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Letter to the Editor

Infinity Property and Casualty Reports Revenue Growth of 15% on Solid Earnings

Net earnings for the quarter were $23.7 million, up almost five percent from the same quarter in 2004. Reported net earnings of $47.7 million for the first six months of 2005 were 14 percent above the first six months of 2004.

Included in both net earnings and operating earnings for the three months and six months ended June 30, 2005 was a loss of $2.6 million or $0.08 per diluted share resulting from the sublease of excess space in the Alpharetta, Georgia office.

In Infinity's 17 focus states, personal auto policies-in-force at June 30, 2005 grew 13.5 percent compared to the same period last year and 2.2 percent compared to March 31, 2005. In the 17 focus states, gross written premiums grew 16.0 percent and 17.7 percent compared to the three months and six months ended June 30, 2004, respectively.

Revenues for the three months and six months ended June 30, 2005 increased primarily due to higher earned premiums and realized gains from sales of securities. Earned premiums increased 13.4 percent and 11.6 percent for the three months and six months ended June 30, 2005. Realized gains of $8.4 million were generated during the second quarter bringing the year-to-date total to $20.5 million. Realized gains of $1.4 million and $3.0 million were generated in the second quarter and six months ended June 30, 2004.

Offsetting the increase in earned premiums and realized gains was lower investment income. For the three months and six months ended June 30, 2005, net investment income was down 5.7 percent and 1.1 percent respectively from the same periods last year as a result of lower investment yields.

As a result of the $0.08 loss on sublease in the second quarter, higher corporate litigation expenses through June 30, 2005 and lower investment income, which is likely to continue in the coming months given the current interest rate environment, Infinity is adjusting its annual operating earnings guidance to the range of $3.20-$3.40 per diluted share from the range of $3.35-$3.65.

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