Infinity Notes Rise in Net Earnings From Q3 2003

Alabama-based Infinity Property and Casualty Corp., a provider of personal automobile insurance with an emphasis on nonstandard auto insurance, reported that net earnings for the third quarter of 2004 were $23.0 million or $1.10 per share, on a fully diluted basis, compared to net earnings of $15.0 million or $0.72 per share for the third quarter of 2003. For the first nine months of 2004, net earnings were $64.7 million or $3.10 per share, as compared with $38.8 million or $1.89 per share for the same period in 2003.

Operating earnings, a non-GAAP measure, were $21.1 million or $1.01 per share for the third quarter of 2004 compared to $14.5 million or $0.70 per share for the third quarter of 2003. For the first nine months of 2004, operating earnings were $60.9 million or $2.92 per share, as compared with $37.9 million or $1.84 per share for the same period in 2003.

Underwriting income, a non-GAAP measure, was $22.0 million and $65.5 million in the third quarter and first nine months of 2004, respectively. By comparison, $13.8 million and $36.3 million of underwriting income was earned in the third quarter and first nine months of 2003, respectively. Infinity produced a GAAP combined ratio in the third quarter of 90.0%, compared to 92.0% in the third quarter of 2003. For the first nine months of 2004, the GAAP combined ratio was 89.9% compared to the 92.8% in the first nine months of 2003.

Catastrophe losses in the third quarter of 2004 were $1.9 million including $2.2 million from the four hurricanes and a $0.3 million release of excess reserves on catastrophes from prior periods. Catastrophe losses for the third quarter of 2003 were $0.4 million.

Net written premiums for the quarter ended Sept. 30, 2004 were $222.1 million compared with $226.6 million for the same period in 2003. Net written premiums for the first nine months of 2004 were $682.9 million, a 9.7% increase over the $622.8 million in net premiums for the first nine months of 2003. The increase in net written premiums in the first nine months of 2004 compared to the first nine months of 2003 is largely attributable to the reduction in the auto physical damage ceded premiums from 90% in the first six months of 2003 to 10% in the first six months of 2004.

Excluding the auto physical damage quota share, net premiums written in the third quarter and first nine months of 2004 were $229.6 million and $699.9 million, respectively compared to $236.5 million and $799.0 million for the same periods in 2003.

Gross written premiums in Infinity’s five franchise states of California, Connecticut, Florida, Georgia and Pennsylvania, which accounted for 82% of gross written premiums in the third quarter of 2004, grew 3.6% to $189.7 million from $183.2 million in the third quarter of 2003. Premiums in the franchise states for the first nine months of 2004 were $577.2 million compared to premiums of $567.3 million for the first nine months of 2003.