Infinity Property and Casualty Reports Improved Earnings per Share in the Third Quarter of 2013

  Infinity Property and Casualty Reports Improved Earnings per Share in the
                            Third Quarter of 2013

PR Newswire

BIRMINGHAM, Ala., Nov. 7, 2013

BIRMINGHAM, Ala., Nov. 7, 2013 /PRNewswire/ --Infinity Property and Casualty
Corporation (NASDAQ: IPCC) today reported results for the three and nine
months ended September 30, 2013:

                      Three months ended September Nine months ended September
                      30,                          30,

                                                                 
(in millions, except
per share amounts     2013     2012     Change     2013       2012    Change
and ratios)
                                                                

Gross written         $328.6   $325.0   1.1%       $1,026.6   $961.2  6.8%
premium ^(1)
Revenues              $335.0   $313.7   6.8%       $1,006.5   $907.1  11.0%
                                                                

Net earnings          $7.2     $5.2     39.6%      $23.3      $16.4   41.8%
Net earnings per      $0.62    $0.43    44.2%      $1.99      $1.37   45.3%
diluted share
Operating earnings    $7.3     $3.2     132.3%     $20.4      $12.9   57.9%
^(1)
Operating earnings
per diluted share     $0.63    $0.27    133.3%     $1.75      $1.08   62.0%
^(1)
                                                                

Underwriting income   $7.5     $(0.2)   NM ^(3)    $20.5      $2.4    744.7%
(loss) ^(1)
Combined ratio        97.7%    100.0%   (2.3) pts  97.9%      99.7%   (1.8
                                                                      pts)
                                                                

Return on equity      4.5%     3.1%     1.4 pts    4.8%       3.3%    1.5 pts
^(2)
Operating earnings
return on equity      4.6%     1.9%     2.7 pts    4.2%       2.6%    1.6 pts
^(1) (2)
                                                                   

Book value per share                               $56.49     $57.71  (2.1%)
Debt to total                                      29.8%      41.1%   (11.3)
capital                                                               pts
Debt to tangible                                   32.4%      43.9%   (11.6)
capital ^(1)                                                          pts
^(1) Measures used in this release that are not based on generally accepted
accounting principles ("non-GAAP") are

 defined at the end of this release and reconciled to the most comparable
GAAP measure.[]
^(2) Annualized[]
^(3) NM = Not meaningful

Net earnings per diluted share jumped 44.2% in the third quarter of 2013
compared with the third quarter of 2012 primarily as a result of improved
underwriting results. A decline of $0.9 million, or 9.7%, in net investment
income during the third quarter of 2013 compared with the same period of 2012
partially offset the increase in underwriting income. Net investment income
declined as a result of low market interest rates. Our book value per share
declined 2.1% from $57.71 at September 30, 2012 to $56.49 at September 30,
2013, predominantly due to a decline in unrealized gains as a result of an
increase in interest rates. Excluding unrealized gains, net of taxes, of
$46.8 million at September 30, 2012 and $16.5 million at September 30, 2013,
book value per share increased 2.5%.

Gross written premium grew 1.1% during the third quarter of 2013 compared with
the same period in 2012, primarily due to growth in Infinity's profitable
businesses, California Personal Auto (0.8%), Florida Personal Auto (19.8%) and
Commercial Vehicle (7.9%). Premiums declined a combined 24.0% in our
remaining Focus States as a result of our efforts to improve profitability in
those states.

James Gober, CEO and Chairman of Infinity, commented, "The improvement in our
third quarter results reflects the continued success of our efforts to improve
our overall returns. I am encouraged by our robust growth in Florida Personal
Auto and our Commercial Vehicle Program as well as the improvement in the
underwriting results in other states. We are moving closer, but we are still
below our long-term return goals, so we will remain steadfast in our pursuit
of improving returns on capital."

2013 Earnings Guidance
Infinity is revising its earnings guidance to $2.40 to $2.90. The guidance
assumes gross written premium growth between 6.0% and 7.0% compared with the
prior year and an accident year combined ratio, which excludes development on
prior accident year loss and loss adjustment expense reserves, between 97.0%
and 98.0%. The prior guidance of $2.90 to $3.40 assumed gross written premium
growth between 5.0% and 8.0% compared with the prior year and an accident year
combined ratio between 96.5% and 97.5%.

