Document:

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                                                                    Exhibit 10.5

                             AGREEMENT OF ALLOCATION
                       OF PAYMENT OF FEDERAL INCOME TAXES
                       ----------------------------------

         THIS AGREEMENT OF ALLOCATION OF PAYMENT OF FEDERAL INCOME TAXES is made
this 13th day of May, 1974, by and between AMERICAN FINANCIAL CORPORATION, an
Ohio corporation (hereinafter "AFC"), and each and every one of those companies
set forth herein on Exhibit "A", attached hereto and incorporated by reference
(hereinafter collectively referred to as "Subsidiary");

                                   WITNESSETH:

         WHEREAS, AFC owns, either directly or indirectly, at least Eighty Per
Cent (80%) of the voting power of all classes of outstanding stock and/or at
least Eighty Per Cent (80%) of each class of nonvoting stock (but excluding
nonvoting stock which is limited and preferred as to dividends) of Subsidiary;
and

         WHEREAS, AFC and Subsidiary comprise an affiliated group (hereinafter
"Affiliated Group") as that term is defined under Section 1504 of the Internal
Revenue Code of 1954, as amended; and

         WHEREAS, the Affiliated Group has exercised its privilege granted to it
under the provisions of Section 1501 of the Internal Revenue Code to file
consolidated Federal Income Tax Returns in lieu of filing separate Federal
Income Tax Returns for each member of the Affiliated Group; and

         WHEREAS, AFC and Subsidiary have received appropriate corporate
authorization from their respective Boards of Directors to enter into this Tax
Allocation Agreement;

         NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, AFC and Subsidiary do hereby agree as follows:

         (1) Effective for the taxable year commencing January 1, 1974, AFC
agrees to prepare (or cause to be prepared) and to file annually on behalf of,
and as agent for, the Affiliated Group, a consolidated return for all taxable
years of the Affiliated Group until such time as the Affiliated Group determines
that its best interests are no longer served thereby and obtains the required
consent of the Commissioner of the Internal Revenue Service to discontinue
filing returns on a consolidated basis. Subsidiary agrees to fully cooperate
with AFC in the preparation, filing and processing of each and every such
consolidated return. Subsidiary agrees to pay One Hundred Per Cent (100%) of
that portion of the tax liability ("Allocated Liability") of the Affiliated
Group which periodically may be allocated to it pursuant to the provisions and
terms of this Agreement.

         (2) AFC shall annually determine the amount of Subsidiary's tax
liability (or refund) as if it were filing on a separate return basis as part of
the Affiliated Group. The term "separate return basis" refers to the
Subsidiary's book taxable income; namely, book income adjusted for all permanent
tax differences. Provided, however, that dividends received from companies
included in the Affiliated Group shall be excluded from income and
carry-forwards and carry-backs of losses and losses of subsidiaries and
affiliates shall be treated in accordance with

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                                      -2-

generally accepted accounting principles and shall be taken into account as
provided in Paragraph 3 of this Agreement.

         (3) In making its computations, Subsidiary shall take into account any
carry-overs of losses sustained in years included in the term of this Agreement
and shall take into account any carry-backs of such losses to years included in
the terms of this Agreement. Losses sustained in, and carry-backs to, years not
included in the term of this Agreement shall not be taken into account.

         (4) If the amount of tax allocated to a subsidiary under the provisions
of this Agreement differs from that amount allocated under Section
1.1552-1(a)(1) of the Income Tax Regulations, such difference will be accounted
for by AFC in accordance with Section 1.1552-1(b)(2) of the Income Tax
Regulations.

         (5) AFC shall determine on a quarterly basis, the amount of tax due to
or from AFC pursuant to this Agreement. Such amount shall be due and payable
within Ten (10) days of such determination unless waived by payee. Within Ten
(10) days after the date on which the consolidated return is filed, Subsidiary
shall pay to AFC (or AFC shall pay to Subsidiary, whichever is applicable) the
difference between the aggregate of such estimated payments and the total amount
payable in accordance with this Agreement.

