Conseco Reports Record Operating EPS for Second Quarter, First Half of 1996.

CARMEL, Ind.--(BUSINESS WIRE)--July 31, 1996-- -0-

                            Highlights

          -- Second quarter operating EPS jumps 67 percent
          -- Conseco on track for $3.50-$3.65 operating EPS in 1996
          -- Insiders increase their direct ownership-0-

Conseco, Inc. today reported record second quarter 1996 operating earnings per fully diluted share of 87 cents, up 67 percent over 52 cents per share in the second quarter of 1995. For the first six months of 1996, operating earnings were a record $1.69 per fully diluted share, up 69 percent over $1.00 per share in 1995.

(Note to editors: As used throughout this release, "operating earnings" exclude trading income (losses), realized investment gains (losses), restructuring income (losses) and extraordinary charge. "Operating earnings per fully diluted share" is the figure security analysts reference in their published earnings estimates. According to First Call, the consensus analyst estimate for Conseco's 2Q96 operating earnings per fully diluted share was 87 cents. All share and per-share data in this release have been adjusted to reflect the two-for-one stock split distributed April 1, 1996.)

Conseco Chairman Stephen C. Hilbert said the company delivered both strong earnings and shareholder value in the second quarter. "Operating results keep us on track to equal or exceed analyst estimates of $3.50-$3.65 of operating earnings per share in 1996, up more than 40 percent over 1995. Conseco stock in the second quarter generated a total return to investors (price appreciation plus reinvested dividends) of 10.6 percent, compared to 4.5 percent for the Standard & Poor's 500 and 3.5 percent for our peer group, the Dow Jones Life Insurance Index. For the first six months of 1996, Conseco stock delivered a total return of 27.9 percent, compared to 10.1 percent for the S&P 500 and 7.8 percent for the DJLI index."

Another highlight of the quarter, Hilbert said, was the implementation of a plan under which directors and officers are significantly increasing their direct ownership of Conseco stock. Under the plan, as reported, Conseco directors and officers in May 1996 purchased 1 million common shares in the open market, financed by personal bank loans facilitated by the company. In addition, directors and officers plan to purchase another 1 million shares under the plan. Insiders will own approximately 24 percent of fully diluted shares outstanding after completion of the stock purchase program and the company's pending merger with Life Partners Group (NYSE:LPG).

"The LPG merger, which we expect to complete within a few days upon receipt of Massachusetts Insurance Division approval, is a key strategic step for Conseco," Hilbert said. "And we are well along in the process of building value for shareholders, policyholders and agents. We are on target to complete the consolidation of LPG's operations into our headquarters in Carmel by August 30. In the process, we will significantly reduce LPG's operating expenses while improving service to agents and policyholders using Conseco's efficient administrative systems. Annual operating expenses will be reduced by $25 million as of August 30, and we expect to eliminate a further $10-$15 million of expenses in 1997. Our operating expertise has been honed by 12 successful acquisitions since 1982."

"Even more important are our plans for profitable growth," Hilbert said. "We have restructured our sales activities under a new subsidiary -- Conseco Distribution Systems, which will manage all marketing and sales activities for Conseco's multiple distribution channels -- in order to take full advantage of the cross-selling opportunities created by the merger. We look forward to working with LPG's outstanding agents to increase the sale of profitable products throughout the Conseco organization.

"I feel that Conseco has never been better positioned for the future," Hilbert said. "We have a number of fundamental strengths which separate Conseco from many of our peers in the life insurance industry, including: (1) a record of outstanding long-term performance; (2) strong prospects for future operating earnings growth; (3) a balanced mix of products which, together with Conseco's disciplined approach to spread management, provide a stable earnings base, regardless of the economic or interest rate environment; (4) diversified distribution channels; (5) a solid base of fee-based revenues; (6) reduced financial leverage, leading to ratings upgrades (Standard & Poor's and Duff and Phelps intend to upgrade Conseco's senior debt to BBB upon completion of the merger); and (7) significant management ownership to align manager and owner priorities. In addition, Conseco is a major force in industry consolidation. We'll continue to pursue strategic acquisitions which can be accomplished within our targeted 30 percent-35 percent debt-to-capital ratio."

