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Independence Holding Company Announces 2021 First-Quarter Results

STAMFORD, Conn., May 06, 2021 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE: IHC) today reported 2021 first-quarter results.

Financial Results

Net income attributable to IHC was $5,621,000, or $.38 per share, diluted, for the three months ended March 31, 2021 compared to $4,278,000, or $.29 per share, diluted, for the three months ended March 31, 2020.

The Company reported revenues of $124,657,000 for the three months ended March 31, 2021 compared to revenues for the three months ended March 31, 2020 of $103,997,000. The increase in revenues primarily relates to an increase for the Paid Family Leave (“PFL”) portion of our New York disability law (“DBL”) business, higher premium volume in our pet insurance business and an increase in sales of insurance products (primarily senior products, Affordable Care Act (“ACA”) plans and small group stop-loss) by the IHC agencies for multiple unaffiliated insurance carriers.

Chief Executive Officer’s Comments

Roy T. K. Thung, Chief Executive Officer, commented, “We are pleased with the increases in net income and revenues for the first quarter of 2021, primarily attributable to the performance of our DBL/PFL line of business as referenced above. Partially offsetting these positive results, we are experiencing a sharp drop in short term medical sales due to changes in the ACA, including the extended Special Enrollment Period for ACA coverage and the increased Advanced Premium Tax Credits, also known as subsidies, which have made ACA plans more affordable for many people who in the past may have elected short term medical. The Company expects weak sales in short term medical to continue. In addition, the group life incidence rate was higher than expected in the first quarter due to COVID-19 reported deaths, but subsequent to March 31st the death rates have returned to normal.”

Mr. Thung added, “IHC has a very strong balance sheet with no indebtedness and a very substantial amount of free cash at the corporate level and significant excess capital in our insurance companies. Our book value was $32.36 per share at March 31, 2021. Our overall investment portfolio continues to be very highly rated (on average, AA) and has an effective duration of under three years.”  

About Independence Holding Company

Through our subsidiaries, Independence Holding Company (NYSE: IHC) underwrites and distributes health, group disability and life, New York State DBL and paid family leave, and pet insurance. IHC underwrites policies in all 50 states, Washington D.C., Puerto Rico and the U.S. Virgin Islands through our three carriers: Independence American Insurance Company, Standard Security Life Insurance Company of New York (“Standard Security Life”) and Madison National Life Insurance Company, Inc. We also distribute products nationally through multiple channels, including our agencies, call centers, advisors, direct and affinity relationships, Web Broker, and web properties, including www.healthedeals.com; www.healthinsurance.org; www.medicareresources.org; www.petplace.com; and www.mypetinsurance.com. As previously announced, IHC recently entered into a stock purchase agreement to sell all of the issued and outstanding capital stock of Standard Security Life. To learn more, visit https://ihcgroup.com/.

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.



INDEPENDENCE HOLDING COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
March 31, 2021

(In Thousands, Except Shares and Per Share Data)

  Three Months Ended
  March 31,
  2021 2020
REVENUES:    
Premiums earned$115,141$96,050 
Net investment income 2,592 3,240 
Fee income 6,356 3,942 
Other income 353 477 
Net investment gains 215 288 
  124,657 103,997 
     
EXPENSES:    
Insurance benefits, claims and reserves 67,378 54,058 
Selling, general and administrative expenses 50,420 44,574 
     
  117,798 98,632 
     
Income before income taxes 6,859 5,365 
Income taxes 1,293 1,043 
     
Net income  5,566 4,322 
(Income) loss from noncontrolling interests 55 (44)
     
NET INCOME ATTRIBUTABLE TO IHC$5,621$4,278 
     
     
Basic income per common share$.38$.29 
     
WEIGHTED AVERAGE SHARES OUTSTANDING 14,641 14,856 
     
Diluted income per common share$.38$.29 
     
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 14,778 14,911 

As of May 6, 2021, there were 14,639,449 common shares outstanding, net of treasury shares.



INDEPENDENCE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)

   March 31,  December 31,
   2021  2020
       
ASSETS:      
 Investments:      
 Short-term investments $1,559  $2,634 
 Securities purchased under agreements to resell  145,392   49,990 
 Fixed maturities, available-for-sale  390,942   406,649 
 Equity securities  2,671   6,119 
 Other investments  10,768   8,238 
 Total investments  551,332   473,630 
       
 Cash and cash equivalents  22,123   72,089 
 Due and unpaid premiums  40,688   29,182 
 Due from reinsurers  357,053   357,205 
 Goodwill  74,900   74,900 
 Other assets  78,876   76,150 
       
 TOTAL ASSETS $1,124,972  $1,083,156 
       
LIABILITIES AND STOCKHOLDERS’ EQUITY:      
LIABILITIES:      
 Policy benefits and claims $193,282  $179,232 
 Future policy benefits  196,439   198,086 
 Funds on deposit  141,891   141,376 
 Unearned premiums  43,798   12,789 
 Other policyholders’ funds  11,920   12,001 
 Due to reinsurers  2,634   3,872 
 Accounts payable, accruals and other liabilities  58,961   63,682 
       
 TOTAL LIABILITIES  648,925   611,038 
       
       
Commitments and contingencies      
Redeemable noncontrolling interest  2,258   2,312 
       
STOCKHOLDERS’ EQUITY:      
 Preferred stock (none issued)  -   - 
 Common stock  18,625   18,625 
 Paid-in capital  125,189   124,757 
 Accumulated other comprehensive income  2,268   4,197 
 Treasury stock, at cost  (77,228)  (77,088)
 Retained earnings  404,894   399,273 
       
TOTAL IHC STOCKHOLDERS’ EQUITY  473,748   469,764 
NONREDEEMABLE NONCONTROLLING INTERESTS  41   42 
        
 TOTAL EQUITY  473,789   469,806 
        
 TOTAL LIABILITIES AND EQUITY  $1,124,972  $1,083,156 


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


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