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UNITED WISCONSIN SERVICES REPORTS SECOND QUARTER EARNINGS

 MILWAUKEE, July 28 /PRNewswire/ -- United Wisconsin Services, Inc. (NASDAQ: UWSI) today announced that pre-tax earnings hit a record high, increasing 8 percent for the second quarter of 1993 over the same period in 1992. Pre-tax earnings for the quarter were $10.2 million, or $.92 per share. Revenue for the second quarter ended June 30, 1993 totalled $140.6 million, or 38 percent over 1992's second quarter revenue of $102.1 million.
 UWSI reported 1993 year-to-date revenue of $272.2 million, a 35 percent increase over revenue of $201.2 million in the first six months of 1992.
 For the second quarter of 1993 on an after-tax basis, UWSI reported earnings of $6.7 million, or $.60 per share, compared to 1992 second quarter earnings of $6.8 million and earnings per share of $.62. Results were impacted by the higher tax rate applicable to the company in 1993.
 The reported earnings for 1993 reflect the adoption of both the Statement of Financial Accounting Standards No. 106 (FAS 106), Accounting for Post-Retirement Benefits Other Than Pensions; and the Statement of Financial Accounting Standards No. 109 (FAS 109), Accounting for Income Taxes. Beginning in 1993, in compliance with FAS 109, the company began recording federal income taxes at the regular corporate rate of 34 percent. (Historically, the company reported federal income tax at a 20 percent rate due to a tax sharing agreement with its parent, Blue Cross & Blue Shield United of Wisconsin. Had the 34 percent tax rate been in effect for 1992, 1993 earnings for the first six months would represent a 36 percent increase over the comparable prior year period.)
 According to Thomas R. Hefty, president and chief executive officer, "The revenue increases continue to be in line with our business plan. We had an excellent quarter given that the after tax earnings reflect the higher federal tax rate, and that we are comparing the 1993 results against an exceptionally strong second quarter in 1992. We are particularly pleased with the performance of our three joint ventures, American Medical Security, United Heartland and Valley Health Plan, all of which are making strong contributions to our earnings."
 Following are individual performance figures, excluding the cumulative effect of adoption of accounting changes in 1993, for UWSI's subsidiaries and joint venture relationships.
 HMO OPERATIONS
 HMO Operations, consisting of Compcare, Valley Health Plan and Dentacare, reported growth in earned premiums of 13 percent to $69.8 million in the second quarter of 1993 from $61.5 million in the same period in 1992. Second quarter earnings decreased 31 percent to $1.8 million in 1993 from $2.5 million for the same period in 1992.
 "Second quarter HMO earnings were impacted moderately by higher than expected health care utilization in the Milwaukee area," Hefty noted.
 For the six months ended June 30, 1993, HMO Operations reported earnings of $3.7 million, compared to $4.1 million for the same period in 1992. Earned premiums have grown from $123.7 million for the first two quarters of 1992 to $138.1 million for the first two quarters of 1993, a 12 percent increase.
 SMALL GROUP HEALTH CARE PRODUCTS
 Small Group Health Care Products, spearheaded by UWSI's joint venture with American Medical Security, Inc. (AMS), again reported strong results. For the second quarter of 1993, UWSI earned premiums attributable to health business sold by AMS increased 94 percent to $54.0 million in 1993 from $27.8 million in 1992.
 This premium growth is partially due to a change in the reinsurance contracts between UWSI and AMS related to this business. Excluding this change, earned premiums increased 55 percent in the second quarter of 1993, compared to the same period the previous year.
 UWSI second quarter earnings attributable to Small Group Health Care Products grew 13 percent to $3.3 million in 1993 from $2.9 million in 1992.
 In the first two quarters of 1993, earnings of $6.4 million are 29 percent above the $4.9 million in earnings for the same period in 1992. Earned premiums for the first two quarters of 1993 are $100.5 million, 94 percent ahead of the $51.8 million in earned premiums for the first two quarters in 1992.
 LIFE AND OTHER EMPLOYEE BENEFIT PRODUCTS
