Infinity Property and Casualty Corporation : Reports Earnings for the First Quarter of 2018

BIRMINGHAM, Ala., April 30, 2018 /PRNewswire/ -- Infinity Property and Casualty Corporation (NASDAQ: IPCC) today reported results for the three months ended March 31, 2018:

Net earnings per diluted share increased 93.6% in the first three months of 2018 compared with the first three months of 2017, primarily due to a decrease in the accident year combined ratio from 98.5% at March 31, 2017, to 95.1% at March 31, 2018, as higher average earned premiums offset relatively flat loss cost trends.

Gross written premium grew 13.7% compared with the same period of 2017. Growth in California, Texas and Commercial Auto, primarily as a result of higher average premium, was offset by a decline in Florida.

Merger with Kemper Corporation

On February 13, 2018, the Company entered into a definitive agreement and plan of merger (the "Merger Agreement") with Kemper Corporation, a Delaware corporation ("Kemper") and Vulcan Sub, Inc., an Ohio corporation and a wholly owned subsidiary of Kemper ("Kemper Merger Sub"). The Company expects the closing of the Merger to occur in the third quarter of 2018. The merger is subject to certain closing conditions, including, among others, (i) adoption by Infinity shareholders of the Merger Agreement, (ii) approval by Kemper stockholders of the issuance of Kemper common stock in connection with the merger, (iii) the receipt of certain regulatory approvals, (iv) the absence of any effective order issued by any court of competent jurisdiction or other legal restraint prohibiting or preventing the consummation of the merger, and (v) other closing conditions.

Forward-Looking Statements

This press release 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 and competitive conditions in our 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. For a detailed list of some of the risks and uncertainties related to the consummation of the merger, see Infinity's Joint Proxy Statement/Prospectus with Kemper, filed with the SEC on April 27, 2018.

Definitions of Non-GAAP Financial and Operating Measures

Net earnings excluding realized gains Management uses net earnings excluding realized gains as a measure to evaluate the insurance business. The Company believes that net earnings excluding realized gains provides investors a valuable measure of the performance without being obscured by the net effect of realized capital gains and losses, which can be volatile on a quarterly basis. Net earnings is the most comparable GAAP measure.

Underwriting income measures the insurer's profit on insurance sales after all losses and expenses have been paid and is calculated by deducting losses and loss adjustment expenses and commissions and other underwriting expenses from earned premium. Management uses underwriting income to measure the success of its pricing and underwriting strategies. It is useful for investors to evaluate the components of our profitability separately from investments. Net earnings is 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 (including assumed premium). Management uses gross written premium as a measure of production levels. Earned premium is the most comparable GAAP measure.

Below is a schedule that reconciles gross written premium to earned premium:

Tangible capital is defined as total capital (face value of 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 provider of personal and commercial automobile insurance primarily meeting the needs and choices of urban and Hispanic customers. Its products are offered through a network of approximately 10,600 independent agencies and brokers. For more information about Infinity, please visit http://www.infinityauto.com.

Additional Information Regarding the Merger and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication is being made in respect of the proposed merger transaction involving Kemper, a wholly-owned subsidiary of Kemper and Infinity, among other things. The proposed issuance of shares of Kemper common stock in connection with the proposed merger transaction will be submitted to the stockholders of Kemper for their consideration, and the proposed merger transaction will be submitted to the shareholders of Infinity for their consideration. In connection therewith, Kemper filed with the SEC on April 4, 2018 a Registration Statement on Form S-4 that included a preliminary joint proxy statement/prospectus (as amended on Form S-4/A, filed with the SEC on April 27, 2018), and each of Kemper and Infinity may be filing with the SEC other documents regarding the proposed merger transaction. Kemper and Infinity will mail the definitive joint proxy statement/prospectus to the stockholders of Kemper and the shareholders of Infinity when it is available. BEFORE MAKING ANY VOTING OR ANY INVESTMENT DECISION, INVESTORS AND SECURITYHOLDERS OF KEMPER AND/OR INFINITY ARE URGED TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER TRANSACTION. Investors and security holders may obtain free copies of the definitive joint proxy statement/prospectus, any amendments or supplements thereto and other documents containing important information about each of the Company and Infinity, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by Kemper will be available free of charge under the "Investors" section of Kemper's website located at http://www.kemper.com or by contacting Kemper's Investor Relations Department at 312.661.4930 or investors@kemper.com. Copies of the documents filed with the SEC by Infinity will be available free of charge under the "Investor Relations" section of Infinity's website located at http://www.infinityauto.com or by contacting Infinity's Investor Relations Department at 205.803.8186 or investor.relations@infinityauto.com

Participants in the Solicitation
Kemper and Infinity, and their respective directors and executive officers, certain other members of their respective management and certain of their respective employees, may be deemed to be participants in the solicitation of proxies in connection with the proposed merger transaction. Information about the directors and executive officers of Kemper is set forth in its annual report on Form 10-K for the fiscal year ended December 31, 2017, which was filed with the SEC on February 13, 2018 and in the Joint Proxy Statement/Prospectus, which was filed with the SEC on April 27, 2018, and information about the directors and executive officers of Infinity is set forth in its annual report on Form 10-K for the fiscal year ended December 31, 2017, which was filed with the SEC on February 15, 2018 (as amended on Form 10-K/A, filed with the SEC on April 23, 2018), each of which can be obtained free of charge from the sources indicated above. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the definitive joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

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SOURCE Infinity Property and Casualty Corporation