Allmerica Financial Swings To Profit

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NU Online News Service, July 30, 10:27 a.m.EDT?Allmerica Financial Corp., reversing last year's $55.5million second-quarter loss, posted net income of $24.4 million forthe period.

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The company said it achieved this profit improvement despite aprofit decline from its property-casualty business, which recorded$20.6 million in income compared to $51.6 million one year ago.

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Net premiums written for the last quarter were $571 million,down slightly from $572.1 million recorded in the 2002 secondquarter.

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Property-casualty earnings were lower in the second quarter, theinsurer explained, mainly because of a pre-tax charge of $23million from a recent adverse arbitration decision regarding aninsurance pool it exited in 1996.

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The company said catastrophe losses were higher in the 2003second quarter compared to one year ago, when CAT losses wereunusually low.

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"Our core earnings in the second quarter were solid and reflectour efforts to improve underwriting results. However, our reportedearnings for the quarter were negatively impacted by thearbitration ruling we announced earlier in the quarter relating tobusiness we exited in 1996," commented Robert Restrepo, presidentof Allmerica's property and casualty companies.

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On the positive side, Allmerica Financial's financial servicesand life insurance unit performed well, posting $18.4 million inprofit, compared to a $113.8 million loss during the year-agoperiod.

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"We are pleased with our second-quarter results and the furtherimprovements in the capital position of our life insurancecompanies," said Edward Parry, chief financial officer at AllmericaFinancial.

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Based in Worcester, Mass., Allmerica Financial is an insuranceand financial services holding company providing personal auto,homeowners, workers' compensation, commercial automobile andcommercial multiple-peril insurance coverage through its CitizensInsurance and Hanover Insurance subsidiaries.

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