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Infinity Property and Casualty Reports 17.1% Growth in Gross Written Premium on Solid Earnings

BIRMINGHAM, Ala., Feb. 8, 2007 -- Infinity Property and Casualty Corporation , a national provider of personal automobile insurance with a concentration on nonstandard auto insurance, today reported for the fourth quarter and twelve months ending December 31, 2006:

                         Three Months Ended        Twelve Months Ended
                            December 31,               December 31,
  (in millions,
  except per share                        %                           %
  amounts and ratios)    2006   2005    Change   2006      2005     Change
  Gross written
   premiums             $259.3 $221.5    17.1%   $986.7   $988.7    (0.2%)
  Revenues              $263.5 $256.3     2.8% $1,021.3 $1,053.3    (3.0%)

  Net earnings           $22.4  $32.0  (30.0%)    $87.3   $106.3   (17.9%)
  Net earnings per
   diluted share         $1.12  $1.53  (26.8%)    $4.26    $5.09   (16.3%)

  Operating earnings(1)  $20.6  $31.5  (34.6%)    $85.9    $84.4      1.8%
  Operating earnings
   per diluted share(1)  $1.03  $1.51  (31.8%)    $4.19    $4.04      3.7%

  Underwriting
   income(1)             $25.2  $34.8  (27.6%)    $87.4    $76.4     14.4%
  Combined ratio         89.6%  85.4%  4.2 pts    90.8%    92.0%  (1.2)pts

  Return on equity       13.6%  21.0% (7.4) pts   13.5%    18.1%  (4.6)pts
  Operating income
   return on
   equity(1)             12.4%  20.7% (8.3) pts   13.3%    14.4%  (1.1)pts

  Book value per
   share                                         $33.88   $30.34     11.7%
  Debt to total
   capital                                        23.1%    24.1%  (1.0)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.

Gross written premiums for the three months ended December 31, 2006 grew 17.1% compared with the same period of 2005 primarily as a result of growth in California, Arizona and Texas. Excluding the business assumed from Great American Insurance Company ("GAI"), which is currently in runoff, gross written premiums during the fourth quarter of 2006 increased 23.4% compared with the fourth quarter of 2005.

Revenues for the three months ended December 31, 2006 increased as a result of a 1.6% increase in earned premiums and $3.7 million of net realized gains during the fourth quarter of 2006. In addition to a 1.3% decline in earned premiums, revenues for the twelve months ended December 31, 2006 declined compared to the same period in 2005 as Infinity recognized $22.3 million of net realized gains during 2005 compared with $2.0 million of net realized gains during 2006.

Earnings for the fourth quarter and twelve months ended December 31, 2006 include a pre-tax charge of $4.8 million related to severance costs from efforts to consolidate certain customer service, claims and information technology back-office operations to Birmingham, as announced in October 2006. Net earnings for the twelve months ended December 31, 2005 include a $7.4 million tax benefit from the utilization of net capital loss carry-forwards. In comparison, net earnings for the twelve months ended December 31, 2006 include a tax benefit of $3.1 million from the utilization of net capital loss carry-forwards.

2007 Earnings Guidance

Infinity's initial guidance for 2007, based on fully diluted operating earnings, is $3.20 -- $3.60. Included in this guidance is a charge of $0.15, the estimated cost to complete the consolidation of back office operations.

Share Repurchase Program

Infinity completed its $50 million share repurchase program in December 2006, repurchasing 364,000 shares at an average cost of $44.26 during the fourth quarter, and in January 2007 began repurchasing shares under the new $100 million repurchase program announced in October 2006.

Forward-Looking Statements

This press release contains certain statements that may be deemed to be "forward-looking statements" that 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 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 "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. Examples of such forward-looking statements include statements relating to expectations concerning market conditions, premiums, growth, earnings, investment performance, expected losses, rate changes and loss experience.

Actual results could differ materially from those expected by Infinity depending on: changes in economic conditions and financial markets (including interest rates), the adequacy or accuracy of Infinity's pricing methodologies, actions of competitors, the approval of requested form and rate changes, judicial and regulatory developments affecting the automobile insurance industry, the outcome of pending litigation against Infinity, weather conditions (including the severity and frequency of storms, hurricanes, snowfalls, hail and winter conditions), changes in driving patterns and loss trends. 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

The Company will hold a conference call to discuss 2006 fourth quarter results at 11:00 a.m. (ET) today, February 8. There are two alternative communication modes available to listen to the call. Telephone access will be available by dialing 1-800-435-1398 and providing the confirmation code 55837671. Please dial 5 to 10 minutes prior to the scheduled start time. A replay of the call will also be available one hour following the completion of the call, at around 1:00 p.m. (ET), and will run until 8:00 p.m. on Thursday, February 15, 2007. To listen to the replay, dial 1-888-286-8010 and provide the confirmation code 61681194. The conference call will also be broadcast live over the Internet. To listen to the call via the Internet, go to Infinity's website, http://www.ipacc.com/, click on Investor Relations and follow the instructions at the webcast link. The archived webcast will be available on Infinity's website approximately one hour following the completion of the call and will be available for one year.

