CERG Ceres (MM)

CINCINNATI, May 30 /PRNewswire-FirstCall/ -- Great American Financial Resources, Inc. ("GAFRI") (NYSE:GFR) today announced that GAFRI has entered into an agreement with American Enterprise Mutual Holding Company through its affiliated companies whereby American Enterprise will acquire through reinsurance the major medical business of the insurance subsidiaries of Ceres Group, Inc. (NASDAQ:CERG) after completion of the merger of Ceres into GAFRI. American Enterprise will pay an $11 million ceding commission in connection with the reinsurance. In addition, as part of the transaction, certain employees of the Ceres major medical business will be given offers of employment with American Enterprise. On May 1, 2006, GAFRI and Ceres entered into a Merger Agreement whereby each outstanding share of common stock of Ceres will be converted into the right to receive $6.13 cash and Ceres will become a wholly-owned subsidiary of GAFRI. Completion of the transaction with American Enterprise is subject to certain conditions, including regulatory approvals and completion of the merger of Ceres into GAFRI, which is expected to occur in the third quarter of 2006. (Logo: http://www.newscom.com/cgi-bin/prnh/20041206/CLM061LOGO ) About GAFRI GAFRI is a Cincinnati-based insurance holding company with $12 billion in assets. The Company's subsidiaries include Great American Life Insurance Company, Annuity Investors Life Insurance Company, United Teacher Associates Insurance Company (headquartered in Austin, Texas) and Loyal American Life Insurance Company. Through these companies, GAFRI markets traditional fixed, indexed and variable annuities and a variety of supplemental insurance products. About Ceres Group Ceres Group, Inc., through its insurance subsidiaries, provides a wide array of health and life insurance products through two primary business segments. Ceres' Medical Segment includes major medical health insurance for individuals, families, associations and small businesses. The Senior Segment includes senior health, life and annuity products for Americans age 55 and over. To help control medical costs, Ceres also provides medical cost management services to its insured. Ceres' nationwide distribution channels include independent and career agents, as well as electronic distribution systems. Ceres is included in the Russell 3000(R) Index. For more information, visit http://www.ceresgp.com/. About American Enterprise American Enterprise Mutual Holding Company, through its affiliated companies World Insurance Company and American Republic Insurance Company, provides customers with financial security through affordable health care and related services while preserving freedom of choice. Both World Insurance Company and American Republic Insurance Company are rated A- (Excellent) by A.M. Best (February 2006). More than 900 home office employees and more than 18,000 independent sales representatives, managing general agents, independent marketing organizations and career agents stand behind the name. Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 encourages corporations to provide investors with information about the Company's anticipated performance and provides protection from liability if future results are not the same as management's expectations. Documents may contain certain forward-looking statements that are based on assumptions which management believes are reasonable but, by their nature, inherently uncertain. Future events and results could differ materially from those projected. Factors that could cause such differences include, but are not limited to: changes in economic conditions, market interest rates, regulatory actions, failure to receive necessary regulatory approvals or satisfy other closing conditions and operating results and physical condition of the subject property. Forward-looking statements are made only as of the date of their release and GAFRI does not have any obligation to update any forward-looking statements to reflect subsequent events or circumstances. http://www.newscom.com/cgi-bin/prnh/20041206/CLM061LOGO http://photoarchive.ap.org/ DATASOURCE: Great American Financial Resources, Inc. CONTACT: Mark F. Muething, Executive Vice President of Great American Financial Resources, Inc., +1-513-333-5515 Web site: http://www.gafri.com/ http://www.ceresgp.com/

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