EX-99.2 4 dex992.htm STATISTICAL SUPPLEMENT STATISTICAL SUPPLEMENT

 

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

 

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