IHC Group

Independence Holding Company

Jun 6, 2016

Independence Holding Company Announces 2015 Fourth-Quarter and Annual Results

STAMFORD, Conn., June 06, 2016 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE:IHC) today reported 2015 fourth-quarter and annual results.  As a result of the delay in reporting these results, IHC is currently working on its 2016 first-quarter results.

Financial Results

Net income attributable to IHC increased to $.28 per share, diluted, or $4,933,000, for the three months ended December 31, 2015 compared to $.23 per share, diluted, or $4,034,000, for the three months ended December 31, 2014. Net income attributable to IHC increased to $1.71 per share, diluted, or $29,944,000, for the year ended December 31, 2015 compared to $.92 per share, diluted, or $16,293,000, for the year ended December 31, 2014.

Revenues decreased to $125,080,000 for the three months ended December 31, 2015 as compared to revenues for the three months ended December 31, 2014 of $127,090,000; and revenues decreased to $532,868,000 for the year ended December 31, 2015 compared to revenues for the year ended December 31, 2014 of $533,933,000.  Revenues decreased primarily due to a reduction in premiums from having exited the major medical market and a decrease in realized gains.  Exiting the major medical line, which was triggered by the requirements of the Affordable Care Act ("ACA"), resulted in a reduction in revenue of $15,856,000 for the fourth quarter and $58,382,000 for the year ended December 31, 2015. These reductions were partially offset by an increase in medical stop-loss and specialty health premiums and from gains due to the following transactions which closed in 2015: (i) the reinsurance of substantially all of our run-off blocks of individual life and annuities and the sale of the infrastructure related to those blocks; and (ii) the joint venture with Ebix, Inc. to form Ebix Health Exchange Holdings, LLC, which acquired our subsidiary Ebix Health Administration Exchange (f.k.a. IHC Health Solutions, Inc.).

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, pet, group and individual specialty health insurance.  All of these lines performed very well in 2015, and the pet and specialty health lines grew significantly.  We anticipate continued growth and good underwriting results from these lines of business in 2016.  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 $18.73 per share at December 31, 2015 from $17.25 per share at December 31, 2014, and our total stockholders' equity increased to $323 million at December 31, 2015 compared to $300 million at December 31, 2014.  Both of these are all-time highs. As previously reported, we have sold IHC Risk Solutions LLC and the stop-loss business it produced on March 31, 2016 and that transaction will further increase our stockholders' equity by approximately $100 million."

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% 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.

December 31, 2015
(In Thousands, Except Per Share Data)
  Three Months Ended Year Ended
  December 31, December 31,
   2015   2014   2015   2014 
Premiums earned$ 117,939 $ 116,938 $ 479,534 $ 479,048 
Net investment income  3,414   5,018   17,298   21,692 
Fee income  1,925   2,633   12,954   20,646 
Other income  1,920   1,727   10,276   4,859 
Gain on sale of subsidiary to joint venture  (221)  -   9,940   - 
Net realized investment gains  103   774   3,094   7,688 
Net impairment losses recognized in earnings  -   -   (228)  - 
   125,080   127,090   532,868   533,933 
Insurance benefits, claims and reserves  73,960   82,547   307,178   326,035 
Selling, general and administrative expenses  42,345   39,850   172,180   177,848 
Amortization of deferred acquisitions costs  78   1,054   3,524   4,941 
Interest expense on debt  444   440   1,798   1,797 
   116,827   123,891   484,680   510,621 
Income before income taxes  8,253   3,199   48,188   23,312 
Income tax expense (benefit)  3,106   (1,013)  17,666   6,391 
Net income  5,147   4,212   30,522   16,921 
Less: income from noncontrolling interests        
in subsidiaries  (214)  (178)  (578)  (628)
NET INCOME ATTRIBUTABLE TO IHC$ 4,933 $ 4,034 $ 29,944 $ 16,293 
Basic income per common share$.29$.23$ 1.73 $.93
WEIGHTED AVERAGE SHARES OUTSTANDING  17,262   17,371   17,314   17,471 
Diluted income per common share$.28$.23$ 1.71 $.92
OUTSTANDING  17,447   17,549   17,484   17,636 

As of May 31, 2016, there were 17,223,233 common shares outstanding, net of treasury shares.

(In Thousands, Except Share Data)
   December 31,  December 31,
    2015    2014 
 Short-term investments $   50   $   50  
 Securities purchased under agreements to resell     28,285       16,790  
 Trading securities     1,259       11,095  
 Fixed maturities, available-for-sale     428,601       583,880  
 Equity securities, available-for-sale     8,426       13,895  
 Other investments     21,538       25,251  
 Total investments     488,159       650,961  
 Cash and cash equivalents     19,171       25,083  
 Deferred acquisition costs     499       30,806  
 Due and unpaid premiums     69,075       62,628  
 Due from reinsurers     480,859       278,242  
 Premium and claim funds     22,755       32,553  
 Goodwill     52,940       50,318  
 Other assets     64,505       65,636  
 TOTAL ASSETS $   1,197,963   $   1,196,227  
 Policy benefits and claims $   245,443   $   236,803  
 Future policy benefits     270,624       277,041  
 Funds on deposit     173,350       186,782  
 Unearned premiums     10,236       9,455  
 Other policyholders' funds     11,822       18,802  
 Due to reinsurers     44,141       47,945  
 Accounts payable, accruals and other liabilities     66,308       67,641  
 Debt     5,189       4,000  
 Junior subordinated debt securities     38,146       38,146  
 TOTAL LIABILITIES     865,259       886,615  
 Preferred stock (none issued)     -       -  
 Common stock     18,569       18,531  
 Paid-in capital     127,733       127,098  
 Accumulated other comprehensive income (loss)     (3,440)     22  
 Treasury stock, at cost     (13,961)     (12,141)
 Retained earnings     194,450       166,177  
TOTAL IHC STOCKHOLDERS' EQUITY     323,351       299,687  
 TOTAL EQUITY     332,704       309,612  
 TOTAL LIABILITIES AND EQUITY  $   1,197,963   $   1,196,227  
CONTACT: Loan Nisser
(646) 509-2107