Hanover Insurance Group Inc · NYSE:THG
Hanover Insurance — Allmerica Financial — Merger or Acquisition (August 2005)
12 slides from Hanover Insurance's merger presentation, Aug 23, 2005
Slide 1: Sale of Variable Life and Annuity Business
Allmerica Financial Corporation Sale of Variable Life and Annuity Business To be read only in conjunction with the conference call scheduled for August 23, 2005.
Slide 2: Forward-looking Statements
Forward-looking Statements All statements in this power point slide presentation, accompanying press release and conference call, other than statements of historical fact, are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. In addition to
Slide 3: Transaction Overview
Transaction Overview Sale of VA and VUL business to The Goldman Sachs Group. Projected proceeds related to the sale of approximately $345 million. In conjunction with the sale, we will seek regulatory approval for $40 million dividend from remaining life company (FAFLIC). Projected GAAP afte
Slide 4: Form of Transaction
Form of Transaction Sale of AFLIAC legal entity, which contains most of the VA and VUL business – $10 billion in Account Value. Transfer of remaining VA and VUL business which is contained in FAFLIC via reinsurance – $0.6 billion in Account Value. Transfer of Allmerica Investment Trust (AIT) a
Slide 5: Major Terms
Major Terms Total projected proceeds of approximately $385 million: – $345 million projected proceeds related to the sale transaction $310M related to sale of AFLIAC $ 9M related to reinsurance of FAFLIC business $ 26M related to transfer of AIT Funds and sale of AFIMS – $40 million estimate
Slide 6: Use of Proceeds
Use of Proceeds 2005 projected cash proceeds of $315 million (total projected proceeds of $385 million less $70M deferred payment). Anticipated share repurchase program of up to $200 million, commencing after the close. Remaining cash held at holding company for: – Reinstatement of a common stoc
Slide 7: Projected GAAP Financial Impact
Projected GAAP Financial Impact Life Segment Earnings – Earnings for 2005 and beyond will only reflect the retained Life business. – Expected loss in 2005 and 2006, resulting principally from timing of expense reductions. – Results for 2007 and beyond are expected to approximate breakeven. Disco
Slide 8: Projected Earnings Impact
Projected Earnings Impact Projections Assume 11/30 Closing 2005 2006 2007 Pre-tax Life Companies Segment Earnings $( 30) M $( 7) M Nil Discontinued Operations Income from operations of discontinued life business, net of taxes $ 25 M $ 0 M $ 0 Loss from disposal of life business, net of taxes $(385)
Slide 9: FAFLIC Retained Business
FAFLIC Retained Business Retained Business ($ in millions) Statutory Reserves (As of June 30, 2005) Description Traditional Life, Traditional participating whole life (approximately $770 70,000 policies). principally Closed Block Primarily purchased benefits providing monthly Pension Annuities $510
Slide 10: Financial Highlights – FAFLIC Retained Business
Financial Highlights – FAFLIC Retained Business Projected statutory total adjusted capital of approximately $175 million after the transition period. Projected breakeven statutory results from operations after the transition period is completed. Tax attributes of approximately $170 million at
Slide 11: Summary
Summary Total projected proceeds estimated to be $385M. Anticipate initiating share repurchase program of up to $200M commencing at closing of sale of AFLIAC. Exit vast majority of life business and eliminate Guaranteed Minimum Death Benefit and other market-driven risks. Retained residual b
Slide 12: Allmerica Financial
ALLMERICA FINANCIAL
Allmerica Financial — Merger or Acquisition (August 2005) on 6ix