Allmerica Posts Narrower Profit

NU Online News Service, April 29, 3:29 p.m.EDT?Allmerica Financial reported that its first-quarterprofit shrank by 22 percent to $37.1 million, or 70 cents pershare, driven down by a smaller investment income and a decreasedprofit from its financial services unit.

In the corresponding period last year, the insurer posted $47.9million, or 90 cents on a per-share basis.

Looking at individual business units, the Worcester, Mass.-basedcompany showed a profit improvement in its property-casualtysegment, which reported a $44.2 million income for the 2003 firstquarter, compared to $39 million in the first quarter of lastyear.

The insurer said earnings in the p-c segment were higher in thequarter thanks to rate increases in all lines and favorabledevelopment on prior years' reserves in most lines. These itemswere somewhat offset, however, by increased current year frequencyof losses and poor weather.

But the net investment results took a bite out of the company'sbottom line. The insurer posted a first-quarter net investmentprofit of $118.7 million, compared to $150.5 million in the sameperiod one year ago.

The company also fared worse in its Allmerica Financial Servicesunit, which had a segment income of $2.4 million in the firstquarter, as compared to $29.7 million a year ago. Income for thequarter decreased mainly due to higher amortization of deferredpolicy acquisition costs, the company said.

Allmerica Financial Corporation is an insurance and financialservices holding company. The firm provides personal automobile,homeowners, workers' compensation, commercial automobile andcommercial multiple-peril insurance coverage. The company posted$3.32 billion in sales last year.