American National Reports 2002 Results

February 10, 2003

Texas-based American National Insurance Company reports gain from operations after tax for the year 2002 was $102,067,000 ($3.86 per share) versus $60,720,000 ($2.29 per share) for 2001, a 68 percent increase. However, primarily due to federal income tax accrual adjustments, the fourth quarter 2002 shows an after tax loss from operations of $1,862,000 versus an after tax gain from operations of $4,768,000 for the same period in 2001. Gain from operations after tax excludes the after tax effect of realized investment gains and losses.

Net income for the year 2002 was $16,855,000 ($0.64 per share) compared with $64,931,000 ($2.45 per share) for 2001. For the fourth quarter of 2002, the Company reports a net loss of $62,800,000 compared with a net loss of $8,656,000 for the fourth quarter of 2001.

The net losses for the fourth quarter in both years and the decrease in net income for 2002 were primarily due to losses on investments resulting from other-than-temporary impairments. The impairments totaled $139,672,000, before tax for 2002. Of this amount, $92,061,000 were other-than-temporary impairments of equity holdings that were recognized under generally accepted accounting principles. Such impairments were based on market price versus cost, without regard for the ability to hold the equities through extended market cycles.

The overall increase in operating gains for 2002 is attributed to improved operations and to the comparison with 2001 operating earnings. The operating results for 2001 were negatively impacted by $12,500,000 in after-tax losses incurred on certain reinsurance programs related to the events of September 11, 2001 as well as the establishment of premium deficiency reserves for health insurance that totaled $15,200,000 after tax.

The improvement in operations for 2002 primarily resulted from changes in the Multiple Line Property and Casualty operations and improvement in the Health Division. The Multiple Line Property and Casualty operations instituted a number of activities including improved risk selection, appropriate rate activity, and expense management actions that are resulting in improved combined loss ratios. The addition of the Farm Family group of companies, acquired in 2001, also added to the Multiple Line operating results. The improvement in the Health Division was primarily the result of a change in product mix.

Total premiums for 2002 were $1,640,822,000, an increase of 13.8 percent, while total revenues for 2002 were $2,241,343,000, up 5 percent over 2001. Stockholders equity was $2,873,729,000 at December 31, 2002 compared with $2,936,339,000 at Dec. 31, 2001.

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