Direct Response Corporation to Boost Equity Capitalization • Response Insurance

Direct Response Corporation, a national, direct-to-the-consumer automobile insurance company, announced today that it recently received $92 million in completion of its original equity financing commitment for $215 million, and that it has also received a commitment for an additional $100 million of equity financing to be completed at year-end. All of the financing, which will total $315 million, has been arranged for Direct Response, which is the parent of the Response Insurance group of companies, by Morgan Stanley Dean Witter (MSDW) Capital Partners. The funds will be used for sustained expansion of the Company's auto insurance writings, which are increasing at a rapid pace.

Speaking for MSDW Capital Partners, its Chairman, Alan E. Goldberg, said, "We are very pleased with the strategy, management team and the foundation Response Insurance has built to date. We look forward to seeing Response Insurance become a household word." Company founders James M. Stone, Chairman, and Peter J. Wood, Vice Chairman, added, "MSDW Capital Partners and our investors have been our partners since day one, and we are very pleased that they have reinforced their commitment to building one of the largest, most respected and technologically advanced automobile insurance companies in the country." Mr. Stone is also the founder of The Plymouth Rock Company, which operates several regional insurance carriers in New England; Mr. Wood is the founder of Direct Line Insurance, the first direct response carrier in the U.K. and now the country's largest auto carrier.

Through its insurance operating subsidiaries, the Company provides low-cost automobile insurance directly to consumers. Response Insurance began marketing automobile insurance in New York State in late 1997, and has since entered California, Florida and Illinois. The Company operates from White Plains, New York and Suisun City, California, where it recently opened an office to accommodate growth. Response Insurance intends to expand throughout much of the U.S. over the next few years, continuing to emphasize low insurance prices, world-class service and its friendly, memorable brand. All Response Insurance marketing initiatives feature its distinctive logo, an animated red telephone on wheels; the tag line, "Response Insurance for Responsible People^TM;" the toll-free number, 1-888-REDPHONE ; and the Company's website, www.response.com. The majority of sales and service activity today takes place over the telephone, but the Company has realized a steady increase in the volume of Internet-generated business since the launch of its site in mid-1998.

The investment group arranged by MSDW Capital Partners includes Morgan Stanley Capital Partners III, L.P., The Plymouth Rock Company, and other institutional investors. MSDW Capital Partners is the private equity unit of Morgan Stanley Dean Witter & Co., the global financial services firm.

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Response Insurance is a direct-to-the-customer automobile insurance company dedicated to insuring responsible people. By focusing on insuring responsible drivers with better driving records and by reaching consumers directly, rather than through commissioned insurance brokers and agents, Response Insurance is able to offer lower insurance prices, more efficient service and excellent value.

Direct Response Corporation, the parent company of Response Insurance and Response Indemnity, was initially financed in 1996 with an equity commitment from an investor group led by Morgan Stanley Capital Partners, the private equity unit of Morgan Stanley Dean Witter & Co. Among the founders of Direct Response Corporation are some of the world's most innovative leaders in the insurance industry. They include Peter J. Wood, the founder of Direct Line, Great Britain's largest private auto insurer, protecting millions of motorists, and James M. Stone, the founder and Chairman of The Plymouth Rock Company, which operates several regional insurance companies in the northeast. The Company's national headquarters is in White Plains, NY. The Company's sales number is 1-800-610-5928.