Warrantech Reinsurance Program Growing Rapidly
EULESS, Texas--July 2, 2002--Warrantech Corporation (OTCBB:WTEC), a leader and innovator in administering service contracts and extended warranties for automobiles, recreational vehicles and other consumer products, launched a popular new warranty program targeting large automobile dealerships in January 2002.
Under an agreement with Automotive Investment Group, a leading general agent on the East Coast, Warrantech began marketing this new reinsurance program on Jan. 1. To date, several clients have signed up for the extended warranty program that is insured through Heritage Insurance Risk Retention Group As a result, new warranty contracts on this program are currently exceeding 2,000 contracts per month a 20% percent increase in business volume for Warrantech's Automotive Division.
"We are extremely pleased that Warrantech's first master general agent account has resulted in the acquisition of incremental business from our targeted market so quickly," Joel San Antonio, chairman and chief executive officer of Warrantech, said. "Initially, we targeted a 15 percent to 20 percent increase in new business volume in FYE 2003 for Warrantech Automotive. To date, we are exceeding our target, and anticipate that this reinsurance program will continue to grow at a rapid rate. In view of the popularity of this program, we expect to accelerate our plans to aggressively increase penetration in this lucrative segment of the $6 billion dollar automotive market."
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.
"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) adverse outcomes of litigation, (i) 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, (j) additionally, if Butler Financial Solutions, LLC is unable to cover the claims previously insured by Reliance Insurance Companies, or if the Company's current insurance carrier ceases to provide credit to the Company in order to fund any shortfalls required by the fund, Warrantech Automotive may ultimately be required to honor the claims under those service contracts in which Warrantech Automotive was the obligor. Since management is not able to determine the Company's potential claims liability, if any, under such contracts, the Company has not taken a reserve for claims losses for which the Company may ultimately be liable. 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.