         The effect of any entries in consolidation or any elimination entries
in the consolidated tax return of the Affiliated Group which results in any net
increase or decrease of the tax liability of the Affiliated Group shall be
credited or debited, or otherwise returned to the appropriate member or members
of the Affiliated Group where any such item or items originated.

         Any deductions or credits reported in the consolidated return which are
changed as a result of adjustments made by the United States taxing authorities
or the filing of an amended consolidated return shall cause the amounts referred
to in Paragraph 2 and 5 of this Agreement to be revised to reflect such changes,
and the amounts payable pursuant to Paragraphs 2 and 5 shall be recomputed. Any
additional amounts payable by Subsidiary to AFC (or by AFC to Subsidiary) as a
result of such an adjustment or recomputation shall be paid within Ten (10) days
of the filing of any amended consolidated return, and any additional amount
payable to adjustments made by the taxing authorities shall be paid within Ten
(10) days after the payment of the related additional tax assessment (or receipt
of the related tax refund) or within Ten (10) days after the final determination
of the adjustment, whichever is the earlier.

         (6) This Agreement shall terminate upon the happening of any one or
more of the following events:

             (a) AFC and Subsidiary agree in writing to terminate this Agreement
         provided that the respective Boards of Directors of AFC and Subsidiary
         approve and authorize, in writing, said termination.

             (b) Subsidiary's membership in Affiliated Group ceases or is
         terminated for any reason whatsoever.

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                                      -3-

             (c) The Affiliated Group for any taxable year fails to file a
         consolidated return.

         Notwithstanding the provisions set forth in this Paragraph 6, AFC's and
Subsidiary's obligations hereunder will remain in effect and in full force with
respect to any period of time during the taxable year in which such termination
may occur for which the income of Subsidiary must be included in the
consolidated return of the Affiliated Group of which Subsidiary was a member at
the time of such termination, and together with any recomputation required as
provided in Paragraph 5 of this Agreement.

         (7) This Agreement may be amended to reflect any and all pertinent and
applicable revisions, changes or other modifications of the Internal Revenue
Code of 1954 and the regulations promulgated thereunder.

         (8) This Agreement shall not be assignable or transferable, whether by
operation of law or otherwise, by either party hereto without the prior written
consent of the other.

         (9) This Agreement shall be governed by and construed under the laws of
the State of Ohio.

         (10) This Agreement shall inure to and shall be binding upon the
parties' successors and assigns.

         IN WITNESS WHEREOF, this Agreement is hereby made effective on the day
and year first above-written by the undersigned.

WITNESSES:                            AMERICAN FINANCIAL CORPORATION

                                      BY:
-----------------------------            ---------------------------------------
                                                   Thomas E. Mischell

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                                                                    Exhibit 10.7

                          REGISTRATION RIGHTS AGREEMENT

      THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
________________, 2002 is between Infinity Property and Casualty Corporation, an
Ohio corporation (the "Corporation"), and American Financial Group, Inc., an
Ohio corporation ("AFG").

                                    RECITALS

      A. The Corporation and AFG are parties to a Formation and Separation
Agreement dated as of ___________, 2002 relating to the formation of the
Corporation.

      B. The Corporation will effect an initial public offering of certain
shares of common stock beneficially owned by AFG pursuant to a Registration
Statement on Form S-1 (the "Public Offering").

      C. After the completion of the Public Offering, AFG will beneficially own
approximately __% (approximately __% if the over-allotment option granted to the
underwriters in the Public Offering is exercised in full) of the outstanding
common stock of the Corporation.

      D. The Corporation has agreed to provide the registration rights specified
in this Agreement to AFG, its affiliates and holders of the Registrable Shares
(as defined below) following the Public Offering, and the Corporation and AFG
are entering into this Agreement to set forth the terms and conditions
applicable to the grant and exercise of such registration rights.

      NOW, THEREFORE, in consideration of the promises and the mutual covenants
and agreements contained therein and herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties hereto, the Corporation and AFG hereby agree as follows:

      1. Definitions. In addition to the capitalized terms defined elsewhere in
this Agreement, the following capitalized terms shall have the following
meanings when used in this Agreement:

      "AFG Entity" means American Financial Group, Inc., an Ohio corporation,
and any and all Subsidiaries of American Financial Group, Inc.

