STAMFORD, Conn., Aug. 06, 2020 (GLOBE NEWSWIRE) — Stamford, Connecticut, August 6, 2020. Independence Holding Firm (NYSE: IHC) at present reported 2020 second-quarter and six-month outcomes.
Internet earnings of $421,000, or $.03 per share for the three months ended June 30, 2020 in comparison with $6,847,000 or $.46 per share, diluted, for the three months ended June 30, 2019. Internet earnings was $4,699,000 or $.32 per share, diluted, for the six months ended June 30, 2020 in comparison with $15,574,000 or $1.04 per share, diluted, for the six months ended June 30, 2019.
Internet earnings in 2020 is decrease primarily due to the next two components. First, now we have skilled a fabric improve in bills associated to the numerous improve in hiring, licensing and coaching numerous name middle brokers, all of whom are workers, and in reference to the latest acquisition of a advertising expertise (“MarTech”) firm. Presently, now we have 143 name middle brokers primarily promoting senior merchandise, however don’t but have any significant gross sales from these new brokers. This scaling up of bills will proceed till the 2021 Annual Enrollment Interval (AEP) begins, which is once we will understand a big majority of our senior gross sales for the 12 months. Starting with AEP, which commences October 15, 2020, we count on to comprehend income and reap the advantages of this ramp up. Second, we had been affected by two non-recurring gadgets: (i) 2020 web earnings consists of bills of $3,660,000, or $.25 per share, diluted, for compliance with the regulatory settlement agreements with our three insurance coverage carriers ensuing from a multistate market conduct examination with respect to a number of of our specialty well being merchandise for the interval January 1, 2014 by means of September 30, 2017, and (ii) the 2019 six months’ web earnings features a $2.6 million acquire, web of tax, or $.17 per share, diluted, on the sale of an fairness methodology funding with no corresponding acquire this 12 months.
On July 28, 2020, the USA Courtroom of Appeals for the Seventh Circuit affirmed the District Courtroom’s affirmation of an arbitration award in favor of the Firm. As beforehand disclosed, the Firm was awarded $5,641,000 in an arbitration continuing in opposition to a 3rd get together administrator with which we previously did enterprise (“TPA”). The TPA filed a bond for the awarded quantity to be able to proceed. IHC has not but recorded this award, and solely upon last willpower will IHC have the ability to acknowledge the award in its earnings.
The Firm reported revenues of $107,305,000 for the three months ended June 30, 2020 in comparison with revenues for the three months ended June 30, 2019 of $95,122,000. The Firm reported revenues of $211,302,000 for the six months ended June 30, 2020 in comparison with revenues for the six months ended June 30, 2019 of $189,304,000. The rise in revenues primarily pertains to a rise in charges for the Paid Household Depart enterprise and better premium quantity in our pet insurance coverage enterprise
Chief Govt Officer’s Feedback
Roy T. Okay. Thung, Chief Govt Officer, commented, “Though web earnings is decrease for 2020 because of the causes acknowledged above and gross sales of sure merchandise would have been larger if not for the COVID-19 pandemic, we’re happy with our gross sales and underwriting outcomes for the primary six months of 2020. We now have carried out enterprise continuity and emergency response plans to proceed to offer service to our prospects and to guard the well being and wellbeing of our workers whether or not they’re working from house or as soon as they return to workplaces which have been modified to guard them. Our buyer going through brokers have transitioned to a full-time work from home model, and with the implementation of enhanced expertise options, now we have not recognized any materials impression to agent productiveness. In truth, our accelerated deployment of expertise enhancements within the areas of coaching, CRM, and prospect scoring, has positioned us to achieve efficiencies throughout the upcoming annual enrollment durations. As soon as brokers are in a position to return to work, we count on to proceed to permit some brokers to work remotely. The success we’re at present experiencing with the work-from-home model will enable us to considerably ramp up the variety of brokers by the 2021 and 2022 AEPs, and our MarTech platform may be readily scaled to provide all the vital leads.
