A.M. Best Assigns Debt Rating to Infinity Property and Casualty Corporation; Affirms Financial Strength Rating of Its Subsidiaries.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 10, 2004

A.M. Best Co. has assigned a "bbb" senior unsecured debt rating to Infinity Property and Casualty Corporation's (IPCC) (Birmingham, AL) (NASDAQ: IPCC) $200 million notes due 2014. Concurrently, A.M. Best has affirmed the financial strength rating of A (Excellent) of Infinity Property and Casualty Group (Infinity P/C), the core auto subsidiaries of IPCC, and the "bbb" debt rating assigned to the $200 million senior secured term loan facility of IPCC. The outlook for all the ratings is stable.

The debt is being issued under Rule 144A. The proceeds from the offering will be used to prepay the existing $193 million syndicate loan, with the remainder of the funds used for general corporate purposes. IPCC is expected to maintain financial leverage at approximately 30% of total capitalization, while generating solid fixed coverage ratios as a result of expected favorable earnings.

The affirmation of the financial strength rating reflects Infinity P/C's excellent capitalization, strong non-standard automobile market presence and the favorable overall operating performance. The group's solid capital position is driven by the reduction of dividend payments subsequent to its initial public offering, as well as its moderate investment risk. Infinity P/C's favorable underwriting profitability is attributed to management's product line expertise, local market knowledge and utilization of sophisticated technologies within the pricing, risk selection and claims handling processes. Further, underwriting returns have been aided by the low cost operating structure, which is facilitated by technology and consolidations of select back-office functions.

Offsetting factors include the potential future earnings fluctuations due to localized competitive market conditions, as well as fraud activity that has been prevalent in some key nonstandard automobile markets. The group's premium is focused in California, Florida and Connecticut, which have been difficult states due to strong competition and increasing claim costs, particularly within Florida's personal injury protection market. However, Infinity P/C has pursued aggressive premium rate actions and tightened underwriting guidelines that mitigate these unfavorable trends.

The following debt rating has been assigned with a stable outlook:

Infinity Property and Casualty Corporation--

-- "bbb" on $200 million senior unsecured debt

The financial strength rating of A (Excellent) has been affirmed with a stable outlook for the following members of the Infinity Property and Casualty Group:

-- American Deposit Insurance Company

-- American Premier Insurance Company

-- Atlanta Casualty Company

-- Atlanta Reserve Insurance Company

-- Atlanta Specialty Insurance Company

-- Coventry Insurance Company

-- Infinity Insurance Company

-- Infinity National Insurance Company

-- Infinity Select Insurance Company

-- Leader Insurance Company

-- Leader Preferred Insurance Company

-- Leader Specialty Insurance Company

-- Regal Insurance Company

-- TICO Insurance Company

-- Windsor Insurance Company

-- Great American Contemporary Insurance Company

-- Great Texas County Mutual Insurance Company

The following debt rating has been affirmed with a stable outlook:

Infinity Property and Casualty Corporation--

-- "bbb" on $200 million senior secured term loan facility

For a complete list of A.M. Best's debt ratings, please visit http://www3.ambest.com/debtratings/.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.