Great American Financial Resources 8-K Current report

FOR IMMEDIATE RELEASE

For: Great American Financial Resources, Inc.	Contact: Mark F. Muething
250 E. Fifth Street	Executive Vice President
Cincinnati, OH 45202	513-333-5515

Web Site: http://www.gafri.com

GREAT AMERICAN FINANCIAL RESOURCES REPORTS

2ND QUARTER RESULTS

CINCINNATI, OHIO - July 21, 2004 - Great American Financial Resources, Inc. ("GAFRI") (NYSE: GFR) today reported net income of $15.0 million ($0.32 per share) for the second quarter of 2004 compared to $7.0 million ($0.16 per share) for the second quarter of 2003. For the first six months of 2004, net earnings were $32.0 million ($0.68 per share) compared to $15.3 million ($0.36 per share) for the same period in 2003.

Many investors and analysts focus on "core net operating earnings" of companies, setting aside items that are not considered to be part of the ongoing earnings of the company. Core net operating earnings, which exclude the effects of realized gains (losses), an accounting change and losses on retirements of subsidiary trust securities were $17.9 million ($0.38 per share) for the second quarter of 2004 compared to $9.3 million ($0.22 per share) for the second quarter of 2003. Core net operating earnings for the first six months of 2004 were $32.3 million ($0.68 per share) compared to $22.9 million ($0.54 per share) in 2003.

The increase in core net operating earnings for the second quarter reflects primarily a 2003 aftertax charge to earnings of $8.1 million ($0.19 per share) related to the negative effect of lower interest rates on GAFRI's fixed annuity operations.

Each of the Company's lines of business recorded improved results for the first six months of 2004. These improvements were partially offset by the issuance in late 2003 and early 2004 of long-term debt to pay down lower costing bank debt with a shorter maturity, resulting in higher interest expense in 2004. In addition, core net operating earnings per share reflect the greater number of shares outstanding as a result of GAFRI's common stock rights offering in 2003. Based on the current interest rate environment, GAFRI expects that core net operating earnings for the entire year of 2004 will exceed those of 2003 by 25% - 30% and core net operating earnings per share will exceed 2003 by 15% - 20%.

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GAFRI's statutory premiums in the first six months of 2004 were approximately $550 million compared to $650 million in the same period in 2003. GAFRI continues to maintain discipline in setting its commission and interest rates, resulting in slowed sales of single premium annuities. All other continuing lines of business, including the Company's 403(b) annuity line and its supplemental health operations, reported an increase in premiums.

At June 30, 2004, GAFRI's book value was approximately $17.90 per common share. This amount includes unrealized gains on equity securities but excludes unrealized gains on fixed maturity securities.

Acquisition of Fixed Annuity Block of Business

As previously announced, on May 17, 2004, GAFRI acquired the fixed annuity block of business from National Health Insurance Company. The block consisted of approximately 33,000 policies with statutory reserves of approximately $780 million as of March 31, 2004. The second quarter results include earnings on this block after the date of acquisition.

Provident Bank Merger with National City Bank Completed

The proposed merger between Provident Financial Group and National City Corporation was completed on July 1, 2004. GAFRI received approximately 1.7 million shares of National City common and common equivalent shares. GAFRI will record a third quarter pretax realized gain of approximately $40 million ($26 million aftertax).

GAFRI's subsidiaries include Great American Life Insurance Company, Annuity Investors Life Insurance Company, United Teacher Associates Insurance Company, Loyal American Life Insurance Company, Great American Life Assurance Company of Puerto Rico, and Manhattan National Life Insurance Company. Through these companies, GAFRI markets fixed and variable annuities and a variety of supplemental, long-term care and life insurance.

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 results could differ materially from those projected. Factors that could cause such differences include, but are not limited to: changes in economic conditions, regulatory actions and competitive pressures. 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.

Conference Call

GAFRI's results will be discussed as part of a conference call being conducted by American Financial Group, Inc., GAFRI's majority shareholder. The call will be held at 11:30 a.m. (EDT) today. Toll-free telephone access will be available by dialing1-800-299-8538. Please dial in 5 to 10 minutes prior to the scheduled start time of the call. A replay of the call will also be available at around 1:30 p.m. (EDT) today until 8:00 p.m. on July 28, 2004. To listen to the replay, dial1-888-286-8010 and provide the confirmation code17924068. The conference call will also be broadcast over the Internet. To listen to the call via the Internet, go to AFG's website,www.afginc.com, and follow the instructions at the Webcast link within theInvestor Relations section.

GREAT AMERICAN FINANCIAL RESOURCES, INC.

Condensed Income Statement

(In millions, except per share amounts)

	Three months ended       June 30,		Six months ended      June 30,
	2004	2003	2004	2003
Revenues:
Net investment income	$131.4	$125.5	$258.8	$255.1
Life, accident and health premiums (a)	87.5	83.2	177.8	162.7
Other income	27.5	21.2	46.0	38.7
Total revenues	246.4	229.9	482.6	456.5
Benefits and expenses (b):
Benefits to policyholders	139.7	140.2	281.3	278.1
Insurance acquisition expenses	32.7	33.3	62.8	59.6
Interest and other financing expenses	6.4	6.1	14.2	12.0
Other expenses	41.5	37.9	78.0	75.1
Total benefits and expenses	220.3	217.5	436.3	$424.8
Core operating earnings	26.1	12.4	46.3	31.7
Related income taxes	8.2	3.1	14.0	8.8
Core net operating earnings	17.9	9.3	32.3	22.9
Non-operating items, aftertax:
Realized gains (losses)	(2.9)	(2.3)	2.8	(7.6)
Loss on retirement of subsidiary trust     securities	- -	- -	(0.9)	- -
Cumulative effect of accounting change (c)	-	-	(2.2)	-
Net income	$ 15.0	$  7.0	$ 32.0	$ 15.3
Average common shares outstanding - diluted	47.3	42.6	47.3	42.6
Diluted earnings per share data:
Core net operating earnings	$ 0.38	$ 0.22	$ 0.68	$0.54
Realized gains (losses)	(0.06)	(0.06)	0.06	(0.18)
Loss on retirement of subsidiary trust     securities	- -	- -	(0.02)	- -
Cumulative effect of accounting change (c)	-	-	(0.04)	-
Diluted net income per common share	$ 0.32	$ 0.16	$ 0.68	$ 0.36
Supplemental Premium Information (a)
Fixed Annuity Premiums	$177.8	$214.3	$327.2	$421.7
Variable Annuity Premiums	26.5	34.3	54.2	64.9
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1. For GAAP income statement purposes, annuity premiums are accounted for as deposits rather than revenues.
2. Includes a 2003 non-cash charge of $12.5 million ($8.1 million aftertax) to write-off a portion of deferred acquisition costs and increase certain insurance accruals due primarily to changes in assumptions related to investment yields.
3. Reflects the implementation of an accounting change related to long duration contracts mandated by Statement of Position 03-1.