Share and Debt Repurchase Program
During the third quarter of 2013, Infinity repurchased 19,000 shares at an
average price, excluding commissions, of $63.70. Infinity has $44.9 million of
capacity left under its share and debt repurchase program, which expires
December 31, 2014.

Forward-Looking Statements
This press release, notably "2013 Earnings Guidance," contains certain
"forward-looking statements" which anticipate results based on our estimates,
assumptions and plans that are subject to uncertainty. These statements are
made subject to the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements in this report not dealing with
historical results or current facts are forward-looking and are based on
estimates, assumptions and projections. Statements which include the words
"assumes," "believes," "seeks," "expects," "may," "should," "intends,"
"likely," "targets," "plans," "anticipates," "estimates" or the negative
version of those words and similar statements of a future or forward-looking
nature identify forward-looking statements.

The primary events or circumstances that could cause actual results to differ
materially from what we expect include determinations with respect to reserve
adequacy, realized gains or losses on the investment portfolio (including
other-than-temporary impairments for credit losses), bodily injury loss cost
trends, undesired business mix or risk profile for new business and
competitive conditions in our key Focus States. Infinity undertakes no
obligation to publicly update or revise any of the forward-looking statements.
For a more detailed discussion of some of the foregoing risks and
uncertainties which could cause actual results to differ from those contained
in the forward-looking statements, see Infinity's filings with the Securities
and Exchange Commission.

Conference Call
Infinity will conduct a conference call and webcast to discuss third quarter
2013 results at 11:00 a.m. (ET) today, November 7, 2013. The webcast can be
accessed on the Company's Investor Relations website at
http://ir.infinityauto.com. The conference call will be available by dialing
1-888-317-6016. For those unable to attend the live event, a replay of the
webcast will be posted on the website shortly after the event ends.

Infinity Property and Casualty Corporation

Statements of Earnings

(in millions, except EPS and dividends)
                                  Three months ended      Nine months ended
(unaudited)                       September 30,           September 30,
                                  2013         2012       2013         2012
Revenues:
Earned premium                    $327.1       $301.5     $976.9       $872.7
Net investment income             8.1          9.0        25.1         28.4
Net realized (losses) gains on    (0.5)        0.3        4.1          2.7
investments ^(1)
Gain on sale of subsidiary        —            2.9        —            2.9
Other income                      0.3          0.1        0.4          0.4
Total revenues                    335.0        313.7      1,006.5      907.1
Costs and Expenses:
Losses and loss adjustment        255.2        238.3      762.7        683.9
expenses ^(2)
Commissions and other             64.3         63.4       193.7        186.4
underwriting expenses
Interest expense                  3.5          3.2        10.5         8.6
Corporate general and             1.9          1.7        6.0          5.8
administrative expenses
Other expenses                    0.4          0.6        1.8          0.9
Total costs and expenses          325.3        307.1      974.6        885.7
Earnings before income taxes      9.6          6.6        31.9         21.4
Provision for income taxes        2.4          1.4        8.6          5.0
Net Earnings                      $7.2         $5.2       $23.3        $16.4


Net Earnings per Common Share:
Basic                             $0.63        $0.44      $2.03        $1.40
Diluted                           $0.62        $0.43      $1.99        $1.37


Average Number of Common
Shares:
Basic                             11.4         11.6       11.5         11.7
Diluted                           11.6         11.9       11.7         12.0

                                  $0.300       $0.225     $0.900       $0.675
Cash Dividends per Common Share
Notes: [ ]
^(1) Net realized gains         $0.3         $0.5       $5.3         $3.9
before impairment losses
 Total
other-than-temporary impairment                                     
("OTTI")
                                  (1.5)        (0.2)      (2.1)        (1.2)
 losses
 Non-credit portion in                                        
other comprehensive
                                  0.7          0.0        0.9          0.0
 income
 OTTI losses reclassified                                     
from other
                                  0.0          0.0        0.0          0.0
 comprehensive income
 Net impairment losses      (0.8)        (0.2)      (1.2)        (1.3)
recognized in earnings
 Total net realized         $(0.5)       $0.3       $4.1         $2.7
(losses) gains on investments
^(2)Losses and loss adjustment expenses for the three months ended
September 30, 2013 and September 30,

