Infinity P/C Unveils Q1 Report

Alabama-based Infinity Property and Casualty Corporation, a national provider of personal automobile insurance with an emphasis on nonstandard auto insurance, reported net earnings for the first quarter of $16.9 million or $0.81 per share, on a fully diluted basis, compared to net earnings of $11.5 million or $0.57 per share for the first quarter of 2003.

Operating earnings, a non-GAAP measure, were $15.9 million or $0.76 per share for the first quarter of 2004 compared to $11.3 million or $0.55 per share for the first quarter of 2003.

Included in both net earnings and operating earnings for the three months ended March 31, 2004 is a net loss of $0.09, on a fully diluted basis, related to non-recurring items. Subsequent to the $200 million senior note offering in February, Infinity wrote off $0.11 of unamortized debt issue costs in connection with the prepayment of the term loan. In addition, there was a $0.02 loss resulting from the sublease of excess space in the Westbury, N.Y. office. Offsetting these two losses was a $0.04 gain from the sale of a building in Dallas.

Underwriting income, a non-GAAP measure, was $18.1 million in the first quarter of 2004. By comparison, $9.6 million of underwriting income was earned in the first quarter of 2003. Infinity produced a GAAP combined ratio in the first quarter of 91.3%, compared to 94.1% in the first quarter of 2003. Underwriting income is defined at the end of this release and reconciled to net earnings, the most comparable GAAP measure.

Net written premiums for the quarter ended March 31, 2004 were
$242.2 million compared with $226.3 million for the same period in 2003. The increase in net written premiums in the first quarter of 2004 compared to the first quarter of 2003 is largely attributable to the reduction in the auto physical damage ceded premiums from 90% in the first quarter of 2003 to 10% in the first quarter of 2004. Excluding the auto physical damage quota share, net premiums written in the first quarter of 2004 were $243.8 million, an 8% decrease compared to the first quarter of 2003.

“We are pleased to start out the new year with another strong quarter,” stated James Gober, Infinity’s president, CEO & chairman. “Frequency trends remained favorable throughout the first quarter, contributing to our strong underwriting results. We also had positive growth in our policy counts, which on a sequential quarter basis grew 3.6% in our franchise states and 1.5% overall.”

Franchise states results
Gross written premiums in Infinity’s five franchise states of California,
Connecticut, Florida, Georgia and Pennsylvania, which accounted for 83% of the gross written premiums in the first quarter of 2004, were $203.9 million compared with $195.5 million the same period in 2003.

These gross written premiums reflect gross premiums for the NSA Group and premiums gross of the auto physical damage quota share for the Assumed Agency Business.