A.M. Best Co. has assigned a financial strength rating of A (Excellent) to Infinity Property and Casualty Group, (Infinity P/C) the core auto subsidiaries of Infinity Property and Casualty Corporation (IPCC) of Birmingham, Ala.
IPCC was created through a spin-off of American Financial Group, Inc.’s nonstandard automobile business produced through independent agents. The rating outlook is stable.
The rating reflects Infinity PC’s excellent capitalization, strong nonstandard 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 nonstandard 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 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.
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, Windsor Insurance Company (Indiana) a member of Infinity P/C, acquired Great American Contemporary Insurance Co from Great American Insurance Company (both of Cincinnati) an insurance subsidiary of AFG. In addition, Great Texas County Mutual Insurance Co (Texas) previously affiliated with Great American Insurance Company, 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 Company
*American Premier Insurance Company
*Atlanta Casualty Company
*Atlanta Reserve Insurance Company
*Atlanta Specialty Insurance Company
*Coventry Insurance Company
*Infinity Insurance Company
*Infinity National Insurance Company
*Infinity Select Insurance Company
*Leader Insurance Company
*Leader Preferred Insurance Company
*Leader Specialty Insurance Company
*Regal Insurance Company
*TICO Insurance Company
*Windsor Insurance Company
*Great American Contemporary Insurance Co
*Great Texas County Mutual Insurance Co
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