Independence Holding Company Announces 2013 Second-Quarter and Six-Month Results

Independence Holding Company Announces 2013 Second-Quarter and Six-Month
Results

STAMFORD, Conn., Aug. 7, 2013 (GLOBE NEWSWIRE) -- Independence Holding Company
(NYSE:IHC) today reported 2013 second-quarter and six-month results.

Financial Results

Net income per share attributable to IHC increased to $.21 per share, diluted,
or $3,691,000, for the three months ended June 30, 2013 compared to $.20 per
share, diluted, or $3,531,000, for the three months ended June 30, 2012.
Revenues increased 50% to $151,900,000 for the three months ended June 30,
2013 compared to revenues for the three months ended June 30, 2012 of
$101,443,000, primarily due to increases in premium revenue, fee income and
net realized investment gains.

Net income per share attributable to IHC increased to $.47 per share, diluted,
or $8,392,000, for the six months ended June 30, 2013 compared to $.41 per
share, diluted, or $7,453,000, for the six months ended June 30, 2012.
Revenues increased 42% to $289,782,000 for the six months ended June 30, 2013
compared to revenues for the six months ended June 30, 2012 of $203,599,000,
primarily due to an increase in premium revenue, fee income and net realized
investment gains.

During the quarter, Madison National Life entered into a coinsurance agreement
to cede approximately $219 million of reserves, primarily annuities. As a
result of this transaction, the Company wrote off approximately $9.3 million
of deferred acquisition costs. However, those costs were more than offset by
the gains realized by the Company in the transaction, most of which resulted
from the required sale and transfer of invested assets.

Chief Executive Officer's Comments

Roy Thung, Chief Executive Officer, commented, "Earned premium for medical
stop-loss, which is by far our largest line of business, grew 25% over the
same quarter last year, driven by annual growth rates in excess of 28% in our
direct-written segment. Profitability of this line continues at expected
levels. We see a significant portion of this growth arising from employer
groups moving from fully insured to self-funding as they consider alternatives
under health care reform. We expect a continuation of these trends through the
remainder of this year and into 2014. We are also encouraged by the
performance of our existing group-life, disability and DBL business lines and
our expansion into new business lines.

"We have made the decision to exit major-medical for individuals and families
in the majority of states in which we do business due to changes brought about
under health care reform. In addition, in the first two quarters of 2013, the
Company experienced an increase in loss ratios in our fully insured segment
from business produced by certain of our major-medical distributors.
Accordingly, we either have terminated, or soon will be terminating, all
small-group producers that were hindering our performance. In order to
leverage our expertise in fully insured health, we are concentrating on
expanding our products in markets not adversely affected by reform, including:
short-term medical, dental, small-group stop-loss; non-subscriber occupational
accident, insurance for overseas employees and travelers, and pet insurance.
We expect that the loss in underwriting income from substantially exiting the
individual major-medical market in 2014 will be offset by an increase in
underwriting income from growth in these other areas.

"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
decreased to $15.44 per share at June 30, 2013 from $15.93 per share at
December 31, 2012 and our total stockholders' equity is $273 million. These
declines are primarily attributable to sharp increases in ten-year treasury
interest rates experienced during the quarter that caused a downward valuation
in our bond portfolio. Were rates to continue to increase, we would expect a
positive effect on future earnings as cash flows could be invested at higher
rates."

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, limited medical, group long and short-term disability and life,
dental, vision and various supplemental products. Madison Life sells group
life and disability, small group major medical, major medical for individuals
and families, 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.



