Allmerica Financial Corporation said despite estimated Hurricane Katrina and Hurricane Rita losses of $170 million, it is declaring a dividend payment of 25 cents a share.
The Worcester, Mass.-based insurer said it estimates its after-tax loss from Hurricane Katrina will be approximately $140 million, or $2.62 a share for the third quarter. The after-tax loss of $140 million is net of reinsurance and includes the cost of reinsurance reinstatement premiums, loss adjustment expense, as well as an estimate for the Louisiana Citizens Fair Plan assessment, the company said.
The company said its estimate is based on the best available data but warned the figure could go higher.
Allmerica estimates its gross direct loss and loss adjustment expense from Katrina to be $485 million. Approximately two-thirds of the loss would be sustained in its commercial lines business and one-third to its personal lines business.
Hurricane Rita is expected to cost the company approximately $30 million on a pre-tax basis and $19.5 million after taxes, or 37 cents a share.
The company also announced it would pay an annual dividend of 25 cents a share on common stock of the company, payable Dec. 12 to shareholders of record at the close of business Nov. 28.
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