Independence Holding COO Says Alliance Acquisition ‘Very Much Within Our Strategy’

Independence Holding Co. has acquired Alliance Underwriters, a Florida-based stop-loss managing general underwriter that controls about $30 million in business.

"What we have found is that the best way to produce consistently profitable business for our insurance company is to actually have an ownership interest in the MGU itself," said David Kettig, IHC's chief operating officer. "It's very much within our strategy."

Alliance has been in the business more than 25 years, according to a statement from Lynn Jennings, former chief executive officer and an owner of the company, who also said the sale "brings to its employees and clients a new opportunity for expanded services" through the wider resources of IHC.

Kettig said his company has been a trailblazer in acquiring managing general underwriters. "A lot of people are starting to adopt our model," he said. "That's getting to be much more commonplace." But he pointed out that IHC's philosophy is largely hands-off, letting the companies operate as they had before. "We try to find well-run companies and let them continue to run themselves for the most part."

In the same deal, IHC (NYSE: IHC) also acquired majority interests in two firms under the same ownership: MedWatch LLC, a medical management company, and Hospital Bill Analysis LLC, focusing on medical cost containment.

MedWatch, Kettig said, employs about 30 nurses to do case-management reviews "to produce a better result for both the patient and the risk-taker." Hospital Bill Analysis, he said, "reviews hospital bills on behalf of risk takers -- health insurance companies -- to look for errors within the bills that can be negotiated with hospitals."

All three companies, based in Lake Mary, Fla., employ about 50 people.

IHC says its group of insurers covers more than 1 million individuals and groups. The details of this latest purchase weren't disclosed by the company.

IHC stock sold at $6.61 in afternoon trading on Jan. 7, up 1.54% over the previous session's close.

Insurers in the IHC Group have current Best's Financial Strength Ratings of A- (Excellent).

(Jesse A. Hamilton, Washington bureau manager: [email protected])