      "Board" means the board of directors of the Corporation.

      "Commission" means the Securities and Exchange Commission.

      "Common Stock" means the common stock, without par value, of the
Corporation.

      "Demand Registration" has the meaning set forth in Section 2(b) hereof.

      "Effective Period" means the period beginning on the Shelf Effective Date
and ending on the earlier of (1) 36 months after the Shelf Effective Date or (2)
the date that the Holders have
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received an opinion of counsel to the Corporation that the Holders can sell all
of their Registrable Shares pursuant to Rule 144 promulgated under the
Securities Act without regard to the volume limitations contained in paragraph
(e) of such Rule.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Holders" means the AFG Entities that hold Registrable Shares and their
respective successors or assigns contemplated by Section 13 hereof.

      "Long-Form Demand Registration" has the meaning set forth in Section 2(a)
hereof.

      "Person" means a natural person, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or other entity, or a governmental
entity or any department, agency or political subdivision thereof.

      "Piggyback Registration" has the meaning set forth in Section 3(a) hereof.

      "Registrable Shares" means, at any time, the shares of Common Stock owned
by the AFG Entities and shares of Common Stock transferred by the AFG Entities
as contemplated by Section 13.

      "Registration Expenses" has the meaning ascribed to it in Section 6 of
this Agreement.

      "Securities Act" means the Securities Act of 1933, as amended.

      "Shelf Effective Date" means the date that the Shelf Registration
Statement is declared effective by the Commission.

      "Shelf Registration Statement" has the meaning set forth in Section 2(b)
hereof.

      "Subsidiary" means any Person of which securities or other ownership
interests representing 50% or more of the ordinary voting power are, at the time
as of which any determination is being made, owned or controlled by the
Corporation or one or more Subsidiaries of the Corporation or by the Corporation
and one or more Subsidiaries of the Corporation.

      "Target Effective Date" means the date that is ninety (90) days after the
Target Filing Date.

      "Target Filing Date" means the first anniversary of the completion of the
Public Offering.

      2. Demand Registrations.

            (a) Long-Form Registrations. Subject to the terms of this Agreement,
AFG may, at any time beginning six (6) months after the completion of the Public
Offering, request registration under the Securities Act on Form S-1, Form S-2 or
any similar long-form registration, of Registrable Shares with an expected
aggregate price to the public of at least $5,000,000. A registration requested
pursuant to this Section 2(a) is referred to as a "Long-Form

                                      -2-
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Demand Registration." The Corporation is required to effect no more than one
Long-Form Demand Registration.

            (b) Short-Form Registration. The Corporation shall prepare and file
with the Commission no later than the Target Filing Date, a "shelf registration
statement" on the appropriate form for an offering to be made on a continuous
basis pursuant to Rule 415 under the Securities Act, covering all of the
Registrable Shares then owned by the Holders (the "Shelf Registration
Statement," and collectively with the Long-Form Demand Registration, the "Demand
Registrations"). The Corporation will use its best efforts to have the Shelf
Registration Statement declared effective on or before the Target Effective Date
and to keep such Shelf Registration Statement continuously effective for the
Effective Period (or such shorter period which will terminate when all
Registrable Securities covered by such Shelf Registration Statement have been
sold or withdrawn, but not prior to the expiration of the applicable period
referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if
applicable). The Corporation further agrees, if necessary, to supplement or
amend the Shelf Registration Statement, as required by the rules, regulations or
instructions applicable to the registration form used by the Corporation for
such Shelf Registration Statement or by the Securities Act or as reasonably
requested (which request shall result in the filing of a supplement or
amendment) by any Holder of Registrable Securities to which such Shelf
Registration Statement relates, and the Corporation agrees to furnish to the
Holders, Holder's counsel and any managing underwriter copies of any such
supplement or amendment prior to its being used and/or filed with the
Commission.

