Warrantech Signs Five-Year Vehicle Service Agreement With Royal & SunAlliance USA; Company to Administer Automotive Portfolio

    EULESS, Texas--June 24, 2002--Warrantech Corporation (OTC:WTEC), a leader and innovator in administering service contracts and extended warranties, today announced that it has signed a five-year agreement with Royal & SunAlliance USA, the U.S. operation of London-based Royal & SunAlliance Insurance Group plc, one of the world's largest multi-line insurance companies.
    Under the terms of the agreement, Warrantech will administer the claims of a portfolio of over 40,000 vehicle service contracts. As one of the nation's leading providers of risk management and insurance solutions for consumer and commercial customers, Royal & SunAlliance USA offers an array of insurance products and programs for multinational companies in addition to small and midsize businesses and consumers throughout the United States.
    The new contract with Royal & Sun Alliance comes during a particularly strong business environment for extended warranties and service contracts within Warrantech's automotive segment. According to Warrantech, more automotive service contracts have been booked during the past quarter than any other three-month period in the prior three years. Overall, without the impact of this agreement, the company's automotive service contract business is up about 15 percent for the first month of FY 2003 over FY 2002.
    "We consider it a confirmation of our reputation and expertise that Royal & SunAlliance has chosen Warrantech as its vehicle service administrator," said Joel San Antonio, chairman and chief executive officer of Warrantech. "More than twenty years of experience in claims administration backed by superior customer support convinced Royal & SunAlliance to award this critical task to Warrantech. As we strive to provide the highest level of assistance and service to Royal & SunAlliance customers throughout North America, we continue to look for opportunities to grow this profitable segment of our business."

    About Warrantech:

    Warrantech Corporation administers and markets service contracts and after-market warranties on automobiles, automotive components, recreational vehicles, appliances, consumer electronics, homes, computer and computer peripherals for retailers, distributors and manufacturers. The company continues to expand its domestic and global penetration, and now provides its services in the United States, Canada, Puerto Rico and Latin America. For additional information on Warrantech, access www.warrantech.com.

    About Royal & SunAlliance:

    Royal & SunAlliance USA provides risk management and insurance solutions through three principal business divisions: Commercial, which writes an array of products and programs for mid-size commercial customers in selected segments; Consumer, serving personal insurance, small business and affinity customers; and Custom Risk, which focuses on larger, sophisticated national and multinational companies. Royal & SunAlliance USA is part of the international Royal & Sun Alliance Insurance Group plc, London, one of the top 10 multi-line insurance companies in the world. The Group transacts business in more than 130 countries and has more than 20 million customers worldwide.

    "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995:

    Except for the historical information contained herein, the matters discussed in this release may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The Company makes such forward-looking statements under the provisions of the "safe harbor" section of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the Company's views and assumptions, based on information currently available to management. Such views and assumptions are based on, among other things, the Company's operating and financial performance over recent years and its expectations about its business for the current and future fiscal years. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Such statements are subject to certain risks, uncertainties and assumptions, including, but not limited to, (a) prevailing economic conditions which may significantly deteriorate, thereby reducing the demand for the Company's products and services, (b) availability of technical support personnel or increases in the rate of turnover of such personnel, resulting from increased demand for such qualified personnel, (c) changes in the terms or availability of insurance coverage for the Company's programs, (d) regulatory or legal changes affecting the Company's business, (e) loss of business from or significant change in relationship with, any major customer of the Company, (f) the ability to successfully identify and contract new business opportunities, both domestically and internationally, (g) ability to secure necessary capital for general operating or expansion purposes, (h) ability to secure an alternate source of payment of claims under the vehicle service contracts, (i) the amount of claims required to be paid by the Company under the service contacts or (j) adverse outcomes of litigation. Additionally, if any of the insurance companies, which insure the service contracts, marketed and administered by the Company were unable to pay the claims under the service contracts, it could have a materially adverse effect on the Company's business. Additionally, the Company is engaged in discussions with Staples concerning administration fees, which have not been paid by Staples. If the discussions are concluded favorably, there will be a positive impact on the Company's results of operations. Should one or more of these or any other risks or uncertainties materialize or develop in a manner adverse to the Company, or should the Company's underlying assumptions prove incorrect, actual results of operations, cash flows or the Company's financial condition may vary materially from those anticipated, estimated or expected.