SUCCESS AND EXPANSION CONTINUES IN 2003 FOR APPLIED UNDERWRITERS

SAN FRANCISCO, CA - January 15, 2004 - Applied Underwriters, the San Francisco-based financial services and workers’ compensation company, reported another year of tremendous growth in 2003. Along with net revenues and gross volumes that more than doubled from 2002, Applied also saw new customer sales increase 75% from the previous year. Since its inception in 1994, Applied has doubled its customer base annually.

The company attributes its growth to a variety of factors as it flourished amidst a hard workers’ compensation market. Having achieved the industry’s highest customer retention rate, Applied capitalized on new business opportunities with its innovative products, unparalleled customer service and focused growth strategy.

“We pioneered the integration of employer coverage with employer-related business services,” CEO Sidney Ferenc stated. “Our unique integrated approach allows us to provide our customers with more accurate and flexible coverage plans while also fulfilling other real business needs. In a hard market, that kind of effectiveness is very compelling.”

In response to increases in both staff and services, Applied proceeded with expansion plans at its main operations center in Omaha. The company’s other construction projects include a new regional service center in Memphis, TN (scheduled to begin operations in April), relocation and expansion of its Los Angeles, CA regional service center, and relocation and expansion of its technology development group in Albany, NY. With the Los Angeles and Memphis locations adjacent to major FedEx hubs, Applied ensured its ability to ship through all weather conditions and in emergency situations.

Applied Underwriters strengthened its market position in 2003 with a brand launch. In an effort to solidify advertising strategies, brand awareness and public relations, Applied hired McCann Worldgroup, an internationally renowned agency. Applied is prepared for an ongoing difficult insurance market and plans on positioning itself accordingly.

“We are all extremely proud of our success and accomplishments. In addition to supporting our growth and expansion, we channeled profits back into the company and toward elevating the overall work experience here,” stated Ferenc. “This included improvements to our employee benefits packages and other initiatives aimed at creating a better work environment for our staff.”

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Applied Underwriters is a premier workers’ compensation and financial services company. The company’s three products - SolutionOne®, EquityComp™, 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 A IX rating assures 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.

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