EXHIBIT 99.1


                  AMERICAN FINANCIAL GROUP, INC. NEWS RELEASE
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Date:        May 27, 2003           Contact:   Anne N. Watson
                                               Vice President-Investor Relations
For Release: Immediate              Phone:     (513) 579-6652
                                    Web Sites: www.amfnl.com
                                               www.GreatAmericanInsurance.com


                         AMERICAN FINANCIAL GROUP, INC.
                 ANNOUNCES EFFECT OF RECENT ARBITRATION DECISION

Cincinnati, Ohio - May 27, 2003 - American Financial Group, Inc. (NYSE: AFG)
announced last week that its principal property and casualty insurance
subsidiary, Great American Insurance Company, had been notified of an
arbitration decision resulting from its share of a 1995 property fire and
business interruption claim. Unless challenged by one of the other parties, it
is anticipated that the decision of the panel will be submitted for entry of
judgment to the Federal District Court and become final shortly. Based on these
developments, AFG today announced that its second quarter earnings will include
an after tax charge of approximately $29 million, or $.41 per share, for the
claim.

The charge represents Great American's share of the claim, net of previously
recorded reserves and payments. The Company was a 9.5% participant with a number
of other companies in the insurance pool that insured the loss during the 1995
coverage year. Great American reduced its participation to 0.2 percent in the
following year and no longer participates in the pool.

Based on appraisals, legal advice and relevant policy provisions, Great American
made substantial payments to the insured subsequent to the loss. In addition,
Great American had established reserves in excess of payments previously made
with respect to disputed portions of the loss. Carl H. Lindner III, co-president
and head of AFG's property and casualty operations, stated, "We were surprised
and disappointed with the outcome of this arbitration. We believe that the
result reached beyond reasonable interpretation of the underlying facts and the
policies written. Nevertheless, we look forward to closing this disputed
matter."

As a result of this matter, and after review of the Company's earnings to date,
Mr. Lindner added, "We are revising our 2003 core earnings expectation to $2.10
to $2.30 per share, including the arbitration charge."

American Financial Group, Inc. is engaged primarily in property and casualty
insurance, focusing on specialized commercial products for businesses, and in
the sale of annuities, life and supplemental health insurance products.

This press release contains certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All
statements in this press release not dealing with historical results are
forward-looking and are based on estimates, assumptions and projections.
Examples of such forward looking statements include statements relating to: the
Company's expectations concerning market and other conditions, future premiums,
revenues, earnings and investment activities; expected losses and the adequacy
of reserves for asbestos, environmental pollution and mass tort claims; rate
increases, improved loss experience and expected expense savings resulting from
other recent initiatives.




Actual results could differ materially from those expected by AFG depending on
certain factors including but not limited to: the unpredictability of possible
future litigation if certain settlements do not become effective, changes in
economic conditions including interest rates, performance of securities markets,
and the availability of capital, regulatory actions, changes in legal
environment, judicial decisions and rulings, tax law changes, levels of
catastrophes and other major losses, the actual amount of liabilities associated
with certain asbestos and environmental related insurance claims, adequacy of
loss reserves, availability of reinsurance and ability of reinsurers to pay
their obligations, competitive pressures, including the ability to obtain rate
increases, driving patterns and other changes in market conditions that could
affect AFG's insurance operations.


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