Independence Holding Company Announces 2014 First-Quarter Results

Independence Holding Company Announces 2014 First-Quarter Results

STAMFORD, Conn., May 8, 2014 (GLOBE NEWSWIRE) -- Independence Holding Company
(NYSE:IHC) today reported 2014 first-quarter results.

Financial Results

IHC reported net income of $.21 per diluted share, or $3,701,000, for the
three months ended March 31, 2014 compared to $.26 per diluted share, or
$4,701,000, for the three months ended March 31, 2013. The Company reported
realized gains, net of tax, of $1,000,000 for the first three months of 2014
as compared to $2,961,000 in 2013. Revenues increased to $141,072,000 for the
three months ended March 31, 2014 compared to revenues for the three months
ended March 31, 2013 of $137,882,000.

Chief Executive Officer's Comments

Roy Thung, Chief Executive Officer, commented, "We are pleased that our
first-quarter results of $.21 per share are significantly improved over those
reported in the fourth quarter of 2013 of $.10 per share. Our fully insured
segment performed significantly better in the first quarter of 2014 than in
the fourth quarter of 2013, as losses arising from the lines of major-medical
business that we have exited – and which are in runoff – were significantly
reduced due to lower premiums. We expect this runoff premium to continue to
decline through the third quarter of 2014 and to terminate by the end of the
year.Losses associated with the runoff are, as previously disclosed, largely
attributable to the requirements of the Affordable Care Act.

Earned premium for medical stop-loss, our largest segment, grew substantially
over the same quarter of last year despite the cancellation during 2013 of two
independent MGU's that were unprofitable.We also are reporting an increase in
earnings in this line in the first quarter of 2014 due to better results on
our directly written business. We attribute these positive developments to
enhanced sales efforts in our direct business, focused underwriting and a
general expansion of the market as new employer groups migrate to self-funding
from fully insured in response to health care reform.We expect continued
growth of business written as evidenced by the 30% growth in our direct
business written in the twelve months ended April 30, 2014.

Our overall investment portfolio continues to be very highly rated (on
average, AA) and has a duration of approximately six years. Our book value was
$15.76 per share at March 31, 2014, an increase of 4% over the book value per
share at December 31, 2013, and our total stockholders' equity is $277 million
at March 31, 2014 compared to $269 million at December 31, 2013. Through May
1, 2014, we have repurchased 168,678 shares of IHC stock for $2.3 million at
an average price of $13.35 per share, and our current intention is to continue
to repurchase shares at current price levels.

With respect to medical stop-loss, we are quite pleased with our
transformation into a direct writer.For 2014 and beyond, we expect that a
growing percentage (currently 85%) of ourblock of stop-loss business will be
written via our direct platform.Our fully insured division has transitioned
from being focused on major-medical to being principally a specialty health
insurance company with controlled distribution and higher-margin lines of
business.As a result of the significant increase in the volume and quality of
our stop-loss business and the improved profitability in our fully insured
segment, we expect improved operating results for the remainder of the year as
compared to 2013." 

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

FIRST QUARTER REPORT
March 31, 2014
(In Thousands, Except Per Share Data)
                                                                  
                                                        Three Months Ended
                                                        March 31,
                                                        2014       2013
REVENUES:                                                          
Premiums earned                                          $123,270 $117,368
Net investment income                                    5,801      8,001
Fee income                                               9,339      6,542
Other income                                             1,111      1,352
Net realized investment gains                            1,551      4,619
                                                        141,072    137,882
                                                                  
EXPENSES:                                                          
Insurance benefits, claims and reserves                  85,309     85,460
Selling, general and administrative expenses             48,135     42,880
Amortization of deferred acquisitions costs              1,282      1,440
Interest expense on debt                                 481        487
                                                                  
                                                        135,207    130,267
                                                                  
Income before income taxes                               5,865      7,615
Income taxes                                             1,860      2,575
                                                                  
Net income                                               4,005      5,040
Less: income from noncontrolling interests in            (304)      (339)
subsidiaries
                                                                  
NET INCOME ATTRIBUTABLE TO IHC                           $3,701   $4,701
                                                                  
Basic income per common share                            $.21     $.26
                                                                  
WEIGHTED AVERAGE SHARES OUTSTANDING                      17,623     17,919
                                                                  
Diluted income per common share                          $.21     $.26
                                                                  
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING              17,763     18,040
                                                                  

As of May 1, 2014, there were 17,491,712 common shares outstanding, net of
treasury shares.

                                                            
INDEPENDENCE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
                                                            
                                                March 31,    December 31,
                                                2014         2013
                                                            
ASSETS:                                                      
Investments:                                                 
Short-term investments                           $50        $50
Securities purchased under agreements to resell  34,971       22,594
Trading securities                               10,594       7,125
Fixed maturities, available-for-sale             535,094      542,287
Equity securities, available-for-sale            11,995       11,803
Other investments                                25,344       25,123
Total investments                                618,048      608,982
                                                            
Cash and cash equivalents                        23,081       24,229
Deferred acquisition costs                       29,857       29,777
Due and unpaid premiums                          62,272       59,435
Due from reinsurers                              380,002      380,229
Premium and claim funds                          38,262       37,353
Goodwill                                         50,318       50,318
Other assets                                     86,178       78,712
                                                            
TOTAL ASSETS                                     $1,288,018 $1,269,035
                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY:                        
LIABILITIES:                                                 
Policy benefits and claims                       $236,656   $237,754
Future policy benefits                           287,309      287,449
Funds on deposit                                 274,090      274,826
Unearned premiums                                13,833       12,423
Other policyholders' funds                       25,014       25,129
Due to reinsurers                                39,528       37,113
Accounts payable, accruals and other liabilities 80,867       71,889
Debt                                             6,000        6,000
Junior subordinated debt securities              38,146       38,146
                                                            
TOTAL LIABILITIES                                1,001,443    990,729
                                                            
STOCKHOLDERS' EQUITY:                                        
IHC STOCKHOLDERS' EQUITY:                                    
Preferred stock (none issued)                    --           --
Common stock                                     18,524       18,524
Paid-in capital                                  126,335      126,239
Accumulated other comprehensive income (loss)    (4,954)      (10,472)
Treasury stock, at cost                          (9,432)      (8,169)
Retained earnings                                146,357      142,669
                                                            
TOTAL IHC STOCKHOLDERS' EQUITY                   276,830      268,791
NONCONTROLLING INTERESTS IN SUBSIDIARIES         9,745        9,515
                                                            
TOTAL EQUITY                                     286,575      278,306
                                                            
TOTAL LIABILITIES AND EQUITY                     $1,288,018 $1,269,035
                                                            

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