Independence Holding Company Reports Second Quarter and Half-Year 2021 Results

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STAMFORD, Connecticut, Aug 09, 2021 (GLOBE NEWSWIRE) – Independence Holding Company (NYSE: IHC) today announced its second quarter and half year 2021 results.

Financial results

Net income attributable to IHC of $ 76,471,000 or $ 5.22 per share for the quarter ended June 30, 2021 compared to $ 421,000 or $ 0.03 per share, diluted, for the quarter ended June 30, 2020. The Net income attributable to IHC was $ 82,092,000 or $ 5.61 per share, diluted, for the six-month period ended June 30, 2021, compared to $ 4,699,000 or $ 0.32 per share, diluted, for the six-month period ended June 30, 2020.

The Company completed three transactions this year for the sale of Madison National Life Insurance Company, Inc. (“Madison National Life”) to Horace Mann Educators Corporation, Standard Security Life Insurance Company of New York (“Standard Security Life”) to Reliance Standard Life Insurance Company and 70% of its pet business, including all of the common shares of Independence American Insurance Company and 85% of the common shares of PetPartners, Inc. (“PetPartners”), to Iguana Capital, Inc. (“Iguana Capital”).

The Company completed the sale of PetPartners on June 30, 2021, and results for the three months and six months of 2021 include a gain on the sale of PetPartners of $ 62,693,000 net of tax. Certain revenues of Standard Security Life and Independence American Insurance Company are also included in the income from discontinued operations. Madison National Life results will be presented as discontinued operations in the third quarter. The gain on the sale of Standard Security Life, Independence American Insurance Company and Madison National Life will be recognized when these transactions receive regulatory approval and are completed.

CEO comments

Roy TK Thung, Chief Executive Officer, said, “We are very pleased with the three deals we have completed this year, and achieving sales should occupy the bulk of the company’s attention for the remainder of 2021. After all the transactions are closed, IHC expects that it will hold approximately $ 560 million in cash and investments, net of liabilities; a 30% stake in Iguana Capital raised to $ 115 million; and our Medicare agency and other assets with an aggregate book value of approximately $ 20 million, resulting in an estimated book value of approximately $ 47.00 per share, calculated as if the transactions had taken place and had been recorded on June 30, 2021. Actual book value by as of June 30, 2021 was $ 37.45. These projections are based on information currently known to management and include the use of estimates and assumptions regarding anticipated transaction costs, estimated tax rates and other potential changes.

Mr. Thung added, “We intend to invest, develop and expand our agency operations into a much larger and profitable operation. As we move forward, our agency operations will be centered on INSXcloud.com (INSX), our CMS approved web brokerage. INSX provides an agent with the ability to quote, directly enroll, and track applications in the federally-facilitated marketplace, and much more. The rest of our agency includes our W-2 call centers and our captive unit of independent advisors, both of which sell into the under / over 65 health insurance markets, as well as our independent brokerage group which recruits independent agents and agencies to sell through our platforms and contracts. We are refocusing part of our over 65 division on the under 65 market in order to take advantage of the positioning of INSX, our agency and our lead generation capabilities, and the market growth resulting from the American Rescue Plan Act. While these operations have not been profitable, we expect these changes will improve results and lead us to profitability in the future. In addition, we will also continue to monitor and support our minority stake in Iguana Capital. “

About the IHC Group

Independence Holding Company (NYSE: IHC), through our current subsidiaries, underwrites and distributes health, disability and group life, New York State DBL, paid family leave, and pet insurance. IHC underwrites policies in all 50 states, Washington DC, Puerto Rico and the US Virgin Islands through our three insurers: Independence American Insurance Company, Standard Security Life Insurance Company of New York (“Standard Security Life”) and Madison National Life Insurance Company, Inc. (“Madison National Life”). We also distribute products nationwide through multiple channels including our agencies, call centers, advisors, direct and affinity relations, web broker and web properties including www.healthedals.com; www.assurancesante.org; www.medicareresources.org; www.petplace.com; and www.inxscloud.com. As previously announced, IHC has entered into share purchase agreements to sell all of the issued and outstanding share capital of Standard Security Life, Madison National Life and Independence American Holdings Corp., which includes Independence American Insurance Company and d ‘other assets of IHC’s companion animal business, each subject to regulatory approval. To learn more, visit https://ihcgroup.com/.

Forward-looking statements

Certain statements and information contained in this press release may be considered “forward-looking statements”, such as statements relating to management’s opinions regarding future events and financial performance. These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical experience or future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, the economic conditions of the markets in which IHC operates, new federal or state regulations, IHC’s ability to effectively operate, integrate and operate any past or future strategic acquisitions, and other factors that may be found in other press releases and documents filed by IHC with the Securities and Exchange Commission. IHC expressly disclaims any obligation to update its forward-looking statements, except as required by applicable law.