Business results

Conseco conducts three business activities. Results from the first two -- (1) life insurance operations, including senior market, annuity, other life insurance and partnership activities; and (2) fee-based operations -- are included in operating earnings. Such operating earnings increased in the second quarter of 1996 compared to the second quarter of 1995 primarily as a result of: (1) Conseco's increased ownership of BLH, the former CCP companies and American Life Holdings, Inc.; and (2) increased business in force.

Results from the third activity, restructuring, are excluded from operating earnings. There was no income or loss from restructuring activities in the second quarter of 1996. Conseco recognized restructuring income of $66.5 million, or $1.29 per share, in the second quarter of 1995 as the result of the release of deferred income taxes previously accrued on income related to BLH (such deferred tax was no longer required when Conseco reached 80 percent ownership of BLH).

All activities are described in detail in the supplement attached as page 7 of this release.

Additional discussion

Invested Assets. At June 30, 1996, Conseco's consolidated $14 billion investment portfolio consisted primarily of investment-grade, publicly traded debt securities. Only 2 percent of investments were mortgages, only 5 percent were high-yield bonds, and there were no significant nonperforming investments.

Net income. Second quarter 1996 net income of $50.1 million, or 81 cents per fully diluted share, also included: (1) trading losses of $1.9 million, or 3 cents per share; and (2) net realized investment losses of $1.8 million, or 3 cents per share. Second quarter 1995 net income of $99.9 million, or $1.94 per share, included: (1) trading income of $0.8 million, or 2 cents per share; (2) net realized investment gains of $5.6 million, or 11 cents per share; and (3) the previously described restructuring income of $66.5 million, or $1.29 per share.

Six-month 1996 net income of $96.4 million, or $1.59 per fully diluted share, also included: (1) trading losses of $4.1 million, or 7 cents per share; (2) net realized investment losses of $2.0 million, or 3 cents per share; (3) restructuring income of $17.7 million, or 29 cents per share, as the result of the sale of Conseco's investment in Noble Broadcast Group, Inc.; and (4) an extraordinary charge of $17.4 million, or 29 cents per share, related to early retirement of debt. Six-month 1995 net income of $124.3 million, or $2.39 per fully diluted share, included: (1) trading income of $1.5 million, or 3 cents per share; (2) net realized investment gains of $4.1 million, or 8 cents per share; and (3) the previously described restructuring income of $66.5 million, or $1.28 per share.

Shares outstanding. Weighted average fully diluted shares outstanding for the second quarter of 1996 increased by 19 percent over the prior year, primarily because of the company's January 1996 offering of PRIDES, which are mandatorily convertible into shares of Conseco common stock.

Conseco, headquartered in Carmel, Ind., is a financial services holding company. -0-

                    Conseco, Inc. (NYSE: CNC)
                       Financial Highlights
               (in millions, except per-share amounts)

                                Quarter Ended      Six Months Ended
                                   June 30:             June 30:
                               1996      1995       1996       1995

Operating earnings (1)        $53.8     $27.0      $102.2     $52.2
Trading income (losses),
 net of related costs and
  taxes                        (1.9)      0.8        (4.1)      1.5
Realized gains (losses),
 net of related costs,
  amortization and taxes       (1.8)      5.6        (2.0)      4.1
Restructuring income            0.0      66.5        17.7      66.5
Extraordinary charge,
 net of tax                     0.0       0.0       (17.4)      0.0
Net income                    $50.1     $99.9       $96.4    $124.3

Per common share-primary:
Weighted average shares
 (in millions)                 52.6      42.6        51.1      43.2
Operating earnings (1)        $0.94     $0.55       $1.82     $1.01
Trading income (losses),
 net of related costs
  and taxes                   (0.04)     0.01       (0.08)     0.03
Realized gains (losses),
 net of related costs,
  amortization and taxes      (0.03)     0.11       (0.04)     0.09
Restructuring income           0.00      1.56        0.35      1.54
Extraordinary charge,
 net of tax                    0.00      0.00       (0.34)     0.00
Net income                    $0.87     $2.23       $1.71     $2.67

