IHC Independence Holding Company

Financial Results

IHC reported a loss from continuing operations attributable to IHC, net of tax, of $11,512,000 or $.79 per share for the three months ended September 30, 2021 compared to a loss of $7,340,000 or $.50 per share for the three months ended September 30, 2020. Loss from continuing operations attributable to IHC, net of tax, of $23,514,000 or $1.61 per share for the nine months ended September 30, 2021 compared to a loss of $16,391,000 or $1.11 per share for the nine months ended September 30, 2020.

Net income attributable to IHC of $17,359,000 or $1.18 per share for the three months ended September 30, 2021 compared to $8,688,000 or $.59 per share, diluted, for the three months ended September 30, 2020. Net income attributable to IHC of $99,451,000 or $6.79 per share, diluted, for the nine months ended September 30, 2021 compared to $13,387,000 or $.91 per share, diluted, for the nine months ended September 30, 2020.

The Company entered into three transactions this year for the sale of (i) all of the shares of common stock of Madison National Life Insurance Company, Inc. (“Madison National Life”) to Horace Mann Educators Corporation, (ii) all of the shares of common stock of Standard Security Life Insurance Company of New York (“Standard Security Life”) to Reliance Standard Life Insurance Company and (iii) 70% of the Company’s pet business, including all of the shares of common stock of Independence American Insurance Company and the Company’s entire interest in 85% of the common stock 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 nine months of 2021 include a gain on the sale of PetPartners of $62,229,000 net of tax. Also included in income from discontinued operations is the operating income from Madison National Life, Standard Security Life and Independence American Insurance Company. The gain on the sales of Madison National Life, Standard Security Life, and Independence American Insurance Company will be recorded when those transactions are consummated. They are currently pending regulatory approval.

The Company has also announced that it has entered into an Agreement and Plan of Merger with Geneve Holdings, Inc. its majority stockholder. Further information regarding the terms and conditions will be contained in a Current Report on Form 8-K filed with the SEC.

Chief Executive Officer’s Comments

Roy T. K. Thung, Chief Executive Officer, commented, “The Company is focusing on the consummation of the three sale transactions for the remainder of the year. Pro forma, including the third quarter results, and after all the transactions are closed, IHC projects that it will hold approximately $575 million in cash and investments, net of liabilities; our interest in Iguana Capital; and our health insurance agency and other assets, resulting in an estimated fully diluted book value of approximately $48.50 per share, which is calculated as if the transactions occurred and were recorded on September 30, 2021. Actual book value per share at September 30, 2021 was $38.47 as compared to $32.08 per share at December 31, 2020. These projections are based on information currently known to management and include the use of estimates and assumptions with regards to anticipated transaction costs, estimated tax rates and other potential changes.”

Mr. Thung added, “Our agency operations have been unprofitable, and we will continue to report losses from our agencies for the near term. We continue to expand our agency digital assets by enhancing our core platform, INSXcloud.com, a CMS approved Web Broker. We have expanded product offerings on the platform and have developed marketing initiatives to drive both direct and partner initiated traffic to the platform. We will continue to invest in and enhance these capabilities at our agency operations as we enter 2022 and work towards building a profitable agency operation.”

About Independence Holding Company

Independence Holding Company (NYSE: IHC), through our current subsidiaries, 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. (“Madison National Life”). 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.insxcloud.com. As previously announced, IHC has entered into stock purchase agreements to sell all of the issued and outstanding capital stock of Standard Security Life, Madison National Life and Independence American Holdings Corp., which includes Independence American Insurance Company and the remaining assets of IHC’s pet business, each subject to regulatory approval. 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 COMPANYCONDENSED CONSOLIDATED STATEMENTS OF INCOMESeptember 30, 2021(In Thousands, Except Shares and Per Share Data)

As of November 9, 2021, there were 14,674,936 common shares outstanding, net of treasury shares.

INDEPENDENCE HOLDING COMPANYCONDENSED CONSOLIDATED BALANCE SHEETS(In Thousands)

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