INDEPENDENCE HOLDING COMPANY
SECOND QUARTER REPORT
June 30, 2013
(In Thousands, Except Per Share Data)

                                  Three Months Ended    Six Months Ended
                                  June 30,              June 30,
                                  2013        2012      2013       2012
                                                                
REVENUES:                                                        
Premiums earned                    $ 125,465 $85,469 $ 242,833 $169,243
Net investment income              7,002     7,609   15,003   16,360
Fee income                         6,039     5,889   12,581   13,310
Other income                       1,659     1,247   3,011    2,403
Net realized investment gains      11,735    1,850   16,354   2,987
Total other-than-temporary         --        (621)    --       (704)
impairment losses
                                                                
                                  151,900   101,443 289,782  203,599
                                                                
EXPENSES:                                                        
Insurance benefits, claims and     89,276    60,265  174,736  117,400
reserves
Selling, general and               44,862    33,331  87,742   69,803
administrative expenses
Amortization of deferred           10,948    1,631   12,388   3,225
acquisitions costs
Interest expense on debt           490       540     977      1,079
                                                                
                                  145,576   95,767  275,843  191,507
                                                                
Income before income taxes         6,324     5,676   13,939   12,092
Income taxes                       2,166     1,846   4,741    3,932
                                                                
Net income                         4,158     3,830   9,198    8,160
Less: income from noncontrolling   (467)     (299)   (806)     (707)
interests in subsidiaries
                                                                
NET INCOME ATTRIBUTABLE TO IHC     $ 3,691   $ 3,531 $ 8,392  $ 7,453
                                                                
Basic income per common share      $ .21      $ .20   $ .47    $ .41
                                                                
WEIGHTED AVERAGE SHARES            17,753    17,987  17,836   18,008
OUTSTANDING
                                                                
Diluted income per common share    $ .21      $ .20   $ .47    $ .41
                                                                
WEIGHTED AVERAGE DILUTED SHARES    17,805   18,025  17,922  18,100
OUTSTANDING

As of August 2, 2013, there were 17,667,526 common shares outstanding, net of
treasury shares.



INDEPENDENCE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)

                                                June 30,    December 31,
                                                2013        2012
                                                           
ASSETS:                                                     
Investments:                                                
Short-term investments                           $ 50        $50
Securities purchased under agreements to resell  10,588      33,956
Trading securities                               7,997       7,016
Fixed maturities, available-for-sale             573,527     719,602
Equity securities, available-for-sale            5,594       15,598
Other investments                                25,648      35,134
Total investments                                623,404     811,356
                                                           
Cash and cash equivalents                        18,977      23,945
Deferred acquisition costs                       29,624      33,401
Due and unpaid premiums                          73,146      49,430
Due from reinsurers                              383,848     166,880
Premium and claim funds                          36,524      40,596
Goodwill                                         50,318      50,318
Other assets                                     77,548      86,382
                                                           
TOTAL ASSETS                                     $ 1,293,389 $ 1,262,308
                                                           
LIABILITIES AND STOCKHOLDERS' EQUITY:                       
LIABILITIES:                                                
Claims and claim adjustment expenses-health      $ 240,155   $ 194,480
Future policy benefits-life and annuity          289,726     290,238
Funds on deposit                                 276,287     278,084
Unearned premiums                                11,106      8,453
Other policyholders' funds                       24,990      22,373
Due to reinsurers                                45,454      48,192
Accounts payable, accruals and other liabilities 71,425      71,495
Debt                                             8,000       8,000
Junior subordinated debt securities              38,146      38,146
                                                           
TOTAL LIABILITIES                                1,005,289   959,461
                                                           
STOCKHOLDERS' EQUITY:                                       
IHC STOCKHOLDERS' EQUITY:                                   
Preferred stock (none issued)                    --        --
Common stock                                     18,474      18,462
Paid-in capital                                  127,187     126,589
Accumulated other comprehensive income           (3,459)     15,013
Treasury stock, at cost                          (7,431)     (4,533)
Retained earnings                                137,921     130,153
                                                           
TOTAL IHC STOCKHOLDERS' EQUITY                   272,692     285,684
NONCONTROLLING INTERESTS IN SUBSIDIARIES         15,408      17,163
                                                           
TOTAL EQUITY                                     288,100     302,847
                                                           
TOTAL LIABILITIES AND EQUITY                     $ 1,293,389 $1,262,308

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