American Overseas Group Limited Announces Third Quarter 2013 Net Income of $9.6 Million and Operating Income of $1.6 Million

American Overseas Group Limited Announces Third Quarter 2013 Net Income of
$9.6 Million and Operating Income of $1.6 Million

HAMILTON, Bermuda, Dec. 20, 2013 (GLOBE NEWSWIRE) -- American Overseas Group
Limited (BSX:AORE) (Pink Sheets:AORE) ("AOG" or the "Company") today reported
net income of $9.6 million, or $3.49 per diluted share, for the quarter ended
September 30, 2013. This compares to a net income of $5.8 million, or $2.20
per diluted share, for the third quarter of 2012. The net income for the first
nine months of 2013 was $7.4 million, or $2.72 per diluted share. This
compares to a net loss of $1.1 million, or $0.41 per diluted share, for the
first nine months of 2012. Property/casualty premiums earned for the nine
months ended September 30, 2013 were $12.0 million compared to $0 for the
first nine months of 2012. The results for the third quarter and first nine
months of 2013 were impacted by net unrealized gains on credit derivatives of
$7.2 million and by net unrealized losses on credit derivatives of $0.5
million, respectively. Book value per share at September 30, 2013 was $26.84,
an increase of 3% from year-end 2012 when book value per share was $26.15.

During the third quarter of 2013, operating income was $1.6 million, or $0.58
per diluted share, compared to operating income of $0.9 million, or $0.35 per
diluted share, during the third quarter of 2012. Operating income for the
first nine months of 2013 was $7.8 million, or $2.86 per diluted share,
compared to operating income of $2.7 million, or $1.01 per diluted share, for
the first nine months of 2012. Operating book value per share was $49.05 at
September 30, 2013, an increase of 1% from year-end 2012 when operating book
value per share was $48.35. Operating income and operating book value per
share are non-GAAP financial measures. Please refer to "Explanation of
Non-GAAP Financial Measures" below for a description of operating income and
for a reconciliation of operating income to net income and operating book
value per share to book value per share.

Changes of Officers and Directors

Sean A. Symons, Chief Financial Officer of AOG and AORe, has left the Company
effective December 11, 2013.

Steven J. Tynan, Chairman, commenting on Mr. Symons' departure, said:"We want
to thank Sean for his contributions to the Company over the past years.We
appreciate his efforts and wish him all the best."

Forward-Looking Statements

This release contains statements that may be considered "forward-looking
statements" within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.These statements include, without
limitation, the Company's expectations respecting the volatility of its
insured portfolio, losses, loss reserves and loss development, the adequacy
and availability of its liquidity and capital resources, its current run off
strategy, its strategy for writing other reinsurance businesses and its
expense reduction measures.These statements are based on current expectations
and the current views of the economic and operating environment and are not
guarantees of future performance.A number of risks and uncertainties,
including economic competitive conditions, could cause actual results to
differ materially from those projected in forward-looking statements.The
Company's actual results could differ materially from those expressed or
implied in the forward-looking statements.Among the factors that could cause
actual results to differ materially are: (i) the Company's ability to execute
its business strategy, including with respect to new reinsurance businesses;
(ii) changes in general economic conditions, including inflation, foreign
currency exchange rates, interest rates and other factors; (iii) the loss of
significant customers with which AORE has a concentration of its reinsurance
in force; (iv) legislative and regulatory developments; (v)changes in
regulations or tax laws applicable to the Company or AORE or its customers;
(vi) more severe or more frequent losses associated with AORE's reinsured
portfolio; (vii) losses on credit derivatives; (viii) changes in the Company's
accounting policies and procedures that impact the Company's reported
financial results; (ix) the effects of ongoing and future litigation and (x)
other risks and uncertainties that have not been identified at this time.The
Company undertakes no obligation to revise or update any forward-looking
statement to reflect changes in conditions, events, or expectations, except as
required by law.

Explanation of Non-GAAP Financial Measures

The Company believes that the following non-GAAP financial measures included
in this press release serve to supplement GAAP information and are meaningful
to investors.

Operating income (loss): The Company believes operating income (loss) is a
useful measure because it measures income from operations, unaffected by
non-operating items such as realized investment gains or losses, unrealized
gains or losses on credit derivatives and foreign currency gains or losses.
Operating income (loss) is typically used by research analysts and rating
agencies in their analysis of the Company.

