Press Release

American Financial Group Announces Environmental Clean-up Settlement Relating to a Former Railroad Subsidiary's Site

CINCINNATI, Nov. 8 /PRNewswire-FirstCall/ -- American Financial Group, Inc. (NYSE: AFG) announced today the settlement of litigation over the allocation of environmental cleanup costs at a site that was part of the historical operations of a subsidiary's railroad predecessor. This settlement resolves the largest of the subsidiary's outstanding environmental exposures.

Based on the settlement, the Company has recorded an after-tax charge of $33.8 million ($.45 per share) to increase the subsidiary's reserves for environmental exposures. The charge has been recorded in the third quarter of 2004 as required under generally accepted accounting principles. Previously announced net earnings for the quarter and nine-months ended September 30, 2004 have been reduced to $138.2 million and $267.3 million ($1.85 and $3.58 per share), respectively. As shown in the attached summary of earnings, core earnings from insurance operations for those periods did not change.

Although management has been advised by counsel that the Company should be able to recover a significant amount of these costs from a financially viable third-party, no recovery asset has been recorded 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.


               AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES
                             SUMMARY OF EARNINGS
                     (In Millions, Except Per Share Data)

                                    Three months ended   Nine months ended
                                        September 30,       September 30,
                                      2004       2003     2004       2003

    Operating revenues              $ 926.6    $ 826.5 $2,656.0   $2,455.4
    Costs and expenses                867.2      754.4  2,433.6    2,304.7
                                       59.4       72.1    222.4      150.7
    Related income taxes               19.7       25.1     73.6       49.7
    Earnings from consolidated
      Insurance operations (a)         39.7       47.0    148.8      101.0
    Net investee earnings from
     Infinity                             -        3.8        -        8.3
    Core earnings from insurance
     operations (a)                    39.7       50.8    148.8      109.3

    Other items, net of tax:
      Special tax benefits (b)            -          -        -        5.5
      Realized investment
       gains (losses)                 140.2(c)    13.9    163.4(c)     6.2
      Litigation charges (d)          (33.8)     (23.1)   (33.8)     (23.1)
      Discontinued operations (e)      (1.0)        .4      (.8)       1.3
      Other                            (3.1)       (.4)    (4.7)      (2.0)
      Cumulative effect of
       accounting Changes (f)          (3.8)         -     (5.6)         -

    Net earnings                    $ 138.2      $41.6   $267.3      $97.2

    Diluted Earnings (Loss) per
     Common Share:
      Core from insurance
       operations(a)                   $.53       $.72    $2.00      $1.56
      Special tax benefits(b)             -          -        -        .08
      Realized investment
       gains (losses)                  1.87 (c)    .20     2.19(c)     .09
      Litigation charges (d)           (.45)      (.33)    (.46)      (.33)
      Discontinued operations (e)      (.01)       .01     (.01)       .02
      Other                            (.04)      (.01)    (.06)      (.03)
      Cumulative effect of
       accounting Changes(f)           (.05)         -     (.08)         -

    Net earnings                      $1.85       $.59    $3.58      $1.39

    Average number of Diluted Shares   74.8       70.0     74.6       69.8

     a) Reflects (a) 2004 3rd quarter losses of $22.8 million ($.30 per share)
        from four hurricanes, and (b) 2003 2nd quarter charges of
        $28.5 million ($.41 per share) for an arbitration decision relating to
        a 1995 property claim arising from a discontinued business and $6.7
        million ($.10 per share) for a reduction in estimated future
        profitability of in-force fixed annuities.
     b) Reflects tax benefits in 2003 relating to the Company's basis in
        Infinity Stock.
     c) Includes $134 million ($1.80 per share) gain on the Provident
        Financial Group investment related to the merger with National City.
     d) Includes a 2004 charge for the settlement of environmental litigation
        and a 2003 charge for the settlement of litigation in the California
        workers' compensation business.
     e) Represents operating results related to the planned disposal of
        Transport Insurance Company.
     f) Reflects the implementation of an accounting change in the third
        quarter related to utilizing the equity method of accounting for
        investments in limited liability companies as required by EITF 03-16,
        and in the first quarter related to long duration contracts mandated
        by Statement of Position 03-1.


                                                  September 30,   December 31,
                                                       2004           2003
    Selected Balance Sheet Data:
      Total Cash and Investments                     $15,503        $13,828
      Long-term Debt                                 $ 1,031           $837
      Payable to Subsidiary Trusts
        (Issuers of Preferred Securities)                $78           $265
      Shareholders' Equity                           $ 2,260        $ 2,076

      Book Value Per Share                           $ 30.68         $28.42
      Common Shares Outstanding                         73.7           73.1

SOURCE American Financial Group, Inc.
CONTACT: Anne N. Watson, Vice President-Investor Relations of American Financial Group, Inc., +1-513-579-6652