Per common share-fully diluted:
Weighted average shares
 (in millions)                 61.5      51.6        60.6      52.1
Operating earnings (1)        $0.87     $0.52       $1.69     $1.00
Trading income (losses),
 net of related costs
  and taxes                   (0.03)     0.02       (0.07)     0.03
Realized gains (losses), net
 of related costs,
  amortization and taxes      (0.03)     0.11       (0.03)     0.08
Restructuring income           0.00      1.29        0.29      1.28
Extraordinary charge,
 net of tax                    0.00      0.00       (0.29)     0.00
Net income                    $0.81     $1.94       $1.59     $2.39

Excluding SFAS 115 (2):
Annualized operating return
 on common equity (1)            23%       16%         23%       15%
Assets (in millions)                             $17,461.7 $16,824.3
Shareholders' equity (in millions)               $ 1,332.9 $   910.1
Book value per share                             $   19.02 $   15.50
Book value per share, assuming
 conversion of Series D
  and Preferred
   Stock and PRIDES                              $   23.06 $   19.15

(1) Excludes trading income (losses), realized investment gains
    (losses), restructuring income and extraordinary charge.
(2) Before adjusting for the fair value of fixed maturity
    investments.

                                 Conseco, Inc.
                           Consolidated Balance Sheet
                                 (in millions)

                                    At June 30,    At Dec. 31,
                                        1996          1995
                                     (Unaudited)    (Audited)

Assets
Investments:
 Actively managed fixed maturities
  at fair value                       $12,500.8      $12,963.3
 Equity securities at fair value           82.3           36.6
 Mortgage loans                           311.0          339.9
 Credit-tenant loans                      309.7          259.1
 Policy loans                             301.2          307.6
 Other invested assets                    112.8           91.2
 Trading account securities at fair value   0.7            0.0
 Short-term investments                   146.7          189.9
 Assets held in separate accounts         271.6          227.0
Total investments                      14,036.8       14,414.6
Accrued investment income                 228.1          207.8
Cost of policies purchased              1,209.5        1,030.7
Cost of policies produced                 561.2          391.0
Reinsurance receivables                    95.0           84.8
Income taxes                               74.9            0.0
Goodwill, net of accumulated
 amortization                             908.3          894.1
Property and equipment, net of
 accumulated depreciation                  89.0           88.7
Securities segregated for future
 redemption of preferred stock of a
  subsidiary                               40.7           39.2
Other assets                              182.8          146.6
Total assets                          $17,426.3      $17,297.5

Liabilities and Shareholders' Equity
Liabilities

Insurance liabilities                 $13,546.9      $13,378.4
Income tax liabilities                      0.0           93.3
Investment borrowings                     445.0          298.1
Other liabilities                         344.1          329.6
Liabilities related to separate
 accounts                                 271.6          227.0
Notes payable of Conseco                  670.0          871.4
Notes payable of Bankers
 Life Holding Corp.,
  not direct obligations of Conseco       297.9          301.5
Notes payable of Partnership II
 entities, not direct
  obligations of Conseco                  281.6          283.2
Total liabilities                      15,857.1       15,782.5

Minority interest                         292.3          403.3

Shareholders' equity
Preferred stock                           536.5          283.5
Common stock and additional
 paid-in capital                          183.4          157.2
Unrealized appreciation (depreciation)
 of securities, net:
  Fixed maturities                        (56.0)         112.6
  Equity securities                         0.3            0.1
Retained earnings                         612.7          558.3
Total shareholders' equity              1,276.9        1,111.7

Total liabilities and shareholders'
 equity                               $17,426.3      $17,297.5

                             Conseco, Inc.
                 Consolidated Statement of Operations
                             (in millions)

                                Quarter Ended    Six Months Ended
                                   June 30:          June 30:
                               1996     1995      1996       1995
Revenues
Insurance policy income       $371.6   $362.6    $741.4     $730.2
Investment activity:
 Net investment income         288.2    286.1     561.9      556.9
 Net trading income (losses)    (3.8)     4.2      (7.3)       6.0
 Net realized gains              0.8     73.0      10.2       74.5
Fee revenue                     10.0      7.7      20.1       15.6
Restructuring income             0.0      0.0      30.4        0.0
Other income                     5.7      3.5       7.6        6.2
Total revenues                 672.5    737.1   1,364.3    1,389.4