            (i) The Corporation may require each Holder of Registrable
      Securities to which such Shelf Registration Statement relates to furnish
      to the Corporation, upon reasonable notice, such information concerning
      the Holder and the distribution of the Registrable Securities as the
      Corporation may from time to time reasonably request, upon reasonable
      notice.

            (ii) The Corporation shall not be deemed to have satisfied its
      obligations under Section 2(b) until the Shelf Registration Statement has
      been declared effective by the Commission and the Corporation has complied
      in all material respects with its obligations under this Agreement with
      respect thereto (including keeping the Shelf Registration Statement
      effective for the Effective Period), provided, however, that if after it
      has been declared effective, the offering of Registrable Shares pursuant
      to a Shelf Registration Statement is interfered with by any stop order,
      injunction or other order or requirement of the Commission or any other
      governmental agency or court, such Shelf Registration Statement will be
      deemed not to have been effective during the period of such interference
      until the offering of Registrable Shares pursuant to such Shelf
      Registration Statement may legally resume and the period of time during
      which sales under the Shelf Registration Statement were suspended shall be
      added to the Effective Period. If a registration requested pursuant to
      this Section 2(b) is deemed not to have been effected, then the
      Corporation shall continue to be obligated to effect a registration
      pursuant to this Section 2(b).

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            (c) If the Holders so elect, the offering of Registrable Shares
pursuant to a Demand Registration shall be in the form of an underwritten
offering If they so elect, the Holders participating in such Demand Registration
shall select one or more nationally recognized firms of investment bankers
reasonably satisfactory to the Corporation to act as the book-running managing
underwriter or underwriters in connection with such offering and shall select
any additional investment bankers and managers to be used in connection with the
offering.

            (d) Priority on Demand Registrations. If a Demand Registration is an
underwritten public offering and the managing underwriters advise the
Corporation in writing that, in their opinion, the inclusion of the number of
Registrable Shares and other securities requested to be included in such
offering creates a substantial risk that the price per share of Common Stock
will be reduced, the Corporation will include in such Registration, prior to the
inclusion of any securities which are not Registrable Shares, the number of
Registrable Shares requested to be included which in the opinion of such
underwriters can be sold in such offering without creating such a risk,
allocated among the participating Holders as designated by AFG.

            (e) Restrictions on Registrations. The Corporation may postpone for
a reasonable period not to exceed ninety (90) days the filing or the
effectiveness of a registration statement for a Demand Registration if the
Corporation shall furnish to AFG a certificate signed by the Corporation's Chief
Executive Officer stating that the Board has determined reasonably and in good
faith that such filing would require a disclosure of a material fact concerning
the Corporation (which the Corporation is not otherwise required to disclose)
that would have a material adverse effect on the Corporation or adversely affect
any plan by the Corporation or any of its Subsidiaries to engage in any
acquisition of assets (other than in the ordinary course of business) or capital
stock or other securities of any other entity, or any financing, acquisition,
reorganization, merger, consolidation, tender offer or other significant
transaction; provided, that the right to postpone may not be exercised for more
than 120 days in any 12-month period. The Corporation will not include in any
Demand Registration, that is an underwritten offering, any securities which are
not Registrable Shares without the written consent of the Holder or Holders of a
majority of the Registrable Shares to be included in such registration.

      3. Piggyback Registrations.

            (a) Right to Piggyback. Whenever securities of the Corporation are
to be registered under the Securities Act (other than pursuant to a Demand
Registration and other than pursuant to a registration statement on Form S-4 or
Form S-8 or successor forms) and the registration form to be used may be used
for the registration of Registrable Shares (a "Piggyback Registration"), the
Corporation will give prompt written notice (and in any event within three (3)
business days after its receipt of notice of any exercise of demand registration
rights by holders of the Corporation's securities other than the Registrable
Shares and at least twenty (20) days prior to the filing of any registration
statement) to AFG of its intention to effect such a registration and will
include in such registration all Registrable Shares with respect to which the
Corporation has received written requests for inclusion therein within 10 days
after the Corporation's notice has been given. If a Holder desires to include
such Holder's Registrable Shares in a Piggyback Registration that is an
underwritten offering, such Holder shall, as a condition to including such

                                      -4-
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Holder's Registrable Shares, enter into an underwriting agreement containing
customary terms and conditions, including customary representations and
indemnities.

