March 23, 2006

Western National Mutual Insurance Group Announces Affiliation Agreement with Farmers Home Group

Western National Insurance Group, based in Edina, MN, today announced an affiliation with Farmers Home Group of Bloomington, MN. The Boards of Directors of the respective companies approved the transaction at meetings held yesterday. 

It is anticipated that the Farmers Home companies will continue to operate as separate entities in their personal lines niche, under the joint management and control of Western National. 

"We are looking forward to working with the fine staff of Farmers Home Group," said Stuart Henderson, president and chief executive officer of Western National. "Given the quality of the underlying book of business of Farmers Home, and the economies of scale we will possess as a combined group to reduce volatility and expenses, this transaction will produce increased profit and stability for our mutual policyholders." 

The transaction is subject to final regulatory and policyholder approval, with a final closing expected by June 2006. 

Western National Insurance Group consists of two regional property and casualty insurance companies with direct written premium in excess of $210 million. Western National Mutual Insurance Company is headquartered in Edina, Minnesota and writes personal and commercial lines in MN, WI, SD, ND and IA. Western National Assurance Company maintains offices in Seattle, Washington, and writes the same types of business in WA and OR. The company distributes its insurance products solely via the Independent Agency distribution system. 

Farmers Home Group consists of three regional property and casualty companies, and a brokerage (FHG Services, Inc.). The 100 plus year old companies specialize in personal lines, writing total premium in excess of $33 million in MN, WA, AZ, NV and UT, and have total assets over $40 million. Independent Agents are the sole distribution system for Farmers Home.

For further information, contact:

Mary S. Manley
SVP Corporate Affairs & Administration

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