Benefits and expenses
Insurance policy benefits      269.8    271.0     544.5      546.1
Change in future policy
 benefits                        2.8      9.5      12.0       13.2
Interest expense on annuities
 and financial products        150.6    144.3     289.7      282.5
Interest expense on notes
 payable                        25.8     26.2      54.2       52.4
Interest expense on short-term
 investment borrowings           4.9     10.1       8.6       13.5
Amortization related to
 operations                     54.9     53.1      99.5      104.5
Amortization related to
 realized gains                  3.2     40.7      12.3       43.4
Other operating costs and
 expenses                       59.2     65.7     122.0      131.5
Total benefits and expenses    571.2    620.6   1,142.8    1,187.1

Income before income taxes,
 minority interest and
  extraordinary charge         101.3    116.5     221.5      202.3
Income tax expense (benefit)    39.4    (21.8)     84.3       13.2
Income before minority interest
 and extraordinary charge       61.9    138.3     137.2      189.1
Minority interest               11.8     38.4      23.4       64.8
Income before extraordinary
 charge                         50.1     99.9     113.8      124.3
Extraordinary charge on
 extinguishment of debt,
  net of taxes and minority
   interest                      0.0      0.0      17.4        0.0
Net income                      50.1     99.9      96.4      124.3
Less preferred stock dividends   9.1      4.6      17.2        9.2
Earnings applicable to common
 stock                         $41.0    $95.3     $79.2     $115.1-0-

A supplement to Conseco's news release of July 31, 1996

Conseco, Inc. Business Profile

Conseco conducts three business activities. Results from the first two -- life insurance operations and fee-based operations -- are included in operating earnings. Results in the third, restructuring activities, are excluded from operating earnings.

Life insurance operations

Senior market operations include the activities of Bankers Life Holding Corp. (NYSE:BLH), in which Conseco holds a 90.5 percent equity interest. BLH's principal operating company, Bankers Life and Casualty, provides Medicare supplement, long-term care, life insurance, annuities and other health products to America's seniors. Bankers distributes its products through approximately 200 branch offices and 3,200 career agents.

Annuity operations include the activities of Great American Reserve Insurance and Beneficial Standard Life. These companies market their products through two distribution channels: (1) approximately 3,000 educator market specialists, who sell tax-qualified annuities and certain employee benefit-related insurance products primarily to school teachers and administrators; and (2) approximately 9,000 professional independent producers, who sell various annuity and life insurance products aimed principally at the retirement market.

Other life insurance operations include the activities of Conseco's other wholly owned life insurance subsidiaries -- Bankers National Life, National Fidelity Life and Lincoln American Life. These companies have profitable in-force blocks of annuity and life products, but do not currently market their products to new customers.

Partnership operations include: (1) Conseco's share of the profits of the life insurance companies owned by Conseco's acquisition partnership (Partnership II); and (2) incentive compensation fees payable to Conseco if Partnership II generates returns in excess of prescribed targets. Partnership II acquired American Life Holdings, Inc. (AGP) in September 1994. AGP's principal operating company, American Life and Casualty, markets, issues and administers various annuity and life insurance products aimed principally at the retirement market through approximately 25,000 professional independent producers. Conseco announced its decision to terminate Partnership II on March 12, 1996; Conseco intends to manage the partnership's investment in AGP to facilitate a distribution to the limited partners as soon as is practicable.

Conseco Private Capital Group makes direct strategic investments in growing companies, providing these firms with the capital or financing they need to continue their growth, make acquisitions or realize the potential of their businesses.

Fee-based operations

Conseco's subsidiaries provide various services to affiliated and unaffiliated clients. Conseco Capital Management manages $28 billion of invested assets. Bankmark provides marketing services to financial institutions related to the distribution of insurance and investment products. Conseco Risk Management distributes property/casualty insurance products as an independent agency. Conseco Mortgage Capital originates and services mortgages. Other subsidiaries provide policy administration, data processing, product marketing, executive management services, and financial services to Partnership II.

CONTACT: Conseco Inc.

Jim Rosensteele, 317/817-2893 (Vice President/IR)

e-mail: [e-mail]