Farmers Insurance Group of Companies(R)     CONTACT: Jeff Beyer 323-930-4149

NEWS BUREAU
4680 Wilshire Blvd.
Los Angeles, CA 90010

FOR IMMEDIATE RELEASE

                   FARMERS ANNOUNCES PRIVATE PLACEMENT OF
               $650 MILLION OF TRUST SURPLUS NOTE SECURITIES

LOS ANGELES (July 17, 1998) - Farmers Insurance Exchange, Truck Insurance
Exchange and Fire Insurance Exchange sold $500 million aggregate principal
amount of 30-year 7.05% surplus notes, and $150 million aggregate principal
amount of 50-year 7.20% surplus notes, announced Farmers Group, Inc. The
Exchanges issued the surplus notes to a newly-formed Delaware business
trust, Farmers Exchange Capital, which purchased the surplus notes with the
proceeds from a concurrent sale of $650 million aggregate liquidation
amount of trust securities.

The net proceeds from the sale of the surplus notes were used to repay $650
million of outstanding certificates of contribution previously issued by
the Exchanges to Farmers Group, Inc. and certain of its subsidiaries. The
new surplus notes of the Exchanges have lower interest rates and
significantly longer maturities than the certificates of contribution that
were repaid.

The trust securities were sold in a private placement pursuant to Rule 144A
under the Securities Act of 1933. The trust securities and the surplus
notes have not been registered under the Securities Act, and may not be
offered or sold in the United States absent registration or applicable
exemption from registration requirements.

This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the trust securities or the surplus notes,
nor shall there be any sale of the trust securities or surplus notes in any
state in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of such state.