            (b) Priority on Primary Registrations. If a Piggyback Registration
is an underwritten primary registration on behalf of the Corporation, and the
managing underwriters advise the Corporation that in their opinion the number of
securities requested to be included in such offering in the registration creates
a substantial risk that the price per share of Common Stock will be reduced in
such offering, the Corporation will include in such registration (i) first, the
securities the Corporation proposes to sell, (ii) second, the Registrable Shares
requested to be included in such registration, allocated among the participating
Holders as designated by AFG, and (iii) third, other securities requested to be
included in such registration.

            (c) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the
Corporation's securities (an "Initiating Securityholder"), and the managing
underwriters advise the Corporation that in their opinion the inclusion of the
number of securities requested to be included in such offering creates a
substantial risk that the price per share of Common Stock will be reduced in
such offering, the Corporation will include in such registration (i) first, the
Registrable Shares requested to be included in such registration, allocated
among the participating Holders as designated by AFG, and (ii) second, the
securities to be offered by the Initiating Securityholder and the Corporation in
such amounts as agreed upon between the Initiating Securityholder and the
Corporation.

            (d) Other Registrations. If the Corporation has previously filed a
registration statement which includes Registrable Shares pursuant to Section 2
or pursuant to this Section 3, and if such previous registration has not been
withdrawn or abandoned, the Corporation will not file or cause to be effected
any other registration of any of its equity securities or securities convertible
or exchangeable into or exercisable for its equity securities under the
Securities Act (except on Form S-4 or Form S-8 or successor forms), whether on
its own behalf or at the request of any holder or holders of such securities,
until a period of ninety (90) days has elapsed from the effective date of such
previous registration, without the prior consent of AFG.

      4. Holdback Agreements. The Corporation agrees (i) not to effect any
public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven (7) days prior to and during the ninety (90) day period beginning on the
effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of such underwritten registration or
pursuant to a registration on Form S-4 or Form S-8 or successor forms), unless
the underwriters managing the registered public offering otherwise agree and
(ii) if requested by the underwriters managing the registered public offering,
to use its best efforts to cause each other holder of its equity securities, or
any securities convertible into or exchangeable or exercisable for such
securities, purchased from the Corporation at any time (other than in a
registered public offering) to agree not to effect any public sale of any such
securities during such period (except as part of such underwritten registration,
if otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.

      5. Registration Procedures.

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            (a) Whenever AFG has requested that any Registrable Shares be
registered pursuant to the terms of this Agreement, the Corporation will use its
best efforts to effect the registration and the sale of such Registrable Shares
in accordance with the intended method of disposition thereof, and pursuant
thereto the Corporation will as expeditiously as possible:

            (i) prepare and file with the Commission a registration statement on
      the appropriate form with respect to such Registrable Shares and use its
      best efforts to cause such registration statement to become effective as
      soon as practicable after such filing;

            (ii) prepare and file with the Commission such amendments and
      supplements to such registration statement and the prospectus used in
      connection therewith as may be necessary to keep such registration
      statement effective and to comply with the provisions of the Securities
      Act with respect to the disposition of all securities covered by such
      registration statement until such time as the Registrable Shares
      registered thereunder have been disposed of in accordance with the
      intended methods of disposition by the sellers thereof set forth in such
      registration statement, but in no event for a period in excess of nine (9)
      months provided that, at least five (5) business days prior to filing a
      Registration Statement or Prospectus or any amendments or supplements
      thereto, excluding documents incorporated by reference after the initial
      filing of the Registration Statement, the Corporation shall furnish to the
      Holders of the Registrable Shares covered by such Registration Statement
      (the "Selling Holders"), Holders' counsel and the underwriters, if any,
      draft copies of all such documents proposed to be filed, which documents
      will be subject to the review of such Holders' counsel and the
      underwriters, if any, and the Corporation will not, unless required by
      law, file any Registration Statement or amendment thereto or any
      Prospectus or any supplement thereto to which Holders of at least a
      majority of the Registrable Shares (the "Objecting Party") shall
      reasonably object, pursuant to notice given to the Corporation prior to
      the filing of such amendment or supplement (the "Objection Notice") and no
      later than five (5) business days after receipt of the documents to which
      the Objection Notice relates. The Objection Notice shall set forth the
      objections and the specific areas in the draft documents where such
      objections arise. The Corporation shall have five (5) business days after
      receipt of the Objection Notice to correct such deficiencies to the
      satisfaction of the Objecting Party, and will notify each Selling Holder
      of any stop order issued or threatened by the Commission in connection
      therewith and shall use its best efforts to prevent the entry of such stop
      order or to remove it at the earliest possible moment if entered;

