Independence Holding Company Announces 2013 Third-Quarter and Nine-Month Results

Independence Holding Company Announces 2013 Third-Quarter and Nine-Month
Results

STAMFORD, Conn., Nov. 6, 2013 (GLOBE NEWSWIRE) -- Independence Holding Company
(NYSE:IHC) today reported 2013 third-quarter and nine-month results.

Financial Results

Net income per share attributable to IHC amounted to $.21 per share, diluted,
or $3,639,000, for the three months ended September 30, 2013 compared to $.22
per share, diluted, or $3,918,000, for the three months ended September 30,
2012. Revenues increased 27% to $141,644,000 for the three months ended
September 30, 2013 compared to revenues for the three months ended September
30, 2012 of $111,502,000, primarily due to increases in premium revenue.

Net income per share attributable to IHC increased to $.68 per share, diluted,
or $12,031,000, for the nine months ended September 30, 2013 compared to $.63
per share, diluted, or $11,371,000, for the nine months ended September 30,
2012. Revenues increased 37% to $431,426,000 for the nine months ended
September 30, 2013 compared to revenues for the nine months ended September
30, 2012 of $315,101,000, primarily due to an increase in premium revenue and
net realized investment gains.

Nine-month results include the write-off of approximately $9.3 million of
deferred acquisition costs related to a coinsurance agreement entered into by
Madison National Life to cede approximately $219 million of reserves,
primarily annuities, in the second quarter of 2013. 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, our largest segment, grew substantially over the same quarter last
year. We anticipate that, by the end of the year, the medical stop-loss we
write on a direct basis will have increased by approximately 25% from 2012
levels. We attribute this growth to enhanced sales efforts, focused
underwriting and an expansion in the market as new employer groups migrate to
self-funding from fully insured in response to health care reform. We expect
this growth to continue in 2014. Profitability of our medical stop-loss line
continues at expected levels. We are also encouraged by the performance of our
existing group life, disability and DBL business lines and the expansion of
our pet insurance line. Additionally, as a result of an equity investment in a
successful producer of non-subscriber occupational accident, we anticipate
significant premiums and income from this new line of business in 2014.

"During 2013, IHC has for the first time experienced underwriting losses in
our individual major medical line of business, which are primarily
attributable to the effects of health care reform. As a result, like many
insurance companies, we have exited this line in all states. Since we have
discontinued writing this business, the losses incurred in 2013 will not recur
in 2014, except for any run-off.We are also recording decreased underwriting
margins in our small-group major medical line of business.The Company
attributes both the underwriting loss from individual major medical and the
reduced profitability of the small-group major medical line to changes brought
about by certain aspects of health care reform.Although health care reform
has led to adverse underwriting results in our major-medical business, it has
had a positive effect on sales for our higher-margin business lines, including
medical stop-loss and ancillary health products such as short-term medical,
dental, small-group stop-loss, hospital indemnity, critical illness,
scheduled-benefit and gap insurance plans.

"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 to $15.49 per share at September 30, 2013 from $15.44 per share at
June 30, 2013 and our total stockholders' equity is $274 million.

"As a result of our increased sales of stop-loss and higher-margin products
not negatively affected by reform, increased sales of pet insurance and
insurance for overseas employees and travelers, and the launching of a
non-subscriber occupational accident product, we remain optimistic as to our
2014 results."

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, group major medical, short-term
medical, limited medical, group long-term and short-term disability and life,
dental, vision and various supplemental products. Madison National Life sells
group life and disability, group major medical, dental, individual life
insurance and various supplemental products. Independence American offers pet
insurance, non-subscriber occupational accident, international coverages,
small-group major medical and short-term medical. 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 that 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
THIRD QUARTER REPORT
September 30, 2013
(In Thousands, Except Per Share Data)
                                                                
                                   Three Months Ended   Nine Months Ended
                                   September 30,        September 30,
                                   2013       2012      2013       2012
                                                                
