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Related to the deal, the property/casualty insurer on July 31 reported a second-quarter net loss of $10.2 million. A net loss from discontinued operations included an estimated after-tax loss of $66.1 million, Hanover said in a statement.
Hanover (NYSE: THG | Quote | Chart | News | PowerRating) agreed to sell its First Allmerica Financial Life Insurance Co. business to Commonwealth Annuity and Life Insurance Co., the Goldman Sachs unit. Total net proceeds from the sale include a preclose dividend of assets valued at about $160 million from First Allmerica.
Hanover said it expects to sell most of the dividend assets to Hanover Insurance Co., a subsidiary. As a result, cash and investments at the holding company will increase by about $220 million.
The deal, expected to close in the fourth quarter, needs regulatory approval from the Massachusetts Division of Insurance and the New Hampshire Insurance Department.
In January 2006, the Worcester, Mass.-based Hanover, formerly known as Allmerica Financial Corp., closed on the sale of its runoff variable life insurance and variable annuity business to Goldman Sachs Group (BestWire, Jan. 3, 2006).
Allmerica changed its name to Hanover Insurance Group in December 2005, seeking to solidify the company's new identity as a property/casualty insurer. Allmerica was a holding company for a group of insurance companies, with Hanover Insurance Co. being the oldest and largest company in the group and the source of the new name (BestWire, Oct. 31, 2005).
A.M. Best Co. commented that all ratings and outlooks of Hanover Insurance Group and its property/casualty insurance members were unchanged following the announcement that it agreed to sell First Allmerica to Goldman Sachs (BestWire, July 31, 2008).
(By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com)
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