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                      Allied Group: Dividend News Release

 
Contact: Jim Shaffer
         Chief Executive Officer
         515-280-4326
 


                     ALLIED GROUP, INC. INCREASES DIVIDEND

Des Moines, Iowa, March 3, 1998 -- ALLIED Group, Inc. (NYSE symbol GRP)
announced that its Board of Directors declared a first-quarter cash dividend of
$0.13 per share at their meeting today.  The dividend is payable March 27, 1998
to stockholders of record on March 16, 1998.

Another action announced by the Company's Board of Directors today was the
election of  Stephen S. Rasmussen as Executive Vice President of ALLIED Group,
Inc.  Mr. Rasmussen was also elected to the same position at the Company's
property-casualty subsidiaries and  its affiliate, ALLIED Mutual Insurance
Company.

ALLIED Group, Inc. is a regional property-casualty insurance holding company
specializing in personal lines.  The Company's property-casualty subsidiaries
use independent agencies, exclusive agencies, and direct response marketing to
offer products in central and western states.

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