RYE BROOK, N.Y.--(BUSINESS WIRE)--Aug. 4, 2003--Universal American
Financial Corp. (NASDAQ National Market: UHCO) ("Universal American")
today announced record results for the second quarter ended June 30,
2003.

Second Quarter 2003 Compared to Second Quarter 2002

-- Pre-tax operating income, excluding investment gains,
increased 39% to $15.4 million;

-- Net operating income, excluding investment gains, increased
34% to $10.2 million;

-- Net operating EPS, excluding investment gains, increased 36%
to $.19 per diluted share;

-- Reported net income, including investment gains, increased
233% to $11.0 million, or $.20 per diluted share; and

-- Revenues, excluding investment gains, rose 68% to $139.8
million.

First Half 2003 Compared to First Half 2002

-- Pre-tax operating income, excluding investment gains and a
one-time non-cash charge of $1.8 million related to the
financing of the acquisition of Pyramid Life ("financing
charge"), increased 28% to $28.8 million;

-- Net operating income, excluding investment gains and the
financing charge, increased 26% to $18.9 million;

-- Net operating EPS, excluding investment gains and the
financing charge, increased 25% to $.35 per diluted share;

-- Reported net income, including investment gains and the
financing charge, was $18.5 million, or $.34 per diluted
share; and

-- Revenues, excluding investment gains, rose 44% to $237.7
million.

Financial Results-Second Quarter 2003

Universal American's reported net income for the second quarter of
2003 was $11.0 million, or $.20 per diluted share, compared to $3.3
million, or $.06 per diluted share in the second quarter of 2002. The
components of net income were as follows:

-- We earned $10.2 million, or $.19 per diluted share from
operations, excluding investment gains. This represents a 34%
increase over the $7.6 million income from operations and a
36% increase over the $.14 per diluted share reported in the
2002 second quarter. Based on this measure of operating
income, return on equity, excluding the effect of FAS 115, for
the second quarter was 15.0% compared to 13.2% in the second
quarter of last year.

-- We realized after tax investment gains of $.8 million, or $.01
per diluted share for the second quarter of 2003 compared to
investment losses of $4.3 million, or $.08 per diluted share
in the second quarter of 2002.

Financial Results-First Half 2003

Universal American's reported net income for the first half of
2003 was $18.5 million, or $.34 per diluted share, compared to $10.8
million, or $.20 per share in 2002. The components of net income were
as follows:

-- We earned $18.9 million, or $.35 per diluted share from
operations, excluding investment gains and the financing
charge. This represents a 26% increase over the $15.0 million
income from operations and a 25% increase over the $.28 per
diluted share reported in the first half of 2002.

-- We expensed $1.8 million, or $.02 per diluted share after tax,
in unamortized deferred loan fees associated with the loan
that we repaid in order to finance the Pyramid acquisition.

-- We had after tax investment gains of $.8 million, or $.02 per
diluted share, in the first half of 2003, compared to an after
tax loss of $4.2 million, or $.08 per diluted share, in 2002.

Balance Sheet Data

Excluding the unrealized appreciation of the Company's investment
portfolio, shareholders' equity was $279.0 million and fully diluted
book value per common share was $5.11, a 15.9% increase over June 30,
2002 and a 14.3% annualized increase since the beginning of the year.
Since 1998, fully diluted book value per share, excluding the effect
of FAS 115, has grown at a compounded rate of 17%.
Shareholders' equity reported as of June 30, 2003 was $330.9
million, or $6.17 per common share, compared to $286.8 million, or
$5.42 per common share on December 31, 2002. During the first half of
2003, total assets grew 18.0% to approximately $1.7 billion, largely
as a result of the assets acquired in the Pyramid acquisition.

Management Comments

Richard Barasch, chairman and CEO of Universal American,
commented, "We are extremely pleased with our record results for the
second quarter of 2003, as our recent transactions boosted the
underlying growth in profitability of our company. Our strategy for
many years has been to grow steadily from operations and then use our
transaction capabilities opportunistically to accelerate our growth.
The results of the past quarter, plus the new business that will come
from the addition of two significant new distribution channels to an
already robust marketing organization, give us good reason to be
optimistic about our ability to sustain a superior rate of growth.
"We are particularly pleased with the increase in our return on
equity to just over 15% for the quarter. This indicates that our
growth, both internal and external, is being financed to bring the
best possible return to our shareholders.

