UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): April 15, 1997 ALLMERICA FINANCIAL CORPORATION (Exact name of Registrant as specified in its charter) Delaware 1-13754 04-3263626 (State or other jurisdic-(Commission File (I.R.S. Employer tion of Incorporation) Number) I.D. Number) 440 Lincoln Street, Worcester, Massachusetts 01653 (Address of Principal Executive Offices) (Zip Code) (508) 855-1000 (Registrant's Telephone Number including area code) Page 1 of 5 pages Exhibit Index on page 4 Item 5. Other Events. On April 15, 1997, Allmerica Financial Corporation announced that it has entered into an agreement in principle to cede its individual disability insurance business under a 100% coinsurance arrangement with Metropolitan Life Insurance Company. The transaction is subject to the negotiation of definitive agreements and regulatory approvals and is expected to occur on or before October 1, 1997. Allmerica Financial Corporation has recognized an after-tax charge of $35 million, or $0.70 per share, in the first quarter as a result of the cession of the disability income block. A copy of the press release is attached as Exhibit 1 and is incorporated by reference herein. Item 7. Financial Statements and Exhibits. Exhibit 1 Press Release dated April 15, 1997, announcing Allmerica Financial Corporation's agreement in principle to cede its individual disability insurance business to Metropolitan Life Insurance Company. page 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ALLMERICA FINANCIAL CORPORATION By: /s/ Edward J. Parry, III Edward J. Parry, III Vice President, Chief Financial Officer, Principal Accounting Officer Date: April 16, 1997 page 3 Exhibit Index Exhibit 1 Press Release dated April 15, 1997, announcing Allmerica Financial Corporation's agreement in principle to cede its individual disability insurance business to Metropolitan Life Insurance Company. page 4 ALLMERICA FINANCIAL AGREES TO REINSURE INDIVIDUAL DISABILITY INSURANCE BLOCK WITH METROPOLITAN LIFE WORCESTER, Mass. April 15, 1997-- Allmerica Financial Corporation (NYSE:AFC) today announced it has reached an agreement in principle to transfer Allmerica's individual disability income business to Metropolitan Life Insurance Company by October 1997. Under the agreement, MetLife will provide administrative services and assume liability, under a 100 percent coinsurance arrangement, for Allmerica's $33 million premium in force individual disability income line. In exchange, Allmerica will transfer to MetLife approximately $200 million in statutory reserves and ceding commissions. Allmerica Financial said it will take an after-tax charge of $35 million, or $0.70 per share to net income in the first quarter of 1997 related to the disposal of the disability income block. The charge reflects the difference in accounting between statutory and GAAP (generally accepted accounting principles) reserves, and the write-off of deferred acquisition costs related to the line. "Individual disability is not a strategic product for our Retail Financial Services segment, and, with this arrangement, retail can focus more fully on its strong- growth, variable product lines," said Edward J. Parry III, vice president and chief financial officer of Allmerica Financial. "We are pleased that MetLife has agreed to assume this business, so that policyholders can be assured of ongoing sound administration and benefits." The transaction is subject to the negotiation of definitive agreements and regulatory approvals. Allmerica Financial Corporation is the holding company for a diversified group of insurance and financial services companies headquartered in Worcester, Mass. Contacts Investors Media Jean Peters Michael F. Buckley Vice President - Investor Relations Director - Public Information (508) 855-3599 (508) 855-3099