				$	41.32		$	40.86		$	41.49		$	42.30					$	41.95		$	41.02		$	42.04		$	40.94
Book value per share, excluding accumulated other comprehensive income				$	42.71		$	41.76		$	41.45		$	40.97					$	38.87		$	38.08		$	38.01		$	37.07

(1) Represents income or loss of the Company's three operating segments: Property and Casualty, Allmerica Financial Services and Asset Management. In accordance with Statement of Financial Accounting Standards No.131, the separate financial information of each segment is presented consistent with the manner in which results are regularly evaluated by the chief operating decision makers in deciding how to allocate resources and in assessing performance. In addition, segment income or loss reflects those results related to the Corporate segment, which consists of income and expenses related to invested assets, corporate debt, preferred securities of a subsidiary trust and corporate overhead expenses. Corporate overhead expenses reflect costs not attributable to a particular segment, such as those related to certain officers and directors, technology, finance, human resources and legal.

(2) Income from continuing operations represents net income before adjustment for the results of the discontinued operations of the Company.

18

CORPORATE OFFICES AND

PRINCIPAL SUBSIDIARIES

Allmerica Financial

440 Lincoln Street

Worcester, MA 01653

The Hanover Insurance Company

440 Lincoln Street

Worcester, MA 01653

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:

Quarter Ended	2003
	Price Range				Dividends
	High		Low		Per Share
March 31	$	16.43	$	9.84	—
June 30
September 30
December 31
Quarter Ended	2002
	Price Range
	High		Low		Dividends Per Share
March 31	$	45.17	$	40.60	—
June 30	$	50.33	$	44.20	—
September 30	$	45.85	$	12.00	—
December 31	$	11.51	$	7.16	—

INDUSTRY RATINGS AS OF APRIL 25, 2003

Financial Strength Ratings	A.M. Best	Standard & Poor’s	Moody’s
First Allmerica Financial Life Insurance Company	B-	B+	Ba2
Allmerica Financial Life Insurance and Annuity Company	B-	B+	Ba2
The Hanover Insurance Company	B++	BBB+	Baa2
Citizens Insurance Company of America	B++	—	—
Debt Ratings	A.M. Best	Standard & Poor’s	Moody’s
Allmerica Financial Corporation Senior Debt	bb	BB-	B1
Allmerica Financial Corporation Capital Securities	b+	B-	B3
Allmerica Financial Corporation Short Term Debt	AMB-4	B	NP
First Allmerica Financial Life Insurance Company Short Term Debt	—	B	—
First Allmerica Financial Life Insurance Company Short Term Insurance Financial Strength Rating	—	B	NP
TRANSFER AGENT

EquiServe, LP

PO Box 43076

Providence, RI 02940-3076

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

hstcyr@Allmerica.com

William J. Steglitz, CPA

Director, Investor Relations

(508) 855-3883

wsteglitz@Allmerica.com

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 http:// www.Allmerica.com