Mr. Pergande: INSpire is a leader in business process outsourcing solutions for the insurance industry. The general business model is to process policies and administer claims for insurance companies in regional processing centers around the country. We have sophisticated software that lets us process policies more efficiently than carriers can. So we can do the back office work at a guaranteed lower price and with higher customer service levels than a carrier can. Here's how it works. We win business from a carrier. We then take over their processing center, put our software in place, and then we leverage that processing center by bringing business from additional carriers into that center. INSpire was the brainchild of Miller's Mutual Insurance Company, which is based in Fort Worth, Texas. They came up with the idea in mid-1995, early 1996 and the idea was, in essence, to take the back office operations of Miller's Insurance Company and spin it out into a separate entity, and then to offer those services to other insurance companies. Those services they were spinning off would be policy issuance, regulatory reporting, and claims handling. So basically all the insurance company would then be responsible for doing would be to decide what products to sell, where to sell them, to whom they wanted to sell them, and set the underwriting and claims guidelines. The timing was great, Miller created the company, they called it Milirisk. That company then became INSpire. They took the company public in 1997 and they did a secondary offering in late 1998. From there, INSpire bought a software company called SDS. They did that in 1997. It was actually that software that gave INSpire the ability to lower costs and improve customer service. We pushed forward a year, a year and a half, and INSpire signed a number of outsourcing customers. We're up to about 14 here in Fort Worth. We also signed contracts a year and a half to two years ago with three additional groups, one called The Island Group, one called Arrowhead, and one called The Robert Plan. The Robert Plan is in Edison, New Jersey, owned by the Wallach family. Arrowhead Group is an MGA, which is based in San Diego, and The Island Group is on the island of Hawaii. Island Group was the contract that was actually canceled recently, but probably a good thing in the end for INSpire. We are in the middle of creating the regional processing centers in Edison, New Jersey and San Diego, California. The one here in Fort Worth is actually up and running and fully functional. We're doing work for about 14 carriers out of this office in Fort Worth. The integration projects in New Jersey and in San Diego are behind schedule. It is one of the reasons why the company has gotten beaten up a little bit over the last year. (NASDAQ:NSPR) We suffered along with the rest of the stock market, and along with some of our competitors, whose stock prices have declined almost in lock step with ours. And the insurance industry overall had gotten beaten up pretty badly. We were also and our competitors were also hit by the fact that, with Y2K at the end of last year, our software sales dried up. Nobody really wanted to buy new software, get involved in new implementations, with Y2K coming up. The software sales lagged. That hurt the bottom line for us, because our software sales were obviously very profitable. We're now at a point where we're working through those implementations. We are in the testing stages in both of the locations, both in New Jersey and in California. We're delivering phases of each of those contracts on a consistent basis right now. We have created an Internet-based version of our system. It's called e- INSpire. We've sold that twice, to two different carriers. We're also working on implementations of e-INSpire with our outsourcing services customers. We really see the e-INSpire platform as a big part of our future.
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