Senior Market Brokerage

"Our Senior Market Brokerage segment returned to robust growth in
profitability in the second quarter after a slightly sub-par first
quarter. Premiums written increased by 9% over the second quarter of
2002 to $122.7 million, and revenues rose even faster, by 58% to $63.4
million, as we retained a larger percentage of our new business and
recaptured a sizable in force block of Medicare supplement business
that had been previously reinsured. The addition of the Nationwide
Medicare supplement block acquired last fall also contributed to our
increased revenues. These factors all helped overcome the slowdown in
new Medicare supplement sales that we had anticipated and previously
discussed.
"The increase in profitability was also driven by the expected
improvement in our Medicare Supplement loss ratios. In the 2nd
quarter, our loss ratio in this line of business was 70.0%, compared
to 73.2% in the first quarter of this year, and 71.9% in the second
quarter of 2002. In addition, we continued to see a noticeable
improvement in results of our Florida home health block.
"Further, as part of a concerted effort to increase our sales of
life insurance in this segment, we recently acquired the field force
of Guarantee Reserve Life and in cooperation with its new owner, Swiss
Re, have begun to sell senior life insurance through that dynamic
field force. The relationship began on July 1, 2003, and the 6,000
applications received from the nearly 1,000 agents in the first month
alone should yield over $3 million of new written life business.

Career Agency

"The Career Agency division continued its excellent performance
bolstered by the Pyramid acquisition which was completed in March.
With the addition of Pyramid, revenues increased 84% to $73.8 million
and profits increased 24% to $9.7 million compared to the second
quarter of 2002. Total sales, including the $6.9 million of business
written by Pyramid since our acquisition, increased by 83% over the
same period last year. In the second quarter of 2003, the Career
Agency division wrote $15.7 million of fixed annuities, on target to
write more than $60.0 million for the year.
"The Canadian career operation continued its steady contribution
to the Career Agency segment, as total revenues increased by 14% and
profits increased by 27% over the second quarter of 2002, helped in
part by the increase in value of the Canadian dollar.
"We continue to progress with the integration of the operations of
Pyramid into our existing facilities. While the acquisition of Pyramid
is already accretive, even taking into account the transition costs,
we expect to see even more benefit from the acquisition when we
complete the integration early in 2004.

Administrative Services

"CHCS Services, one of the country's leading senior market
third-party administrators, continued its important contribution to
the profitability and cash flow of our company. Revenues for the
quarter increased 15% to $11.5 million and operating income increased
46% to $2.6 million over the comparable period of 2002, as a result of
the growth in premiums managed. The pipeline for new business
continues to be active, from both internal and external sources, and
we expect to see continued growth in this segment that will more than
make up for the Federal employee long term care program that peaked in
the two previous quarters.

Investment Portfolio

"Our investment portfolio, which now totals $1.2 billion with the
inclusion of Pyramid Life, is in excellent shape with over 99% of the
portfolio invested in debt securities rated investment grade by at
least one of the rating agencies. As of the end of the second quarter,
our bonds were worth $82 million more than our cost and we had no
write-downs in the quarter. We made a conscious decision to invest
cautiously especially toward the end of the second quarter as interest
rates hit multi-decade lows, and at one point we had accumulated
around $100 million in short duration investments. While this decision
dampened investment income last quarter, it has proven to be correct
as rates have risen recently and we have been able to reinvest these
funds at higher yields.

Capitalization

"The capital markets have recognized our growing strength and we
have been able to finance our growth, internally and through
acquisitions, on increasingly more favorable terms. In March 2003, we
replaced our prior debt with a larger bank facility at a lower
interest rate that not only helped us fund the Pyramid acquisition,
but also gave us a large revolving credit facility. During the second
quarter, we also issued two Trust Preferred Securities that allowed us
to replace a portion of the bank debt with thirty year non-amortizing
financing that is given substantial equity treatment by the rating
agencies, but does not dilute the equity of our shareholders."

Conference Call

Universal American will host a conference call at 10 am Eastern
Daylight Time on Tuesday, August 5, 2003 to discuss the second quarter
results and other corporate developments. This conference call will be
webcast live over the Internet and can be accessed at Universal
American's website at www.uafc.com. To listen to the live call, please
go to the website at least 15 minutes early to download and install
any necessary audio software. If you are unable to listen live, the
conference call will be archived and can be accessed for approximately
30 days.

About Universal American Financial Corp.

Universal American Financial Corp. offers a portfolio of
supplemental life and health insurance products, primarily to the
senior market, as well as third party administrator services for
insurance and non-insurance programs in the senior market. The Company
is included on the Russell 2000 and 3000 Indexes. For more information
on Universal American, please visit our website at www.uafc.com.
Except for the historical information contained above, this
document may contain some forward looking statements, including
statements related to 2003 operating results, which involve a number
of risks and uncertainties that could cause actual results to differ
materially. These risk factors are listed from time to time in the
Company's SEC reports.

