Conseco reports record operating EPS for third quarter, first nine months of 1996.

CARMEL, Ind.--(BUSINESS WIRE)--Nov. 5, 1996--

Highlights

-- Third quarter operating EPS jumps 40 percent

-- Conseco on track for $5.00 operating EPS in 1997

-- Insiders increase their direct ownership

Conseco, Inc. today reported record third quarter 1996 operating earnings per fully diluted share of $1.01, up 40 percent over 72 cents per share in the third quarter of 1995. For the first nine months of 1996, operating earnings were a record $2.70 per fully diluted share, up 58 percent over $1.71 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 3Q96 operating earnings per fully diluted share was 94 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 again delivered both strong earnings and shareholder value in the third quarter. "Operating results keep us on track to equal or exceed analyst estimates of $5.00 of operating earnings per share in 1997, up more than 35 percent over 1996 expectations. Conseco stock in the third quarter generated a total return to investors (price appreciation plus reinvested dividends) of 23.3 percent, compared to 3.1 percent for the Standard & Poor's 500 and 8.3 percent for our peer group, the Dow Jones Life Insurance Index. For the first nine months of 1996, Conseco stock delivered a total return of 57.7 percent, compared to 13.5 percent for the S&P 500 and 16.7 percent for the DJLI index."

"We are very pleased with results of the quarter," Hilbert said, "which demonstrate Conseco's ability to produce profitable internal growth, while at the same time taking part in the consolidation of the insurance industry through strategic, accretive acquisitions. During the quarter we completed our acquisition of Life Partners Group (August 2) and American Life Holdings (September 30). We consolidated LPG's operations into our headquarters in Carmel on August 30, thereby reducing LPG's annual operating expenses by $25 million, while maintaining a solid level of new sales. In 1997, we plan to eliminate a further $10-$15 million of LPG expenses while improving service to agents and policyholders using Conseco's efficient administrative systems. We also plan to consolidate American Life Holdings' operations from Des Moines, Iowa, into Carmel by the middle of this month. This move will reduce American Life Holdings' annual operating expenses by approximately $10 million."

Hilbert said he expects that by year-end Conseco will complete the pending acquisitions of American Travellers Corp. (NASDAQ:ATVC) and Capitol American Financial Corp. (NYSE:CAF) announced August 26; and the acquisition of Transport Holdings Inc. (NASDAQ:TLIC) announced September 26. Hilbert said that Conseco expects to complete the acquisition of the remaining 9.5 percent stake in Bankers Life Holding Corp. (NYSE:BLH) by early January. Following the completion of these transactions, Hilbert said Conseco will be the only life insurer positioned as the leader or among the leaders in each of the products important to consumers aged 40 and above, including: (1) long-term care insurance; (2) Medicare supplement insurance; (3) cancer and other specified disease insurance; (4) annuities; and (5) universal life insurance.

"Upon completion of these transactions," Hilbert said, "Conseco will have approximately $31 billion of investments under management, $27 billion of assets on its own balance sheet, $7.0 billion of annual premiums and revenues, $5.9 billion of equity market capitalization, $690 million of projected annual EBIT (earnings before interest and taxes) cash flow, and a book value of $33.50 per share, assuming conversion of our PRIDES securities. Further, these transactions have been structured to maintain Conseco's debt-to-capital ratio in our targeted 30 percent-35 percent range. We are especially pleased that the major rating agencies have responded to our announced acquisitions and capital strategy by upgrading their ratings during 1996."

Directors and officers continued to significantly increase their direct ownership of Conseco stock during the quarter, Hilbert said. During September, as reported, Conseco directors and officers purchased 1 million common shares in the open market, financed by personal bank loans facilitated by the company, completing the 2 million share purchase plan which was announced in April 1996. Insiders now own approximately 24 percent of fully diluted shares outstanding.

