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ARGONAUT GROUP INC. ANNOUNCES THIRD QUARTER EARNINGS

 ARGONAUT GROUP INC. ANNOUNCES THIRD QUARTER EARNINGS
 LOS ANGELES; Oct. 6 /PRNewswire/ -- Argonaut Group Inc.


(NASDAQ-NMS: AGII) today announced consolidated operating income after tax of $18.8 million for the quarter ended Sept. 30, 1992, compared with $27.6 million for the same period last year. For the nine months ended Sept. 30, 1992, consolidated operating income after tax was $58.4 million, compared with $56.0 million for the nine-month period last year. Operating income excludes gains on the sale of investments and, for the nine months ended Sept. 30, 1992, a non- recurring tax adjustment described below.
 In 1987, Argonaut Group adopted Financial Accounting Standard No. 96 ("FAS 96"), Accounting for Income Taxes. In February 1992, the Financial Accounting Standards Board issued a new standard for accounting for income taxes, Financial Accounting Standard No. 109 ("FAS 109"), which supersedes FAS 96. The company adopted FAS 109 as of Jan. 1, and, accordingly, year-to-date net income for 1992 reflects a one-time increase of $61.8 million ($2.37 per common share). This adjustment records the impact of expenses which were deducted for book purposes in prior years, but could not be recognized in the tax provision under FAS 96.
 Consolidated net income was $25.2 million ($0.99 per common share) on total revenue of $120.1 million for the third quarter of 1992, compared with $29.6 million ($1.11 per common share) on total revenue of $117.4 million for the same quarter last year. For the nine months ended Sept. 30, 1992, consolidated net income was $133.1 million ($5.10 per common share) on total revenue of $358.2 million, compared with net income of $64.5 million ($2.42 per common share) on total revenue of $388.1 million for the same period in 1991.
 Total revenue includes gains on sales of investments of $9.7 million for the current quarter, compared with $2.2 million for the same period in 1991. For the nine months ended Sept. 30, 1992, gains on sales of investments were $19.6 million, compared with $10.9 million for the same period last year. 1992 gains resulted primarily from transactions in U.S. Treasuries and municipal bonds to lengthen the average maturity of the portfolio; 1991 gains resulted primarily from the sale of warrants in Hanson Trust PLC held for investment, and third quarter transactions to lengthen the average maturity of the portfolio. We cannot anticipate when or if similar gains may occur in the future.
 On July 27, 1989, the Argonaut Group board of directors authorized the repurchase of up to 6 million shares of its outstanding common stock. No shares were reacquired during the third quarter of 1992, but the company has reacquired a total to date of 3,400,125 shares. There were 25,560,341 common shares outstanding at Sept. 30, 1992, compared with 26,463,766 common shares outstanding at Dec. 31, 1991.
 Argonaut Group is primarily engaged in the selling, underwriting and servicing of workers compensation and other lines of property- casualty insurance. Argonaut Group is traded on NASDAQ's National Market System, ticker symbol AGII.
 ARGONAUT GROUP INC.
 Financial Highlights
 (In millions)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1992 1991 1992 1991
 Earned premiums $79.6 $81.8 $244.3 $275.6
 Net investment
 income 30.8 33.4 94.3 101.6
 Gains on sale
 of investments 9.7 2.2 19.6 10.9
 Total revenue 120.1 117.4 358.2 388.1
 Income before tax 34.5 36.3 96.8 83.0
 Income tax provision 9.3 6.7 25.5 18.5
 Income before
 cumulative effect
 of accounting change 25.2 29.6 71.3 64.5
 Cumulative effect of
 change in accounting
 for income taxes --- --- 61.8 ---
 Net income $25.2 $29.6 $133.1 $64.5
 Income per common
 share:
 Income before
 cumulative effect
 of accounting
 change $0.99 $1.11 $2.73 $2.42
 Cumulative effect
 of change in
 accounting for
 income taxes --- --- 2.37 ---
 Net income per
 common share $0.99 $1.11 $5.10 $2.42
 Weighted average
 common shares 25,554,856 26,685,589 26,098,187 26,691,644
 -0- 10/6/92 R
 /CONTACT: Jim Halliday, director of investor relations of Argonaut Group, 415-858-6602/
 (AGII) CO: Argonaut Group Inc. ST: California IN: INS SU: ERN


JL -- LA022 -- 7285 10/06/92 18:02 EDT
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Date:Oct 6, 1992
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