2012include $0.9 million and $5.3 million of unfavorable development
on prior accident year loss and loss

adjustmentexpense reserves, respectively. Losses and loss adjustment
expenses for the nine months

ended September30, 2013 and September 30, 2012 include $2.2 million
and $7.1 million of unfavorable

development on prioraccident year loss and loss adjustment expense
reserves, respectively.[]
Columns may not foot due to rounding.^



Infinity Property and Casualty Corporation

Balance Sheets

(in millions, except book value per share)
                                         September 30,         December 31,
                                         2013                  2012
                                         (unaudited)
Assets:
Investments:
Fixed maturities, at fair value          $1,372.9              $1,321.8
Equity securities, at fair value         76.6                  73.1
Short-term investments, at fair          4.1                   0.0
value
Total investments                        1,453.5               1,394.9
Cash and cash equivalents                87.3                  165.2
Accrued investment income                12.1                  11.9
Agents' balances and premium             461.3                 427.2
receivable
Property and equipment (net of           48.1                  39.3
depreciation)
Prepaid reinsurance premium              3.1                   2.6
Recoverable from reinsurers              14.3                  14.4
Deferred policy acquisition costs        91.2                  88.3
Current and deferred income taxes        30.1                  25.8
Receivable for securities sold           0.5                   48.5
Other assets                             11.6                  10.2
Goodwill                                 75.3                  75.3
Total assets                             $2,288.4              $2,303.6
Liabilities and Shareholders'
Equity:
Liabilities:
Unpaid losses and loss adjustment        $632.9                $572.9
expenses
Unearned premium                         580.9                 538.1
Payable to reinsurers                    0.2                   0.1
Long-term debt                           275.0                 275.0
Commissions payable                      17.9                  18.1
Payable for securities purchased         10.7                  132.4
Other liabilities                        121.7                 110.7
Total liabilities                        1,639.2               1,647.4
Shareholders' Equity:
Common stock                             21.6                  21.5
Additional paid-in capital               366.7                 361.8
Retained earnings ^(1)                   679.1                 666.2
Accumulated other comprehensive          16.0                  29.9
income, net of tax
Treasury stock, at cost ^(2)             (434.2)               (423.2)
Total shareholders' equity               649.2                 656.2
Total liabilities and                    $2,288.4              $2,303.6
shareholders' equity
                                                             

Shares outstanding                       11.5                  11.6
Book value per share                     $56.49                $56.55
Notes:[]
^(1) The change in retained earnings from December 31, 2012 is a result of
net income of $23.3 million less

shareholder dividends of $10.4 million. []
^(2) Infinity repurchased 165,900 common shares during the first nine months
of 2013 at an average per

share price, excluding commissions, of $57.91.[]
Columns may not foot due to rounding.^



Infinity Property and Casualty Corporation

Statements of Cash Flows

(in millions)
                                              Three months ended September 30,
                                              2013                2012
Operating Activities:
Net earnings                                  $ 7.2               $ 5.2
Adjustments:
Depreciation                                  2.3                 2.4
Amortization                                  5.4                 2.6
Net realized losses (gains) on investments    0.5                 (0.3)
(Gain) loss on disposal of property and       (0.1)               0.0
equipment
Gain on sale of subsidiary                    0.0                 (2.9)
Share-based compensation expense              1.0                 0.7
Activity related to rabbi trust               0.1                 0.0
Decrease (increase) in accrued investment     0.7                 0.1
income
Decrease (increase) in agents' balances and   (4.8)               (18.3)
premium receivable
Decrease (increase) in reinsurance            0.8                 (1.1)
receivables
Decrease (increase) in deferred policy        1.0                 (2.5)
acquisition costs
Decrease (increase) in other assets           (2.6)               (2.7)
Increase (decrease) in unpaid losses and      20.9                13.4
loss adjustment expenses
Increase (decrease) in unearned premium       (0.9)               21.6
Increase (decrease) in payable to reinsurers  0.2                 0.0
Increase (decrease) in other liabilities      11.0                (1.1)
Net cash provided by operating activities     42.3                17.2
Investing Activities:
Purchases of fixed maturities                 (148.2)             (89.1)
Purchases of equity securities                (1.0)               0.0
Purchases of short-term investments           (0.6)               0.0
Purchases of property and equipment           (5.9)               (0.9)
Maturities and redemptions of fixed           46.1                62.2
maturities
Proceeds from sale of fixed maturities        42.9                10.0
Proceeds from sale of short-term investments  0.1                 0.0
Proceeds from sale of property and equipment  0.2                 0.0
Net cash used in investing activities         (66.3)              (17.9)
Financing Activities:
Proceeds from stock options exercised and
employee stock purchases, including           1.2                 0.4