            (iii) furnish to each seller of such Registrable Shares and the
      underwriters of the securities being registered such number of copies of
      such registration statement, each amendment and supplement thereto, the
      prospectus included in such registration statement (including each
      preliminary prospectus) and such other documents as such seller or
      underwriters may reasonably request in order to facilitate the disposition
      of the Registrable Shares owned by such seller or the sale of such
      securities by such underwriters;

            (iv) use its best efforts to register or qualify such Registrable
      Shares under such other securities laws of such jurisdictions as any
      seller reasonably requests and do

                                      -6-
<PAGE>
      any and all other acts and things which may be necessary or desirable to
      enable such seller to consummate the public sale or other disposition in
      such jurisdictions of the Registrable Shares owned by such seller
      (provided, however, that the Corporation will not be required to qualify
      generally to do business in any jurisdiction where it would not otherwise
      be required to qualify but for this subparagraph or consent to general
      service of process in any such jurisdiction);

            (v) cause all such Registrable Shares to be listed on each
      securities exchange on which similar securities issued by the Corporation
      are then listed;

            (vi) enter into customary agreements (including underwriting
      agreements) and take all such other actions as AFG or the underwriters, if
      any, reasonably request in order to expedite or facilitate the disposition
      of such Registrable Shares;

            (vii) make available for inspection by AFG, any underwriter
      participating in any disposition pursuant to such registration statement,
      and any attorney, accountant or other agent designated by any such seller
      or underwriter, all financial and other records, pertinent corporate
      documents and properties of the Corporation, and cause the Corporation's
      officers, directors, employees and independent accountants to supply all
      information reasonably requested by any such seller, underwriter,
      attorney, accountant or agent in connection with such registration
      statement;

            (viii) notify each seller of such Registrable Shares, promptly after
      it shall receive notice thereof, of the time when such registration
      statement has become effective or a supplement to any prospectus forming a
      part of such registration statement has been filed;

            (ix) notify each seller of such Registrable Shares of any request by
      the Commission for the amending or supplementing of such registration
      statement or prospectus or for additional information;

            (x) prepare and file with the Commission, promptly upon the request
      of AFG, any amendments or supplements to such registration statement or
      prospectus which, in the reasonable opinion of counsel selected by AFG, is
      required under the Securities Act or the rules and regulations thereunder
      in connection with the distribution of Registrable Shares by AFG;

            (xi) prepare and promptly file with the Commission and promptly
      notify each seller of such Registrable Shares of the filing of such
      amendment or supplement to such registration statement or prospectus as
      may be necessary to correct any statements or omissions if, at the time
      when a prospectus relating to such securities is required to be delivered
      under the Securities Act, any event shall have occurred as the result of
      which any such prospectus would include an untrue statement of a material
      fact or omit to state any material fact necessary to make the statements
      therein, in the light of the circumstances in which they were made, not
      misleading; and

                                      -7-
<PAGE>
            (xii) at the request of any seller of such Registrable Shares in
      connection with an underwritten offering, furnish on the date or dates
      provided for in the underwriting agreement a customary opinion of counsel,
      addressed to the underwriters and AFG, covering such matters as such
      underwriters and sellers may reasonably request.

