AMIC American Independence Corp.

Financial Results

On March 31, 2016, IHC completed the sale of IHC Risk Solutions LLC (“Risk Solutions”), exited the medical stop-loss business and realized an after tax gain of approximately $99,793,000, net of noncontrolling interest.  In addition, under the purchase and sale agreement, all of IHC’s in-force medical stop-loss business produced by Risk Solutions is 100% co-insured as of January 1, 2016 and is expected to run out by early 2017.    The disposal transaction qualified for reporting as discontinued operations in the first quarter of 2016.   

Net income attributable to IHC of $106,010,000, or $6.08 per share diluted, for the three months ended March 31, 2016 increased from $5,219,000, or $.30 per share diluted, in the same period of 2015 primarily due to the sale of Risk Solutions. Income from continuing operations increased to $.33 per share, diluted, or $5,896,000, for the three months ended March 31, 2016 compared to $.27 per share, diluted, or $4,701,000, for the three months ended March 31, 2015.

The Company reported revenues of $75,895,000 for the three months ended March 31, 2016 compared to revenues for the three months ended March 31, 2015 of $133,105,000.  Revenues decreased primarily due to a reduction in premiums from the 100% co-insurance of the Company’s stop-loss business produced by Risk Solutions. 

Chief Executive Officer’s Comments

Roy T. K. Thung, Chief Executive Officer, commented, “With the sale of our stop-loss business, we are now focused on growing our remaining lines of business: group long term disability and life, statutory disability benefit policies (DBL) in New York, and group and individual specialty health insurance (including dental, vision, short term medical, hospital indemnity, gap and scheduled benefit plans).  All of these lines performed well in the first quarter and we anticipate continued growth and good underwriting results from these lines of business for the remainder of 2016.”

He continued, “Also as a result of the sale of our stop-loss business, we will have a very significant amount of cash and, by early next year as the stop-loss runs out, significant excess statutory surplus in our carriers.  We have designated a relatively small portion of our liquidity to generate growth in our current product lines, and to date we have made two investments in call centers that focus on selling our specialty health products.  We have not yet determined how to utilize our remaining large amount of liquidity. Our overall investment portfolio continues to be very highly rated (on average, AA) and has a duration of approximately five and a half years. Our book value increased to $25.08 per share at March 31, 2016 from $18.73 per share at December 31, 2015, and our total stockholders’ equity increased to $432 million at March 31, 2016 compared to $323 million at December 31, 2015.  Both of these are all-time highs.  The closing price of IHC stock on Friday was $17.41 or 69% of our book value and 81% of our tangible book value.”  

About The IHC Group

Independence Holding Company (NYSE:IHC) is a holding company that is principally engaged in underwriting, administering and/or distributing group and individual disability, specialty and supplemental health, pet, and life insurance through its subsidiaries since 1980.  The IHC Group (including through its 91.4% ownership of American Independence Corp. (NASDAQ:AMIC)) owns three insurance companies (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company), a majority of Ebix Health Administration Exchange, Inc., a fully insured third party administrator, and IHC Specialty Benefits, Inc., which is a technology-driven insurance sales and marketing company that creates value for insurance producers, carriers and consumers (both individuals and small businesses) through a suite of proprietary tools and products (including ACA plans and small group medical stop-loss).  All products are placed with highly rated carriers.

Forward-looking Statements

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 unless required by applicable law.

Loan Nisser
(646) 509-2107
www.IHCGroup.com

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