S&P ups Allmerica outlook to positive

Standard & Poor's said it revised its outlook on Allmerica Financial Corp. to positive from stable and affirmed its BB counterparty credit, senior unsecured debt and preferred stock ratings on the company.

At the same time, S&P said it revised its outlook on Allmerica Financial Life Insurance & Annuity Co. and First Allmerica Financial Life Insurance Co. to positive from stable and affirmed its BB counterparty credit and financial strength ratings on these companies.

The agency also said it affirmed its BBB+ counterparty credit and financial strength ratings on Hanover Insurance Co., Citizens Insurance Co. of America and other rated property/casualty affiliates.

The outlook remains stable.

The outlook revision on Allmerica reflects the stabilization of operating performance of the life operations and S&P's diminished concern that it will require additional capital support, the agency said.

S&P said the ratings on Allmerica P/C reflect its established market position in certain states, a more focused business strategy, diminished concern about the financial condition of the life companies and strong capital position relative to the current rating.

These strengths are offset, to some degree, by the geographic concentration of the P/C business in states that have been problematic for personal lines carriers, a lack of premium growth in the recent hard market and an increased expense structure that is reducing underwriting results at the current volume of business, S&P added.

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