Infinity P/C Assigned ‘A’

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). 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 PC’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.

A.M. Best said the rating also recognizes Infinity P/C’s strong non-standard private passenger automobile market presence as one of the top nonstandard auto insurance groups in the U.S. 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 nonstandard automobile markets. The group’s premium is focused in three key states, California, Florida and New York, which represent
approximately 50 percent of the total book of business.

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.

Topics Property Casualty