tax benefit
Proceeds from issuance of bonds               0.0                 273.2
Principal payments under capital lease        (0.1)               0.0
obligation
Increase in restricted cash related to        0.0                 (209.9)
planned redemption of debt
Acquisition of treasury stock                 (2.2)               (3.2)
Dividends paid to shareholders                (3.4)               (2.6)
Net cash (used in) provided by financing      (4.6)               57.9
activities
Net (decrease) increase in cash and cash      (28.6)              57.3
equivalents
Cash and cash equivalents at beginning of     115.9               69.3
period
Cash and cash equivalents at end of period    $ 87.3              $ 126.6
Note: Columns may not foot due to rounding
                                              Nine months ended September 30,
                                              2013                2012
Operating Activities:
Net earnings                                  $23.3               $16.4
Adjustments:
Depreciation                                  6.3                 6.4
Amortization                                  15.1                7.1
Net realized gains on investments             (4.1)               (2.7)
(Gain) loss on disposal of property and       (0.1)               0.0
equipment
Gain on sale of subsidiary                    0.0                 (2.9)
Share-based compensation expense              3.0                 2.8
Activity related to rabbi trust               0.1                 0.1
Decrease (increase) in accrued investment     (0.2)               0.0
income
Decrease (increase) in agents' balances and   (34.1)              (62.7)
premium receivable
Decrease (increase) in reinsurance            (0.3)               (1.1)
receivables
Decrease (increase) in deferred policy        (3.0)               (12.4)
acquisition costs
Decrease (increase) in other assets           1.8                 (8.0)
Increase (decrease) in unpaid losses and      60.0                48.9
loss adjustment expenses
Increase (decrease) in unearned premium       42.7                83.2
Increase (decrease) in payable to reinsurers  0.0                 0.0
Increase (decrease) in other liabilities      11.2                (2.1)
Net cash provided by operating activities     121.7               73.0
Investing Activities:
Purchases of fixed maturities                 (638.6)             (344.5)
Purchases of equity securities                (2.1)               0.0
Purchases of short-term investments           (4.2)               0.0
Purchases of property and equipment           (15.1)              (8.5)
Maturities and redemptions of fixed           149.4               144.2
maturities
Proceeds from sale of fixed maturities        323.8               133.5
Proceeds from sale of equity securities       7.2                 0.0
Proceeds from sale of short-term investments  0.1                 0.0
Proceeds from sale of property and equipment  0.2                 0.0
Net cash used in investing activities         (179.2)             (75.4)
Financing Activities:
Proceeds from stock options exercised and
employee stock purchases, including           1.9                 1.2

tax benefit
Proceeds from issuance of bonds               0.0                 273.2
Principal payments under capital lease        (0.6)               0.0
obligation
Increase in restricted cash related to        0.0                 (209.9)
planned redemption of debt
Acquisition of treasury stock                 (11.4)              (11.5)
Dividends paid to shareholders                (10.4)              (7.9)
Net cash (used in) provided by financing      (20.4)              45.1
activities
Net (decrease) increase in cash and cash      (77.9)              42.8
equivalents
Cash and cash equivalents at beginning of     165.2               83.8
period
Cash and cash equivalents at end of period    $87.3               $126.6
Note: Columns may not foot due to rounding

Definitions of Non-GAAP Financial and Operating Measures

Operating earnings  are defined as net earnings, before realized gains and
losses on investments and sale of subsidiary and the cumulative effect of a
change in accounting principle, after tax. Infinity reports this non-GAAP
measure because realized gains and losses on investments can be volatile and
because it is a measure used often by investors in evaluating insurance
companies. Net earnings are the most comparable GAAP measure.

Underwriting income  measures the insurer's profit on insurance sales after
all losses and expenses have been paid. It is calculated by deducting losses
and loss adjustment expenses and underwriting expenses from premiums earned.
Infinity reports this non-GAAP measure to show profitability before inclusion
of net investment income, other income, interest expense, corporate general
and administrative expenses, other expenses and taxes and because it is a
measure used often by investors in evaluating insurance companies. Net
earnings are the most comparable GAAP measure.

