Worcester, Mass. — The Hanover Insurance Group Inc. completed the previously announced sale of its remaining run-off life insurance business, First Allmerica Financial Life Insurance Co. (FAFLIC), to Commonwealth Annuity and Life Insurance Co., a Goldman Sachs company.
"We are very pleased to complete the divestiture of our run-off life business, concluding a process that began in 2002," says Frederick Eppinger, CEO of The Hanover Insurance Group. "This transaction significantly enhances our liquidity position and financial flexibility. It frees capital that previously was tied up in our life business and enables us to use that capital more effectively, further strengthening our property and casualty business and positioning us to improve our overall return on equity."
The company previously reported a net after-tax loss on the sale of FAFLIC of approximately $72 million through Sept. 30, 2008. The final purchase price, proceeds from the sale and the net after-tax loss are subject to adjustment as of Dec. 31, 2008. The company currently estimates that an additional loss of approximately $8 million will be recorded in the quarter ended Dec. 31, 2008, principally resulting from investment-related purchase price adjustments. The company will provide details of the adjusted transaction effects when it issues its fourth quarter results.
Source: The Hanover Insurance Group Inc.
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