Amwest Insurance Group Inc. Announces First Quarter Results.

CALABASAS, Calif.--(BUSINESS WIRE)--May 3, 1999--

Amwest Insurance Group Inc. (AMEX:AMW)(PCX:AMW) reported net income of $2,366,000, or 55 cents per share, for the three months ended March 31, 1999, as compared with net income of $2,056,000, or 48 cents per share, for the three months ended March 31, 1998.

Operating income, which excludes net realized gains, increased by 24 percent to $1,878,000, or 43 cents per share, as compared with $1,515,000, or 35 cents per share, for the three months ended March 31, 1998. 1998 amounts have been restated to reflect the 10 percent stock dividend paid to stockholders of record as of March 31, 1999.

Gross premiums written increased to $32,135,000 for the three months ended March 31, 1999, as compared with $29,342,000 for the three months ended March 31, 1998. Substantially all of the premium growth was attributable to the Surety Division, which increased its writings by 11 percent to $25,033,000 in 1999 from $22,634,000 in 1998. Property and casualty premiums written increased slightly to $7,102,000 in 1999 from $6,708,000 in 1998.

"Our first quarter results showed continued improvement, particularly in the Property and Casualty Division's loss ratios. The Division has refocused its efforts in its core commercial transportation product which has produced business with excellent pure loss ratios for the past two underwriting years, and which has continued in the first quarter. In the past, these results have been overshadowed by adverse development for pre-1997 commercial transportation business and poor results from our non-core products. I am confident this Division is moving in the right direction and look to much improved performance during 1999," commented John E. Savage, president and chief executive officer. "Additionally, the Surety Division is off to a strong start, which bodes well for the 1999 year."

"The continued strong Surety Division writings are reflective of the company's strong commitment and service to its agency force through out network of 30 branch and field offices in the United States," commented Neil F. Pont, executive vice president of the Surety Division. "During the first quarter of 1999, a number of companies either withdrew or committed to sell their surety operations. Our agency force has responded to Amwest's continuing commitment and consistency during this period and I expect that the Surety Division's growth for 1999 will continue to exceed that experienced by the industry."

"Although the Property & Casualty Division's first quarter premiums increased only slightly from 1998, we are now beginning to see the resurgence of our core products, including commercial transportation and specialty programs written through our Interstate Program Managers subsidiary," commented Jeffrey A. Shonka, senior vice president of the Property and Casualty Division. "Certain new product lines have distracted our organization in recent years, which not only produced unfavorable results, but also led to the general decline of our primary product focus. We are withdrawing from the Arizona private passenger and California homeowners markets and have re-engineered our commercial transportation product offerings. Targeted business is now being written at an accelerated pace, and we expect an improved mix throughout the 1999 year."

Certain statements contained in this news release regard matters which are not historical facts and are forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to: the ineffectiveness of the aforementioned programs, a deterioration in results of the company's other products, or a general economic decline. The company undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Amwest is a Calabasas-based insurance holding company underwriting surety and property and casualty insurance through Amwest Surety Insurance Co., Condor Insurance Co. and Far West Insurance Co. -0-

             Amwest Insurance Group Inc. and Subsidiaries
            (Amounts in thousands, except per-share data)

                                 Consolidated Statements of Operations
                                           Three Months Ended
                                    March 31, 1999      March 31, 1998

Gross premiums written                $ 32,135             $ 29,342

Net premiums earned                   $ 26,993             $ 27,124
Losses and loss adjustment
 expenses                                9,086                8,908
Policy acquisition costs                12,540               14,146
General operating costs                  3,979                3,155

Total underwriting expenses             25,605               26,209

Underwriting income                      1,388                  915

Interest expense                          (554)                (405)
Net investment income                    1,769                1,577
Net realized gains                         740                  820

Income before income taxes               3,343                2,907
Provision for income taxes                 977                  851

Net income                            $  2,366             $  2,056

Net earnings per common share(a):
 Basic                                55 cents             49 cents
 Diluted                              55 cents             48 cents

Operating earnings per common share(a):
 Basic                                44 cents             36 cents
 Diluted                              43 cents             35 cents


                                Consolidated Balance Sheet Information
                               March 31, 1999        Dec. 31, 1998

Total assets                      $222,931             $216,292
Total liabilities                  159,848              154,390
Total stockholders' equity          63,083               61,902
 Book value per share             $  14.62             $  14.36

(a)  1999 and 1998 basic and diluted earnings per share have been
     calculated in accordance with SFAS No. 128.


             Amwest Insurance Group Inc. and Subsidiaries
                        (Amounts in thousands)

                                             Summary of Premiums and
                                              Losses by Product Line
                                                 Three Months Ended
                                               March 31,    March, 31,
                                                  1999         1998

Surety
 Gross premiums written                          25,033       22,634
 Net premiums earned                             21,500       21,931
 Net losses and loss adjustment expenses          5,641        4,908
 Other expenses                                  14,537       15,104
 Underwriting income                              1,322        1,919
 Loss and loss adjustment expense ratio             26%          22%
 Expense ratio                                      68%          69%
 Combined ratio                                     94%          91%

Property & Casualty
 Gross premiums written                           7,102        6,708
 Net premiums earned                              5,493        5,193
 Net losses and loss adjustment expenses          3,445        4,000
 Other expenses                                   1,982        2,197
 Underwriting income (loss)                          66       (1,004)
 Loss and loss adjustment expense ratio             63%          77%
 Expense ratio                                      36%          42%
 Combined ratio                                     99%         119%

Total Company
 Gross premiums written                          32,135       29,342
 Net premiums earned                             26,993       27,124
 Net losses and loss adjustment expenses          9,086        8,908
 Other expenses                                  16,519       17,301
 Underwriting income                              1,388          915
 Loss and loss adjustment expense ratio             34%          33%
 Expense ratio                                      61%          64%
 Combined ratio                                     95%          97%