REVENUES:                                                        
Premiums earned                     $125,174 $92,236 $368,007 $261,479
Net investment income               6,841      9,346     21,844     25,706
Fee income                          6,290      7,754     18,871     21,064
Other income                        922        1,155     3,933      3,558
Net realized investment gains      2,417      1,011     18,771     3,998
Net impairment losses recognized in --         --        --         (704)
earnings
                                                                
                                   141,644    111,502   431,426    315,101
                                                                
EXPENSES:                                                        
Insurance benefits, claims and      88,177     63,034    262,913    180,434
reserves
Selling, general and administrative 45,597     39,791    133,339    109,594
expenses
Amortization of deferred            1,404      1,587     13,792     4,812
acquisitions costs
Interest expense on debt            470        509       1,447      1,588
                                                                
                                   135,648    104,921   411,491    296,428
                                                                
Income before income taxes          5,996      6,581     19,935     18,673
Income taxes                       2,080      2,191     6,821      6,123
                                                                
Net income                         3,916      4,390     13,114     12,550
                                                                
Less: income from noncontrolling    (277)      (472)     (1,083)    (1,179)
interests in subsidiaries
                                                                
NET INCOME ATTRIBUTABLE TO IHC      $3,639   $3,918  $12,031  $11,371
                                                                
Basic income per common share       $.21     $.22    $.68     $.63
                                                                
WEIGHTED AVERAGE SHARES OUTSTANDING 17,683     17,957    17,784     17,991
                                                                
Diluted income per common share     $.21     $.22    $.67     $.63
                                                                
WEIGHTED AVERAGE DILUTED SHARES     17,735     18,028    17,890     18,076
OUTSTANDING
                                                                
As of November 1, 2013, there were 17,687,669 common shares outstanding, net
of treasury shares.


INDEPENDENCE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
                                                             
                                                September 30, December 31,
                                                2013          2012
                                                             
ASSETS:                                                       
Investments:                                                  
Short-term investments                           $50         $50
Securities purchased under agreements to resell  34,036        33,956
Trading securities                               6,394         7,016
Fixed maturities, available-for-sale             546,707       719,602
Equity securities, available-for-sale            5,605         15,598
Other investments                                26,302        35,134
Total investments                                619,094       811,356
                                                             
Cash and cash equivalents                        16,835        23,945
Deferred acquisition costs                       29,578        33,401
Due and unpaid premiums                          58,343        49,430
Due from reinsurers                              377,802       166,880
Premium and claim funds                          40,795        40,596
Goodwill                                         50,318        50,318
Other assets                                     83,984        86,382
                                                             
TOTAL ASSETS                                     $1,276,749  $1,262,308
                                                             
LIABILITIES AND STOCKHOLDERS' EQUITY:                         
LIABILITIES:                                                  
Claims and claim adjustment expenses-health      $232,688    $194,480
Future policy benefits-life and annuity         285,175       290,238
Funds on deposit                                 276,379       278,084
Unearned premiums                                10,970        8,453
Other policyholders' funds                       24,975        22,373
Due to reinsurers                                36,734        48,192
Accounts payable, accruals and other liabilities 75,861        71,495
Debt                                             6,000         8,000
Junior subordinated debt securities              38,146        38,146
                                                             
TOTAL LIABILITIES                                986,928       959,461
                                                             
STOCKHOLDERS' EQUITY:                                         
IHC STOCKHOLDERS' EQUITY:                                     
Preferred stock (none issued)                    --            --
Common stock                                    18,520        18,462
Paid-in capital                                  127,683       126,589
Accumulated other comprehensive income (loss)    (5,923)       15,013
Treasury stock, at cost                          (7,430)       (4,533)
Retained earnings                                141,564       130,153
                                                             
TOTAL IHC STOCKHOLDERS' EQUITY                   274,414       285,684
NONCONTROLLING INTERESTS IN SUBSIDIARIES         15,407        17,163
                                                             
TOTAL EQUITY                                     289,821       302,847
                                                             
TOTAL LIABILITIES AND EQUITY                    $1,276,749  $1,262,308

CONTACT: ADAM VANDERVOORT
         (646) 509-2156
         www.IHCGroup.com