            (b) The Corporation may require AFG to furnish to the Corporation
such information regarding the distribution of such securities and such other
information relating to AFG and the AFG Entities, if applicable, participating
in such distribution, and the ownership by AFG and the AFG Entities, if
applicable, of Registrable Shares as the Corporation may from time to time
reasonably request in writing. AFG agrees to furnish such information to the
Corporation and to cooperate with the Corporation as reasonably necessary to
enable the Corporation to comply with the provisions of this Agreement.

      6. Registration Expenses. All expenses incident to the Corporation's
performance of or compliance with this Agreement, including, but not limited to,
all registration and filing fees, fees and expenses of compliance with federal,
state and foreign securities laws, printing expenses, messenger and delivery
expenses, and fees and disbursements of counsel for the Corporation and its
independent certified public accountants, underwriters (excluding discounts and
commissions attributable to the Registrable Shares included in such
registration) and other Persons retained by the Corporation (all such expenses
being herein called "Registration Expenses"), will be borne by the Corporation.
In addition, the Corporation will pay its internal expenses (including, but not
limited to, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit or quarterly
review, the expense of any liability insurance obtained by the Corporation and
the expenses and fees for listing the securities to be registered on each
securities exchange. The Holders shall pay the fees and disbursements of their
counsel in connection with any registration under this Agreement.

      7. Indemnification.

            (a) The Corporation agrees to indemnify, to the fullest extent
permitted by law, each seller of Registrable Shares, its officers and directors
and each Person who controls such seller (within the meaning of the Securities
Act or the Exchange Act) from and against all losses, claims, damages,
liabilities and expenses (including, but not limited to, reasonable attorneys'
fees except as limited by Section 7(c)) arising out of or based upon any untrue
or alleged untrue statement of a material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or any violation by the Corporation of any Federal or state
securities laws, except insofar as the same are caused by or contained in any
information furnished in writing to the Corporation by such seller expressly for
use therein or by such seller's failure to deliver a copy of the prospectus or
any amendments or supplements thereto after the Corporation has furnished such
seller with a sufficient number of copies of the same. In connection with an
underwritten offering, the Corporation will indemnify such underwriters, their
officers and directors and each Person who controls such underwriters (within
the meaning of the Securities Act or the Exchange Act) to the same extent as
provided above with respect to the indemnification of the sellers of Registrable
Shares. The reimbursements required by this

                                      -8-
<PAGE>
Section 7(a) will be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.

            (b) In connection with any registration statement in which a seller
of Registrable Shares is participating, each seller will furnish to the
Corporation in writing such information and affidavits as the Corporation
reasonably requests for use in connection with any such registration statement
or prospectus and, to the fullest extent permitted by law, will indemnify the
Corporation, its directors and officers and each Person who controls the
Corporation (within the meaning of the Securities Act or the Exchange Act) from
and against any losses, claims, damages, liabilities and expenses (including,
but not limited to, reasonable attorneys' fees except as limited by Section
7(c)) resulting from any untrue statement of a material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by such seller; provided that
the obligation to indemnify will be several, not joint and several, among such
sellers of Registrable Shares, and the liability of each such seller of
Registrable Shares will be in proportion to the number of Registrable Shares
sold by each such seller divided by the total number of Registrable Shares
included in such registration statement, and provided further that such
liability will be limited to, in any event, the net amount received by such
seller from the sale of Registrable Shares pursuant to such registration
statement.

            (c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without the indemnifying party's consent (but such
consent will not be unreasonably withheld). An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest exists
between such indemnified party and any other of such indemnified parties with
respect to such claim.

            (d) If the indemnification provided for in this Section is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the fullest extent permitted by applicable law contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and of the indemnified party on
the other in connection with the matters that resulted in such loss, claim,
damage or liability, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by a court of law by reference to, among other things, whether the

                                      -9-
<PAGE>
untrue or alleged untrue statement of a material fact or the omission to state a
material fact related to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement of omission;
provided, that in no event shall the amounts payable in indemnity by a Holder
under Section 7 exceed the net proceeds received by such Holder in the
registered offering out of which such indemnification arises. No party guilty of
fraudulent misrepresentation under Section 11(f) of the Securities Act shall be
entitled to contribution under this Section 7(d).

            (e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten pubic offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.