"I continue to feel that Conseco has never been better positioned for the future," Hilbert said. "Our strengths include: (1) a record of outstanding long-term performance; (2) accelerating operating earnings growth; (3) a balanced mix of products which, together with Conseco's disciplined approach to product profit management, provides a stable earnings base, regardless of the economic or interest rate environment; (4) diversified distribution, with 90,000 agents capable of cross-marketing products from multiple Conseco companies; (5) a solid core of fee-based revenues; (6) a strong balance sheet; (7) significant management ownership to align manager and owner priorities; and (8) a proven record as a profitable consolidator, positioned to thrive in a consolidating industry. We'll continue to pursue strategic acquisitions which can be accomplished within our targeted 30 percent-35 percent debt-to-capital ratio."

Conseco conducts two business activities: life insurance operations, including senior market, annuity and life insurance activities; and fee-based operations. Operating earnings increased in the third quarter of 1996 compared to the third quarter of 1995 primarily as a result of: (1) the acquisition of LPG; (2) Conseco's increased ownership of BLH, the former CCP companies and American Life Holdings; and (3) increased business in force.

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

Additional discussion

Invested Assets. At Sept. 30, 1996, Conseco's consolidated $18.1 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. Third quarter 1996 net income of $78.1 million, or 99 cents per fully diluted share, also included: (1) trading losses of $0.1 million, or nil per share; (2) net realized investment losses of $0.2 million, or nil per share; and (3) an extraordinary charge of $1.2 million, or 2 cents per share, related to early retirement of debt. Third quarter 1995 net income of $43.5 million, or 84 cents per share, included: (1) trading losses of $2.0 million, or 4 cents per share; and (2) the previously described restructuring income of $8.4 million, or 16 cents per share.

Nine-month 1996 net income of $174.5 million, or $2.59 per fully diluted share, also included: (1) trading losses of $4.2 million, or 6 cents per share; (2) net realized investment losses of $2.2 million, or 3 cents per share; (3) restructuring income totalling $17.7 million, or 26 cents per share, arising from the previously discussed first quarter sale of Conseco's investment in Noble Broadcast Group, Inc.; and (4) an extraordinary charge of $18.6 million, or 28 cents per share, related to early retirement of debt. Nine-month 1995 net income of $167.8 million, or $3.22 per fully diluted share, included: (1) trading losses of $0.5 million, or 1 cent per share; (2) net realized investment gains of $4.1 million, or 8 cents per share; and (3) restructuring income of $74.9 million, or $1.44 per share, arising from the previously discussed release in the third quarter of deferred income taxes previously accrued on income related to CCP, and from the similar release in the second quarter of deferred income taxes on income related to Bankers Life Holding Corp. (such deferred tax was no longer required when Conseco reached 80 percent ownership of that company).

Shares outstanding. Weighted average shares outstanding (for the purposes of calculating fully diluted earnings per share) increased by 53 percent in the third quarter of 1996 over the prior year, primarily because of: (1) the company's August 1996 acquisition of LPG, in which 16.1 million Conseco shares were issued; and (2) its January 1996 offering of PRIDES, which are mandatorily convertible into shares of Conseco common stock. There were 67.0 million shares issued and outstanding at Sept. 30, 1996.

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  Nine Months Ended
                                     Sept. 30:        Sept. 30:
                                   1996    1995     1996      1995
____________________________________________________________________
Operating earnings (1)             $79.6   $37.1   $181.8     $89.3
Trading income (losses), net
 of related costs and taxes         (0.1)   (2.0)    (4.2)     (0.5)
Realized gains (losses), net
 of related costs, amortization
 and taxes                          (0.2)    0.0     (2.2)      4.1
Restructuring income                 0.0     8.4     17.7      74.9
Extraordinary charge, net of tax    (1.2)    0.0    (18.6)      0.0
____________________________________________________________________
Net income                         $78.1   $43.5   $174.5    $167.8
____________________________________________________________________

