A New AutoOne

While our clients and friends are aware of some of the changes at AutoOne, there is still more to communicate. One thing remains constant, however: our mission to meet the long-term needs of our business partners and clients for LAD and CLAD services across the nation. We strive to earn that business by consistently demonstrating our ability, stability and dependability in all facets of our operations.

We entered 2007 with full knowledge of our position in the AIP Cycle and our tasks to continue our mission. Change is inevitable in all things we do — this newsletter, for example, represents a change in how we communicate with you from now on and we hope you find this electronic version more readable, accessible and easy to share with members of your organization.

AutoOne has evolved significantly. We have new leadership throughout many parts of the organization and you will hear from each of them in this edition. Also, we’ve adjusted the size of our organization to reflect the investments we’ve made in technology over the years and account for the continuing decline in the total size of the market we serve.

Finally, we are at the stage in our organizational life-cycle where all parts of our operation can now move beyond building and expanding our capabilities. We now focus our energy on improving those things we already do to ensure we continue to deliver quality products and services while lowering our total cost of that delivery. Ultimately, we pass those savings on to our clients.

As in the past, included in this edition you will find a report on Assigned Risk trends in New York and other major AIP program states. The good news for you is that the plans continue to shrink in almost all markets, thereby reducing the burden AIP places on your organization. On the other hand, the business you will receive from the AIP will be by far the least desirable risks generating a combined ratio that is considered unacceptable by any measure.

In addition to the AIP program report, you will also find information about take-out credits and what trends are developing in New York as a result of the continued shrinking of the Assigned Risk Plan. The use of Take-Out credits remains a very attractive tool for a number of our clients in order to reduce the overall cost of their Assigned Risk obligations.

One of the major development efforts for our Information Technology group was completed in the first quarter of 2007. We are proud to proclaim that AutoOne has the only proprietary Assigned Risk Processing system for all LAD/CLAD services across the country. In conjunction with continued investments in Claims imaging and the introduction of our Claims Fast Track Triage unit, we continue to improve our operational efficiency and effectiveness. You will read more about this in the Claims Management and Technology sections of this newsletter.

As an organization, AutoOne has grown rapidly since its inception in late 2001; today, we face the challenges of continued growth for ourselves, our owners and our customers in spite of a shrinking market. Fortunately, we have positioned ourselves well to manage through the peaks and valleys of the cycle and look forward to helping our client companies manage their assigned risk obligations regardless of the size of the market or the quality of the risks that remain in the various plans.

Thank you for your continued support! As you look towards 2008 and plan how your organization will handle its assigned risk obligations, I trust you will let us know how we can help.

Paul F. DiFrancesco
President & CEO