Years Ended December 31, 2000 and 1999

Consolidated net income after Federal income taxes increased by $13.3 million to $22.9 million ($0.49 per share) in 2000, compared to $9.6 million ($0.34 per share) in 1999. Operating income before realized gains and Federal income taxes increased by $16.6 million to $32.9 million in 2000 compared to $16.3 million in 1999.

Operating income from the Career Agency segment increased by $17.2 million, reflecting the impact of a full year's results in 2000 compared to five months in 1999. The results for 2000 trend consistently with 1999 on an annualized basis.

The Senior Market Brokerage segment improved results by more than 40%, increasing operating income by $1.6 million. This improvement is the result of continued internally generated growth of business in the segment, primarily in the medicare supplement and long term care lines, offset in part by a slight deterioration in overall loss ratios for the segment.

The operating results for the Special Markets segment improved by approximately 4% over 1999. This reflects the impact of a full year's results in 2000 from the companies acquired in 1999 compared to five months in 1999. However, underwriting results for the segment were negatively impacted by a deterioration of the loss ratios in the major medical line of business. Based, in part by the poor performance of this block of business, and in an effort to focus more on strategic lines, management decided to exit the major medical business during 2000 and as a result, wrote off $1.4 million of deferred acquisition costs relating to that line of business.

Operating income for the Administrative Services segment nearly doubled in 2000 compared to 1999, primarily as a result of the acquisitions of AIAG in January 2000 and CHCS in August 2000. The increase in the operating loss from the Corporate segment reflects the inclusion of a full year of costs related to the acquisition financing in 2000, compared to five months for 1999.

The effective tax rate for the Company was 30.8% for 2000 as compared to 38.9% in 1999. The decrease in the tax rate was primarily due to the release of valuation reserves on certain of the tax loss carryforwards which were not considered necessary as a result of the increased profitability of the Administrative Services segment.

Years Ended December 31, 1999 and 1998

Consolidated net income after Federal income taxes increased by $7.5 million to $9.6 million ($0.34 per share) in 1999, compared to $2.2 million ($0.20 per share) in 1998. Operating income before realized gains and Federal income taxes increased by $12.6 million to $16.3 million in 1999 compared to $3.7 million in 1998.

The addition of the Career Agency segment, acquired in July 1999, added $12.2 million of operating income during 1999. The Senior Market Brokerage segment improved by $1.8 million, compared to 1998, as a result of internally generated growth combined with improvement in overall loss ratios. The Special Market segment improved by over $3.5 million, primarily as the result of the companies acquired during 1999. Results for the Administrative Services segment for 1999 were consistent with 1998. The effective tax rate for the Company was 38.9% in 1999 as compared to 33.8% in 1998. The increase in the tax rate was primarily due to the addition of the Canadian operations included in the Career Agency segment. The effective tax rate on the Canadian operations was approximately 45%.