Below isaschedulethat reconciles operating earnings and underwritingincome
tonet earnings:

                                         Three months ended  Nine months ended
                                         September 30,       September 30,
                                         2013       2012     2013      2012
(in millions, except EPS)
Earned premium                           $327.1     $301.5   $976.9    $872.7
Losses and loss adjustment expenses      (255.2)    (238.3)  (762.7)   (683.9)
Commissions and other underwriting       (64.3)     (63.4)   (193.7)   (186.4)
expenses
Underwriting income                      7.5        (0.2)    20.5      2.4
Net investment income                    8.1        9.0      25.1      28.4
Other income                             0.3        0.1      0.4       0.4
Interest expense                         (3.5)      (3.2)    (10.5)    (8.6)
Corporate general and administrative     (1.9)      (1.7)    (6.0)     (5.8)
expenses
Other expenses                           (0.4)      (0.6)    (1.8)     (0.9)
Pre-tax operating earnings               10.2       3.4      27.8      15.8
Provision for income taxes               (2.8)      (0.2)    (7.4)     (2.9)
Operating earnings, after-tax            7.3        3.2      20.4      12.9
Realized (losses) gains on investments,  (0.5)      0.3      4.1       2.7
pre-tax
Realized gain on sale of subsidiary,     —          2.9      —         2.9
pre-tax
Provision for income taxes on capital    0.2        (1.2)    (1.4)     (2.0)
gains
Prior period tax adjustment on capital   0.2        —        0.2       —
gains
Increase in provision for tax valuation  —          —        —         (0.1)
allowance
Realized (losses) gains on investments,  (0.2)      2.0      2.9       3.5
net of tax
Net earnings                             $7.2       $5.2     $23.3     $16.4
Operating earnings per diluted share     $0.63      $0.27    $1.75     $1.08
Realized (losses) gains on investments
and sale of subsidiary, net              (0.03)     0.16     0.22      0.30

of tax
Prior period tax adjustment on capital   0.02       0.00     0.02      0.00
gains
Increase in provision for tax valuation  —          —        —         (0.01)
allowance
Net earnings per diluted share           $0.62      $0.43    $1.99     $1.37
Note: Columns may not foot due to rounding



Gross written premium  is the amount of premium charged for policies issued
during a fiscal period. Earned premium is a GAAP measure and represents the
portion of gross written premium (after cessions to reinsurers) that has been
recognized in income in the financial statements for the periods presented as
earned on a pro-rata basis over the term of the policies.

Below is a schedule that reconciles gross written premium to earned premium:

                                         Three months ended  Nine months ended
                                         September 30,       September 30,
(in millions)                            2013       2012     2013       2012
Gross written premium                    $328.6     $325.0   $1,026.6   $961.2
Ceded reinsurance                        (2.5)      (2.0)    (7.4)      (5.7)
Net written premium                      326.0      323.0    1,019.2    955.5
Change in unearned premium               1.1        (21.5)   (42.3)     (82.8)
Earned premium                           $327.1     $301.5   $976.9     $872.7
Note: Columns may not foot due to
rounding

Tangible capital  is defined as total capital (long-term debt plus total
shareholders' equity) less intangible assets. Infinity reports this non-GAAP
measure because it is a measure often used by debt-holders and rating agencies
when evaluating financial leverage. Total capital is the most comparable GAAP
measure.

Below is a schedule that reconciles tangible capital to total capital:

                                            September 30,  September 30,
(in millions)                               2013           2012
Tangible capital                            $848.9         $1,069.2
Goodwill                                    75.3           75.3
Total capital                               $924.2         $1,144.5
Note: Columns may not foot due to rounding

Infinity also makes available an investor supplement on its website.To access
the supplemental financial information, go to http://ir.infinityauto.comand
click on "Annual & Quarterly Reports."

About Infinity
Infinity Property and Casualty Corporation (NASDAQ: IPCC) is a national
provider of personal automobile insurance with a concentration on nonstandard
auto insurance. Its products are offered through a network of approximately
13,000 independent agencies and brokers. For more information about Infinity,
please visit http://www.infinityauto.com.

SOURCE Infinity Property and Casualty Corporation

Website: http://www.infinityauto.com
Contact: Elise Horn Investor Relations (205) 803-8991 elise.horn@ipacc.com
 
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