Mr. Thung continued, “We’re notably excited by the prospects for 2 of our traces of enterprise: pet insurance coverage and senior market gross sales. I want to first replace you on the prospects of our pet division. We proceed to see very sturdy demand for pet insurance coverage ensuing from file adoptions and breeder gross sales as pet dad and mom are looking for the consolation of canine and cat companions in these tough occasions. To this finish, Pet Companions, Inc. (PPI) continues to expertise a major improve in gross sales because of elevated registrations with its unique relationship with American Kennel Membership (AKC) and PPI’s efforts to extend insurance coverage conversions by means of enhanced expertise and direct advertising. PPI has developed an app with state-of-the-art expertise (together with a full suite of insurance coverage self-service capabilities), which will probably be obtainable in Android and IOS app shops by September 1st. We are going to distribute this app with present gross sales channels and promote it by means of different massive companions that need to distribute pet insurance coverage to their purchasers. This app can even include options that we consider will probably be very engaging to AKC breeders and pet dad and mom who want to stay in contact with their breeder and litter mates. PPI can be coming to market with a number of white label distribution offers and has considerably elevated its funding in advertising outreach to pet dad and mom underneath the PPI model. We consider these initiatives will proceed to speed up PPI’s insured pets. Our different pet distributors proceed to indicate accelerating development as they transfer enterprise to one in all our carriers, Independence American Insurance coverage Firm (IAIC). We now consider we are going to exceed $100 million of gross annualized pet insurance coverage premium or over 170,000 pet lives by the top of this 12 months, and will probably be considerably larger by the top of 2021.
We now have invested a substantial quantity of capital coming into the senior market. We now have enhanced our SalesForce CRM platform, in addition to our producer licensing, client and web-based enrollment methods. We proceed to construct our MarTech infrastructure by means of synthetic intelligence information science, and automatic remarketing amongst different capabilities to generate high-intent leads. Together with repeatedly rising our proficiency in effectively producing leads, we’re actively working to rent, practice and license extra senior-focused buyer care middle brokers. We at present have 143 licensed brokers centered totally on the senior market, and we’re striving to have 200 brokers by the 2021 AEP, which commences October 15, 2020. As well as, IAIC has approval of its Medicare Complement product in twenty-nine states, and count on so as to add a 30th state by the 2021 AEP. This will probably be a compelling proprietary product providing in our spectacular portfolio of senior merchandise.
In conclusion, whereas now we have made important investments in rising these two traces of enterprise which has impacted quarterly earnings, we strongly consider that now we have created important shareholder value. We now have the mandatory instruments in place for materials development within the senior and pet markets, which can profit us within the fourth quarter and sooner or later.”
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 $31.23 per share at June 30, 2020. IHC increased its annual dividend to $.44 per share in 2020, which is the sixth increase since December 2014 when the annual dividend paid to the stockholders was $.07 per share. Our overall investment portfolio continues to be very highly rated (on average, AA) and has an effective duration under three years. In May 2020, the Company repurchased 36,377 shares of IHC common stock in connection with a tender offer to its stockholders by permitting them the opportunity to tender shares of IHC common stock for cash. Year to date the Company has repurchased 200,110 shares including the aforementioned tender offer and is still repurchasing shares on a daily basis up to the maximum allowable, so as to provide liquidity to the market.”
