February 14, 2007

Western National Mutual Insurance Group Announces Year End 2006 Results

Western National Insurance Group today announced their full year financial results through December 31, 2006.These results reflect the pooled financial results of all companies in the group. For year-to-year comparison purposes, 2005 was adjusted to reflect the combined results of the Western National Group and the Farmers Home Group, although the pooling was effective 1/1/2006, with the actual change in management and control being effective 6/5/2006. Significant comparative financial measures include:

“2006 was another extraordinary year for Western National, producing a result that once again exceeds that of the prior year, and the industry as a whole, ” said Stuart Henderson, president & chief executive officer. “This was achieved in the face of tornado/hail/wind losses in the third and fourth quarters, and some development in the September 2005 hail losses. The affiliation with FHG grew our assets, our premium, and our geographic reach – in addition to adding talent to our staff and distribution force. However, the transaction also added catastrophe losses and significant, although non-recurring, expenses ($4 million). Those expenses, plus the ongoing cost of the new end-to-end Policy Administration system, added almost 3 points on our expense ratio (27%). We will get back to our targeted 25% in 2007.”

Western National Insurance Group consists of five regional Property and Casualty Insurance companies with shared administrative offices in Edina, Minnesota. Western National Mutual Insurance Company writes personal and commercial lines in MN, WI, SD, ND and IA. Western National Assurance Company writes personal and commercial lines in WA and OR (and maintains an Underwriting and Claim office in Seattle). Farmers Home Mutual Insurance Company, Western Home Insurance Company and Pioneer Insurance Company write personal lines in MN, WA, NV and UT. All of the companies distribute their insurance products solely via the Independent Agency system.

For further information, please contact:

Mary S. Manley
SVP Corporate Affairs & Administration

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