Per common share-primary:
Weighted average shares
 (in millions)                      71.6    42.8     57.9      43.0
____________________________________________________________________
Operating earnings (1)             $1.10   $0.76    $2.97     $1.77
Trading income (losses), net
 of related costs and taxes         0.00   (0.05)   (0.07)    (0.01)
Realized gains (losses), net
 of related costs, amortization
 and taxes                          0.00    0.00    (0.04)     0.08
Restructuring income                0.00    0.20     0.30      1.74
Extraordinary charge, net of tax   (0.02)   0.00    (0.32)     0.00
____________________________________________________________________
Net income                         $1.08   $0.91    $2.84     $3.58
____________________________________________________________________

Per common share-fully diluted:
 Weighted average shares
 (in millions)                      79.0    51.7     67.4      52.1
____________________________________________________________________
Operating earnings (1)             $1.01   $0.72    $2.70     $1.71
Trading income (losses), net
 of related costs and taxes         0.00   (0.04)   (0.06)    (0.01)
Realized gains (losses), net
 of related costs, amortization
 and taxes                          0.00    0.00    (0.03)     0.08
Restructuring income                0.00    0.16     0.26      1.44
Extraordinary charge, net of tax   (0.02)   0.00    (0.28)     0.00
____________________________________________________________________
Net income                         $0.99   $0.84    $2.59     $3.22
____________________________________________________________________

Excluding SFAS 115 (2):
Annualized operating return on
 common equity (1)                    23%     20%      23%       17%
Assets (in millions)                             $23,066.6 $16,749.0
Shareholders' equity (in millions)                $2,002.6    $945.4
Book value per share                                $25.92    $16.35
Book value per share, assuming
 conversion of PRIDES                               $26.90    $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 Sept. 30,  At Dec. 31,
                                              1996         1995
                                           (Unaudited)   (Audited)
____________________________________________________________________
Assets
Investments:
 Actively managed fixed maturities
  at fair value                               $15,959.8   $12,963.3
 Equity securities at fair value                  104.2        36.6
 Mortgage loans                                   372.5       339.9
 Credit-tenant loans                              393.8       259.1
 Policy loans                                     526.0       307.6
 Other invested assets                            211.0        91.2
 Short-term investments                           212.3       189.9
 Assets held in separate accounts                 300.4       227.0
____________________________________________________________________
Total investments                              18,080.0    14,414.6
Accrued investment income                         276.7       207.8
Cost of policies purchased                      1,847.1     1,030.7
Cost of policies produced                         541.0       391.0
Reinsurance receivables                           214.1        84.8
Income taxes                                      138.9         0.0
Goodwill, net of accumulated amortization       1,524.7       894.1
Property and equipment, net of accumulated
 depreciation                                     105.9        88.7
Securities segregated for future redemption
 of preferred stock of a subsidiary                45.0        39.2
Other assets                                      216.1       146.6
____________________________________________________________________
Total assets                                  $22,989.5   $17,297.5
____________________________________________________________________

Liabilities and Shareholders' Equity
Liabilities
Insurance liabilities                         $17,964.2   $13,378.4
Income tax liabilities                              0.0        93.3
Investment borrowings                             539.4       298.1
Other liabilities                                 482.0       329.6
Liabilities related to separate accounts          300.1       227.0
Notes payable of Conseco                        1,182.0       871.4
Notes payable of Bankers Life Holding Corp.,
 not direct obligations of Conseco                418.1       301.5
Notes payable of Partnership II entities,
 not direct obligations of Conseco                  0.0       283.2
____________________________________________________________________
Total liabilities                              20,885.8    15,782.5
____________________________________________________________________
Minority interest                                 147.8       403.3
____________________________________________________________________
Shareholders' equity
Preferred stock                                   267.1       283.5
Common stock and additional paid-in capital     1,054.5       157.2
Unrealized appreciation (depreciation)
 of securities, net:
   Fixed maturities                               (46.7)      112.6
   Other investments                               (0.3)        0.1
Retained earnings                                 681.3       558.3
____________________________________________________________________
Total shareholders' equity                      1,955.9     1,111.7
____________________________________________________________________
Total liabilities and shareholders' equity    $22,989.5   $17,297.5
____________________________________________________________________

