EXHIBIT 99.2

ALLMERICA FINANCIAL CORPORATION

IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS


         The Company wishes to caution readers that the following important
factors, among others, in some cases have affected the Company's results and in
the future could cause actual results and needs of the Company to vary
materially from forward-looking statements made from time to time by the Company
on the basis of management's then-current expectations. The businesses in which
the Company is engaged are in rapidly changing and competitive markets and
involve a high degree of risk, and accuracy with respect to forward looking
projections is difficult.


Geographic Concentration in the Property and Casualty Insurance Business

         Substantially all of the Company's property and casualty insurance
subsidiaries net premiums written and earnings are generated in Michigan and the
Northeast (Connecticut, Maine, Massachusetts, New York, New Jersey, New
Hampshire, Rhode Island and Vermont). The revenues and profitability of the
Company's property and casualty insurance subsidiaries are therefore subject to
prevailing economic, regulatory, demographic and other conditions, including
adverse weather, in Michigan and the Northeast.


Cyclicality in the Property and Casualty Insurance Industry

         Historically, the property and casualty insurance industry has been
highly cyclical. The property and casualty industry's profitability can be
affected significantly by price competition, volatile and unpredictable
developments such as extreme weather conditions and natural disasters, legal
developments affecting insurer liability and the size of jury awards,
fluctuations in interest rates and other factors that affect investment returns
and other general economic conditions and trends that may affect the adequacy of
reserves.

         Over the past several years, the property and casualty insurance
industry as a whole has been in a soft market. Competition for premiums in the
property and casualty insurance markets may continue to have an adverse impact
on the Company's rates and profitability.


Catastrophe Losses in the Property and Casualty Insurance Industry

         Property and casualty insurers are subject to claims arising out of
catastrophes, which may have a significant impact on their results of operations
and financial condition. The Company may experience catastrophe losses in the
future which could have a material adverse impact on the Company. Catastrophes
can be caused by various events including hurricanes, earthquakes, tornadoes,
wind, hail, fires, severe winter weather and explosions, and the frequency and
severity of catastrophes are inherently unpredictable. The extent of losses from
a catastrophe is a function of two factors: the total amount of insured exposure
in the area affected by the event and the severity of the event. Although
catastrophes can cause losses in a variety of property and casualty lines,
homeowners and commercial property insurance have in the past generated the vast
majority of the Company's catastrophe-related claims. The Company purchases
catastrophe reinsurance as protection against catastrophe losses. The Company
believes, based upon its review of its reinsurers' financial statements and
reputations in the reinsurance marketplace, that the financial condition of its
reinsurers is sound. However, there can be no assurance that reinsurance will be
adequate to protect the Company against such losses or that such reinsurance
will continue to be available to the Company in the future at commercially
reasonable rates.



Uncertainty Regarding Adequacy of Property and Casualty Loss Reserves

         The Company's property and casualty insurance subsidiaries maintain
reserves to cover their estimated ultimate liability for losses and loss
adjustment expenses ("LAE") with respect to reported and unreported claims
incurred as of the end of each accounting period. These reserves are estimates,
involving actuarial projections at a given time, of what the Company's property
and casualty insurance subsidiaries expect the ultimate settlement and
administration of claims will cost based on facts and circumstances then known,
predictions of future events, estimates of future trends in claims severity and
judicial theories of liability, legislative activity and other factors. The
inherent uncertainties of estimating reserves are greater for certain types of
property and casualty insurance lines, particularly workers' compensation, where
a longer period of time may elapse before a definitive determination of ultimate
liability may be made, and environmental liability, where the technological,
judicial and political climates involving these types of claims are changing.

         The Company's property and casualty insurance subsidiaries regularly
review reserving techniques, reinsurance and overall reserve adequacy. Based
upon (i) review of historical data, legislative enactments, judicial decision,
legal developments in imposition of damages, changes in political attitudes and
trends in general economic conditions; (ii) review of per claim information;
(iii) historical loss experience of the property and casualty insurance
subsidiaries and the industry; and (iv) the relatively short-term nature of most
of its property and casualty insurance policies, management believes that
adequate provision has been made for reserves. However, establishment of
appropriate reserves is an inherently uncertain process involving estimates of
future losses and there can be no certainty that currently established reserves
will prove adequate in light of subsequent actual experience. The Company's
property and casualty insurance subsidiaries' reserves are annually certified as
required by insurance regulatory authorities.