INDEPENDENT HOLDING COMPANY

CONDENSED CONSOLIDATED INCOME STATEMENTS
June 30, 2021
(In thousands, except shares and data per share)

Three months ended

Six months ended

June 30th

June 30th

2021

2020

2021

2020

REVENUES:

Earned premiums

$

42 451

$

49 138

$

86,023

$

99,804

Net investment income

1,651

2 329

3 452

4,828

Fee income

4,944

3,907

11,079

7 341

Other income

410

807

1,026

1,432

Net investment gains (losses)

(126

)

274

91

117

49,330

56,455

101 671

113,522

EXPENSES:

Insurance benefits, claims and reservations

17 192

21 339

39,113

47 628

Selling, general and administrative expenses

32,842

37 974

63,602

69,034

50,034

59,313

102,715

116,662

Loss from continuing operations before income taxes

(704

)

(2858

)

(1044

)

(3 140

)

Tax benefit

(267

)

(1,066

)

(430

)

(1,187

)

Loss from continuing operations, net of tax

(437

)

(1792

)

(614

)

(1,953

)

Interrupted operations:

Total income before tax from discontinued operations

92 375

3,594

99,574

9,243

Tax expense on discontinued operations

15,570

1,264

17,026

2,430

Profit from discontinued operations, net of tax

76,805

2,330

82,548

6 813

Net revenue

76,368

538

81,934

4 860

(Income) loss of non-redeemable non-controlling interests

1

(43

)

2

(34

)

Loss (of income) from redeemable non-controlling interests

102

(74

)

156

(127

)

NET INCOME ATTRIBUTABLE TO IHC

$

76,471

$

421

$

82,092

$

4,699

Basic income per common share

Loss from continuing operations

$

(.03

)

$

(.12

)

$

(.04

)

$

(.13

)

Income from interrupted operations

5.25

.15

5.65

.45

Basic income per common share

$

5.22

$

.03

$

5.61

$

.32

WEIGHTED AVERAGE OUTSTANDING SHARES

14 642

14 765

14 641

14 811

Diluted earnings per common share

Loss from continuing operations

$

(.03

)

$

(.12

)

$

(.04

)

$

(.13

)

Income from interrupted operations

5.25

.15

5.65

.45

Diluted earnings per common share

$

5.22

$

.03

$

5.61

$

.32

WEIGHTED AVERAGE OF DILUTED SHARES IN CIRCULATION

14 642

14 765

14 641

14 811

As of August 7, 2021, there were 14,644,389 ordinary shares outstanding, net of treasury shares.

INDEPENDENT HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)

June 30, 2021

December 31, 2020

ASSETS:

Investments:

short term investments

$

1,550

$

1,568

Securities purchased under resale agreements

70,323

33,038

Fixed maturities, available for sale

183,709

210,719

Equity securities

1,753

Other investments

2,022

1,928

Total investments

257,604

249,006

Cash and cash equivalents

22 834

31 923

Investment in Iguana Capital, Inc.

33 762

Premiums due and unpaid

10,950

9,981

Due by reinsurers

354,735

357,237

Good will

12 486

12 486

Sequestered funds

78,779

other assets

29,864

46 832

Assets attributable to discontinued operations

416 162

375,691

TOTAL ASSETS

$

1 217 176

$

1,083,156

LIABILITIES AND EQUITY:

LIABILITIES:

Police benefits and claims

$

127 815

$

132,957

Future benefits of the policy

196,026

198,086

Funds on deposit

142,155

141,376

Unearned premiums

1,763

1952

Other insured’s funds

11 988

12,001

Due to reinsurers

2 242

3,872

Accounts payable, accrued liabilities and other liabilities

66,519

44 855

Liabilities attributable to discontinued operations

120 180

75 939

TOTAL RESPONSIBILITIES

668 688

611,038

Commitments and contingencies

Interest not giving redeemable control

2 312

EQUITY:

Preferred shares (none issued)

Ordinary actions

18,625

18,625

Paid-up capital

125 653

124,757

Cumulative other comprehensive income

3,220

4,197

Own shares, at cost

(77 189

)

(77,088

)

Retained earnings

478,139

399,273

TOTAL IHC EQUITY

548,448

469 764

NON-RECOVERABLE INTEREST WITHOUT CONTROL

40

42

EQUITY

548,488

469,806

TOTAL LIABILITIES AND EQUITY

$

1 217 176

$

1,083,156

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


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