IHC Independence Holding Company

American Independence Corp. (NASDAQ: AMIC) today reported 2007 fourth-quarter and annual results. Financial Results Revenues increased to $28.5 million for the three months ended December 31, 2007, compared to revenues of $22.1 million for the three months ended December 31, 2006. Net income was $0.3 million ($.04 per share, diluted), net of a provision for income taxes of $0.2 million, for the three months ended December 31, 2007, compared to $0.6 million ($.07 per share, diluted), net of a provision for income taxes of $0.4 million, for the three months ended December 31, 2006. As of December 31, 2007, AMIC had approximately $275 million of federal net operating loss carryforwards. To the extent that AMIC utilizes any such carryforwards, it will not pay any income taxes, except for federal alternative minimum taxes and state income taxes. AMIC also reported net income of $1.1 million ($.13 per share, diluted), net of a provision for income taxes of $0.7 million, for the year ended December 31, 2007, compared to $1.5 million ($.17 per share, diluted), net of a provision for income taxes of $1.0 million, for the year ended December 31, 2006. Revenues increased to $119.1 million for the year ended December 31, 2007, compared to revenues of $81.5 million for the year ended December 31, 2006. On a non-GAAP basis, the Company's income from continuing operations excluding amortization expense and federal income tax charge related to deferred taxes for the three months ended December 31, 2007 was $0.5 million ($.06 per share, diluted), as compared to $1.0 million ($.12 per share, diluted) for the three months ended December 31, 2006. On a non-GAAP basis, the Company's income from continuing operations excluding amortization expense and federal income tax charge related to deferred taxes was $1.9 million ($0.22 per share, diluted) for the year ended December 31, 2007, as compared to $2.7 million ($.32 per share, diluted) for the year ended December 31, 2006. Chief Executive Officer�s Comments Roy Thung, Chief Executive Officer, commented, �We are very pleased with the increased revenues generated in 2007 and the direction of AMIC in general but are disappointed with the drop in our earnings. This decrease was largely caused by the need to strengthen reserves in the third quarter of 2007 for medical stop-loss business written in 2006 and 2007. We are optimistic that we will see increases in both revenues and earnings in 2008 for the following reasons. Given Independence American�s enhanced A- (Excellent) rating from A.M. Best, we expect that Independence American will write more health business. In particular, in 2008, we expect to expand premiums from our major medical plans for individuals and families. The fully insured medical business written by Independence American in 2007 produced profits, and we expect that this will continue in 2008 and beyond. In addition, our fixed maturity portfolio is rated, on average, AA, and our book value is $9.96 per share.� Non-GAAP Financial Measures The Company provides non-GAAP financial measures to complement its consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures are intended to supplement the user's overall understanding of the Company's current financial performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by identifying certain expenses that, when excluded from the GAAP results, may provide additional understanding of the Company's core operating results or business performance. However, these non-GAAP financial measures are not intended to supersede or replace the Company's GAAP results. A reconciliation of the non-GAAP results to the GAAP results is provided in the "Reconciliation of GAAP Income from Continuing Operations to Non-GAAP Income from Continuing Operations� schedule below. Operating results reported on a non-GAAP basis exclude non-cash charges related to the amortization of intangible assets recorded in purchase accounting and the Federal income tax charge related to deferred taxes. About American Independence Corp. AMIC is a holding company principally engaged in employer medical stop-loss, small group major medical, major medical for individuals and families, and managed care insurance and reinsurance through Independence American Insurance Company and its managing general underwriter division. Certain statements in this news 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 which 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 AMIC operates, new federal or state governmental regulation, AMIC�s ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in AMIC�s other news releases and filings with the Securities and Exchange Commission. AMERICAN INDEPENDENCE CORP. FOURTH QUARTER REPORT DECEMBER 31, 2007 (In thousands except per share data) � � Three Months Ended December 31, Year Ended December 31, 2007 � 2006 2007 � 2006 � Premiums earned $ 25,395 $ 18,402 $ 106,100 $ 67,777 MGU fee income 2,269 2,738 9,398 10,356 Net investment income 915 901 3,611 3,267 Net realized investment gains (losses) (137) 18 (88) 66 Other income 59 5 75 19 � Revenues 28,501 22,064 119,096 81,485 � Insurance benefits, claims and reserves 19,039 12,791 78,618 47,799 Selling, general and administrative expenses 8,659 8,115 37,463 30,267 Amortization and depreciation 242 130 971 689 Minority interest 66 57 215 262 � Expenses 28,006 21,093 117,267 79,017 � Income (loss) from continuing operations before income tax 495 971 1,829 2,468 Provision (benefit) for income tax 190 361 691 960 � Income (loss) from continuing operations 305 610 1,138 1,508 Gain (loss) on disposition of discontinued operations, net of tax - - - (54) � Net income (loss) $ 305 $ 610 $ 1,138 $ 1,454 � Basic Income (Loss) Per Common Share: Income (loss) from continuing operations $ .04 $ .07 $ .13 $ .18 Gain (loss) on disposition of discontinued operations, net of tax - - - (.01) � Net income (loss) $ .04 $ .07 $ .13 $ .17 � Weighted average basic common shares 8,504 8,454 8,484 8,452 � Diluted Income (Loss) Per Common Share: Income (loss) from continuing operations $ .04 $ .07 $ .13 $ .18 Gain (loss) on disposition of discontinued operations, net of tax - - - (.01) � Net income (loss) $ .04 $ .07 $ .13 $ .17 � Weighted average diluted common shares 8,532 8,514 8,535 8,506 As of December 31, 2007 there were 8,503,989 common shares outstanding, net of treasury shares. RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS TO NON-GAAP INCOME FROM CONTINUING OPERATIONS (In thousands except per share data) � � Three Months Ended December 31, � Year Ended December 31, 2007 � 2006 2007 � 2006 � Income (loss) from continuing operations $ 305 $ 610 $ 1,138 $ 1,508 Amortization of intangible assets related to purchase accounting 50 73 194 427 Federal income tax charge (benefit) related to deferred taxes 146 305 518 749 � Income (loss) from continuing operations excluding amortization and federal income tax charge (benefit) $ 501 $ 988 $ 1,850 $ 2,684 � Non - GAAP Basic Income (Loss) Per Common Share: Income (loss) from continuing operations excluding amortization and federal income tax charge (benefit) $ .06 $ .12 $ .22 $ .32 � Non - GAAP Diluted Income (Loss) Per Common Share: Income (loss) from continuing operations excluding amortization and federal income tax charge (benefit) $ .06 $ .12 $ .22 $ .32