Sensitivity to Interest Rates Relative to Life Insurance Subsidiaries

         The Company's life insurance subsidiaries are exposed to risk of
disintermediation and reduction in interest spread or profit margins when
interest rates fluctuate. Bond calls, mortgage prepayments, contract surrenders
and withdrawals of life insurance policies, annuities and guaranteed investment
contracts are influenced by the interest rate environment. Since the Company's
life insurance subsidiaries' investment portfolios consist primarily of fixed
income assets, the investment portfolio market value and the yields on newly
invested and reinvested assets vary depending on interest rates. Management
attempts to mitigate any negative impact of interest rate changes through
asset/liability management, product design (including an increased focus on
variable insurance products), management of crediting rates, use of hedging
techniques, relatively high surrender charges and management of mortality
charges and dividend scales with respect to its in force life insurance
policies.


Uncertainty Regarding Accident and Health Assumed Reinsurance Pool Business

         The Company believes that notwithstanding the recent losses incurred by
the accident and health assumed reinsurance business, the Company's reserves
appropriately reflect both current claims and unreported losses. However, due to
the inherent volatility in this business, possible issues related to the
enforceability of reinsurance treaties in the industry and to its recent history
of increased losses, we cannot assure you that our current reserves are adequate
or that we will not have losses in the future. Although we have discontinued our
participation in these reinsurance pools, we may become subject to claims
related to prior years. We may be harmed from liabilities resulting from any
such claims.




Regulatory, Surplus, Capital, Rating Agency and Related Matters

         Insurance companies are subject to supervision and regulation by the
state insurance authority in each state in which they transact business. Such
supervision and regulation relate to numerous aspects of an insurance company's
business and financial condition, including limitations on the authorization of
lines of business, underwriting limitations, the setting of premium rates, the
establishment of standards of solvency, the licensing of insurers and agents,
concentration of investments, levels of reserves, the payment of dividends,
transactions with affiliates, changes of control and the approval of policy
forms. Such regulation is concerned primarily with the protection of
policyholders.

         State regulatory oversight and various proposals at the federal level
(including the proposed adoption of a federal regulatory framework for insurance
companies) may in the future adversely affect the Company's ability to sustain
adequate returns in certain lines of business. In recent years, the state
insurance regulatory framework has come under increased federal scrutiny, and
certain state legislatures have considered or enacted laws that alter and, in
many cases, increase state authority to regulate insurance companies and
insurance holding company systems. Further, the National Association of
Insurance Commissioners ("NAIC") and state insurance regulators are reexamining
existing laws and regulations, and as a condition to accreditation have required
the adoption of certain model laws which specifically focus on insurance company
investments, issues relating to the solvency of insurance companies, risk-based
capital ("RBC") guidelines, interpretations of existing laws, the development of
new laws, and the definition of extraordinary dividends.

         The capacity for an insurance company's growth in premiums is in part a
function of its statutory surplus. Maintaining appropriate levels of statutory
surplus, as measured by state insurance regulators, is considered important by
state insurance regulatory authorities and the private agencies that rate
insurers' claims-paying abilities and financial strength. Failure to maintain
certain levels of statutory surplus could result in increased regulatory
scrutiny, action by state regulatory authorities or a downgrade by the private
rating agencies.

         The NAIC uses a system for assessing the adequacy of statutory capital
for life and health insurers and property and casualty insurers. The system,
known as risk-based capital, is in addition to the states' fixed dollar minimum
capital and other requirements. The system is based on risk-based formulas
(separately defined for life and health insurers and property and casualty
insurers) that apply prescribed factors to the various risk elements in an
insurer's business to report a minimum capital requirement proportional to the
amount of risk assumed by the insurer.

          Management believes that its strong ratings are important factors in
marketing the products of its insurance companies to its agents and customers,
since rating information is broadly disseminated and generally used throughout
the industry. Insurance company ratings are assigned to an insurer based upon
factors relevant to policyholders and are not directed toward protections of
investors. Such ratings are neither a rating of securities nor a recommendation
to buy, hold or sell any security. Further downgrades may have a material
adverse effect on the Company's business and prospects.


State Guaranty Funds, Shared Markets Mechanisms and Pooling Arrangements

         All fifty states of the United States have insurance guaranty fund laws
requiring all life and health and property and casualty insurance companies
doing business within the state to participate in guaranty associations, which
are organized to pay contractual obligations under insurance policies issued by
impaired or insolvent insurance companies. These associations levy assessments
(up to prescribed limits) on all member insurers in a particular state on the
basis of the proportionate share of the premiums written by member insurers in
the lines of business in which the impaired or insolvent insurer is engaged.
Mandatory assessments by state guaranty funds are used to cover losses to
policyholders of insolvent or rehabilitated companies and can be partially
recovered through a



reduction in future premium taxes in many states. These assessments may increase
in the future depending upon the rate of insolvencies of insurance companies.

