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, Massachusetts, New York, New Jersey, New
Hampshire, Rhode Island, Vermont and Maine).  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.


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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 pool business, the Company's
current 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.


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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 has created a new system for assessing the adequacy of
statutory capital for life and health insurers and property and casualty
insurers.  The new system, known as risk-based capital, is in addition to
the states' fixed dollar minimum capital and other requirements.  The new
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.

     Because the investment of First Allmerica Financial Life Insurance
Company ("FAFLIC"), a life insurance subsidiary of the Company, in Allmerica
Property & Casualty Companies, Inc. ("Allmerica P&C") represents a
significant percentage of FAFLIC's surplus, the trading

     In addition, in 1997, A.M. Best decided to no longer rate Citizens
independently from its majority parent, The Hanover Insurance Company, but
instead rated the two separate companies as a group.  Consequently, Citizens
was assigned Best's "A (Excellent)" rating, despite its "A+ (Superior)"
qualifications.  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.


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State Guaranty Funds, Shared Markets Mechanisms and Pooling Arrangements

     All fifty states of the United Sates 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 four principal segments:
Property and Casualty Insurance, Corporate Risk Management Services,
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
and health maintenance organizations.  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
should current regulatory restrictions on the sale of insurance and
securities by these institutions be 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, if at all, only when the
insurance or annuity benefits are actually paid or to be paid.  Also, for
example, interest on loans up to $50,000 secured by the cash value of
certain insurance policies owned by businesses is eligible for deduction
even though investment earnings during the accumulation period are
tax-deferred.


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     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.

     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 insurer's
flexibility and


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Impact of the Year 2000 Issue

     The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year.  Any of
the Company's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000.
This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities.

     Based on a third party assessment, the Company determined that
significant portions of its software required modification or replacement
to enable its computer systems to properly process dates beyond December
31, 1999. The Company is presently completing the process of modifying or
replacing existing software and believes that this action will resolve the
Year 2000 issue. However, if such modifications and conversions are not
made, or are not completed timely, or should there be serious unanticipated
interruptions from unknown sources, the Year 2000 issue could have a
material adverse impact on the operations of the Company. Specifically, the
Company could experience, among other things, an interruption in its
ability to collect and process premiums, process claim payments, safeguard
and manage its invested assets, accurately maintain policyholder
information, accurately maintain accounting records, and perform customer
service. Any of these specific events, depending on duration, could have a
material adverse impact on the results of operations and the financial
position of the Company.

     The Company has initiated formal communications with all of its
suppliers to determine the extent to which the Company is vulnerable to
those third parties' failure to remediate their own Year 2000 issue.  The
Company's total Year 2000 project cost and estimates to complete the
project include the estimated costs and time associated with the Company's
involvement on a third party's Year 2000 program, and are based on presently
available information. However, there can be no guarantee that the systems
of other companies on which the Company's systems rely will be timely
converted, or that a failure to convert by another company, or a conversion
that is incompatible with the Company's systems, would not have material
adverse effect on the Company. The Company does not believe that it has
material exposure to contingencies related to the Year 2000 issue for the
products it has sold.  Although the Company does not believe that there is a
material contingency associated with the Year 2000 issue, there can be no
assurance that exposure for material contingencies will not arise.

     The cost of the Year 2000 project will be expensed as incurred and is
being funded primarily through a reallocation of resources from
discretionary projects and a reduction in systems maintenance and support
costs.  Therefore, the Year 2000 project is not expected to result in any
significant incremental technology cost and is not expected to have a
material effect on the results of operations.  Approximately 10% of the
Company's Year 2000 resources to be utilized in 1999 have been allocated to
the Company's remediation plan, which has three mission critical elements:
internal systems, desktop systems, and external partners.

Internal Systems
     Over 98% of the Company's internal systems have been corrected,
tested for year 2000 dates, and returned to production. The remaining
systems, which include relatively small systems waiting for vendor upgrade
or scheduled for elimination or replacement, are targeted to be complete by
June 30, 1999.

Desktop Systems
     The Company has verified that all desktop computers are capable of
correctly processing year 2000 dates.  Additionally, over 98% of the third
party software installed on the Company's desktop machines has been
confirmed capable of processing year 2000 dates properly. The remaining
desktop systems are expected to be upgraded, eliminated, or replaced by June
30, 1999.


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External Partners
     The Company has verified that 50% of its electronic interfaces will
process year 2000 dates correctly.  Eighty percent of the Property and
Casualty agents have confirmed that they are capable of properly processing
year 2000 dates.  Sixty percent of the Company's non-electronic partners
have responded that they are capable of properly processing year 2000
dates.  Most external partners have informed the Company that they expect
to be compliant.  The Company hopes for full compliance of external
partners by July 1, 1999.

     In partnership with an outside consulting firm, the Company has
completed an enterprise-wide year 2000 business risk identification and
assessment. The Continuity of Operations Plan (COOP) requirements have been
identified for all business units of the Company and applicable plans are
currently being developed. These plans will contain immediate steps needed
to keep business functions operating while unforeseen Year 2000 issues are
being addressed.  It outlines responses to situations that may affect
critical business functions and also provides triage guidance, a documented
order of actions to respond to problems. During the triage process, business
priorities are established and "Critical Points of Failure" are identified
as having a significant impact on the business. The Company's contingency
plans are designed to keep business unit operations functioning in the event
of a failure or delay due to Year 2000 record format and date calculation
changes. All plans, including individual plans by business segment, are
scheduled to be completed by September 30, 1999. Contingency planning will
utilize approximately 15% of the Company's Year 2000 resources in 1999.

     The remaining 75% of the Company's Year 2000 resources will be utilized
to address on-going compliance issues. These include periodic reviews of
applications, installation and testing of new hardware and software
packages, testing new software maintenance and testing internally developed
software.

     The costs of the project and the date on which the Company plans to
complete the Year 2000 modifications are based on management's best
estimates, which were derived utilizing numerous assumptions of future
events including the continued availability of certain resources, third
party responsiveness and modification plans, and other factors.  However,
there can be no guarantee that these estimates will be achieved and actual
results could differ materially from those plans.  Specific factors that
might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to
locate and correct all relevant computer codes, the Year 2000 readiness of
suppliers and business partners, and similar uncertainties.


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