Fitch Affirms Infinity’s IDR at ‘BBB+’; Outlook Stable

Fitch Ratings has affirmed Infinity Property & Casualty Corporation’s ratings (Infinity) (NASDAQ: IPCC) as follows:

–Long-term IDR at ‘BBB+’;

–$200 million senior notes due 2014 ‘BBB’;

–Insurer financial strength (IFS) at ‘A’.

For a complete list of subsidiary ratings, see below. The Rating Outlook is Stable.

The ratings are based on Infinity’s solid underwriting results, quality balance sheet, strong capitalization and adequate loss reserving levels. Offsetting these positives are Infinity’s business concentration in the California auto market, which represents approximately 53% of gross written premiums, increased competitive landscape, and exposure to political and operating uncertainty.

Infinity is the seventh largest non-standard auto insurance company in the country. As of March 31, 2008, Infinity had total GAAP capital of $812 million. The corporation’s debt-to-total capital ratio was 25%, below Fitch’s 30% tolerance for the current rating category. Fitch notes that earnings based interest coverage was 9.0 times for the period, and anticipates that the company will continue to maintain adequate interest coverage levels to support debt servicing requirements going forward.

Infinity reported a statutory underwriting combined ratio of 99.3% for the first quarter-2008 (1Q’08), compared with 98.3% for full year 2007. Infinity reported net earned premium revenues of $235.1 million for 1Q’08, down slightly from $256 million reported for 1Q’07.

Infinity’s personal lines insurance operations utilize an extensive independent agency sales force of approximately 13,000 agents. Infinity reported GAAP consolidated assets of $2 billion and total shareholder equity of $612.5 million as of March 31, 2008.

Fitch has also affirmed the following IFS ratings at ‘A’ with a Stable Outlook:

Hillstar Insurance Co

Infinity Assurance Insurance Co

Infinity Auto Insurance Co

Infinity Casualty Insurance Company

Infinity County Mutual Insurance Company

Infinity General Insurance Co

Infinity Indemnity Insurance Co

Infinity Insurance Company

Infinity Preferred Insurance Co

Infinity Premier Insurance Co

Infinity Reserve Insurance Co

Infinity Safeguard Insurance Co

Infinity Security Insurance Company

Infinity Select Insurance Co

Infinity Specialty Insurance Co

Infinity Standard Insurance Co

Fitch’s rating definitions and the terms of use of such ratings are available on the agency’s public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch’s code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the ‘Code of Conduct’ section of this site.