Nov. 5, 2009 (PR Newswire) --
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.