            (f) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and will survive the transfer of securities.

      8. Compliance with Rule 144. At any time and from time to time after the
Corporation has a class of securities registered under Section 12 of the
Exchange Act, the Corporation will (i) make available to the public and such
holders such information as will enable the Holders to make sales pursuant to
Rule 144 promulgated under the Securities Act, and (ii) file with the Commission
in a timely manner all reports and other documents required of the Corporation
under the Exchange Act.

      9. Underwritten Registrations. AFG agrees, on its behalf and on behalf of
the AFG Entities, that, in connection with any underwritten offering, AFG will
(a) sell its Registrable Shares on the basis provided in any underwriting
arrangements approved by AFG and (b) complete and execute all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements. AFG will have the
right to select the managing underwriters to administer any offering of the
Corporation's securities in which the Corporation does not participate, subject
to the prior approval of the Corporation, which approval shall not be
unreasonably withheld, and the Corporation will have the right to select the
managing underwriters in any offering in which it does participate.

      10. Adjustments Affecting Registrable Shares. The Corporation will not
knowingly take any action, or knowingly permit any change to occur, with respect
to its securities which would materially adversely affect the ability of AFG to
include Registrable Shares in a registration undertaken pursuant to this
Agreement or which would materially adversely affect the marketability of such
Registrable Shares in any such registration.

      11. Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.

                                      -10-
<PAGE>
      12. Amendments and Waivers. Except as otherwise expressly provided herein,
the provisions of this Agreement may be amended or waived at any time only by
the written agreement of the Corporation and AFG. Any waiver, permit, consent or
approval of any kind or character on the part of any such holders of any
provision or condition of this Agreement must be made in writing and shall be
effective only to the extent specifically set forth in writing.

      13. Successors and Assigns. The rights to cause the Corporation to
register Registrable Securities granted pursuant to this Agreement may be
transferred or assigned by any Holder to a transferee or assignee, provided,
however, that the transferee or assignee of such rights, other than an AFG
Entity, assumes the obligations of such transferor or assignor, as the case may
be, under this Agreement and that such transferee or assignee executes and
delivers a copy of this Agreement to the Company.

      14. Entire Agreement. This Agreement constitutes the entire agreement of
the parties concerning the matters referred to herein, and supersedes all prior
agreements and understandings.

      15. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.

      16. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience of reference only and do not constitute a part of and
shall not be utilized in interpreting this Agreement.

      17. Notices. Any notices required or permitted to be sent hereunder shall
be delivered personally, or mailed, certified mail, return receipt requested, or
delivered by overnight courier service to the following addresses, or such other
addresses as shall be given by notice delivered hereunder, and shall be deemed
to have been given upon receipt, if delivered personally, or mailed, or one
business day after delivery to the courier, if delivered by overnight courier
service:

      If to the Corporation, to:

             Infinity Property and Casualty Corporation

             ------------------------------------------

             ------------------------------------------
             Attention:  Chief Executive Officer

      If to AFG, to:

             American Financial Group, Inc.
             One East Fourth Street
             Cincinnati, Ohio   45202
             Attention: James C. Kennedy, Vice President and
                          Deputy General Counsel

                                      -11-
<PAGE>
      If to successors or assigns of AFG as permitted under Section 13, to the
addresses set forth on the stock record books of the Corporation.

      18. Governing Law. The validity, meaning and effect of this Agreement
shall be determined in accordance with the laws of the State of Ohio applicable
to contracts made and to be performed in that state.

      19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument. Each
party shall receive a duplicate original of the counterpart copy or copies
executed by it and the Corporation.

         [The remainder of this page has been intentionally left blank.
                            Signature pages follow.]

                                      -12-
<PAGE>
            IN WITNESS WHEREOF, the parties hereto have executed this
Registration Agreement on the date first set forth above.

                                        INFINITY PROPERTY AND CASUALTY
                                        CORPORATION

                                        By:
                                           ------------------------------------
                                        Its:
                                            -----------------------------------

                                        AMERICAN FINANCIAL GROUP, INC.

                                        By:
                                           ------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------

                                      -13-

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