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                      Allied Group: Dividend News Release

CONTACT:  Jim Shaffer, Sr. Vice President & CFO
          (515) 280-4326



                  ALLIED GROUP, INC. ANNOUNCES DIVIDEND

Des Moines, Iowa, August 26, 1998 -- ALLIED Group, Inc. (NYSE symbol GRP)
announced that its Board of Directors declared a third-quarter cash dividend
of $0.13 per share at their meeting today.  The dividend is payable September
25, 1998 to stockholders of record on September 11, 1998.

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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