Allmerica Financial Quarterly Profit Drops 6 %
By Michael Ha
NU Online News Service, Jan. 30, 3 :03 p.m. EST?Allmerica Financial Corp.'s 2003 fourth-quarter net profit fell six percent on a year-over-year basis, to $14 million from $14.9 million reported a year earlier, because of weaker results from its asset management operations, the company said..[@@]
However, the Worcester, Mass.-based insurer reported improved underwriting profits for its property-casualty segment for the quarter. Its p-c businesses earned $40.2 million for the fourth quarter, up from $35.2 million one year ago, despite a $16.0 million charge to its workers' compensation reserves and higher operating expenses.
Allmerica credited improved current accident year loss trends, particularly in personal lines, and premium rate increases for its higher p-c income. Net premiums written were $524 million for the quarter, compared to $543.5 million in the 2002 fourth quarter.
For full-year 2003, Allmerica's net income came in at $86.9 million, in contrast to net loss of $306.1 million the company reported in 2002. That year, Allmerica took charges of $556.4 million to exit the variable annuity and life insurance business, and also suffered from a continuing equity market decline.
Allmerica's p-c segment income for full-year 2003 was $143.6 million, down from $184.3 million reported for 2002.
The decline in the insurer's p-c earnings results in 2003 were attributed to several factors. Catastrophe losses in the current year were up, at $59.4 million, compared to $31.3 million in 2002. Current-year p-c earnings also included a charge of $21.9 million for an adverse arbitration decision on a large property claim in a voluntary insurance pool, Allmerica noted.
Excluding these adverse factors, Allmerica said, the p-c income for 2003 was up by $9.3 million, helped by premium rate increases.
Allmerica Financial is an insurance and financial services holding company providing personal auto, homeowners, workers' compensation, commercial auto and commercial multiple-peril insurance coverage through its Citizens Insurance and Hanover Insurance subsidiaries. Allmerica sells its products through independent agents.
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