About The IHC Group
Independence Holding Firm (NYSE: IHC), shaped in 1980, is a holding firm that’s principally engaged in underwriting, administering and/or distributing group and particular person specialty profit merchandise, together with incapacity, supplemental well being, pet, and group life insurance coverage by means of its subsidiaries (Independence Holding Firm and its subsidiaries collectively known as “The IHC Group”). The IHC Group consists of three insurance coverage firms (Customary Safety Life Insurance coverage Firm of New York, Madison Nationwide Life Insurance coverage Firm, Inc. and Independence American Insurance coverage Firm). We additionally personal the next businesses: (i) PetPartners, Inc., our pet insurance coverage administrator; (ii) IHC Specialty Advantages, Inc., a technology-driven full-service advertising and distribution firm that focuses on small employer and particular person client merchandise by means of its name middle, profession brokers, and Independence Brokerage Group; and (iii) The INSX Cloud Platform by means of My1HR, our wholly owned Net Primarily based Entity. Our InsureTech division is comprised of our name facilities, area and profession brokers, in-house MarTech synthetic intelligence capabilities and domains, together with www.healthedeals.com; www.healthinsurance.org; www.medicareresources.org; www.petplace.com; and www.mypetinsurance.com.
Sure statements and data contained on this launch may be thought-about “forward-looking statements,” similar to statements regarding administration’s views with respect to future occasions and monetary efficiency. Such forward-looking statements are topic to dangers, uncertainties and different components that would trigger precise outcomes to vary materially from historic expertise or from future outcomes expressed or implied by such forward-looking statements. Potential dangers and uncertainties embrace, however usually are not restricted to, financial situations within the markets through which IHC operates, new federal or state governmental regulation, IHC’s skill to successfully function, combine and leverage any previous or future strategic acquisition, and different components which may be present in IHC’s different information releases and filings with the Securities and Alternate Fee. IHC expressly disclaims any obligation to replace its forward-looking statements until required by relevant regulation.
INDEPENDENCE HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
June 30, 2020
(In 1000’s, Besides Shares and Per Share Knowledge)
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Internet funding earnings||3,139||4,134||6,379||8,130|
|Internet funding beneficial properties||575||1,455||863||1,626|
|Internet impairment losses acknowledged in earnings||–||–||–||(646||)|
|Insurance coverage advantages, claims and reserves||54,589||44,410||108,647||87,529|
|Promoting, basic and administrative bills||51,979||42,206||96,553||82,735|
|Earnings earlier than earnings taxes||737||8,506||6,102||19,040|
|(Earnings) from noncontrolling pursuits||(117||)||(69||)||(161||)||(232||)|
|NET INCOME ATTRIBUTABLE TO IHC||$||421||$||6,847||$||4,699||$||15,574|
|Fundamental earnings per frequent share||$||.03||$||.46||$||.32||$||1.04|
|WEIGHTED AVERAGE SHARES OUTSTANDING||14,765||14,929||14,811||14,939|
|Diluted earnings per frequent share||$||.03||$||.46||$||.32||$||1.04|
|WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING||14,767||14,948||14,839||15,007|
As of August 3, 2020, there have been 14,668,481 frequent shares excellent, web of treasury shares.
INDEPENDENCE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
|June 30,||December 31,|
|Securities bought underneath agreements to resell||101,417||107,157|
|Fastened maturities, available-for-sale||384,245||384,974|
|Money and cash equivalents||21,224||21,094|
|Due and unpaid premiums||34,497||26,244|
|Due from reinsurers||359,244||362,969|
|LIABILITIES AND STOCKHOLDERS’ EQUITY:|
|Coverage advantages and claims||$||179,777||$||164,802|
|Future coverage advantages||199,775||201,205|
|Funds on deposit||141,597||140,951|
|Different policyholders’ funds||11,646||12,049|
|As a result of reinsurers||3,640||5,016|
|Accounts payable, accruals and different liabilities||61,569||61,049|
|Commitments and contingencies|
|Redeemable noncontrolling curiosity||2,364||2,237|
|Most popular stock (none issued)||–||–|
|Gathered different complete earnings||2,854||1,212|
|Treasury stock, at price||(74,325||)||(69,724||)|
|TOTAL IHC STOCKHOLDERS’ EQUITY||459,275||459,694|
|NONREDEEMABLE NONCONTROLLING INTERESTS||49||18|
|TOTAL LIABILITIES AND EQUITY||$||1,081,293||$||1,054,303|
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