  Infinity Property and Casualty Corporation
  Statement of Earnings
  (in millions, except EPS and dividends)

                                        For the Three      For the Twelve
                                        Months Ended        Months Ended
                                         December 31,        December 31,

                                        2006      2005      2006      2005
  Revenues:
    Earned premiums                   $242.6    $238.8    $948.7    $961.5

    Net investment income               16.9      16.6      68.4      65.5
    Realized gains (losses) on
     investments (1)                     3.7       0.0       2.0      22.3
    Other income                         0.2       0.9       2.3       4.0
       Total revenues                  263.5     256.3   1,021.3   1,053.3

  Costs and Expenses:
    Loss and loss adjustment
     expenses (2)                      163.0     147.9     635.1     660.6
    Commissions and other underwriting
     expenses                           54.4      56.1     226.1     224.5
    Interest expense                     2.8       2.8      11.1      11.1
    Corporate general and
     administrative expenses             1.6       1.6       7.1       6.6
    Restructuring charge                 4.8         -       4.8         -
    Other expenses (3)                   2.1       0.3       5.7       1.7
       Total costs and expenses        228.7     208.6     889.9     904.5

  Earnings before income taxes          34.8      47.7     131.4     148.8
  Provision for income taxes (4)        12.4      15.7      44.1      42.5
  Net earnings                         $22.4     $32.0     $87.3    $106.3

  Earnings per common share:
  Basic                                $1.13     $1.55     $4.30     $5.15
  Diluted                              $1.12     $1.53     $4.26     $5.09

  Average number of common shares:
  Basic                               19.771    20.644    20.303    20.640
  Diluted                             19.953    20.907    20.475    20.892

  Cash dividends per common share     $0.075     $0.06     $0.30     $0.24

       Note:  Columns may not foot due to rounding

  Notes:
  (1) Realized gains (losses) for the three months and twelve months ended
      December 31, 2006, include $7.0 million and $8.9 million,
      respectively, of taxable gains from securities sold to utilize a
      portion of the available tax loss carry-forward.

      Realized gains (losses) for the three months and twelve months ended
      December 31, 2005, include $0.5 million and $20.3 million,
      respectively, of taxable gains from securities sold to utilize a
      portion of the available tax loss carry-forward.

  (2) Loss and loss adjustment expenses for the three and twelve months
      ended December 31, 2006, include $6.7 million and $31.2 million of
      favorable development on prior accident period loss and loss
      adjustment expense reserves, respectively.

      Loss and loss adjustment expenses for the three and twelve months
      ended December 31, 2005, include $18.9 million and $17.0 million of
      favorable development on prior accident period loss and loss
      adjustment expense reserves, respectively.  The development for the
      three months ended December 31, 2005 includes $9.0 million related to
      favorable development for the first three accident quarters of 2005.

  (3) Other expenses for the three and twelve months ended December 31, 2006
      include a $1.7 million increase in reserves for class action lawsuits.
      Other expenses for the twelve months ended December 31, 2005 include a
      $2.7 million reduction in reserves for class action lawsuits.

  (4) Income taxes for the three and twelve months ended December 31, 2006
      include a $2.5 million and $3.1 million tax benefit from the
      utilization of net capital loss carryforwards, respectively.  Income
      taxes for both the three and twelve months ended December 31, 2006
      also include a $3.0 million increase in the provision for tax
      valuation allowance on net capital loss carryforwards.

      Income taxes for the three and twelve months ended December 31, 2005
      include a $0.5 million and $7.4 million tax benefit from the
      utilization of net capital loss carry-forwards, respectively.

