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, its 10 insurance subsidiaries and one affiliate.
Concurrently, A.M. Best has affirmed the ICR of "bbb" and debt rating of "bbb" on $275 million 5 percent senior unsecured notes due 2022, issued by Infinity's parent, Infinity Property & Casualty Corporation (IPCC). The outlook for all ratings is stable.
The named companies are all headquartered in Birmingham, Alabama.
The rating affirmations of Infinity reflect what A.M. Best has termed its “excellent” risk-adjusted capitalisation, favourable five-year operating performance and strong non-standard automobile market presence.
Infinity's favourable operating earnings are attributed to management's product line expertise, local market knowledge and use of sophisticated technologies within the pricing, risk selection and claims-handling process.
In addition, the group has implemented numerous strategic initiatives to improve underwriting results in underperforming states, which include rate increases, rating enhancements, agency management initiatives and revised claims operational processes.
A.M. Best commented: “Infinity benefits from the financial flexibility provided by IPCC, which maintains moderate financial leverage and solid interest and fixed coverage.”
Partially offsetting these positive rating factors, according to the ratings agency, are Infinity's “limited” business profile with policies comprised predominantly of non-standard auto and approximately 80 percent of its direct written premiums concentrated in “two key states”.
As a result, the organisation's earnings are susceptible to increased competition in the non-standard auto segment and changes in the regulatory, judicial and legislative environment in its largest states.
