A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of Infinity Property & Casualty Group (Infinity P/C) and its operating members. Concurrently, A.M. Best has affirmed the ICR of “bbb” and debt rating of “bbb” on $195 million 5.50% senior unsecured notes due 2014, issued by Infinity P/C’s parent, Infinity Property & Casualty Corporation (IPCC) (NASDAQ: IPCC). The outlook for all ratings is stable. The above named companies are headquartered in Birmingham, AL. (See below for a detailed listing of the companies.)
The rating affirmations of Infinity P/C reflect its excellent risk-adjusted capitalization, favorable five-year operating performance and strong non-standard automobile market presence. Infinity P/C’s favorable underwriting profitability is attributed to management’s product line expertise, local market knowledge and utilization of sophisticated technologies within the pricing, risk selection and claims handling process. Infinity P/C ranks among the leading non-standard automobile writers in the United States. In addition, Infinity P/C’s ratings recognize the financial flexibility provided by IPCC, which has modest financial leverage measures and favorable fixed interest coverage ratios.
Partially offsetting these positive rating factors are Infinity P/C’s limited business profile, with policies comprised predominantly of non-standard auto and approximately two-thirds of its direct written premiums concentrated in two key states. As a result, earnings are susceptible to increased competition in the non-standard auto segment and changes in the regulatory, judicial and legislative environment in its largest states. This was evident in 2011, when Infinity P/C’s underwriting results deteriorated, driven by adverse loss reserve development primarily related to an increase in loss severity in Florida’s personal injury protection coverage. In addition, dividend distributions over the previous five-year period to IPCC limited Infinity P/C’s ability to increase its surplus position. However, Infinity P/C has maintained solid earnings through rate adequacy and underwriting discipline to support its dividend expectations.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV