Infinity Property and Casualty Reports Improved Earnings per Share in the First Quarter of 2014

BIRMINGHAM, Ala., May 8, 2014 /PRNewswire/ -- Infinity Property and Casualty Corporation (NASDAQ: IPCC) today reported results for the three months ended March 31, 2014:

(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

Net earnings per diluted share increased 20.3% in the first quarter of 2014 compared with the first quarter of 2013 primarily as a result of improved underwriting profitability and an increase in favorable development on prior accident year loss and loss adjustment expense ("LAE") reserves.

Gross written premium grew 0.5% during the first quarter of 2014 compared with the same period of 2013. Premium growth of 6.3% in California, Florida, Texas and Commercial Vehicle was offset by a decline of 28.9% in the remaining Focus States of Arizona, Georgia, Nevada and Pennsylvania.

James Gober, CEO and Chairman of Infinity, commented, "The improvement in our first quarter results reflects the continued success of our efforts to improve our overall returns.  I am pleased by our continued profitability in California, Florida, Texas and our Commercial Vehicle Program as well as the improvement in the underwriting results in other states."

2014 Earnings Guidance
The Company is increasing its operating earnings guidance to $3.55 to $4.35.  The operating guidance reflects $3.1 million, pre-tax, of favorable development on prior accident year loss and LAE reserves recognized during the first quarter of 2014 but does not include any additional development in earnings during the remaining nine months of the year. The current guidance assumes gross written premium growth between 2.0% and 4.0% as compared with the prior year, and an accident year combined ratio, which excludes development on prior accident period loss and loss adjustment expense reserves, between 95.5% and 96.5%, which is consistent with the prior guidance.

Share and Debt Repurchase Program
During the first quarter of 2014, Infinity repurchased 24,200 shares at an average price, excluding commissions, of $72.20.  Infinity has $42.1 million of capacity left under its share and debt repurchase program, which expires December 31, 2014.

Forward-Looking Statements
This press release, notably "2014 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), 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 first quarter 2014 results at 11:00 a.m. (ET) today, May 8, 2014.  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.

Notes:

(1)     The change in retained earnings from December 31, 2013 is a result of net income of $10.3 million less shareholder dividends of $4.1 million.

(2)      Infinity repurchased 24,200 common shares during the first three months of 2014 at an average per share price, excluding commissions, of $72.20. 

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 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 is a schedule that reconciles operating earnings and underwriting income to net earnings:

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:

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:

Infinity also makes available an investor supplement on its website.  To access the supplemental financial information, go to http://ir.infinityauto.com and 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 12,500 independent agencies and brokers.  For more information about Infinity, please visit http://www.infinityauto.com.

SOURCE Infinity Property and Casualty Corporation