September 7, 2004

Western National Insurance Group Announces Upgrade to A- (Excellent) by A.M. Best

Western National Insurance Group announced that, effective September 3, 2004, A.M. Best has upgraded the financial strength rating of the Group and its member companies (Western National Mutual Insurance Company and Western National Assurance Company) to A- (Excellent). Due to the Group's strong capitalization, extensive local market knowledge, and sound underwriting results, the outlook was noted as "Stable." 

The Western National Companies had been rated in the A category by A.M. Best for most of its over 100 year history. The capital and performance challenges that caused the companies to have a lesser rating as of November of 2000 were created in large part by multiple severe weather losses starting in 1998 and continuing through 2001. Millions of dollars were paid to policyholders who filed claims in that period, but the result for the Companies was reduced financial resources. 

"The actions taken by management over the last two and a half years, together with the hard work and loyal support of our Independent Agents and employees, have resulted in this recognition of our renewed financial strength by A.M. Best" said President & CEO, Stu Henderson. "The fact is our financial and market strength has improved significantly over that period of time - enough to have supported 2 upgrades by A.M. Best since 2000. This is truly amazing, particularly given the number of companies that have either been downgraded or placed in rehabilitation or runoff during that same period." 

The Company noted that its financial results to date continue to be stronger than the industry as a whole, and that it continues to see reasonable premium growth at responsible rates. By the end of 2004, the Companies' Policyholder Surplus is expected to be at least double the amount it recorded at year end 2000. "After several years of moratoriums on growth, we are very pleased to once again be in a position to serve the insurance needs of new customers who desire a relationship with a strong, stable, regional mutual insurance company that will be there when a covered claim is filed. After all, that is the reason we exist!" concluded Mr. Henderson.

Western National Insurance Group consists of two regional Property and Casualty Insurance companies with annual direct written premium in excess of $195 million. Western National Mutual Insurance Company (with headquarters in Edina, Minnesota) currently offers insurance products in Minnesota, South Dakota, Iowa, and Wisconsin. Western National Assurance Company (with offices in Seattle, Washington) currently offers insurance products in the states of Washington and Oregon. The company distributes its insurance products solely via the Independent Agency distribution system.

For further information, contact:

Mary S. Manley

SVP Corporate Affairs & Administration