Amwest Insurance Group Inc. announces third quarter earnings and quarterly cash dividend.

WOODLAND HILLS, Calif.--(BUSINESS WIRE)--Nov. 8, 1996--Amwest Insurance Group Inc. (ASE/PSE:AMW) reported net income of $1,190,000 for the three months ended Sept. 30, 1996 as compared with net income of $787,000 for the three months ended Sept. 30, 1995.

The results for the third quarter of 1995 have been restated to account for the operations of Condor Services Inc. which was acquired on March 14, 1996, in a transaction accounted for as a pooling of interests.

The results for the three months ended Sept. 30, 1996 are reflective of improved loss experience for the surety operations from that encountered during the first six months of 1996 and the three months ended Sept. 30, 1995.

The loss ratio for the surety operations improved to a loss ratio of 25.4 percent for the three months ended Sept. 30, 1996, from a loss ratio of 41.4 percent for the six months ended June 30, 1996, and 32.4 percent for the three months ended Sept. 30, 1995. The improved loss ratio is reflective of decreased loss severity in the contract performance and payment product line.

While the loss ratio for the surety operations improved during the third quarter, the loss ratio for the specialty property and casualty operations increased to 84.2 percent for the three months ended Sept. 30, 1996, from 79.4 percent for the first six months of 1996 and from 83.7 percent for the three months ended Sept. 30, 1995.

The increase in the loss ratio is attributable to business written under the Arizona private passenger automobile program and in particular, business written prior to May 1, 1996, at which time the company implemented a rate increase averaging approximately 21.4 percent for this program. The loss ratio for this program was 126.6 percent for the three months ended Sept. 30, 1996 vs. 119.2 percent for the six months ended June 30, 1996.

In reviewing the results for the three months ended Sept. 30, 1996, John E. Savage, president and co-chief executive officer noted that the loss experience in the contract performance and payment product line of the surety operations had improved primarily due to the absence during the quarter of large losses on several contractor work programs which had adversely affected the results during the first six months of 1996.

He also noted that the continued unfavorable results for the specialty property and casualty operations were significantly influenced by the Arizona private passenger automobile program, in particular, business that had been written prior to the significant rate increase of May 1996.

Due to the significant decline in in-force policies with effective dates prior to May and significantly reduced premium volume thereafter, he indicated that this program's impact on the results of the specialty property and casualty operations should be significantly reduced for the fourth quarter of 1996 and the upcoming year.

Separately the company announced that the board of directors declared a quarterly cash dividend of 11 cents per share. The cash dividend will be paid on Jan. 15, 1997, to stockholders of record as of Dec. 31, 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
        (Amounts in thousands, except share and per share data)

                               Consolidated Statements of Operations
                              Three Months ended    Nine Months ended
                                   Sept. 30,             Sept. 30,
                               1996       1995       1996       1995

Gross premiums written      $ 24,719   $ 24,728   $ 73,676   $ 71,860

Net premiums earned         $ 22,239   $ 21,322   $ 65,609   $ 63,707

Losses and loss adjustment
 expenses                      8,299      9,154     30,200     25,797
Policy acquisition costs      10,702      9,639     29,258     28,422
General operating costs        3,093      3,557     10,208     11,314

  Total underwriting
   expenses                   22,094     22,350     69,666     65,533

  Underwriting income (loss)     145     (1,028)    (4,057)    (1,826)

Interest expense                (229)      (257)      (774)      (805)
Collateral interest expense     (293)      (427)      (940)    (1,305)
Merger expense                    --         --       (710)        --
Lease termination cost            --         --     (1,300)        --
Recovery on misappropriation
 of funds                         --         --         --        890
Net investment income          1,581      1,969      5,067      5,951
Net unrealized gain (loss)
 on trading securities            --         (1)        --         74
Net realized investment gains    326        682      1,867      1,292
Commissions and fees              --        141        223        453

  Income (loss) before
   income taxes                1,531      1,079       (623)     4,724
Provision (benefit) for
 income taxes                    340        292       (589)       996

  Net income (loss)         $  1,190   $    787   $    (35)  $  3,728

Earnings (loss) per common
 share:

  Operating income (loss)   $   0.29   $   0.10   $  (0.38)  $   0.86
  Net realized investment
   gains                        0.06       0.13       0.37       0.26

  Net income (loss)         $   0.36   $   0.24   $  (0.01)  $   1.12

  Weighted average shares
   outstanding                 3,347      3,337      3,348      3,341

                              Consolidated Balance Sheet Information
                                 Sept. 30, 1996     Dec. 31, 1995

Total assets                       $ 180,116          $ 183,833
Total liabilities                    128,142            128,758
Total stockholders' equity            51,974             55,075

  Book value per share             $   15.65          $   16.76

  Shares outstanding                   3,322              3,287

CONTACT: Amwest Insurance Group Inc., Woodland Hills

Steven R. Kay, 818/592-3200