Infinity Auto Agrees to Refund $46M in Excess Profits to Florida Policyholders

One year after Progressive insurance was forced to disgorge excessive profits in Florida, a Kemper insurance subsidiary must now do the same. Infinity Auto, a nonstandard and specialty insurer based in Birmingham, Alabama, filed an excess profits report with the Florida Office of Insurance Regulation in June. The OIR has “determined that Infinity has realized, and therefore owes to applicable policyholders, excessive profits in the amount of $46,246,666,” for 2023, 2024 and 2025 calendar years, reads an Oct. 22 order from Florida’s insurance commissioner. Florida law provides a formula to be used to calculate an auto insurer’s underwriting profits: “Excessive profit has been realized if there has been an underwriting gain for the 3 most recent calendar-accident years combined which is greater than the anticipated underwriting profit plus 5 percent of earned premiums for those calendar-accident years,” the Florida law reads. The OIR information did not indicate the number of policyholders who may see refunds or credits, nor what the average refunds will amount to. Checks should be mailed within the next two months. Commissioner Mike Yaworsky said Infinity Auto has agreed to try and locate any policyholders whose refund checks are returned. The company waived its right to an administrative hearing on the refund order. “Kemper has taken a series of rate reductions for its Florida auto customers as insurance market conditions in the state have improved, following legislative reforms that reduced legal system abuse in Florida,” reads a statement from Kemper. “Relatedly, Kemper is returning approximately $46.2 million to eligible Florida auto policyholders through premium credits and refunds in accordance with Florida’s excess-profit provisions.” The regurgitation order comes a year after Progressive was required to refund some $950 million in profits that were above the statutory formula’s threshold. That affected more than 2.7 million insureds and produced an average refund of about $300. The announcement came just days after OIR announced an auto insurance rate cut by USAA insurance, and new homeowners rate decreases from 11 carriers. More refunds for excessive profits are expected in the near future, OIR noted. Related: More Florida Insurers Announce Rate Cuts for Auto, Homeowners, Condo Units Topics Florida Auto Profit Loss