Exhibit 99.1


                         ALLMERICA FINANCIAL CORPORATION
                    INCREASES HURRICANE CHARLEY LOSS ESTIMATE

WORCESTER,  Mass.,  September 2, 2004 - Allmerica  Financial  Corporation (NYSE:
AFC) increased its estimate of pre-tax  catastrophe  losses related to Hurricane
Charley to approximately $40 million.

The company increased  its initial  estimate by $10 million in its  commercial
lines business,  based on additional  inspections of the damaged  properties and
more complete  information  provided by  policyholders.  These  estimates may be
subject to further revisions in the wake of Hurricane Frances, which could cause
further damage to already impacted properties or escalate repair costs.

The revised estimate for Hurricane  Charley brings the company's total estimated
pre-tax catastrophe losses to approximately $42 million for the quarter to date,
or $0.69 per share after taxes. The anticipated charges will be reflected in the
company's third quarter results.  The estimated total pre-tax catastrophe losses
for the year to date are now at $78 million.

The company maintains a property catastrophe  aggregate  reinsurance treaty that
protects  against multiple  catastrophes  within a year. The treaty provides $50
million of  reinsurance  coverage in excess of cumulative  losses in the year of
approximately $80 million. For purposes of the $80 million retention, individual
events are capped at $30 million.  In addition,  the company  retains 10% of the
risk on the $50 million coverage.

The  company  estimates  that  approximately  $67  million  of the  year-to-date
catastrophe losses can be applied against the $80 million retention held on this
aggregate treaty.

Allmerica  Financial  Corporation  is scheduled  to announce  its third  quarter
financial results on Monday, October 25.

Certain statements in this release, including the Company's estimates of pre-tax
catastrophe  losses,  may be  considered  to be  forward-looking  statements  as
defined in the  Private  Securities  Litigation  Reform Act of 1995.  Use of the
words "believes",  "anticipates",  "expects" and similar expressions is intended
to identify forward-looking  statements. The Company cautions investors that any
such  forward-looking  statements are not guarantees of future performance,  and
actual results could differ materially.

Investors are directed to consider the risks and  uncertainties  in our business
that may affect future  performance and that are discussed in readily  available
documents,  including the Company's  annual report and other  documents filed by
Allmerica  with the  Securities  and  Exchange  Commission  and  which  are also
available at www.allmerica.com under "Investor Relations".

These uncertainties include the difficulty in estimating  catastrophe losses, as
well as the  possibility of adverse  catastrophe  experience and severe weather,
adverse loss development and adverse trends in mortality and morbidity,  changes
in the stock and financial  markets,  changes from assumed surrender  activities
and assumed stock market returns,  adverse selection in underwriting  activities
and surrender patterns, investment impairments,  heightened competition, adverse
state and federal  legislation or regulation,  financial  ratings  actions,  and
various other  factors,  which  include the effect of the Company's  decision to
close its retail broker-dealer  operations as well as the anticipated impact and
cost of the GMDB hedging program.


Allmerica Financial  Corporation is the holding company for a group of insurance
companies headquartered in Worcester, Massachusetts.

CONTACTS:             Investors:                         Media:
                      Sujata Mutalik                     Michael F. Buckley
                      (508) 855-3457                     (508) 855-3099
                      smutalik@allmerica.com             mibuckley@allmerica.com