AFG Notes Preliminary Katrina Losses

September 19, 2005

American Financial Group Inc. has issued a preliminary estimate of its expected loss from Hurricane Katrina.

Based on information available at this time, AFG estimates that its after-tax loss, net of reinsurance, will be approximately $20 million. This preliminary estimate is based on a significant amount of judgment as well as information derived from catastrophe modeling software. However, due to legal and regulatory uncertainty, the size and complexity of the hurricane, limited access to impacted areas and the nature of the losses being reported, our aggregate loss will not be known for some time.

Substantially all of the claims reported are from commercial policies covering businesses located in the affected areas of Louisiana, Mississippi and Alabama.

AFG’s insurance operations not affected by Hurricane Katrina continue to report strong operating earnings. Even with the currently estimated loss from this unprecedented catastrophe, the company believes that the core earnings guidance for 2005 of between $3.40 and $3.70 per share remains achievable. However, it is still early in the process and there could be further developments that are unforeseen at this time.

Through the operations of the Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of retirement annuities, supplemental insurance and life products.

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