A.M. Best Affirms Ratings of Infinity Insurance Company, Its Insurance Subsidiaries and Affiliates; Assigns Indicative Ratings to New Shelf Registration

OLDWICK, N.J.--()--A.M. Best has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of "a" of Infinity Insurance Company (Infinity), its nine insurance subsidiaries and two affiliates. Concurrently, A.M. Best has affirmed the ICR of "bbb" and issue rating of "bbb" on $275 million 5.00% senior unsecured notes due 2022, issued by Infinity's parent, Infinity Property & Casualty Corporation (IPCC) [NASDAQ:IPCC]. The outlook for each rating is stable.

Additionally, A.M. Best has assigned indicative ratings of "bbb" to senior unsecured debt, "bbb-" to subordinated debt, "bb+" to junior subordinated debt and "bb+" to preferred stock of the recently filed shelf registration of IPCC. The outlook assigned to each of these ratings is stable. The new shelf registration replaces IPCC’s previous shelf registration, which is set to expire on June 7, 2016. Consequently, the indicative ratings for the previous shelf registration have been withdrawn. A.M. Best has also withdrawn the indicative ratings of "bb+" of the preferred securities of Infinity Capital Trust I, which were issued under IPCC's previous shelf registration statement. The above named companies are headquartered in Birmingham, AL. (See below for a detailed listing of the companies and ratings.)

The rating affirmations of Infinity reflect its excellent risk-adjusted capitalization, favorable five-year overall operating performance and strong non-standard automobile market presence. Infinity's favorable operating earnings are attributed to management's product line expertise, local market knowledge and utilization of sophisticated technologies within the pricing, risk selection and claims-handling processes. Infinity ranks among the leading non-standard automobile writers in the United States. The group has implemented numerous strategic initiatives to improve underwriting results in underperforming states, including rate increases, rating enhancements, agency management initiatives and revised claims operational processes. In addition, Infinity benefits from the financial flexibility provided by IPCC, which maintains moderate financial leverage and solid interest and fixed coverage ratios.

Partially offsetting these positive rating factors is Infinity's limited business profile, with policies composed predominantly of non-standard auto and approximately 88% of its direct written premiums concentrated in two key states. As a result, the organization's earnings are susceptible to increased competition in the non-standard auto segment and changes in the regulatory, judicial and legislative environments in its largest states. In addition, dividend distributions over the current five-year period to IPCC have tempered Infinity's surplus growth.

The FSR of A (Excellent) and the ICRs of "a" have been affirmed for Infinity Insurance Company and its following insurance subsidiaries and insurance affiliates:

  • Infinity Assurance Insurance Company
  • Infinity Auto Insurance Company
  • Infinity Casualty Insurance Company
  • Infinity Indemnity Insurance Company
  • Infinity Preferred Insurance Company
  • Infinity Safeguard Insurance Company
  • Infinity Security Insurance Company
  • Infinity Select Insurance Company
  • Infinity Standard Insurance Company
  • Hillstar Insurance Company (Affiliate)
  • Infinity County Mutual Insurance Company (Affiliate)

The following issue rating has been affirmed:

Infinity Property & Casualty Corporation—

-- “bbb” on $275 million 5.00% senior unsecured notes, due 2022

The following indicative ratings have been assigned with a stable outlook on securities available under IPCC’s shelf registration:

Infinity Property & Casualty Corporation—

-- “bbb” on senior unsecured debt

-- “bbb-” on subordinated debt

-- “bb+” on junior subordinated debt

-- “bb+” on preferred stock

This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Ricardo Longchallon, +1 908 439 2200, ext. 5676
Senior Financial Analyst
ricardo.longchallon@ambest.com
or
Christopher Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Gerard Altonji, +1 908 439 2200, ext. 5626
Assistant Vice President
gerard.altonji@ambest.com
or
Jim Peavy, +1 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Ricardo Longchallon, +1 908 439 2200, ext. 5676
Senior Financial Analyst
ricardo.longchallon@ambest.com
or
Christopher Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Gerard Altonji, +1 908 439 2200, ext. 5626
Assistant Vice President
gerard.altonji@ambest.com
or
Jim Peavy, +1 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com