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                                  EXHIBIT 99.1


[AMERICAN EAGLE LOGO]


                                  NEWS RELEASE


                           AMERICAN EAGLE GROUP, INC.
                ANNOUNCES COMPLETION OF ITS CAPITAL PROGRAM AND
     FORMATION OF A STRATEGIC ALLIANCE WITH AMERICAN FINANCIAL GROUP, INC.

Dallas, Texas; Wednesday, November 6, 1996 -- American Eagle Group, Inc.
(NYSE:FLI) today announced the signing of agreements regarding a $35 million
capital investment by American Financial Group, Inc. (NYSE:AFG) in American
Eagle Group, Inc. convertible preferred stock. This transaction is the result
of American Eagle's capital raising efforts begun in the spring of 1996.

In addition to the capital investment, the agreements also address various
strategic elements regarding future cooperation and activities of the two
companies. These strategic alliances will allow American Eagle's marketing and
underwriting of both new and expanded aviation insurance product lines, and
American Eagle's access to the A.M. Best "A" rated capacity of American
Financial Group. The potential expansion of aviation product lines will provide
American Eagle with additional revenue opportunities in the aviation insurance
marketplace for both existing and new aviation products.

American Financial Group will nominate two senior executives to join the
American Eagle Board of Directors upon closing of the transaction.

M. Philip Guthrie, Chairman and Chief Executive Officer of American Eagle
stated, "All of us at American Eagle are extremely pleased with this new
strategic alliance. Not only does it provide a substantial capital investment
on attractive terms to American Eagle, but additional strategic benefits and
revenue are expected from this alliance. The financial strength and expertise
of American Financial Group will assist the future development of American
Eagle. We look forward to the experience and expertise that the American
Financial executives will bring to our Board. The access to A. M. Best "A"
rated capacity from American Financial Group, coupled with additional product
offerings and expansions of existing American Eagle product lines, should yield
substantial benefits to American Eagle and its stockholders.  American Eagle
believes that the combination of additional capital and the strategic alliance
will have a very positive, long-term effect on the company's performance in
1997 and beyond. We also believe that the impact of this strategic alliance and
the new capital will have a positive impact on operating results and
shareholder value in 1997 and beyond despite the dilutive effect of the
preferred stock.

Under the capital terms of the strategic alliance, American Financial Group has
agreed to invest $35 million in an American Eagle Series D Preferred Stock.
This security will carry a cumulative dividend rate of 9% per annum payable
quarterly, with an option for the first five years for American Eagle to pay
these dividends in kind with additional shares of Series D Preferred Stock. The
preferred stock is convertible at a conversion price of $5.25 per share into
common stock of American Eagle, subject to standard anti-dilution provisions.
At the time of issuance, the Series D Preferred Stock will be convertible into
approximately 48% of the outstanding common stock (calculated on a fully
converted basis). The preferred stock matures in 20 years with mandatory
redemption of 10% of principal per year beginning in year eleven. The preferred
stock is callable at par by American Eagle at any time. In the event that the
preferred stock is called prior to the seventh anniversary of its issuance, the
holder will receive warrants to purchase American Eagle common stock at $5.25
per share exercisable any time during the period between the call date and the
seventh anniversary of the issuance of the preferred stock. The preferred stock
carries limited voting rights equal, in the aggregate, to 20% of the total
votes eligible to be cast on matters submitted to holders of common stock. Upon
default in the payment of dividends for two consecutive quarters or any
mandatory redemption, the preferred stock will have the right to cast the
number of votes equal to the number of shares of common stock into which it is
then convertible, and the preferred stock, voting as a class, will be entitled
to elect a majority of the directors. Until the seventh anniversary of the
issuance of the preferred stock, American Financial Group has the right to
nominate for election to American Eagle's Board of Directors 30% of the number
of directors. American Financial Group has also entered into a voting agreement
limiting its total voting rights for the first 3-1/2 years after issuance of
the preferred stock to 20% of the total votes eligible to be cast on matters
submitted to holders of common stock. As part of the overall transaction,
American Eagle has granted to American Financial Group warrants for 800,000
shares of American Eagle common with an exercise price of $3.45 per share. Such
warrants will become exercisable in the event that the company terminates its
agreement with American Financial Group and enters into a competing transaction
with another party. These warrants will be canceled upon closing of the
transaction with American Financial Group.

Proceeds from the transaction will be utilized to contribute capital to
American Eagle Group's insurance company subsidiary, to reduce bank debt, and
for other general corporate purposes.

In connection with the transaction, the company would record, at the time of
closing of the transaction, a recapitalization charge of $15 million before
federal income tax. This recapitalization charge will provide additional
strengthening of American Eagle's balance sheet and overall reserve levels and
is intended to cover contingencies and estimated exposures associated with
various previously reported strategic actions and product line
discontinuations.

The transaction is currently expected to close prior to December 31, 1996.

Closing of the transaction is subject to approval by American Eagle
stockholders and applicable regulatory agencies and to other customary
conditions. The Company's financial adviser, CS First Boston, advised the
Company's Board of Directors that the transaction with American Financial Group
was fair to the Company from a financial point of view. Mason Best Company, the
holder of approximately 42% of American Eagle's outstanding common stock, has
agreed to vote its shares of common stock in favor of the transaction.

American Eagle will hold a special meeting of stockholders on December 30, 1996
to vote upon the transaction. Holders of record of American Eagle Common Stock
at the close of business on December 4, 1996 will be entitled to vote at the
meeting. 

American Eagle Group is an insurance holding company that, through its
subsidiaries, markets and underwrites specialized property and casualty
coverages in selected niche markets. These markets include general aviation,
selected artisan contractors, and yachts. The company's business is organized
in three divisions, the Aviation Division, headquartered in Dallas, Texas; the
Property & Casualty Division, headquartered in Sacramento, California; and the
Marine Division, headquartered in Baltimore, Maryland.

This news release, other than historical information, consists of
forward-looking statements that involve risks and uncertainties, including
fluctuations in results, impact of competitive products and pricing and other
risks detailed from time to time in American Eagle's SEC reports, including the
Proxy Statement relating to this transaction.





Contacts:                       
                                
American Eagle Group, Inc.            M. Philip Guthrie, Chairman, CEO
12801 N. Central Expressway           (972) 448-1460
Suite #800                            Richard M. Kurz, Sr. Vice President, CFO
Dallas, TX 75243                      (972) 448-1477