Smith Barney Citigroup Small & Mid-Cap Conference

May 6, 2004

Allmerica Financial Corporation

Ed ParryExecutive Vice PresidentChief Financial Officer

Allmerica Financial CorporationForward Looking Statement

Allmerica Financial CorporationForward Looking Statement

Certain statements in this presentation may contain, “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. In particular, this presentation may include forward looking statements with respect to earnings growth, return on equity, anticipated price increases in our P&C business, growth, expense management and improved underwriting. 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. These uncertainties include 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. The performance of the hedging program is dependent on, among other things, the future performance and volatility of the equity market, the extent to which the performance of the various hedging instruments correlate with the investment performance of the underlying annuity sub-accounts, the continued availability of equity index futures and redemption and mortality patterns in the Company’s annuity contracts. The discussion in this presentation includes financial measures that are not derived from generally accepted accounting principles, or GAAP. Information regarding these non-GAAP financial measures is available in the Investor Relations section of the Allmerica website at www.allmerica.com

Who We AreWho We Are

Fortune 500: Market Capitalization of $1.9B

Regional Property and Casualty Company• 30th Largest Property and Casualty Insurer• Over $2 billion in Written Premium• Partnerships with 1,850 Local Agencies

in 25 States – Northeast and Michigan Focus• Hanover & Citizens Brand Names• Over 150 Years in the Business• A.M. Best Rating of A- [Excellent]

Life Companies• Closed Block of Business Consisting Primarily of

Variable Annuities• $14B in Assets • $120 Million in Annual Operating Cash Flow• A.M. Best “Secure” Rating of B+ [Very Good]

Who We Are in NumbersWho We Are in Numbers

Life $0.8B

P&C $2.5B

Total Revenue: $3.3B

2003 Revenue

P&C $118M

2003 Pre-tax Segment Income*

2003 Net Income: $87m EPS: $1.63

* Excludes Corporate Debt

24%

76%

7%

93%

P&C $1.6B

Life $1.2B

$326

$892

$482

$830

$553

$1,002

$590

$1,029

Q3 '02 Q4 '02 Q4 '03 Q1 '04

Life Surplus P&C Surplus

Who We Are in NumbersWho We Are in Numbers

Life and P&C Equity $2.8BDebt (0.5B)Total GAAP Equity $2.3B

43%

57%

3/31/04 Life Company RBC = 420%

$1,555

$1,312$1,218

GAAP EquityStatutory Surplus

$1,619

Allmerica Financial Corporation 2003 Property and Casualty Business Mix

Allmerica Financial Corporation 2003 Property and Casualty Business Mix

• 68% Personal Lines - Short-tail Liabilities• 32% Commercial Lines - Predominately “Main Street” Small Commercial

Other Personal2%

Other Commercial

3%

Personal Auto49%

Commercial Multi Peril15%

Homeow ners17%

Commercial Auto8%

Workers' Comp6%

47%22%13%8%

10%

< $10k

$10k < $25k

$25k

-$50

k

$50k-$100k

> $100k

22%13%

9%

10%

46%

Commercial Lines by Size

81% in Policies < $50K2/3 of Accounts < $75K

$2.2B Total Net Written Premium

Personal Lines2004 Priorities

Personal Lines2004 Priorities

Agency PartnershipsAgency Partnerships

Product & UnderwritingProduct & Underwriting

Responsive Service DeliveryResponsive Service Delivery

Identify and Grow with Key Agents Aggressively Manage Underperforming Agents

Accelerate Deployment of POS Introduce Pre-Fill

Achieve Adequate Pricing Levels Continue Implementation of Rate

Tiering Shift Geographic Mix of Business Improve MA Auto Results

Margin Improvement Drive Earnings GrowthMargin Improvement Drive Earnings Growth

Commercial Lines2004 Priorities

Commercial Lines2004 Priorities

Improve Renewal Retention Enhance New Business Mix Tiered Pricing Strategies

Agency PartnershipsAgency Partnerships

Product & UnderwritingProduct & Underwriting

Responsive Service DeliveryResponsive Service Delivery

Lock in Strategic Partnerships with Winning Commercial Lines Agencies

Refine small commercial operating model

Build the Foundation for Earnings Growth in 2005Build the Foundation for Earnings Growth in 2005

Life Companies2004 Priorities

Life Companies2004 Priorities

• Maintain Expense Margins• Retain Profitable Customers

• Manage GMDB Risk Through Hedging

• Create Strategies to Utilize Excess Capital

Maximize Long Term Cash FlowMaximize Long Term Cash Flow

Maximize Long Term ValueMaximize Long Term Value

Manage VolatilityManage Volatility

Allmerica Financial Corporation Financial Performance

Allmerica Financial Corporation Financial Performance

• Segment Income up 40%

• Solid P&C Earnings

• Life Earnings Better than Expected

First Quarter Highlights

$24

$33

Q1 2003 Q1 2004

After Tax Segment Earnings

($ in millions)

Property & Casualty Financial Performance

Property & Casualty Financial Performance

Personal Lines:• Rate Increases• Lower Frequency of Losses

Commercial Lines: • Lower Favorable Development• Premium Growth• Increased Retention

$39

$27

-$3

$11$2 $1

$38 $39

CommercialLines

PersonalLines

Other P&C Total P&C

Q1 2003 Q1 2004

First Quarter Highlights

($ in millions)

Pre-tax Segment Earnings

Net Operating Cash Flow

Q42003

Life Companies Financial PerformanceLife Companies

Financial Performance

-$2

$10• Lower Operating Expenses

• Favorable Equity Market

• Strong Positive Cash Flow

$2

Q12003

$5

($ in millions)

($ in millions)

$42

$32$39

$32

Q12004

Q12004

$40

$29

$40

Pre-tax Segment Earnings

• Cash Flow

• Statutory Surplus

• Cash Flow

• Statutory Surplus

• GAAP Earnings

• GAAP Book Value

• Return onEquity

• GAAP Earnings

• GAAP Book Value

• Return onEquity

AFC Performance MetricsAFC Performance Metrics

P&CP&C LifeLife

2004 Financial Summary2004 Financial Summary

Focus on the BasicsFocus on the Basics

Personal LinesPersonal Lines

Margin Improvement Drives Earnings Growth

Margin Improvement Drives Earnings Growth

Commercial LinesCommercial Lines

Building the Foundation for Growth

Building the Foundation for Growth

Life CompaniesLife Companies

Maximize Cash Flow & Maintain Strong SurplusMaximize Cash Flow & Maintain Strong Surplus

Improve ROE

Improve ROE

Great Start

Towards Becoming a World

Class P&C

Company

Great Start

Towards Becoming a World

Class P&C

Company

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