QQLink.Com, Ceres' E-Commerce Subsidiary, Closes $2.7 Million Private Placement Offering; Establishes Chicago Headquarters

    CLEVELAND, Nov. 6 /PRNewswire/ -- QQLink.com, Inc., the insurance e-
 commerce subsidiary of Ceres Group, Inc. (Nasdaq:   CERG), has announced the
 closing of its first round of financing through a $2.7 million private
 placement offering.  The subsidiary also announced it has established its
 headquarters in Chicago.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000315/CRLOGO )
     The 18 investors in the private placement now collectively own 6 percent
 of QQLink.com.  Ceres Group, Inc. retains 94 percent ownership.  Most of these
 investors are key marketing management personnel of the company.  As
 "Founders," these marketing individuals, located across the nation, will also
 assist in business planning, charting the direction for QQLink and enrolling
 agents to participate in the new program.  Proceeds from the offering will be
 used to fund continuing website development and the release of new products.
     "QQLink is the most exciting project I have ever undertaken," said Peter
 W. Nauert, Chairman of Ceres Group and QQLink.com.  "The fact that these
 investors and nearly 100 Regional Servicing Agents have signed on is
 generating tremendous excitement in the program.  And, the fact that these
 Founders, who are closely associated with Ceres, believe in the QQLink.com
 process enough to make a personal investment says a lot for the quality and
 potential of this program."
     QQLink.com is a new B2B-B2C Agent Exchange program, which combines the
 consumer service and support of a top-quality sales agent with the
 convenience, efficiency and cost savings of direct purchase of insurance and
 other financial service products over the Internet.  Consumers may apply for
 and purchase insurance online either at a participating agent's website, or
 the QQLink.com master website.  Consumers who go directly to the QQLink.com
 master site will have ready access to a selected or assigned agent to handle
 questions or provide service at no additional cost.
     During September and October, QQLink.com and Ceres sponsored a National
 Seminar Program to recruit agents in over 70 cities across the country.  Over
 3,000 agents attended these seminars, which included valuable information on
 QQLink.com and the product lines of the Ceres insurance subsidiaries that will
 be available on QQLink.com.
 
     Goal is to Enroll 2,500 Agents By Year-End
     With over 1,000 agents already signed up for the QQLink program, the
 company's goal is to enroll 2,500 participating agents by the end of 2000.
 The company previously announced that it has enrolled nearly 100 Regional
 Servicing Agents who are each expected to recruit from 100 to 250 agents to
 participate in QQLink.com.
     "By the end of 2002, our goal is to have 25,000 participating QQLink
 agents," according to Bruce Henry, Executive Vice President of QQLink.com and
 Chief Marketing Officer of Ceres.  "With this level of distribution, we expect
 to be able to reach 50 million consumers through QQLink."
 
     Six Health Products Are Part of the Initial Roll-out
     QQLink.com is expected to be online for consumer use this month, with
 roll-out in 20-25 states in the first few months and 10-15 additional states
 in 2001.  Initial products will feature three levels of major medical, a
 short-term major medical, individual dental and individual critical illness
 coverage.
     "The three major medical plans and short-term major medical, which are
 generally difficult-to-get products, offer an attractive range of benefits and
 costs which should fit the needs of most Internet customers," said Henry.
 "This first round of products should appeal to a wide cross-section of
 Americans and will be supplied by Ceres' subsidiary, Continental General
 Insurance Company.
     "Our next round of products, planned for the first quarter of 2001, will
 be specifically targeted for individuals aged 55 or older and will include
 Medicare supplement and long term care plans," Henry said.  "We expect these
 products to be provided by both Ceres and non-Ceres insurance companies."
     The company is pursuing strategic alliances with insurance companies and
 providers of other goods and services, which could be offered at a discount
 through QQLink.com.
     "In the second quarter of 2001, we plan to add life insurance and annuity
 plans from unaffiliated companies," Henry added.  "Negotiations are now in the
 final stages with a carrier for term life insurance, and we have already
 announced a marketing alliance with Great American Financial Resources, Inc.
 (NYSE:   GFR), for an annuity series underwritten by its subsidiary, Loyal
 American Life Insurance Company.  We are also targeting other medical and
 specialty products which would include worksite marketing plans and wealth
 accumulation products for future releases."
 
     Websites Designed for Consumer Convenience
     "In our website development, we focus on making QQLink.com an easy-to-use,
 informative site," Henry added.  "Product benefits are described clearly, in
 easy-to-understand language.  In addition to an overview of benefits and how
 the plan works, customers also can find as much detail as they want and need
 on each product.
     "Once they have selected a product, the QQLink.com website makes it easy
 to receive a cost estimate based on coverage desired," Henry said.  "Then,
 it's a matter of going through a two-step application process.  A few
 preliminary questions will determine if the prospect is likely to qualify for
 the coverage.  If not, the prospect can easily exit or select another product.
 If it seems likely that coverage would be approved through underwriting, the
 consumer completes the full application online."
     After the application is submitted, a final determination on coverage
 approval is made and the approved policy is sent to the customer.
 
