Infinity Property and Casualty Reports Continued Strong Underwriting Results

BIRMINGHAM, Ala., Nov. 5 /PRNewswire-FirstCall/ -- Infinity Property and
Casualty Corporation (Nasdaq: IPCC), a national provider of personal
automobile insurance, today reported results for the three and nine months
ended September 30, 2009:

Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(in millions, except per
share amounts and ratios)
--------------------------
% %
2009 2008 Change 2009 2008 Change
---- ---- ------ ---- ---- ------

Gross written premiums $212.6 $222.9 (4.6%) $649.9 $703.9 (7.7%)
Revenues $210.4 $233.8 (10.0%) $658.7 $730.9 (9.9%)

Net earnings $8.2 $4.4 88.2% $35.9 $30.5 17.8%
Net earnings per diluted
share $0.60 $0.28 114.3% $2.58 $1.90 35.8%

Operating earnings (1) $19.8 $16.0 23.7% $53.0 $45.3 16.9%
Operating earnings per
diluted share (1) $1.44 $1.03 39.8% $3.80 $2.82 34.8%

Underwriting income (1) $22.2 $15.1 46.8% $55.8 $38.6 44.4%
Combined ratio 89.5% 93.5% (4.0)pts 91.3% 94.5% (3.2)pts

Return on equity 5.7% 3.0% 2.7 pts 8.6% 7.0% 1.6 pts
Operating income return
on equity (1) 13.7% 11.0% 2.7 pts 12.6% 10.4% 2.2 pts

Book value per share $43.56 $37.05 17.6%
Debt to total capital 25.2% 26.4% (1.2)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.

--------------------------------------------------------------------------------------------------------------------------------------

Net and operating earnings increased during the third quarter of 2009 as
compared with the same period in 2008 primarily as a result of favorable
development on prior accident period loss and loss adjustment reserves.

Gross written premiums declined 4.6% and 7.7% during the three and nine months
ended September 30, 2009, respectively, as compared with the same periods in
2008, but were up 1.3% during the month of September as compared with
September 2008. The premium growth in September represents the first time the
company has seen premium growth on a countrywide basis since August 2007.
Premiums for the quarter were down primarily from a decline in gross written
premiums in Arizona, Florida, Georgia and the Classic Collector program.
Partially offsetting these premium declines was premium growth in California,
Illinois, Pennsylvania and the Commercial Vehicle program.

Earnings and underwriting income for the three and nine months ended September
30, 2009, include $13.2 million, pre-tax ($0.62 per diluted share after-tax)
and $33.4 million, pre-tax ($1.56 per diluted share after-tax), respectively,
of favorable development on prior accident period loss and loss adjustment
expense reserves, primarily from accident years 2006 and 2007. This compares
with $1.3 million, pre-tax ($0.05 per diluted share after-tax), and $13.5
million, pre-tax ($0.55 per diluted share after-tax), respectively, of
favorable development for the three and nine months ended September 30, 2008.

During the third quarter and first nine months of 2009, Infinity recorded
$11.0 million, pre-tax, ($0.80 per diluted share after-tax) and $19.4 million,
pre-tax, ($1.39 per diluted share after-tax), respectively, of
other-than-temporary impairment charges on fixed income securities. During
the third quarter and first nine months of 2008, Infinity recorded $13.8
million, pre-tax, ($0.89 per diluted share after-tax) and $21.5 million,
pre-tax, ($1.34 per diluted share after-tax), respectively, of
other-than-temporary impairment charges on fixed income securities.

Catastrophe losses during the third quarter and first nine months of 2009
totaled $0.4 million, pre-tax ($0.02 per diluted share after-tax) and $0.6
million, pre-tax ($0.03 per diluted share after-tax), respectively.
Catastrophe losses during the third quarter and first nine months of 2008
totaled $1.3 million, pre-tax ($0.06 per diluted share after-tax) and $1.8
million, pre-tax ($0.07 per diluted share after-tax), respectively, including
$1.1 million from Hurricane Ike.

2009 Earnings Guidance
As a result of better than expected underwriting results in the third quarter,
Infinity is increasing its operating earnings guidance to $4.40 - $4.65 per
diluted share from $3.75 - $4.25 per diluted share. The revised guidance
assumes gross premiums for the twelve months ended December 31, 2009 decline
between 5.0% and 7.5% as compared with the prior year and an accident year
combined ratio, which excludes favorable development on prior accident period
loss and loss adjustment expense reserves, between 96.0% and 97.0%.

Share and Debt Repurchase Program
During the third quarter of 2009, Infinity repurchased 37,800 shares at an
average price, excluding commissions, of $38.80. Infinity did not repurchase
any outstanding debt during the third quarter of 2009. Infinity has $49.6
million of capacity left under its share and debt repurchase program, which
expires December 31, 2010.