  Infinity Property and Casualty Corporation
  Condensed Balance Sheet
  (in millions, except book value per share)

                                                    For the Period Ended
                                                 December 31,  September 30,
                                                     2006           2006
    Assets:
    Investments:
         Fixed maturities, at fair value           $1,250.2       $1,272.4
         Equity securities, at fair value              55.5           80.9
            Total investments                       1,305.7        1,353.3
    Cash and cash equivalents                         109.2           67.5
    Accrued investment income                          16.1           14.9
    Agents' balances and premiums
     receivable                                       343.1          321.8
    Prepaid reinsurance premiums                        4.3            5.9
    Recoverables from reinsurers                       31.8           19.9
    Deferred policy acquisition costs                  76.8           73.7
    Current and deferred income taxes                  34.6           35.3
    Prepaid expenses, deferred charges
     and other assets                                  17.5           15.2
    Goodwill                                           75.3           75.3
          Total assets                             $2,014.4       $1,982.8

  Liabilities and Shareholders' Equity:
  Liabilities:
    Unpaid losses and loss adjustment
     expenses                                        $595.4         $587.3
    Unearned premiums                                 431.0          417.1
    Payable to reinsurers                               0.6            1.0
    Long-term debt                                    199.4          199.4
    Commissions payable                                30.1           29.6
    Accounts payable, accrued expenses
     and other liabilities                             93.2           89.6
           Total liabilities                        1,349.8        1,324.1

  Shareholders' Equity:
    Common stock                                       20.8           20.8
    Additional paid-in capital                        335.7          335.3
    Retained earnings (1)                             361.7          340.7
    Other comprehensive income                         (3.2)          (3.8)
    Treasury stock, at cost (2)                       (50.4)         (34.3)
             Total shareholders' equity               664.6          658.7
             Total liabilities and
              shareholders' equity                 $2,014.4       $1,982.8

  Shares outstanding                                 19.617         19.976
  Book value per share                               $33.88         $32.98

       Note:  Columns may not foot due to rounding

  Notes:
  (1) Net income of $22.4 million less shareholder dividends of $1.5 million
      resulted in the increase in retained earnings from September 2006.

  (2) Infinity repurchased 364,000 shares during the fourth quarter of 2006
      at an average price of $44.26.

  Definitions of Non-GAAP Financial and Operating Measures

Operating earnings are defined as net income, before realized gains and losses and the cumulative effect of a change in accounting principle, after tax. Infinity reports this non-GAAP measure because realized gains and losses 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 loss and loss adjustment expenses and underwriting expenses from premiums earned. Infinity reports this non-GAAP measure to show profitability before inclusion of investment income or 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, both non-GAAP measures, to net earnings:

                         For the Three Months     For the Twelve Months
                           Ended December 31,       Ended December 31,

 (in millions,
  except EPS)              2006         2005        2006          2005

  Earned premiums         $242.6       $238.8       $948.7       $961.5
  Loss and loss
   adjustment expenses    (163.0)      (147.9)      (635.1)      (660.6)
  Commissions and other
   underwriting expenses   (54.4)       (56.1)      (226.1)      (224.5)

  Underwriting income       25.2         34.8         87.5         76.4

  Net investment income     16.9         16.6         68.4         65.5
  Other income               0.2          0.9          2.3          4.0
  Interest expense          (2.8)        (2.8)       (11.1)       (11.1)
  Corporate general and
   administrative expenses  (1.6)        (1.6)        (7.1)        (6.6)
  Restructuring charge      (4.8)           -         (4.8)           -

  Other expenses            (2.1)        (0.3)        (5.7)        (1.7)

  Pre-tax operating
   earnings                 31.1         47.7        129.5        126.5

    Provision for
     income taxes          (10.5)       (16.2)       (43.6)       (42.1)

  Operating earnings,
   after-tax                20.6         31.5         85.9         84.4

    Realized gains
     (losses) on
     investments, pre-tax    3.7          0.0          2.0         22.3
    Provision for
     income taxes           (1.3)         0.0         (0.7)        (7.8)
    Utilization of capital
     loss carry-forward      2.5          0.5          3.1          7.4
    Increase in provision
     for tax valuation
     allowance              (3.0)            -        (3.0)            -

     Realized gains on
     investments,
     after-tax               1.9          0.5          1.4         21.9

  Net earnings             $22.4        $32.0        $87.3       $106.3

  Operating earnings
   per share - diluted     $1.03        $1.51        $4.19        $4.04
  Net realized gains
   on investments           0.12         0.00         0.07         0.70
  Utilization of capital
   loss carry-forward       0.12         0.02         0.15         0.35
  Increase in provision
   for tax valuation
   allowance               (0.15)           -        (0.15)           -

  Net earnings
   per share - diluted     $1.12        $1.53       $ 4.26        $5.09

  Note: Columns may not foot due to rounding

Infinity also makes available an investor supplement on our website. To access the supplemental financial information, go to www.ipacc.com and click on "Investor Relations" followed by "Quarterly Reports."

FCMN Contact: amy.starling@ipacc.com