STAMFORD, Conn., May 09, 2018 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE:IHC) today reported 2018 first-quarter results. 

Financial Results

Net income attributable to IHC per share increased 59% to $.46 per share, diluted, or $6,961,000, for the three months ended March 31, 2018 compared to $.29 per share, diluted, or $4,936,000, for the three months ended March 31, 2017. The Company reported revenues of $88,304,000 for the three months ended March 31, 2018 compared to revenues for the three months ended March 31, 2017 of $71,840,000. 

Chief Executive Officer’s Comments

Roy T. K. Thung, Chief Executive Officer, commented, “We are very pleased with our results for the first quarter of 2018.  Our growth in earnings is largely attributable to a substantial increase in earnings from the specialty health segment, which significantly increased sales in 2017 and the first quarter of 2018.  Given that the current administration in Washington has endorsed affordable options to expensive Obamacare-compliant major medical health insurance coverages, IHC’s products are extremely well-positioned to have accelerating sales growth in the fourth quarter of 2018 and all of 2019.  The comment period has now closed on the proposed rule extending the duration of short-term medical (“STM”) to up to 364 days, or longer, and we anticipate that the final rule will be released soon and will likely be effective by the fourth quarter of this year.  In addition, beginning January 1, 2019, there will no longer be a penalty for individuals who do not have Affordable Care Act (“ACA”) plans.  We believe that these developments and the expected continuing increases in ACA premiums will make our alternatives much more attractive as individuals compare prices and benefits when the 2019 open enrollment period begins November 1, 2018.

We are recognized for our development of medical insurance packages that provide affordable coverage alternatives for consumers who cannot afford ACA policies or need our supplemental products to cover their high deductibles.  We recently introduced Connect Plus, which is a first-of-its-kind temporary medical plan providing coverage for certain pre-existing conditions up to $25,000 to consumers who qualify, subject to a deductible and coinsurance.  Our portfolio of affordable health insurance options also includes the following “core” products: Connect Lite (STM for the budget-minded), Connect (STM for those not concerned with pre-existing condition limitations), Care Access (first dollar indemnity coverage for hospitalizations) and Fusion (Care Access coupled with a high deductible STM product which provides both first dollar coverage for hospitalizations and peace of mind for large expenditures).  We bundle our core products with well-priced ancillary coverages, including: MetalGap (affordable coverage for claims due to both accidents and critical illnesses), dental, vision, Rx discount card and telemedicine.  We believe that sales of our bundled products will accelerate once the duration of STM is extended as anticipated. In addition, we are now targeting underserved small employer groups, which are also seeking more affordable health care plans through our limited medical and gap policies.

In addition to distributing our products through the best known e-brokers and the largest health insurers, a point of emphasis for IHC is enhancing our owned or internal distribution. We have hired an experienced executive to expand our call center distribution and upgrade our lead generation capabilities through investing in, which we view as our central platform for generating leads and sales opportunities for the call center, and creating a lead generation division through acquisition or organic growth.  We are also seeking to recruit additional HealtheDeals career advisors and have tasked one of our sales executives to focus on this effort.  Given the expected accelerated growth of our products later this year and in 2019 and our expanded lead generation, call center and advisor capabilities, we expect that a growing percentage of our sales will be produced by our owned distribution channels, which builds significant value for IHC. For all of the foregoing reasons, we are very optimistic as to the growth and profitability of our specialty health segment.”

Mr. Thung added, “We have also further invested in our New York statutory disability (DBL) line of business, which has begun to experience significant growth as a result of New York’s enactment of a paid family leave (PFL) rider.  We also are confident that both Madison National Life’s group life and disability business and Independence American’s pet insurance line of business will grow profitably. Our book value is $29.17 per share at March 31, 2018 compared to $28.98 per share at December 31, 2017. We have increased our dividend in each of the last four years, and announced a 50% increase to $.30 per share annually beginning with our next semi-annual dividend. In the first quarter of 2018, we repurchased 95,263 shares at an average cost of $27.73 per share or $2.6 million. Subsequent to March 31, the Company has repurchased an additional 8,200 shares at an average cost of $35.08 per share.  Our overall investment portfolio continues to be very highly rated (on average, AA) and has an effective duration of approximately four years. Finally, IHC has a substantial amount of free cash at the corporate level and excess capital in our insurance companies, which will readily support our expected growth and investments in distribution.”

About The IHC Group

Independence Holding Company (NYSE:IHC), formed in 1980, is a holding company that is principally engaged in underwriting, administering and/or distributing group and individual specialty benefit products, including disability, supplemental health, pet, and group life insurance through its subsidiaries.  The IHC Group owns three insurance companies (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company), and IHC Specialty Benefits, Inc., a technology-driven full-service marketing and distribution company that focuses on small employer and individual consumer products through general agents, telebrokerage, advisor centers, private label arrangements, and through the following brands:; Health eDeals Advisors; Aspira A Mas;; and  IHC creates value for insurance producers, carriers and consumers (both individuals and small businesses) through a suite of proprietary tools and products, all of which are underwritten by IHC’s carriers or placed with highly rated insurance companies.

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.


March 31, 2018
(In Thousands, Except Per Share Data)

  Three Months Ended
  March 31,
  2018 2017
Premiums earned$79,492 $62,941 
Net investment income 3,186  3,911 
Fee income 5,211  3,225 
Other income 344  1,591 
Net investment gains 71  172 
  88,304  71,840 
Insurance benefits, claims and reserves 35,907  32,211 
Selling, general and administrative expenses 43,343  32,082 
  79,250  64,293 
Income before income taxes 9,054  7,547 
Income taxes 2,006  2,538 
Net income  7,048  5,009 
(Income) from noncontrolling interests (87) (73)
Basic income per common share$.47 $.30 
Diluted income per common share$.46 $.29 

As of May 3, 2018, there were 14,795,049 common shares outstanding, net of treasury shares.


(In Thousands, Except Share Data)

  March 31,  December 31,
  2018  2017
Short-term investments$50  $50 
Securities purchased under agreements to resell 9,597   10,269 
Fixed maturities, available-for-sale 443,190   441,912 
Equity securities, available-for-sale 6,019   6,120 
Other investments 18,033   18,547 
Total investments 476,889   476,898 
Cash and cash equivalents 19,897   26,465 
Due and unpaid premiums 32,013   21,950 
Due from reinsurers 374,358   380,593 
Goodwill 50,697   50,697 
Other assets 86,387   84,020 
TOTAL ASSETS$1,040,241  $1,040,623 
Policy benefits and claims$165,923  $168,683 
Future policy benefits 212,174   214,766 
Funds on deposit 143,802   143,537 
Unearned premiums 15,678   6,666 
Other policyholders' funds 10,314   10,402 
Due to reinsurers 2,159   3,808 
Accounts payable, accruals and other liabilities 53,629   56,453 
TOTAL LIABILITIES 603,679   604,315 
Commitments and contingencies     
Redeemable noncontrolling interest 2,148   2,065 
Preferred stock (none issued) -   - 
Common stock 18,625   18,625 
Paid-in capital 124,774   124,538 
Accumulated other comprehensive loss (8,985)  (4,598)
Treasury stock, at cost (65,996)  (63,404)
Retained earnings 363,378   356,383 
TOTAL EQUITY 434,414   434,243 
TOTAL LIABILITIES AND EQUITY $1,040,241  $1,040,623 

CONTACT: Loan Nisser
(646) 509-2107