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Independence Holding Company Announces 2012 Fourth-Quarter and Annual Results

Independence Holding Company Announces 2012 Fourth-Quarter and Annual Results

STAMFORD, Conn., March 7, 2013 (GLOBE NEWSWIRE) -- Independence Holding
Company (NYSE:IHC) today reported 2012 fourth-quarter and annual results. As
previously reported, IHC paid a special 10% stock dividend to shareholders of
record on February 17, 2012. All per share amounts reflect such stock
dividend. This press release contains both GAAP and non-GAAP financial
information for which reconciliations can be found at the end of this release.

Financial Results

Net income per share attributable to IHC increased to $.46 per share, diluted,
or $8,290,000, for the three months ended December 31, 2012 compared to $.18
per share, diluted, or $3,225,000, for the three months ended December 31,
2011. Revenues increased to $112,960,000 for the three months ended December
31, 2012 compared to revenues for the comparable period in 2011 of
$104,493,000, primarily as a result of an increase in premiums. Due to the
profitability in 2012 and projected continuing profitable results of the
Company's 80% owned subsidiary, American Independence Corp. (AMIC), IHC's net
income and operating income for the fourth quarter and year 2012 was
positively impacted by an increase of $4,637,000, net of minority interest for
an increase in the deferred tax asset related to AMIC's federal net operating
loss carryforward (NOL). The deferred tax asset is reviewed for reasonableness
on a quarterly basis.

Net income per share attributable to IHC increased to $1.09 per share,
diluted, or $19,661,000, for the year ended December 31, 2012 compared to $.74
per share, diluted, or $13,003,000, for the year ended December 31, 2011. This
increase was achieved despite not receiving a one-time benefit this period
comparable to the credit of $2,319,000 of deferred income taxes relative to
the Company's investment in AMIC that we recorded in the first quarter of
2011. The year 2012 net income was positively impacted by the increase in
deferred tax asset of AMIC mentioned above. Revenues increased to $428,061,000
for the year ended December 31, 2012 compared to revenues for the year ended
December 31, 2011 of $417,996,000, primarily due to an increase in premiums.

IHC reported operating income^1 per share of $.42 per share, diluted, or
$7,595,000, for the three months ended December 31, 2012, compared to $.16 per
share, diluted, or $2,815,000, for the year ended December 31, 2011. IHC
reported operating income per share of $.93 per share, diluted, or
$16,816,000, for the year ended December 31, 2012, compared to $.64 per share,
diluted, or $11,301,000, for the year ended December 31, 2011. The operating
income for the year ended December 31, 2011 benefited from the tax credit of
$2,319,000 as described above whereas the operating income for the year ended
December 31, 2012 had no such benefit. The operating results for both the
three months and year ended December 31, 2012 were positively impacted by the
aforementioned increase in deferred tax asset of AMIC.

Chief Executive Officer's Comments

Roy Thung, Chief Executive Officer, commented, "We continue to be encouraged
by the significant increase in the profitability and growth of our stop-loss
segment, our largest core business, which we attribute to the more efficient
and controlled model of writing the majority of our medical stop-loss on a
direct basis. At present, all indicators point to a continuation of this
growth and higher level of profitability.  We are also encouraged by the
performance of our other lines of business, our expansion into new lines of
business, including pet, non-subscriber occupational accident and
international insurance, and our new direct-to-consumer tools and distribution
platforms. Our overall investment portfolio continues to be very highly rated
(on average, AA), and has a duration of approximately six years. Our book
value has increased 10% to $15.93 per share at December 31, 2012 from $14.46
per share at December 31, 2011 and our total stockholders' equity of $286
million is an all-time high."

Non-GAAP Financial Measures

The Company provides non-GAAP financial measures to complement its
consolidated financial statements presented in accordance with GAAP: (i)
Operating income is net income attributable to IHC excluding net realized
gains or losses and other-than-temporary impairment losses; and (ii) Operating
income per share is operating income (loss) on a per share basis.These
non-GAAP financial measures are intended to supplement the user's overall
understanding of the Company's current financial performance and its prospects
for the future.Specifically, the Company believes the non-GAAP results
provide useful information to both management and investors by excluding
realized gains or losses, net of taxes, that, when excluded from the GAAP
results, may provide additional understanding of the Company's core operating
results or business performance.However, these non-GAAP financial measures
are not intended to supersede or replace the Company's GAAP results.A
reconciliation of the non-GAAP results to the GAAP results is provided in the
"Reconciliation of GAAP Net Income Attributable to IHC to Non-GAAP Income from
Operations" schedule below. 

About Independence Holding Company

IHC is a holding company principally engaged in the life and health insurance
business and the acquisition of blocks of policies through its insurance
company subsidiaries (Standard Security Life Insurance Company of New York,
Madison National Life Insurance Company, Inc. and Independence American
Insurance Company) and its marketing and administrative affiliates.Standard
Security Life markets medical stop-loss, small group major medical, short-term
medical, major medical for individuals and families, limited medical, group
long and short-term disability and life, dental, vision and various
supplemental products. Madison Life sells group life and disability, employer
medical stop-loss, small group major medical, major medical for individuals
and families, short-term medical, dental, individual life insurance, and
various supplemental products. Independence American offers major medical for
individuals and families, medical stop-loss, small group major medical,
short-term medical, pet insurance, and non-subscriber occupational accident
and international coverages. IHC owns certain subsidiaries through its
majority ownership of American Independence Corp. (Nasdaq:AMIC), which is a
holding company principally engaged in the insurance and reinsurance business.