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

                                Quarter Ended    Nine Months Ended
                                  Sept. 30:           Sept. 30:
                                1996     1995      1996      1995
____________________________________________________________________
Revenues
Insurance policy income        $451.8   $373.1   $1,193.2   $1,103.3
Investment activity:
 Net investment income          364.8    293.6      926.7      850.5
 Net trading income (losses)      0.8     (3.2)      (6.5)       2.8
 Net realized gains               6.1      3.3       16.3       77.8
Fee revenue                       9.6      8.0       29.7       23.6
Restructuring income              0.0      0.0       30.4        0.0
Other income                      1.2      1.9        8.8        8.1
____________________________________________________________________
Total revenues                  834.3    676.7    2,198.6    2,066.1
____________________________________________________________________

Benefits and expenses
Insurance policy benefits       313.8    268.7      858.3      814.8
Change in future policy benefits  3.9     15.2       15.9       28.4
Interest expense on annuities
 and financial products         184.7    150.3      474.4      432.8
Interest expense on notes
 payable                         30.4     31.5       84.6       83.9
Interest expense on short-term
 investment borrowings            6.5      5.7       15.1       19.2
Amortization related to
 operations                      74.6     53.8      174.1      158.3
Amortization related to realized
 gains                            3.3      1.2       15.6       44.6
Other operating costs and
 expenses                         85.6    66.7      207.6      198.2
____________________________________________________________________
Total benefits and expenses      702.8   593.1    1,845.6    1,780.2
____________________________________________________________________

Income before income taxes,
 minority interest and
 extraordinary charge            131.5    83.6     353.0       285.9
Income tax expense (benefit)      49.8    21.1     134.1        34.3
____________________________________________________________________
Income before minority interest
 and extraordinary charge         81.7    62.5     218.9       251.6
Minority interest                  2.4    19.0      25.8        83.8
____________________________________________________________________
Income before extraordinary
 charge                           79.3    43.5     193.1       167.8
Extraordinary charge on
 extinguishment of debt, net of
 taxes and minority interest       1.2     0.0      18.6         0.0
____________________________________________________________________
Net income                        78.1    43.5     174.5       167.8
Less preferred stock dividends     5.5     4.6      22.7        13.8
____________________________________________________________________
Earnings applicable to common
 stock                           $72.6   $38.9    $151.8      $154.0
____________________________________________________________________

A supplement to Conseco's news release of Nov. 5, 1996

Conseco, Inc.

Business Profile

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 (and will hold a 100 percent equity position after completion of the CNC/BLH merger announced Aug. 26, 1996). 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. Upon completion of three other transactions announced in August and September 1996, this segment will also include the operations of: (1) American Travellers Corp. which sells long-term care insurance and other supplemental health and life insurance products through 22,000 independent agents; (2) Capitol American Financial Corp., which sells cancer insurance and other supplemental health insurance products through 3,700 independent agents; and (3) Transport Holdings Inc., which sells cancer insurance and other supplemental health insurance products through 600 independent and 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. This segment also includes (beginning with its acquisition by Conseco on Sept. 30, 1996) the activities of American Life and Casualty, which markets, issues and administers various annuity and life insurance products aimed principally at the retirement market through approximately 25,000 professional independent producers.

Life insurance operations include the activities of Philadelphia Life, Massachusetts General Life, Lamar Life and Wabash Life, beginning with their acquisition in August 1996. These companies distribute universal life insurance products using two primary marketing systems--the client company system and the regional director system--comprising a total of approximately 25,000 professional independent producers. Segment activities also include Conseco's other life insurance subsidiaries--Bankers National Life, National Fidelity Life and Lincoln American Life--which have profitable in-force blocks of annuity and life products, but do not currently market their products to new customers.

Fee-based operations

Conseco's subsidiaries provide various services to affiliated and unaffiliated clients, including investment management, marketing for financial institutions related to the distribution of insurance and investment products, property/casualty insurance agency services, and mortgage origination.

NOTE TO EDITORS: There is an "at" symbol before "conseco.com" below. That symbol may not appear properly in some systems.

CONTACT: Conseco, Inc.

Jim Rosensteele, 317/817-2893

E-mail: [e-mail]