Amwest Insurance Group Reports 78 Percent Increase in Net Income for Second Quarter.

CALABASAS, Calif.--(BUSINESS WIRE)--Aug. 4, 1999--

Amwest Insurance Group Inc. (AMEX:AMW) (PCX:AMW) today reported that net income advanced 78% to $1,740,000, or $.40 per share, for the second quarter ended June 30, 1999, from $975,000, or $.22 per share, for the corresponding prior-year period.

Operating income, excluding net realized investment gains and $317,000 in employee termination costs associated with the restructuring of the property and casualty division, increased 302% to $1,093,000, or $.25 per share. This is an increase from $272,000, or $.06 per share, a year ago. Per share amounts for 1998 have been restated to reflect the 10% stock dividend paid to stockholders of record as of March 31, 1999.

For the six months ended June 30, 1999, net income increased 35% to $4,105,000, or $.95 per share, from $3,031,000, or $.70 per share, for the first half of 1998. Operating income increased 66% to $2,970,000, or $.69 per share, from $1,787,000, or $.41 per share, a year ago.

Gross premiums written advanced to $36,042,000 for the three months ended June 30, 1999, from $35,044,000 last year. Gross premiums written increased to $68,177,000 for the first half of 1999 from $64,386,000 for the corresponding prior-year period.

All of the increased premium writings were attributable to the Surety division, with gross premiums written for the Property and Casualty division decreasing by $710,000 or 9% over the prior year's quarter due to the previously announced discontinuation of the Arizona Private Passenger Automobile and California Homeowners program in 1999.

"The improved operating results for the 1999 second quarter reflect solid performance by Amwest's Surety division, marked by our strong branch structure and an increase in commercial surety writings," said John E. Savage, president and chief executive officer.

"Our progress was achieved despite the fact that loss and loss adjustment expenses were increased by $1,800,000, for prior accident years, primarily relating to the 1997 underwriting year for our commercial trucking product. This strengthening of our reserves was made as part of our ongoing analysis.

"During the first half of 1999, we re-engineered our commercial transportation product offerings, made several senior level personnel changes and withdrew from the Arizona Private Passenger and California Homeowners product lines," continued Savage. "Moreover, we believe that our targeted business mix continues to improve both in commercial transportation and specialty business written through our Interstate Program Manager's division."

On June 17, 1999, the company announced a program to repurchase up to 1,500,000 of its common stock, as market conditions warrant. To date, 13,500 shares have been repurchased.

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

Certain statements contained in this news release regard matters that 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 reengineering of the commercial transportation products; a deterioration in premiums written or losses incurred in the company's surety and other specialty businesses; a reduction in the investment yield earned on the company's investment portfolio; 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. -0-

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

                           Consolidated Statements of Operations
                          Three Months ended      Six Months ended
                                June 30,              June 30,
                            1999       1998       1999       1998

Premiums written          $36,042    $35,044    $68,177    $64,386

Net premiums earned       $26,986    $27,248    $53,979    $54,372
Net investment income       1,705      1,560      3,474      3,137
Net realized investment
 gains                      1,297      1,065      2,037      1,885
Commissions and fees          522        515      1,129        728
 Total revenue             30,510     30,388     60,619     60,122

Net losses and loss
 adjustment expenses       10,003     11,188     19,089     20,096
Policy acquisition costs   12,736     13,317     25,923     27,464
General operating costs     4,558      3,794      8,497      7,161
Interest expense              493        506      1,047        911
 Total expenses            27,790     28,805     54,556     55,632

Income before income
 taxes                      2,720      1,583      6,063      4,490
Provision for income
 taxes                        980        608      1,958      1,459
Net income                $ 1,740    $   975    $ 4,105    $ 3,031

Net earnings per
 common share (a):
  Basic                   $  0.40    $  0.23    $  0.95    $  0.72
  Diluted                 $  0.40    $  0.22    $  0.95    $  0.70
Operating earnings  per
 common share (a):
  Basic                   $  0.25    $  0.06    $  0.69    $  0.42
  Diluted                 $  0.25    $  0.06    $  0.69    $  0.41

                Consolidated Balance Sheet Information
                           June 30, 1999           December 31, 1998

Total assets                 $ 221,219                 $ 216,292
Total liabilities              158,047                   154,390
Total stockholders' equity      63,172                    61,902
 Book value per share          $ 14.63                   $ 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      Six months ended
                                June 30,                June 30,
                            1999        1998        1999        1998
Surety
 Gross premiums written   $28,916     $27,208     $53,949     $49,842
 Net premiums earned       21,395      21,631      42,895      43,562
 Net losses and loss
  adjustment expenses       3,747       6,689       9,388      11,597
 Loss and loss adjustment
  expense ratio                18%         31%         22%         27%

Property & Casualty
 Gross premiums written   $ 7,126     $ 7,836     $14,228     $14,544
 Net premiums earned        5,591       5,617      11,084      10,810
 Net losses and loss
  adjustment expenses       6,256       4,499       9,701       8,499
 Loss and loss adjustment
  expense ratio               112%         80%         88%         79%

Total Company
 Gross premiums written   $36,042     $35,044     $68,177     $64,386
 Net premiums earned       26,986      27,248      53,979      54,372
 Net losses and loss
  adjustment expenses      10,003      11,188      19,089      20,096
 Loss and loss adjustment
  expense ratio                37%         41%         35%         37%