Forward-Looking Statements
This press release, notably "2009 Earnings Guidance", contains certain
statements that may be deemed to be "forward-looking statements". These
statements are made subject to the safe-harbor provisions of the Private
Securities Litigation Reform Act of 1995. All statements in this press release
not dealing with historical results or current facts are forward-looking and
are based on estimates, assumptions, and projections. Statements that 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 those expected by Infinity include determinations with respect
to reserve adequacy, realized gains or losses on the investment portfolio
including other-than-temporary impairments for credit losses, rising loss cost
trends, actions of competitors and natural disasters. 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
The Company will hold a conference call to discuss third quarter 2009 results
at 11:00 a.m. (ET) today, November 5. There are two alternative
communication modes available to listen to the call. Telephone access will be
available by dialing 1-888-713-4214 and providing the confirmation code
25322592. Please dial 5 to 10 minutes prior to the scheduled start time. A
replay of the call will also be available one hour following the completion of
the call, at around 1:00 p.m. (ET), and will run until 8:00 p.m. on Thursday,
November 12, 2009. To listen to the replay, dial 1-888-286-8010 and provide
the confirmation code 85126889. The conference call will also be broadcast
live over the Internet. To listen to the call via the Internet, go to
Infinity's website, http://www.ipacc.com, click on Investor Relations and
follow the instructions at the webcast link. The archived webcast will be
available on Infinity's website approximately two hours following the
completion of the call and will be available for one year.

Infinity Property and Casualty Corporation
Statement of Earnings
(in millions, except EPS)

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
(unaudited) -------------------- -------------------

2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Earned premiums $210.3 $231.1 $638.7 $699.5
Net investment income 12.1 14.1 37.9 44.2
Net realized losses on
investments(1) (12.1) (11.6) (18.1) (14.8)
Other income 0.0 0.2 0.1 1.9
--- --- --- ---
Total revenues 210.4 233.8 658.7 730.9

Costs and Expenses:
Loss and loss adjustment
expenses (2) 141.1 164.9 443.2 500.3
Commissions and other
underwriting expenses 47.1 51.1 139.8 160.6
Interest expense 2.8 2.8 8.3 8.3
Corporate general and
administrative expenses 1.6 1.7 5.2 5.5
Restructuring charge - 0.1 0.0 0.5
Other expenses 0.4 1.2 1.8 4.0
--- --- --- ---
Total costs and expenses 192.9 221.8 598.2 679.2

Earnings before income taxes 17.4 12.0 60.4 51.7
Provision for income taxes 9.2 7.7 24.5 21.2
--- --- ---- ----
Net earnings $8.2 $4.4 $35.9 $30.5
==== ==== ===== =====

Earnings per common share:
Basic $0.61 $0.29 $2.62 $1.93
Diluted $0.60 $0.28 $2.58 $1.90

Average number of common
shares:
Basic 13.534 15.260 13.713 15.838
Diluted 13.753 15.499 13.921 16.066

Cash dividends per common
share $0.12 $0.11 $0.36 $0.33

Note: Columns may not foot due to rounding
--------------------------------------------------------------------------
Notes:

(1) Net realized gains (losses)
before impairment losses $(1.1) $2.2 $1.3 $6.7
Total other-than-temporary
impairment (OTTI) losses (0.3) (13.8) (11.8) (21.5)
Non-credit portion
recognized in other
comprehensive income - n/a 3.8 n/a
OTTI losses reclassed from
other comprehensive
income (10.8) n/a (11.3) n/a
------ ----- ------ -----
Net impairment losses
recognized in net
earnings (11.0) (13.8) (19.4) (21.5)

Total net realized losses
on investments $(12.1) $(11.6) $(18.1) $(14.8)
======= ====== ====== ======

(2) Loss and loss adjustment expenses for the three and nine months ended
September 30, 2009, include $13.2 million and $33.4 million, pre-tax,
of favorable development on prior accident period loss and loss
adjustment expense reserves, respectively. Included in the favorable
development for the three and nine months ended September 30, 2009 is
$2.4 million and $2.6 million, pre-tax respectively, related to the
cancellation of non-escheatable claim checks that accumulated over
several periods.

Loss and loss adjustment expenses for the three and nine months ended
September 30, 2008, include $1.3 million and $13.5 million, pre-tax,
of favorable development on prior accident period loss and loss
adjustment expense reserves, respectively.

Infinity Property and Casualty Corporation
Condensed Balance Sheet
(in millions, except book value per share)

September 30, June 30, December 31,
2009 2009 2008
(unaudited) (unaudited) (audited)
---------- ---------- --------
Assets:
Investments:
Fixed maturities, at
fair value $1,134.8 $1,045.5 $1,032.2
Equity securities, at
fair value 39.4 32.3 31.2
---- ---- ----
Total investments 1,174.2 1,077.9 1,063.4
Cash and cash equivalents 104.2 122.2 109.3
Accrued investment income 10.2 10.3 11.0
Agents' balances and
premiums receivable 309.7 306.6 300.8
Property, plant and
equipment (net of depreciation) 29.7 30.7 33.3
Prepaid reinsurance premiums 1.9 1.8 1.7
Recoverables from reinsurers 18.4 20.0 23.4
Deferred policy acquisition costs 71.2 71.2 70.1
Current and deferred income taxes 13.2 28.0 20.9
Receivable for securities sold 2.3 - -
Prepaid expenses, deferred charges
and other assets 8.4 9.1 14.8
Goodwill 75.3 75.3 75.3
---- ---- ----
Total assets $1,818.7 $1,753.2 $1,723.9
======== ======== ========

