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                               FOURTH AMENDMENT TO
                       TERM CREDIT AGREEMENT AND GUARANTY

         THIS  AMENDMENT  dated as of November  17, 1997 is entered  into by and
among ALLIED Group, Inc.  ("Company"),  State Street Bank and Trust Company, not
in its  individual  capacity but as trustee for The ALLIED Group  Employee Stock
Ownership Trust ("ESOP Trustee"), Bank of Montreal,  Chicago Branch ("BOM"), and
Norwest Bank Iowa,  National  Association  ("Norwest")  to amend the Term Credit
Agreement and Guaranty dated March 13, 1995, as amended October 12, 1995,  March
5, 1996, and September 26, 1997 ("Agreement").

         1. This Amendment shall be effective as of November 1, 1997.

         2. Subsection  (ii) of Section  6.1.25 of the  Agreement  is amended to
            read as follows:

         (ii) the sum of the Company's  consolidated real estate,  mortgages and
         non-affiliated  equity  securities  not to exceed 10% of the  Company's
         consolidated Total Assets.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed  by  their  respective  officers  as of the day and  year  first  above
written.

ALLIED Group, Inc.                       The ALLIED Group Employee Stock
                                         Ownership Trust

By:  /s/ Douglas L. Andersen             By State Street Bank and Trust Company,
   ------------------------------        not individually, but solely in its  
         Douglas L. Andersen             capacity as ESOP Trustee   
   ------------------------------                         
Title:   President                                             


                                         By:  /s/ Kelly Driscoll
                                            ------------------------------------
Bank of Montreal, Chicago Branch                  Kelly Driscoll
                                         Title:   Vice President
By:  /s/ K. Daniel Streiff                     ---------------------------------
   ------------------------------
         K. Daniel Streiff
Title:   Managing Director
      ---------------------------


Norwest Bank Iowa, National
Association


By:  /s/ John D. Landry
   ------------------------------- 
         John D. Landry
Title:   Assistant Vice President
      ----------------------------