Infinity P/C Earns ‘A’ Rating From A.M. Best

A.M. Best Co. has assigned a financial strength rating of A (Excellent) to Infinity Property and Casualty Group, the core auto subsidiaries of Infinity Property and Casualty Corp. (IPCC), based in Birmingham, Ala.

IPCC was created through a spin-off of American Financial Group Inc.’s non-standard automobile business produced through independent agents. The rating outlook is stable.

The rating reflects Infinity P/C’s excellent capitalization, strong non-standard automobile market presence and the historically favorable overall operating performance of the book. The group’s solid capital position is driven by its moderate investment risk profile and commitment to loss reserve adequacy.

Historical underwriting profitability is attributable to management’s product expertise, local market knowledge and utilization of sophisticated technologies within the pricing, risk selection and claims handling processes. Underwriting returns have been aided by the low cost operating structure, which is facilitated by technology and consolidations of select back office functions.

Finally, the rating recognizes Infinity P/C’s strong non-standard private passenger automobile market presence as one of the top nonstandard auto insurance groups in the United States with direct premiums written of approximately $905 million.

Somewhat offsetting these positive rating factors are the potential future earnings fluctuations due to localized competitive market conditions and fraud activity prevalent in some key non-standard automobile markets. The group’s premium is focused in three key states, California, Florida and New York, which represent about 50 percent of the total book of business.

Over recent years, the operating climate in these states has been difficult due to strong competition and increasing claim costs, particularly within New York and Florida’s personal-injury protection market. However, Infinity P/C has pursued aggressive premium rate increases and tightened underwriting guidelines and will benefit from recent price firming throughout nonstandard auto markets.

A.M. Best expects the group’s parent, IPCC, to maintain manageable financial leverage and solid fixed coverage ratios as a result of expected favorable earnings and operating cash flow. A.M. Best views the rating outlook as stable due to Infinity P/C’s excellent capitalization and solid nonstandard automobile market position.

As part of the transaction, Indiana-based Windsor Insurance Co., a member of Infinity P/C, acquired Great American Contemporary Insurance Co. from Great American Insurance Co., both of Cincinnati, an insurance subsidiary of AFG. In addition, Great Texas County Mutual Insurance Co., previously affiliated with Great American Insurance Co., became affiliated with Infinity P/C.

The financial strength rating of A (Excellent) has been assigned to the following members of the Infinity Property and Casualty Group:

— American Deposit Insurance Co.
— American Premier Insurance Co.
— Atlanta Casualty Co.
— Atlanta Reserve Insurance Co.
— Atlanta Specialty Insurance Co.
— Coventry Insurance Co.
— Infinity Insurance Co.
— Infinity National Insurance Co.
— Infinity Select Insurance Co.
— Leader Insurance Co.
— Leader Preferred Insurance Co.
— Leader Specialty Insurance Co.
— Regal Insurance Co.
— TICO Insurance Co.
— Windsor Insurance Co.
— Great American Contemporary Insurance Co.
— Great Texas County Mutual Insurance Co.

Topics AM Best Property Casualty