NU Online News Service, July 30, 12:43 p.m. – Allmerica Financial Corp., Worcester, Mass., is reporting a $56 million net loss for the second quarter on $798 million in revenue, compared with $13 million in net income on $795 million in revenue for the second quarter of 2001.
The operating loss, which excludes $64 million in investment losses for the latest quarter and a $142 million write-off of deferred policy acquisition costs, was $28 million, down from operating income of $59 million for the comparable quarter in 2001.
Allmerica sells life insurance and investment products along with property-casualty insurance.
At the Allmerica Financial Services unit, sales of variable annuities and variable life insurance policies were strong, but the stock-market slump hurt the profitability of the annuity business, Allmerica says.
The slump has reduced Allmerica’s ability to benefit from past sales and marketing expenses, and it also increases the cost of providing the minimum death benefits guaranteed by the annuity contracts, Allmerica says.