Operating book value per share and adjusted operating book value per
share:The Company believes the presentation of operating book value per share
and adjusted operating book value per share to be useful because they give a
measure of the value of the Company, excluding non-operating items such as
unrealized gains and losses on credit derivatives.The Company derives
operating book value by beginning with GAAP book value and adding back the
unrealized gain or loss portion of its derivative liability, excluding the
impact of credit impairments.Adjusted operating book value per share begins
with operating book value as calculated above and then adding or subtracting
the value of:

a. GAAP unearned premium reserves (on policies classified as financial
guarantee);

b. Deferred acquisition costs;

c. Unearned premiums reserves and the present value of estimated future
installment premiums net of ceding commissions on credit derivative policies
(discounted at 1.39% at September 30, 2013, and 0.72% at December 31, 2012);

d. Unrealized appreciation or depreciation of investments; and

e. Noncontrolling interest in subsidiary – Class B preference shares.

Credit impairments on insured credit default swap ("CDS") contracts:
Management measures and monitors credit impairments on AORE's credit
derivatives, which are expected to be paid out over the term of the CDS
contracts.The credit impairments are a non-GAAP financial measure which
management believes to be useful to analysts and investors in reviewing the
results of our entire portfolio of policies.Management considers credit
derivative policies as a normal extension of AORE's financial guarantee
business and reinsurance in substance.

Reconciliations of these non-GAAP financial measures to the most comparable
GAAP measures are set forth below.

Information About the Company

American Overseas Group Limited is a Bermuda-based holding company.Its
operating subsidiary, American Overseas Reinsurance Company Ltd., is a
property/casualty reinsurance company that currently writes short tail
non-catastrophe property/casualty reinsurance and historically wrote financial
guaranty reinsurance for U.S. and international public finance and structured
finance transactions.The Company's financial guaranty reinsurance business is
in run-off.More information can be found at www.aoreltd.com.


American Overseas Group Limited
Consolidated Balance Sheets
(unaudited)
As at September 30, 2013 and December 31, 2012
(dollars in thousands)
                                                           
                                                           
                                         September 30, 2013 December 31, 2012
Assets                                                      
Investments:                                               
Fixed-maturity securities held as                           
available for sale, at fair value
(Amortized cost: $146,200 and $154,334)   $151,727         $165,758
Other investments, at fair value (Cost:   21,979            --
$21,000 and $Nil)
Cash and cash equivalents                 26,321            36,317
Restricted cash                           42,145            45,139
Accrued investment income                 899                1,189
Reinsurance balances receivable, net      9,228             11,561
Funds withheld                            6,005              1,533
Recoverables on paid losses               5,526              6,687
Deferred policy acquisition costs         25,607             28,775
Deferred expenses                         280                346
Other assets                              1,213              90
Total Assets                              $290,930         $297,396
                                                           
Liabilities and Equity                                      
Liabilities:                                                
Loss and loss expense reserve             $20,090          $22,247
Unearned premiums                         65,048             72,538
Accounts payable and accrued liabilities  619                698
Derivative liabilities                    65,573            65,214
Redeemable Series A preference shares
($1,000 redemption value and $0.10 par
value; authorized shares - 75,000;issued 59,700             59,700
and outstanding shares - 59,700 at
September 30, 2013 and December 31,
2012)
Total Liabilities                         211,030            220,397
                                                           
Shareholders' Equity:                                       
Common shares                             2,721              2,677
Additional paid-in capital                232,452            231,891
Accumulated other comprehensive income    6,506              11,424
Retained deficit                          (168,644)          (176,004)
Total Shareholders' Equity                73,035             69,988
                                                           
Noncontrolling interest- Class B         6,865              7,011
preference shares of subsidiary
                                                           
Total Equity                              79,900             76,999
                                                           
Total Liabilities and Equity              $290,930         $297,396

                                                                         

American Overseas Group Limited
Consolidated Statements of Operations
(unaudited)
For the nine months ended September 30, 2013 and 2012
(dollars in thousands except share and per share amounts)

                    Three Months Ended            Nine Months Ended     
                     September 30,                  September 30,
                    2013       2012               2013       2012       
Revenues                                                             
                                                                    
Net premiums earned  $6,501   $3,797           $19,955  $12,192  
                                                                    
Change in fair value
of credit                                                            
derivatives
Realized gains and   356       599               1,456     1,846     
other settlements
Unrealized gains     7,154     4,180             (489)     (5,188)   
(losses)
Net change in fair
value of credit      7,510     4,779             967       (3,341)   
derivatives
Net investment       1,214     1,562             3,800     5,525     
income
Net realized gains
on sale of           748       355               794       355       
investments
Total
other-than-temporary --        --                --        --        
impairment losses
Portion of
impairment losses
recognized in other  --        --                --        --        
comprehensive income
(loss)
Net
other-than-temporary
impairment losses    --        --                --        --        
(recognized in
earnings)
                                                                    
Foreign currency     245       105               (147)     8         
losses (gains)
Total revenues       16,218    10,599            25,369    14,739    
                                                                    
