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Letter to the Editor

Insurance Auto Auctions Announces Investment By ValueAct Capital Partners, L.P.

SCHAUMBURG, Ill. -- Insurance Auto Auctions, Inc., a provider of automotive salvage and claims processing services in the United States, has announced that ValueAct Capital Partners, L.P. has purchased approximately 1,667,000 shares of its common stock from another shareholder in a private transaction. The completion of that transaction increases ValueAct Capital's total holdings to 1,924,457 shares of common stock or approximately 16.8 percent of IAA's common stock outstanding.

As a result of the transaction, ValueAct Capital asked for representation on the Company's board of directors, and the Company has agreed to elect two of ValueAct Capital's representatives to the Board. Peter H. Kamin and Jeffrey W. Ubben will fill the vacancies left after the recent resignations of Thomas O'Malia, Chairman of the Board, and Christopher J. Knowles. Joseph Mazzella, an existing director, was elected the new Chairman of the Board.

Insurance Auto Auctions CEO, Thomas O'Brien, stated, "We welcome ValueAct Capital's long-term view of the Company and I look forward to working closely with Peter Kamin and Jeff Ubben on the board. We also would like to thank Chris and Tom for their valuable service and effort over the last few years." Peter Kamin, one of the ValueAct Capital principals, stated "We have made this investment because of our confidence in Tom O'Brien's ability. We believe in the long term value of the Company and are excited to be actively involved in the company."

The company has entered into a shareholder agreement with ValueAct Capital, and will discuss changes at a yet-to-be rescheduled conference call with investors and shareholders.

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