 Earned premiums for Life and Other Employee Benefit Products in the second quarter of 1993 were $10.9 million, or 40 percent ahead of the $7.8 million for the same period last year.
 Second quarter earnings were $1.5 million in 1993, a 10 percent decrease from $1.7 million for the same period in 1992.
 For the first six months of 1993 earnings were $3.2 million, a 5 percent decrease from $3.4 million in the same period in 1992. Earned premiums have grown from $15.0 million for the first two quarters of 1992 to $21.2 million for the first two quarters of 1993, a 41 percent increase.
 UNITED HEARTLAND
 UWSI, through its United Heartland joint venture, recorded earnings of $232,000 in the second quarter of 1993. This figure includes $150,000 of underwriting earnings. United Heartland, Inc., which began in 1991, brings managed care techniques to the workers' compensation market. The second quarter of 1993 represents the initial recording of underwriting gain for the joint venture.
 OTHER OPERATIONS
 UWSI's Other Operations, which market a variety of computer software, consulting, cost containment and health promotion programs, posted a second quarter loss of $39,000 on revenue of $1.9 million. In the second quarter of 1992, a loss of $71,000 was reported on revenue of $1.5 million.
 For the six months ended June 30, 1993, Other Operations reported a loss of $155,000, as compared to a loss of $113,000 for the first six months of 1992. Revenue for the same period was $3.7 million, a 22 percent increase over the $3.0 million of revenue for the first six months of 1992.
 UNITED WISCONSIN SERVICES, INC.
 United Wisconsin Services, Inc. is a leading provider of managed care services and employee benefit products, providing quality, cost- effective health benefits and services to employers. The operations consist of three HMOs marketed as Compcare, Dentacare and Valley Health Plan; small group health care products sold and administered by American Medical Security; life, disability and workers' compensation products; and related products and services.
 UNITED WISCONSIN SERVICES, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except share and per share data)
 (Unaudited)
 Three Months Ended Six Months Ended
 6/30/93 6/30/92 6/30/93 6/30/92
 Revenues:
 Premium revenue $134,251 $96,775 $258,938 $189,867
 Investment income 3,845 3,306 7,461 6,305
 Realized investment
 gains (losses) - net 568 350 2,096 1,969
 Other revenue 1,985 1,688 3,733 3,055
 Total revenues 140,649 102,119 272,228 201,196
 Expenses:
 Medical and life benefits 104,230 75,263 201,175 149,787
 Commission expenses 7,856 4,184 14,589 7,811
 Administrative expenses 14,982 10,958 29,570 21,942
 Premium taxes and
 other assessments 1,427 915 2,611 1,788
 Interest and profit
 sharing on joint ventures 1,357 751 2,731 1,941
 Dividends on preferred
 stock of subsidiary 613 613 1,225 1,225
 Total expenses 130,465 92,684 251,901 184,494
 Income before income
 tax expense and cumulative
 effect of accounting
 changes 10,184 9,435 20,327 16,702
 Income tax expense 3,513 2,611 7,230 4,671
 Income before cumulative
 effect of accounting changes 6,671 6,824 13,097 12,031
 Cumulative effect of
 accounting changes:
 Adoption of SFAS No. 106 -- -- (1,455) --
 Adoption of SFAS No. 109 -- -- 1,553 --
 Total cumulative
 effect of
 accounting changes -- -- 98 --
 Net income $6,671 $6,824 $13,195 $12,031
 Earnings per common share:
 Income before cumulative
 effect of accounting
 changes $.60 $.62 $1.18 $1.09
 Cumulative effect of
 accounting changes:
 Adoption of SFAS No. 106 -- -- (0.13) --
 Adoption of SFAS No. 109 -- -- 0.14 --
 Total cumulative effect
 of accounting changes -- -- 0.01 --
 Earnings per common share $.60 $.62 $1.19 $1.09
 Weighted average common
 shares 11,069,981 11,069,981 11,069,981 11,069,981
 Actual Pro forma Actual Pro forma
 Earnings at full
 federal income tax rate:
 Net income $6,671 $5,503 $13,195 $9,693
 Earnings per common share $.60 $.50 $1.19 $.88
 -0- 7/28/93
 /CONTACT: Tom Luljak, director, corporate communications, for United Wisconsin Services, 414-226-5756/
 (UWSI)


CO: United Wisconsin Services, Inc. ST: Wisconsin IN: INS SU: ERN

AL -- MN025 -- 6978 07/28/93 17:35 EDT
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Date:Jul 28, 1993
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