         In addition, as a condition to the ability to conduct business in
various states, the Company's property and casualty insurance subsidiaries are
required to participate in mandatory property and casualty shared market
mechanisms or pooling arrangements, which provide various insurance coverages to
individuals or other entities that otherwise are unable to purchase such
coverage voluntarily provided by private insurers. The Company cannot predict
whether its participation in these shared market mechanisms or pooling
arrangements will provide underwriting profits or losses to the Company.


Competition

         The Company's business is composed of three principal segments: Risk
Management, Allmerica Financial Services, and Allmerica Asset Management. Each
of these industry segments, in general, is highly competitive. The Company's
products and services compete not only with those offered by insurance
companies, but also with products offered by other financial institutions. In
all of its segments, many of the Company's competitors are larger and have
greater financial, technical, and operating resources than those of the Company.
In addition, the Company may face additional competition from banks and other
financial institutions since prior regulatory restrictions on the sale of
insurance and securities by these institutions have been repealed.


Retention of Key Executives

         The future success of the Company will be affected by its continued
ability to attract and retain qualified executives. The Company's success is
dependent in large part on John F. O'Brien, the loss of whom could adversely
affect the Company's business. The Company does not have an employment agreement
with Mr. O'Brien.


Federal Income Tax Legislation

         Currently, under the Code, holders of certain life insurance and
annuity products are entitled to tax-favored treatment on these products. For
example, income tax payable by policyholders on investment earnings under
certain life insurance and annuity products is deferred during the product's
accumulation period and is payable only when the insurance or annuity benefits
are actually paid or to be paid.

         In the past, legislation has been proposed that would have curtailed
the tax-favored treatment of the life insurance and annuity products offered by
the Company. These proposals were not enacted, however; such proposals or
similar proposals are currently under consideration by Congress. If these or
similar proposals directed at limiting the tax-favored treatment of life
insurance policies and annuity contracts were enacted, market demand for such
products offered by the Company would be adversely affected.


Sales Practices

         A number of civil jury verdicts have been returned against life and
health insurers in the jurisdictions in which the Company does business
involving the insurers' sales practices, alleged agent misconduct, failure to
properly supervise agents, and other matters. Some of the lawsuits have resulted
in the award of substantial judgements against the insurer, including material
amounts of punitive damages. In some states, juries have



substantial discretion in awarding punitive damages in these circumstances. The
Company and its subsidiaries, from time to time are involved in such litigation.
Although the outcome of any litigation cannot be predicted with certainty, to
date, no such lawsuit has resulted in the award of any material amount of
damages against the Company for which the Company has not established
appropriate reserves.

         In December 1996, the Company received notice from the Securities and
Exchange Commission (the "Commission") that it would be conducting a limited
inspection concerning the Company's marketing and sales practices associated
with variable insurance products. The Commission requested that certain
information be provided to it by the Company, which the Company promptly
complied with. No litigation has been instituted, nor has the Commission
initiated any further action with respect to this matter.


Health Care Reform Legislation

         There continue to be a number of legislative and regulatory proposals
introduced at the federal and state level to reform the current health care
system. At the federal level, recent proposals have focused on managed care
reform, and patient protection and advocacy. State and federal legislation
adopted over the past few years generally limits the flexibility of insurers
with respect to underwriting practices for small employer plans that contain
less than 50 employees, provides for crediting previous coverage for the
purposes of determining pre-existing conditions, and limits the ability to
medically underwrite individual risks in the group market. In addition, several
states have enacted managed care reform legislation which may change managed
care programs. While future legislative activity is unknown, it is probable that
limitations on insurers that utilize managed care programs or market health
insurance to small employers will continue. However, the Company's rating,
underwriting practices, and managed care programs are consistent with the
experience rate small cases, nor does it refuse coverage to eligible individuals
because of medical histories. Also, its managed care programs provide for
coverage outside of the preferred network and allow for open communication
between a doctor and his/her patient. Because of its emphasis on managed care
and risk sharing partnerships, management believes that it will continue to be
able to operate effectively in the event of further reform, even if specified
states expand the existing limitations.

         The Company believes that the proposed federal and state health care
reforms would, if enacted, substantially expand access to and mandate the
amounts of health care coverage while limiting or eliminating an insurer's
flexibility in this market.