APPLIED UNDERWRITERS EXPANDS CURRENT FACILITIES AND ADDS NEW LOCATION IN MEMPHIS, TN TO ACCOMMODATE GROWTH AT ALL LEVELS

OMAHA, NE - March 22, 2004 - After another year of tremendous growth, Applied Underwriters expanded its operations in Omaha, NE, Los Angeles, CA, and Albany, NY, and added a new regional service center in Memphis, TN. With its customer base doubling for the 9th consecutive year and staff size increasing 50% in 2003, Applied's new facilities will accommodate the demand for the company's innovative services while maintaining its commitment to superior customer service well into the future.

The Applied Underwriters main operations center in Omaha virtually doubled in size. Already possessing high employee retention, Applied has created its own Corporate University and Employee Training Center that seeks to evolve current practices, preserve industry-leading service standards and enhance the personal development opportunities for all employees.

To ensure the company's ability to ship through all weather conditions and in emergency situations, the company established twin regional service centers in Memphis, TN and Los Angeles, CA. These facilities are strategically located adjacent to major FedEx hubs and large segments of Applied's customer base. Construction is nearly complete in Memphis and that facility is scheduled to be operational in April. Construction on the expanded Los Angeles office is slated to begin in April with a clean transition from existing space scheduled for June. Both facilities were designed to be as efficient as possible and, like the main operations office in Omaha, have been built to accommodate the company's projected future growth.

The company is also relocating its technology development group to a much larger facility in Albany, NY in April. This team created and implemented a variety of important system enhancements in 2003. Among these were robust website enhancements designed to drive Applied's productivity and quality of service. Like the Los Angeles and Memphis locations, this facility will accommodate substantial growth.

"Each of these construction projects was designed to meet three important criteria - ensuring superior customer service at all levels, enhancing our employees' overall work experience and accommodating future growth," said Dan Engel, SVP of Strategic Planning and Corporate Development. "We believe that we are set from a facilities perspective to handle several more years of growth commensurate with our past growth."

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Applied Underwriters is a premier workers' compensation and financial services company. The company's three products - 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 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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