APPLIED UNDERWRITERS' CONSISTENT GROWTH AMIDST DISTRESSED MARKET PROVES COMPANY'S CONCEPT IS HERE TO STAY
Company's Unique Integrated Solutions Spawn Eye-Catching Success

SAN FRANCISCO - April 7, 2003 - In today's beleaguered insurance industry, Applied Underwriters' reliable, profitable growth stands out. Since its inception, the San Francisco-based financial services and workers' compensation company has annually doubled its customer base. In the face of a distressed economy and a suffering insurance industry, Applied Underwriters boasts annual net revenues in excess of $150 million on gross volume exceeding $1 billion.

Applied Underwriters' success stems from its sophisticated, unique approach to workers' compensation coverage. The company offers solutions that seamlessly integrate employer coverages with employer-related business services such as payroll processing, thereby filling a clear market need: the regulatory and administrative needs of small and mid-sized employers nationwide. "We've been with Applied Underwriters for two years and they are doing excellent work," says Fred Wallace, the president of One Big Man & One Big Truck Moving Co., Inc. "Combining workers' comp and payroll is just genius. It really takes a lot of headaches away from us. Every week everything is on time, and they respond quickly to our needs. They make workers' comp and payroll workable."

While insurance carriers traditionally have been slow to innovate, the state of the insurance market has forced providers to be even more conservative. Meanwhile, Applied Underwriters' uniquely integrated solutions aimed at employers of small and mid-sized companies have propelled the company to such significant growth that the company is gaining the attention of insiders and outsiders alike.

"When we founded the company in the early 1990s, we considered ourselves a financial services company aimed at very particular needs of small and mid-sized employers," says Steven Menzies, chief operating officer of Applied Underwriters. "The result of this vision is that our infrastructure is not limited to that of a traditional insurance provider which is only capable of supporting basic coverage. We built Applied Underwriters from the ground up to meet the complex demands of supporting integrated services and coverages."

The company's success proves that there is profit in underwriting small business - and that integrated solutions fill a real market demand of employers nationwide. Applied Underwriters' flagship product, SolutionOne, seamlessly integrates employer coverages - including workers' compensation and employment practices liability - with payroll processing and risk reduction services. The result is that employers no longer have to deal with a variety of vendors for their financial services. And because Applied Underwriters has the technological and organizational infrastructure to support integration, the company is able to efficiently utilize the full scope of customer data. This allows Applied Underwriters to offer its renowned personalized service while at the same time allowing the company to proactively manage its risk portfolio, which in turn has allowed the company to grow reliably and profitably.

"We believe Applied Underwriters is a different type of company that will revolutionize the field of insurance," says Sidney Ferenc, Applied Underwriters' chief executive officer. "The strength of our business model is that the very thing that allows us to offer customers a superior product - integration - is the very thing that is the source of our consistent profitability."

Underlying Applied Underwriters' steady growth is its remarkable ability to maintain its customer base. Indeed, Applied Underwriters enjoys a customer retention rate that would make any company envious. "Applied Underwriters has been bending over backwards for us. They are extremely attentive and they make everything so easy for us," says Mario Montalvo, President of Super Mario Portable Welding.

Applied Underwriters' reliable, profitable growth testifies well to a truth that is now thoroughly apparent: integration is a concept whose time has come.

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Applied Underwriters is a premier workers' compensation and financial services company. The company's three solutions - SolutionOne^®, EquityCompT, and Coverage Dynamics® - integrate workers' compensation coverage with employer-related services to ensure the success of small to medium-sized businesses. Its A.M. Best rated A coverage solutions offer unparalleled dependability and reliability. Founded in 1994, Applied Underwriters is headquartered in San Francisco, with a national customer service center in Omaha, NE. Additional information about the company is available at www.applieduw.com www.applieduw.com

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