Amwest Insurance Group Inc. announces first-quarter results.

WOODLAND HILLS, Calif.--(BUSINESS WIRE)--May 8, 1996--Amwest Insurance Group Inc. (ASE/PSE:AMW) Wednesday reported results for the first quarter ended March 31, 1996.

On March 14, 1996, Amwest completed its previously announced merger with Condor Services Inc. (``Condor''), which has been accounted for as a pooling of interests. Accordingly, the results for the first quarter include the results of Condor as of and for the period ended March 31, 1996.

Further, financial results as of Dec. 31, 1995, and for the three months ended March 31, 1995, have been restated to include Condor's prior period results.

Net income decreased to $86,000, or 3 cents per share for the three months ended March 31, 1996, from $1,259,000, or 38 cents per share, for the corresponding 1995 period. The results for the first quarter of 1996 include a charge of $710,000 for non-recurring expenses related to the merger of Condor and Amwest.

The results for the first quarter of 1996 include net realized investment gains of $980,000, as compared with $51,000 for the corresponding 1995 period.

Net premiums earned increased 2.8 percent to $21,835,000 for the three months ended March 31, 1996, from $21,233,000 for the corresponding 1995 period. Gross premiums written increased 6.5 percent to $23,208,000 for the three months ended March 31, 1996 vs. gross premiums written of $21,799,000 for 1995. The increase in gross premiums written is primarily attributable to increased premiums written by Condor Insurance Co.

Losses and loss adjustment expenses increased to $10,071,000 resulting in a loss ratio of 46.1 percent for the first quarter of 1996, as compared with $8,134,000, or a loss ratio of 38.3 percent for the corresponding 1995 period. The loss ratio for the surety operations increased from 32.2 percent to 38.1 percent due primarily to a continuation of increased loss severity in the contract performance product line.

The loss ratio for the property and casualty operations increased to 73.7 percent from 60.8 percent, primarily due to the results of the private passenger automobile operations in the state of Arizona.

``The results for the first quarter are disappointing,'' said John E. Savage, president and co-chief executive officer. ``However, we are confident that our acquisition of Condor and Southern California Bonding Services Inc., both of which were completed during the first quarter, will result in improved performance during the second half of 1996.

``In particular the administrative cost and reinsurance savings anticipated in the Condor merger should be reflected in our operating results in the third and fourth quarters of 1996.''

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

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

                               Three Months Ended
                                   March 31,
                                1996       1995

Gross premiums written        $23,208    $21,799

Net premiums earned           $21,835    $21,233

Losses and loss
  adjustment expenses          10,071      8,134
Policy acquisition costs        9,487      9,115
General operating costs         3,844      4,143
Merger expenses                   710          0
  Total underwriting
    expenses                    24,112    21,392
  Underwriting loss             (2,277)     (159)

Interest expense                  (238)     (280)
Collateral interest expense       (356)     (445)
Net investment income            1,868     1,997
Net realized investment gains      980        51
Commissions and fees               143       185

Income before income taxes         120     1,349
Provision for income taxes          34        90

  Net income                    $   86    $1,259

Earnings per common share:
  Net income                    $  .03    $  .38

  Weighted average shares
    outstanding                  3,344     3,319

Underwriting Data:
Consolidated:
Loss ratio                       46.1%     38.3%
Expense ratio                    61.1%     62.4%
  Combined ratio                107.2%    100.7%

Surety:
Loss ratio                       38.1%     32.2%
Expense ratio                    67.6%     67.7%
  Combined ratio                105.7%     99.9%

Specialty Property and Casualty:
Loss ratio                       73.7%     60.8%
Expense ratio                    38.5%     42.8%
  Combined ratio                112.2%    103.6%

                                 Consolidated Balance Sheet Information
                                      March 31, 1996    Dec. 31, 1995

Total assets                             $179,558          $183,833
Total liabilities                         125,307           128,758
Total stockholders' equity                 54,251            55,075
  Book value per share                   $  16.10          $  16.76

CONTACT: Amwest Insurance Group Inc., Woodland Hills

Steven R. Kay, 818/592-3200