     QQLink to Offer Marketing Services for Participating Agents
     Each agent who enrolls in the QQLink.com program will receive:
 
     * a QQLink website
     * access to the quoting system for products available through the program
     * access to Internet certification and online product training and, in the
       future, continuing educational credits online
     * opportunity to access specialized lead and prospect generating programs
 
     Prospecting System is Exclusive to QQLink
     "We expect the lead and prospect generating programs to be of significant
 value to our participating agents," Nauert said.  "QQLink will offer an
 exclusive targeted database management and sales prospecting system through a
 joint venture with Econometrics, Inc., a Chicago-based consumer and business
 research and database marketing firm.
     "Econometrics has analyzed the policyholder base of Ceres insurance
 companies for products similar to those being offered through QQLink," Nauert
 said.  "Agents will be able to select product profiles for specific 5-digit
 zip code areas and receive online and in real time a set of most-likely-to-buy
 prospects.  These prospects will be derived from a 180-million consumer
 database."
     Some of the initial tests of this exclusive prospecting system by the
 sales organizations of several of the QQLink.com Founders have yielded sales
 close rates of 15-20% or more.
     This prospecting system is part of QQLink.com's wide range of services
 provided to assist participating agents in achieving the best e-commerce
 results.
     In addition to the Econometrics system, QQLink.com is establishing
 alliances with a number of affinity groups to move consumers to the website.
     "We expect over the coming months to develop a significant affinity
 database through groups such as credit unions, community banks, local and
 regional auto clubs and Chambers of Commerce," said Henry.  "We will be able
 to link these consumers to our QQLink.com websites, providing them with access
 to discount insurance and other products.  This process will generate
 increased traffic which will benefit the efforts of our participating QQLink
 agents."
     The marketing support arm of QQLink.com, called QQBiz.com, also includes a
 number of separate programs which will be available to participating agents:
 
     * Telemarketing Leads.  QQLink.com plans to develop qualified leads
       generated through telemarketing on a real time basis.
     * Turnkey Advertising Materials.  Mailers, ad slicks and e-mail letter
       texts will be available to agents through the QQBiz program.  Agents can
       then follow-up with traditional sales calls or via e-mail.
     * Internet Leads.  These leads will be generated through affinity groups
       and strategic partners and will include Internet shoppers who have
       expressed interest in the types of products QQLink has to offer.  Agents
       will be able to order these leads online and receive them through e-
       mail.
 
     Chicago Headquarters Established for QQLink.com
     To facilitate its growth and development, QQLink.com has established its
 headquarters in Chicago, at Madison Plaza.
     "We have set up this office to distinguish QQLink as a separate company,
 with a separate identity from Ceres," Nauert said.  "Chicago has become a
 hotbed of Internet-related companies and developments.  We believe this
 location will provide us greater access to additional personnel, technical
 support, creative talent and strategic alliances for the future."
 
     About Ceres Group
     Ceres Group provides a broad spectrum of health and life insurance,
 medical cost management services and specialty products to approximately
 600,000 insureds.  The Company actively distributes its products on a national
 basis through approximately 50,000 independent licensed sales agents and
 career agents and through various e-commerce platforms, including its own
 subsidiary, QQLink.com B2B-B2C Agent Exchange.  Traditional and e-commerce
 products are marketed to individuals, small businesses and the senior market.
 Through the implementation of its sales and financial business plan and
 acquisition strategy, the Company focuses on increasing fee-based revenue and
 reducing medical costs and underwriting risks for its subsidiaries and the
 blocks of business it acquires.  For more information, visit www.ceresgp.com.
     This news release contains certain forward-looking statements with respect
 to the financial condition, results of operations and business of the Company
 and QQLink.  Forward-looking statements are statements other than historical
 information or statements of current condition.  In light of the risks and
 uncertainties inherent in all future projections, the inclusion of forward-
 looking statements herein should not be regarded as representation by the
 Company, QQLink or any other person that the objectives or plans of the
 Company or QQLink will be achieved.  Many factors could cause actual results
 to differ materially from those contemplated by such forward-looking
 statements, including, among others, failure to successfully implement the
 business plans for QQLink, failure of businesses and consumers to adopt the
 Internet as a vehicle for purchasing insurance, rising healthcare costs,
 business conditions and competition in the healthcare industry and on the
 Internet for healthcare and other insurance products, developments in
 healthcare reform and other regulatory issues.  The foregoing review of
 important factors should not be construed as exhaustive. Investors and others
 should refer to the Company's filings with the Securities and Exchange
 Commission, including its annual report on Form 10-K for the year ended
 December 31, 1999, its quarterly reports on Form 10-Q and other periodic
 filings, for a description of the foregoing and other factors. The Company
 undertakes no obligation to update forward-looking statements to reflect
 events or circumstances after the date hereof or to reflect the occurrence of
 unanticipated events.
 
 

SOURCE Ceres Group, Inc.

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