*  Net income:
      -- $.42 per share for third quarter 2009 compared to $.22 per share loss for 2008
      -- $1.70 per share for first nine months of 2009 compared to $.50 per share for 2008
 *  Book value per share of $13.47 increased 20% for the first nine months of 2009
 *  ROE of 18.4%

RICHFIELD, Ohio, Nov. 2, 2009 (GLOBE NEWSWIRE) -- National Interstate Corporation (Nasdaq:NATL) today reported net income of $8.2 million ($.42 per share) for the 2009 third quarter and $32.9 million ($1.70 per share) for the first nine months of 2009, both significantly better than the same 2008 periods. Net earnings from operations improved for both the 2009 third quarter and first nine months compared to the same periods in 2008 reflecting fewer large claims. In addition, a reduction of the deferred income tax valuation allowance and net realized gains from investments contributed to the higher 2009 net income.

The table below shows the Company's net income determined in accordance with U.S. generally accepted accounting principles (GAAP), reconciled between net income from operations, the change in the valuation allowance related to net capital losses, and net realized gains (losses) from investments, all of which are non-GAAP financial measures:

                                Three Months Ended  Nine Months Ended
                                  September 30,      September 30,
                                ------------------  ------------------
                                 2009       2008      2009       2008
                                --------  --------  --------  --------
                                 (In thousands, except per share data)
 Net after-tax earnings
  from operations               $  5,869  $  4,460  $ 29,324  $ 19,903
 Change in valuation allowance
  related to net capital losses $  1,792  $ (3,191) $  2,397  $ (3,191)
 Net after-tax realized gain
  (loss) from investments       $    495  $ (5,497) $  1,190  $ (6,999)
                                ------------------  ------------------
 Net income (loss)              $  8,156  $ (4,228) $ 32,911  $  9,713
                                ==================  ==================

 Net after-tax earnings from
  operations per share, diluted $   0.30  $   0.23  $   1.51  $   1.03
 Change in valuation allowance
  related to net capital
  losses per share, diluted     $   0.09  $  (0.17) $   0.13  $  (0.17)
 Net after-tax realized gain
  (loss) from investments
  per share, diluted            $   0.03  $  (0.28) $   0.06  $  (0.36)
                                ------------------  ------------------
   Net income (loss)
    per share, diluted          $   0.42  $  (0.22) $   1.70  $   0.50
                                ==================  ==================

Operations

The Company's net earnings from operations include underwriting income and recurring investment income. The 2009 third quarter pre-tax earnings from operations of $8.8 million was 40% better than the 2008 third quarter, improving the pretax operating income for the first nine months of 2009 to $43.8 million, 51% ahead of last year. The combined ratio of 92.8% for the 2009 third quarter and 84.6% for the first nine months of 2009 were 4.7 and 7.9 percentage points, respectively, better than the same periods in 2008.

     Claims: The loss and loss adjustment expense (LAE) ratio for the
     2009 third quarter of 68.2% was 1.1 percentage points better than
     the 2008 third quarter, and was 60.5% for the first nine months
     of 2009 or 6.7 percentage points better than the same period last
     year. The 2008 third quarter and year to date loss and LAE
     results were adversely impacted by an unusual number of severe
     claims. In contrast, the Company experienced favorable large
     claims activity for the 2009 third quarter and first nine months.
     During the 2009 third quarter, the Company experienced elevated
     frequency related to higher vehicle usage particularly with our
     RV and transportation risks, which adversely impacted claims
     results. The Company does not consider elevated severity and/or
     frequency in the third quarter unusual based on the seasonality
     associated with the risks it insures. Development from prior year
     loss and LAE reserves was not significant for the 2008 and 2009
     third quarter and first nine months. The Company experienced
     unfavorable development from prior year claims of $0.3 million
     which reduced the loss and LAE ratio by 0.5 percentage points
     for the 2009 third quarter.

     Expenses: The underwriting expense ratio of 24.6% for the 2009
     third quarter and 24.1% for the first nine months of 2009 were
     both improved compared to the same 2008 periods. The Company
     continues to closely manage expenses which have been within
     expected ranges. Quarterly underwriting expense ratio
     fluctuations are primarily related to varying commission levels
     on business written or one-time expenses in the respective
     quarters.

     Investment Income: Net investment income decreased for both the
     third quarter and first nine months of 2009 compared to the same
     periods last year reflecting lower yields primarily on cash,
     short-term and fixed income investments in part due to a greater
     allocation to high quality investments made during the peak of
     the financial crisis. For the first nine months of 2009 compared
     to 2008, the decrease in after-tax investment income is
     approximately 10.5%, compared to 14.4% on a pre-tax basis, which
     reflects a higher proportion of tax preferred holdings in 2009.

Gross premiums written of $69.6 million for the 2009 third quarter and $279.7 million for the first nine months of 2009 were both approximately 10% below the same 2008 periods. The table below summarizes gross premiums written by business component:

                                   Three Months Ended September 30,
                                --------------------------------------
                                       2009                2008
                                ------------------  ------------------
                                 Amount    Percent   Amount    Percent
                                --------  --------  --------  --------
                                        (Dollars in thousands)

 Alternative Risk Transfer      $ 27,839     40.0%  $ 33,808     43.7%
 Transportation                   18,837     27.1%    20,972     27.1%
 Specialty Personal Lines         14,692     21.1%    14,120     18.2%
 Hawaii and Alaska                 6,319      9.1%     6,996      9.0%
 Other                             1,881      2.7%     1,555      2.0%
                                --------  --------  --------  --------
 Gross premiums written         $ 69,568    100.0%  $ 77,451    100.0%
                                ========  ========  ========  ========

                                     Nine Months Ended September 30,
                                --------------------------------------
                                       2009                 2008
                                ------------------  ------------------
                                 Amount    Percent   Amount    Percent
                                --------  --------  --------  --------
                                       (Dollars in thousands)

 Alternative Risk Transfer      $161,188     57.6%  $172,024     55.1%
 Transportation                   51,147     18.3%   71,735      23.0%
 Specialty Personal Lines         48,210     17.2%   46,800      15.0%
 Hawaii and Alaska                14,958      5.3%   17,727       5.7%
 Other                             4,243      1.5%    3,961       1.2%
                                --------  --------  --------  --------
 Gross premiums written         $279,746    100.0%  $312,247    100.0%
                                ========  ========  ========  ========

The Specialty Personal Lines component has consistently grown in each of the first three quarters of 2009 when compared to 2008. The Alternative Risk Transfer, Transportation, and Hawaii and Alaska components experienced declines for both the 2009 third quarter and first nine months compared to the same periods in 2008.