(Tables to follow)




UNIVERSAL AMERICAN FINANCIAL CORP. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
In millions, except per share amounts
(Unaudited)

Three Months Six Months
Ended June 30, Ended June 30,
Consolidated Operating Results 2003 2002 2003 2002
---------------------------------------------- ------- ------- -------

Premiums before fees and reinsurance $183.3 $144.2 $338.0 $291.6
====== ====== ====== ======

Net premiums and policyholder fees $121.6 $ 65.6 $200.8 $130.6
Net investment income 15.4 14.4 29.8 28.7
Other income 2.8 3.3 7.1 6.0
------ ------ ------ ------
Total Operating revenue 139.8 83.3 237.7 165.3
------ ------ ------ ------

Policyholder benefits 86.7 46.6 142.4 91.8
Interest credited to policyholders 3.2 2.6 6.4 5.2
Change in deferred acquisition costs (11.1) (6.9) (19.3) (12.8)
Amortization of present value of future
profits and Goodwill 1.1 0.4 1.2 0.8
Commissions and general expenses, net
of Allowances 44.5 29.5 78.2 57.8
------ ------ ------ ------
Total benefits and expenses 124.4 72.2 208.9 142.8
------ ------ ------ ------

Pro forma operating income, before
income taxes(1) 15.4 11.1 28.8 22.5

Income Taxes (2) (5.2) (3.5) (9.9) (7.5)
------ ------ ------ ------

Pro forma net operating income (1) 10.2 7.6 18.9 15.0

Non-recurring items
Early extinguishment of debt - - (1.8) -
Income taxes on non-recurring items - - 0.6 -
------ ------ ------ ------
Net non-recurring items - - (1.2) -
------ ------ ------ ------

Net Operating income (1) 10.2 7.6 17.7 15.0

Investment gains(losses)
Realized gains (losses) 1.2 (6.6) 1.3 (6.5)
Income taxes on realized gains (losses) (0.4) 2.3 (0.5) 2.3
------ ------ ------ ------
Net realized gains (losses) 0.8 (4.3) 0.8 (4.2)
------ ------ ------ ------

Reported net income (1) $ 11.0 $ 3.3 $ 18.5 $ 10.8
====== ====== ====== ======

Per Share Data (Diluted)
Pro forma net operating income (1) $ 0.19 $ 0.14 $ 0.35 $ 0.28
Non-recurring items - - (0.02) -
Realized gains (losses) net of tax 0.01 (0.08) 0.01 (0.08)
------ ------ ------ ------

Reported net income (1) $ 0.20 $ 0.06 $ 0.34 $ 0.20
====== ====== ====== ======





UNIVERSAL AMERICAN FINANCIAL CORP. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
In millions, except per share amounts
(Unaudited)

Three Months Six Months
Ended June Ended June
30, 30,
Consolidated Operating Results by Segment 2003 2002 2003 2002
------------------------------------------------- ----- ----- -----

Career Agency $ 9.7 $ 7.8 $19.2 $15.0
Senior Market Brokerage 5.4 3.1 8.4 7.2
Administrative Services 2.6 1.8 5.2 3.6
----- ----- ----- -----
Segment operating income 17.7 12.7 32.8 25.8

Corporate (2.2) (1.6) (5.8) (3.3)
----- ----- ----- -----

Net operating Income before federal
income taxes (1) $15.5 $11.1 $27.0 $22.5
===== ===== ===== =====




BALANCE SHEET DATA June 30, December
2003 31, 2002
-------------------------------------------------- --------- ---------
Total Cash and Investments $1,216.1 $ 999.9
--------- ---------
Total Assets $1,654.2 $1,401.7
--------- ---------
Total Policyholder Related Liabilities $1,169.4 $ 993.7
--------- ---------
Total Outstanding Bank Debt $ 50.0 $ 50.8
--------- ---------
Trust Preferred Securities $ 55.0 $ 15.0
--------- ---------
Total Shareholders' Equity $ 330.9 $ 286.8
--------- ---------
Total Shareholders' Equity (excluding SFAS 115) $ 279.0 $ 256.9
--------- ---------
Diluted Weighted Average Shares Outstanding YTD 54.4 54.3
--------- ---------
Book Value per Common Share $ 6.17 $ 5.42
--------- ---------
Diluted Book Value per Common Share (excluding
SFAS 115) (4) $ 5.11 $ 4.77
--------- ---------
Debt to Total Capital Ratio (5) 13.0% 15.7%
--------- ---------

(1) We describe our income as follows: "Reported net income" is income
based on generally accepted accounting principles. "Net operating
income" excludes realized gains (losses). "Pro forma operating
income" also excludes items that are non-recurring and, in the
opinion of management, are not indicative of overall operating
trends. The table on page 6 reconciles Pro forma operating income
and Net operating income to Reported net income in accordance with
generally accepted accounting principles.

(2) The effective tax rates were 33.9% and 25.8% for the quarters
ended June 30, 2003 and 2002, respectively and 34.5% and 32.8% for
the six months ended June 30, 2003 and 2002, respectively.

(3) Tax on realized capital gains (losses) and other non-recurring
items is based on a 35.0% effective tax rate for all periods.

(4) Diluted book value per share represents total Shareholders'
Equity, excluding accumulated other comprehensive income, plus
assumed proceeds from the exercise of vested options, divided by
the total shares outstanding plus the shares assumed issued from
the exercise of vested options.

(5) The Debt to Total Capital Ratio is calculated as the ratio of the
Total Outstanding Bank Debt to the sum of Shareholders' Equity
excluding FAS 115 plus Total Outstanding Bank Debt plus Trust
Preferred Securities.