Hanover to sell First Allmerica insurance business

Worcester-based Hanover Insurance Group Inc. plans to sell its remaining life insurance business, First Allmerica Financial Life Insurance Co., to a Goldman Sachs Group Inc. subsidiary.

Hanover said today that it’s seeking approval from the Massachusetts Division of Insurance for a dividend from FAFLIC of various assets valued at about $160 million. Net proceeds from the sale, including the dividend, are projected to be about $220 million.

Subsequently, Hanover expects to record a loss of about $66 million related to the sale.

The deal, subject to regulatory approval, is expected to close in the fourth quarter.

Hanover’s life insurance business has been in run-off since 2002. Run-off is a situation when an insurer books no new business and instead generates revenue only from existing premiums.

Proceeds from the sale will be used to build the company’s property and casualty business, and for possible acquisitions and share repurchase programs.
(AP)