Business

Business plan – Insurance Group Plan

This Confidential Plan (the “Plan”) and its appendices are furnished to you by Van Robinson Insurance Group, Inc. (the “Company”) on a confidential basis. The information contained in this Business Plan has been prepared by Robinson. This Plan, however, is not intended to provide the primary basis for any decision about, or recommendation that any person participate in, a transaction with Van Robinson Insurance Group.

The information concerning Robinson’s insurance business and prospects set forth in the Business Plan is derived from publicly available information as well as material furnished by Robinson and its management. All references to projected or anticipated results are based on financial projections prepared by Robinson’s management.

The financial projections and forecasts included herein are based on numerous assumptions made by management, and no assurances can be given that any such assumptions and the resulting projections and forecasts will prove to be accurate. All forecasts and proforma financial information are included for illustrative purposes only.

It is impossible to predict future operating results of Robinson with certainty, and no representation or warranty is made that any particular financial results can or will be achieved. No representations can be expressed or implied as to the attainability of any such forecast.

Robinson reserves the right to request the return of the Plan at any time. Any reproduction or distribution of the Plan, in whole or in part, or the disclosure of any of its contents, is prohibited without the expressed prior written consent of Robinson. The recipient will promptly return this Plan and all material received in connection herewith without retaining any copies should Robinson request such action.

Industry overview and analysis

Over the last several years, the insurance coverage industry has been in the process of significant evolution and reform.

Coverage and self-funded contracts, the creation and operation of sophisticated information systems, and a turn-key management service for managing agency offices. Robinson believes that this climate of change presents a significant opportunity to expand market share and profitability of the business.

U.S. health insurance industry

National insurance spending currently exceeds $1.5 trillion, with approximately $400 billion directly attributable to medical, dental, physician liability, and supplemental insurance policies. At this level, insurance coverage expenditures represent more than 13.6% of the gross domestic product (“GDP”). The Insurance Provider Financing Administration forecasts that national coverage spending in 2001 was approximately $1 trillion, with approximately $310 billion directly attributable to agency services. Insurance agency expenditures continue to be the largest sector in the insurance coverage industry with costs of approximately $400 billion, representing 40% of all provider expenditures.

Insurance provider market

The concept of group practice is not new, providing the basis for such leading nonprofit organizations as the P.A. Joel Clinic and the Carolina Medical Clinic. The environment in which they operate is what makes the new generation of group practices different. The growth of managed coverage and capitated plans, the resource-based relative value scale (RBVRS) payment system, and a growing demand for complex outpatient services are the driving forces behind the growth of physician groups.

Last word

A study by the American Medical Association (AMA) estimates that there are 16,576 group practices (defined as three or more formally organized physicians) in the United States, with a mean number of 11.5 physicians per group.

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