Expenses                                                             
Losses and loss      3,191     1,665             7,826     5,785     
adjustment expenses
Acquisition expenses 2,124     1,540             5,940     5,343     
Operating expenses   1,349     1,553             4,164     4,689     
Total expenses       6,664     4,759             17,930    15,817    
                                                                    
Net income (loss)   $9,554   $5,839           $7,439   $(1,078) 
                                                                    
Net income (loss)                                                    
per common share:
Basic                $3.52    $2.20            $2.74    $(0.41)  
Diluted              3.49      2.20              2.72      (0.41)    
Weighted average
number of common                                                     
shares outstanding:
Basic                2,716,329 2,654,259         2,712,027 2,648,248 
Diluted              2,739,234 2,654,538         2,738,548 2,650,049 
                                                                    
                                                                    
                    Three Months Ended             Nine Months Ended
                     September 30, 2013             September 30, 2013
Segment information  P&C        FG         Total    P&C        FG         Total
                                                                    
Net earned premiums  $4,284   $2,217   $6,501 $11,975  $7,980   $19,955
                                                                    
Incurred losses      3,236     (45)      3,191   9,283     (1,457)   7,826
Impairment on credit --        (171)     (171)   --        (533)     (533)
derivatives
Acquisition costs    1,007     1,117     2,124   2,800     3,140     5,940
                                                                    
Net underwriting     $41      $1,316   $1,357 $(108)   $6,830   $6,722
(loss) gain
                                                                    
                                                                    
Loss ratio           75.5%      -9.7%      46.5%    77.5%      -24.9%     36.5%
Expense ratio        23.5%      50.4%      32.7%    23.4%      39.3%      29.8%
Combined ratio       99.1%      40.6%      79.1%    100.9%     14.4%      66.3%

Reconciliation of net income (loss) to operating income (loss):
(Dollars in thousands except share and per share amounts)

                                       Three Months Ended Nine Months Ended
                                        September 30,      September 30,
                                       2013      2012     2013     2012
Operating income                                                 
                                                                
Net income (loss)                       $9,554  $5,839 $7,439 $(1,078)
Less: Realized (gains) on sale of
investments and other-than-temporary    (748)    (355)   (794)   (355)
impairment losses
Less: Unrealized (gains) losses on      (7,154)  (4,180) 489     5,188
credit derivatives
Add back: credit impairment on          171      (271)   533     (1,082)
derivatives
Less: Foreign currency (gains) losses  (245)    (105)   147     (8)
                                                                
Operating income                        $1,578  $928   $7,814 $2,664
                                                                
                                                                
Net income (loss) per diluted share     $3.49   $2.20  $2.72  $(0.41)
Less: Realized (gains) on sale of
investments and other-than-temporary    (0.27)    (0.13)   (0.29)   (0.13)
impairment losses
Less: Unrealized (gains) losses on      (2.61)    (1.57)   0.18     1.96
credit derivatives
Add back: credit impairment on          0.06      (0.10)   0.19     (0.41)
derivatives
Less: Foreign currency (gains) losses   (0.09)    (0.04)   0.05     (0.00)
Operating income per diluted share      $0.58   $0.35  $2.86  $1.01

Reconciliation of book value per share to operating book value per share and
adjusted operating book value per share:
(Dollars in thousands except per share amounts)

                                              As at              As at
                                              September 30, 2013 Dec 31, 2012
                                                                
Shares outstanding                            2,721             2,677
Book Value Per Share                           26.84             26.15
Shareholders' Equity (Book Value)              73,035            69,988
Derivative liability ^(1)                      65,442            64,953
Credit impairments on derivatives              (5,004)           (5,537)
Operating book value per share                 49.05             48.35
Noncontrolling interest in subsidiary - Class  6,865             7,011
B preference shares
Unearned premiums ^(2)                         65,529            73,205
Deferred acquisition costs                     (25,607)          (28,775)
Present value of installment premiums ^(3)     6,923             8,942
Unrealized gains on investments                (6,506)           (11,424)
Adjusted operating book value per share        $66.40           $66.64

(1) Represents the unrealized gains (losses) portion of the derivative
liability.

(2) Includes unearned premium balances on financial guaranty, property
casualty and credit derivative policies. The unearned premiums on financial
guaranty policies include the present value of future installment premiums,
net of ceding commissions.

(3) Estimated present value of future installments, net of ceding commissions,
on policies written in credit derivative form only. At September 30, 2013 and
December 31, 2012, the discount rate was 1.39% and 0.72%, respectively.

The Company has posted its third quarter 2013 financial results to its website
at www.aoreltd.com under "Investor Information".

CONTACT: American Overseas Group Limited
         info@aoreltd.com