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Insurance Auto Auctions Expects Q2 Earnings To Exceed Analyst Expectations

9 June 1999

Insurance Auto Auctions Expects Second-Quarter Earnings To Exceed Analyst Expectations

    SCHAUMBURG, Ill., June 9 -- Insurance Auto Auctions, Inc.
, a leader in automotive total loss and specialty salvage
services, today announced that the company expects its earnings for the second
quarter ending June 30, 1999 to be at least 35 percent to 40 percent above
analysts' expectations of approximately $0.26 per diluted share.
    Christopher G. Knowles, chief executive officer, explained the favorable
outcome, "Our efforts to improve IAA's profitability and the improvement in
salvage returns for our customers have occurred at a velocity which has
exceeded our original plan.  In addition, the success of our initiatives is
leveraging our marginal profitability per unit at a level greater than
initially expected.
    "Furthermore, our marketing efforts have created unit volume in 1999 above
our original forecasts for the first two quarters.  With higher than planned
volumes and accelerated profit improvement programs, we are realizing
significant gains in earnings.  Traditionally, volumes and margins are weaker
in the second half of the year.  Therefore, we will be tracking these historic
trends carefully," concluded Knowles.
    Thomas J. O'Malia, chairman of the Board of Directors, stated, "We are
pleased with our financial results and remain positive about the direction the
company is taking.  The company's short-, mid- and long-term plans are well
crafted and are being implemented well.  The earnings improvement in the first
half of 1999 is excellent.  We are working to continue our efforts to enhance
this earnings expansion and leverage our profitability by pursuing growth
opportunities through marketing, acquisitions and other strategic partnerships
or transactions."
    Founded in 1982, Insurance Auto Auctions, Inc. is the largest provider of
automotive and specialty salvage services in the United States, providing
insurance companies with cost-effective, turnkey solutions to process and sell
total-loss and recovered-theft vehicles, a $3 billion per year industry.  The
company currently has 51 auction sites across the United States.
    This press release contains forward-looking information that is subject to
certain risks and uncertainties that could cause actual results to differ
materially from those projected, expressed or implied by such forward-looking
information.  The company's actual results could differ materially from those
discussed or implied herein.  Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in the company's
annual report, Form 10-K for the fiscal year ended December 31, 1998, or
subsequent quarterly reports.  Among these risks are legislative acts, weather
conditions, changes in the market value of salvage, outcome of litigation,
competition, quality and quantity of inventory available from suppliers and
dependence on key insurance company suppliers.
    For additional information regarding Insurance Auto Auctions free of
charge via fax, dial 1-800-PRO-INFO and use the company's stock symbol,
"IAAI."
    Additional information about Insurance Auto Auctions, Inc. is available on
the World Wide Web at http://www.iaai.com