OLDWICK, N.J.--(BUSINESS WIRE)--July 17, 2003--A.M. Best Co. has
assigned a rating of "bbb" to Infinity Property and Casualty
Corporation's (Birmingham, AL) (NASDAQ: IPCC) $200 million senior
secured term loan facility. The rating outlook is stable. The
financial strength rating of A (Excellent) of Infinity's insurance
subsidiaries remains unaffected by this transaction.
A.M. Best expects proceeds from the senior debt issuance to be
used primarily to fund insurance operations to repay a $55 million
note payable to American Financial Group, Inc. (Cincinnati) (NYSE:AFG)
and for general corporate purposes. Infinity's financial leverage
(debt to total capitalization) will be approximately 30%, which is
manageable and within the range that A.M. Best anticipated. In
addition, A.M. Best expects Infinity's solid fixed charge coverage
ratios of five to six times to be derived from expected favorable
earnings.
The rating reflects Infinity's excellent capitalization of the
insurance operating entities and the historically favorable operating
performance of the book of business. The rating also recognizes the
group's strong non-standard automobile market presence as one of the
top non-standard auto insurance groups in the United States, with
direct premiums written of approximately $905 million.
Somewhat offsetting these positive factors are the potential
earnings fluctuations going forward due to localized market conditions
and fraud activity prevalent in some key markets.
However, Infinity has pursued aggressive premium rate increases
and will benefit from recent price firming throughout the non-standard
auto market.
The following debt rating has been assigned with a stable outlook:

Infinity Property and Casualty Corporation--
-- "bbb" on $200 million senior secured term loan facility

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.