Liabilities and Shareholders' Equity:
Liabilities:
Unpaid losses and loss
adjustment expenses $532.0 $534.0 $544.8
Unearned premiums 388.0 387.0 380.4
Payable to reinsurers - - 1.0
Long-term debt 199.6 199.6 199.6
Commissions payable 23.5 22.9 22.6
Payable for securities purchased 36.9 1.6 0.3
Accounts payable, accrued expenses
and other liabilities 46.0 47.9 50.0
---- ---- ----
Total liabilities 1,226.0 1,192.9 1,198.6
------- ------- -------

Shareholders' Equity:
Common stock 21.1 21.0 21.0
Additional paid-in capital 343.7 342.9 341.9
Retained earnings (1) 508.1 501.5 439.1
Accumulated other comprehensive
income (loss), net of tax 22.9 (3.6) 6.0
Treasury stock, at cost (2) (303.2) (301.7) (282.6)
------ ------ ------
Total shareholders'
equity 592.7 560.2 525.3
----- ----- -----
Total liabilities and
shareholders' equity $1,818.7 $1,753.2 $1,723.9
======== ======== ========

Shares outstanding 13.605 13.626 14.146
Book value per share $43.56 $41.11 $37.14

Note: Columns may not foot due to rounding
--------------------------------------------------------------------------
Notes:
(1) The change in retained earnings from June 30, 2009 is a result of net
income of $8.2 million less shareholder dividends of $1.6 million.
The change in retained earnings from December 31, 2008 is a result of
net income of $35.9 million less shareholder dividends of $5.0 million
and a reclass made in the second quarter of 2009 of ($38.1) million,
after-tax, from retained earnings to accumulated other comprehensive
income (loss) for the non-credit portion of other-than-temporary
impairment losses previously recognized in retained earnings.

(2) Infinity repurchased 37,800 common shares during the third quarter of
2009 at an average per share price, excluding commissions, of $38.80.
Infinity repurchased 578,800 common shares during the first nine
months of 2009 at an average per share price, excluding commissions,
of $35.53.

Definitions of Non-GAAP Financial and Operating Measures

Operating earnings are defined as net earnings, before realized gains and
losses and the cumulative effect of a change in accounting principle, after
tax. Infinity reports this non-GAAP measure because realized gains and losses
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 loss and
loss adjustment expenses and underwriting expenses from premiums earned.
Infinity reports this non-GAAP measure to show profitability before inclusion
of investment income or taxes and because it is a measure used often by
investors in evaluating insurance companies. Net earnings are the most
comparable GAAP measure.

Below is a schedule that reconciles operating earnings and underwriting
income, both non-GAAP measures, to net earnings:

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------- -------------------

(in millions, except EPS) 2009 2008 2009 2008
---- ---- ---- ----

Earned premiums $210.3 $231.1 $638.7 $699.5
Loss and loss adjustment expenses (141.1) (164.9) (443.2) (500.3)
Commissions and other
underwriting expenses (47.1) (51.1) (139.8) (160.6)
----- ----- ------ -------

Underwriting income 22.2 15.1 55.8 38.6

Net investment income 12.1 14.1 37.9 44.2
Other income 0.0 0.2 0.1 1.9
Interest expense (2.8) (2.8) (8.3) (8.3)
Corporate general and
administrative expenses (1.6) (1.7) (5.2) (5.5)
Restructuring charge - (0.1) (0.0) (0.5)
Other expenses (0.4) (1.2) (1.8) (4.0)
---- ---- ---- ----

Pre-tax operating earnings 29.5 23.6 78.5 66.5

Provision for income taxes (9.7) (7.6) (25.6) (21.2)
---- ---- ----- -----

Operating earnings, after-tax 19.8 16.0 53.0 45.3

Realized gains (losses) on
investments, pre-tax (12.1) (11.6) (18.1) (14.8)
Provision for income taxes 4.2 4.1 6.3 5.2
Increase in provision for
tax valuation allowance (3.7) (4.1) (5.3) (5.2)
---- ---- ---- ----
Realized gains (losses) on
investments, net of tax (11.6) (11.6) (17.0) (14.8)

Net earnings $8.2 $4.4 $35.9 $30.5
==== ==== ===== =====

Operating earnings per
share - diluted $1.44 $1.03 $3.80 $2.82
Realized gains (losses) on
investments, net of tax (0.57) (0.49) (0.84) (0.60)
Increase in provision for
tax valuation allowance (0.27) (0.26) (0.38) (0.32)
----- ----- ----- -----
Net earnings per share - diluted $0.60 $0.28 $2.58 $1.90
===== ===== ===== =====

Note: Columns may not foot due to rounding

Infinity also makes available an investor supplement on our website. To
access the supplemental financial information, go to www.ipacc.com and click
on "Investor Relations" followed by "Quarterly Reports."

SOURCE Infinity Property and Casualty Corporation

Amy Jordan, Investor Relations, +1-205-803-8186, amy.jordan@ipacc.com