Administaff Announces Further Improvements to Its Workers' Compensation Program

Business Wire, Sept 10, 2007

* Coverage to be provided by ACE Group of Companies

* Policy administration to be provided by Lockton Companies, Inc.

* Three-year program to result in administrative cost savings

HOUSTON -- Administaff, Inc. (NYSE:ASF), a leading provider of human resources services for small and medium-sized business, today announced it has selected ACE Group of Companies ("ACE"), an A+ XV rated property and casualty insurance company, to provide statutory workers' compensation coverage for all of its corporate and worksite employees effective Oct. 1, 2007. The policy with ACE provides the same coverage as the company's current insurance policy, whereby Administaff Captive Insurance Companies Limited will reinsure ACE for the first $1 million of claims per occurrence.

Under the new program, Lockton Companies, Inc., the nation's seventh largest property and casualty insurance broker, will provide policy administration services. Claims adjudication will continue to be performed by Specialty Risk Services, a division of The Hartford Insurance Companies.

"We have successfully executed on our strategy to further unbundle the critical components of our workers' compensation program," said Richard G. Rawson, Administaff's president. "This improved structure will allow for additional administrative cost savings and provide further flexibility for insurance carrier options in future years."

The new arrangement is expected to result in administrative cost savings of at least $2 million in the first policy year, as well as a reduction in cash funding levels related to expected claims.

Administaff is the nation's leading professional employer organization (PEO), serving as a full-service human resources department that provides small and medium-sized businesses with administrative relief, big-company benefits, reduced liabilities and a systematic way to improve productivity. The company operates 47 sales offices in 23 major markets. For additional information, visit Administaff's Web site at http://www.administaff.com.

The statements contained herein that are not historical facts are forward-looking statements within the meaning of the federal securities laws (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). You can identify such forward-looking statements by the words "expects," "intends," "plans," "projects," "believes," "estimates," "likely," "possibly," "probably," "goal," "objective," "target," "assume," "outlook," "guidance," "predicts," "appears," "indicator" and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, Administaff, Inc., in an effort to help keep our stockholders and the public informed about our operations, may from time to time issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, or projections involving anticipated revenues, earnings, unit growth, profit per worksite employee, pricing, operating expenses or other aspects of operating results. We base the forward-looking statements on our current expectations, estimates and projections. These statements are not guarantees of future performance and involve risks and uncertainties that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: (i) changes in general economic conditions; (ii) regulatory and tax developments and possible adverse application of various federal, state and local regulations, including but not limited to the California State Unemployment Tax matter; (iii) changes in our direct costs and operating expenses including, but not limited to, increases in health insurance costs and workers' compensation rates and underlying claims trends, financial solvency of workers' compensation carriers and other insurers, state unemployment tax rates, liabilities for employee and client actions or payroll-related claims, changes in the costs of expanding into new markets, and failure to manage growth of our operations; (iv) the effectiveness of our sales and marketing efforts; (v) changes in the competitive environment in the PEO industry, including the entrance of new competitors and our ability to renew or replace client companies; (vi) our liability for worksite employee payroll and benefits costs; and (vii) an adverse final judgment or settlement of claims against Administaff. These factors are discussed in further detail in Administaff's filings with the U.S. Securities and Exchange Commission. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate.