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First Priority Signs Contracts with Additional Carriers

10 July 1998

First Priority Group Announces Contracts Signed with Additional Insurance Carriers

    PLAINVIEW, N.Y., July 10 -- First Priority Group, Inc.
, announced today a significant expansion of its
industry-leading nationwide Direct Repair Program (DRP) for auto insurance
carriers.
    FPG's Chairman and CEO Barry Siegel said that four additional regional
insurance carriers have signed contracts to outsource their collision repair
claims processing to the Company's DRP business unit.  Two additional
insurance companies have signed letters of intent to begin use of the
Company's DRP during the next two weeks.  Collision repair is a $28 billion
industry in the United States.  Siegel said the Company's existing outsourcing
clients are shifting from pilot programs to a full roll-out as they begin to
see the benefits in cost reductions and customer satisfaction.  FPG's
outsourcing claims volume from the DRP business unit has doubled in the last
month putting the Company ahead of its projections to reach over 1,000,000
claims processed per year by 2001.
    "Our turnkey program enables smaller or regional auto insurers to benefit
from the same kind of streamlined cost-efficient claims handling systems that
the biggest insurance companies themselves have established," Siegel said.
"These smaller carriers are finding that our program makes them much more
competitive.  For smaller insurers, it's neither cost-efficient nor practical
to develop the technology and nationwide claims-handling system such as we
have, with our network of 2,000 high quality contracted collision repair
facilities and our efficient, customer-friendly claims handling service."
This segment of the insurance industry marketplace represents collision repair
volumes exceeding $12 billion per annum.
    Siegel said that the Company is in the process of setting up a second
telephone claims center, located in south Florida, to handle the increasing
volume.  FPG is also hiring additional experienced sales staff in the
northeast and southeast regions.  "It would appear that the greatest challenge
facing us at this time is our ability to keep up with the potential claims and
repair volumes.  We have begun to issue volume maximums and staggered starting
dates for our new clients so that we can keep pace with the number of claims
available to us.  We have also begun longer work schedules, and overtime for
our staff while we expand," Siegel said.
    He said the increased revenue should position the Company in the black by
the fourth quarter, potentially offsetting much or all of the losses incurred
during the year in expanding infrastructure and staff to accommodate growth.
    FPG, which was listed on Nasdaq for the first time last month, was founded
in 1985.  FPG is primarily engaged directly and through its wholly owned
subsidiaries in nationwide managed auto care services for self-insured
corporate fleets, insurance companies, members of affinity groups and
consumers.  FPG's immediate future endeavors will include the nationwide
management of the collision repair industry with its proprietary software
programs, strategic alliances, company-owned stores and its contracted
collision repair network of approximately 2,000 shops nationwide.
    Certain information contained herein includes information that is
forward-looking.  The matters referred to in forward-looking statements may be
affected by the risks and uncertainties involved in the Company's business.
These forward-looking statements are qualified in their entirety by the
cautionary statements contained in the Company's Securities and Exchange
Commission filings.