Certain statements and information contained in this release may be considered
"forward-looking statements," such as statements relating to management's
views with respect to future events and financial performance.Such
forward-looking statements are subject to risks, uncertainties and other
factors which could cause actual results to differ materially from historical
experience or from future results expressed or implied by such forward-looking
statements.Potential risks and uncertainties include, but are not limited to,
economic conditions in the markets in which IHC operates, new federal or state
governmental regulation, IHC's ability to effectively operate, integrate and
leverage any past or future strategic acquisition, and other factors which can
be found in IHC's other news releases and filings with the Securities and
Exchange Commission.IHC expressly disclaims any duty to update its
forward-looking statements or earnings guidance, and does not undertake to
provide any such guidance in the future.

^1 Operating income is a non-GAAP measure representing net income attributable
to IHC excluding net realized investment gains (losses) and
other-than-temporary impairment losses, net of applicable income tax. The
Company believes that the presentation of operating income may offer a better
understanding of the core operating results of the Company.A reconciliation
of net income attributable to IHC to operating income is included in this
press release.


INDEPENDENCE HOLDING COMPANY

THIRD QUARTER REPORT
December 31, 2012
(In Thousands, Except Per Share Data)

                                       Three Months Ended Year Ended
                                       December 31,       December 31,
                                       2012      2011     2012      2011
REVENUES:                                                         
Premiums earned                         $ 94,588  $ 81,310 $ 356,067 $ 336,414
Net investment income                   7,650     10,804   33,356    39,788
Fee income                              8,226     5,809    29,290    28,632
Net realized investment gains           1,101     6,065    5,099     8,670
Total other-than-temporary impairment   --        (948)    (704)     (1,523)
losses
Other income                            1,395     1,453    4,953     6,015
                                       112,960   104,493  428,061   417,996
                                                                 
EXPENSES:                                                         
Insurance benefits, claims and reserves 64,357    55,802   244,791   238,862
Selling, general and administrative     40,405    35,827   149,999   147,102
expenses
Amortization of deferred acquisitions   1,754     6,276    6,566     11,569
costs
Interest expense on debt                503       532      2,091     1,965
                                                                 
                                       107,019   98,437   403,447   399,498
                                                                 
Income before income taxes              5,941     6,056    24,614    18,498
Income taxes                            (4,120)   2,565    2,003     3,732
                                                                 
Net income                              10,061    3,491    22,611    14,766
Less: income from noncontrolling        (1,771)   (266)    (2,950)   (1,763)
interests in subsidiaries
                                                                 
NET INCOME ATTRIBUTABLE TO IHC          $ 8,290   $ 3,225  $ 19,661  $ 13,003
                                                                 
Basic income per common share           $ .46     $ .18    $ 1.09    $ .74
                                                                 
WEIGHTED AVERAGE SHARES OUTSTANDING     17,946    18,060   17,979    17,577
                                                                 
Diluted income per common share         $ .46     $ .18    $ 1.09    $ .74
                                                                 
WEIGHTED AVERAGE DILUTED SHARES         18,123    18,061   18,088    17,584
OUTSTANDING

 As of March 6, 2013, there were 17,913,966 common shares outstanding, net of
                               treasury shares.


RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO IHC TO NON-GAAP
INCOME FROM OPERATIONS
(In Thousands, Except Per Share Data)

                                         Three Months Ended Year Ended
                                         December 31,       December 31,
                                         2012      2011     2012     2011
                                                                  
Net income attributable to IHC            $ 8,290   $ 3,225  $ 19,661 $ 13,003
                                                                  
Realized gains, net of taxes              (695)     (3,883)  (3,292)  (5,553)
Net impairment losses recognized in       --        595      447      973
earnings, net of taxes
Write-off of deferred acquisition costs,  --        2,878    --       2,878
net of taxes^2
                                                                  
Operating income from operations          $ 7,595   $ 2,815  $ 16,816 $ 11,301
                                                                  
Non - GAAP basic income per common share  $ .42     $ .16    $ .94    $ .64
                                                                  
Non - GAAP diluted income per common      $ .42     $ .16    $ .93    $ .64
share

The other-than-temporary-impairment losses are primarily due to the write down
in value of certain Alt-A mortgage fixed maturities.

^2 In the fourth quarter of 2011, Standard Security Life entered into a
coinsurance agreement effective December 31, 2011, to transfer approximately
$143 million of group annuity contracts in the first quarter of 2012. As a
result of such agreement, the Company wrote-off $4.6 million of deferred
acquisition costs at December 31, 2011.

CONTACT: DAVID T. KETTIG
         (212) 355-4141 Ext. 3047
         www.IHCGroup.com