Erie Indemnity Reports First Quarter 2024 Results

About this update from Erie Indemnity Company

Net Income was $124.6 million , Earnings per Diluted Share was $2.38 ERIE, Pa. , April 25, 2024 /PRNewswire/ -- Erie Indemnity Company (NASDAQ: ERIE ) today announced financial results for the quarter ending March 31, 2024 . Net income was $124.6 million , or $2.38 per diluted share, in the first quarter of 2024, compared to $86.2 million , or $1.65 per diluted share, in the first quarter of 2023. 1Q 2024 (in thousands) 1Q'24 1Q'23 Operating income $ 138,812 $ 110,543 Investment income (loss) 15,079 (4,732) Other income 3,411 3,337 Income before income taxes 157,302 109,148 Income tax expense 32,750 22,907 Net income $ 124,552 $ 86,241 1Q 2024 Highlights Operating income before taxes increased $28.3 million , or 25.6 percent, in the first quarter of 2024 compared to the first quarter of 2023. Management fee revenue - policy issuance and renewal services increased $107.6 million , or 19.3 percent, in the first quarter of 2024 compared to the first quarter of 2023. Management fee revenue - administrative services increased $1.7 million , or 11.5 percent, in the first quarter of 2024 compared to the first quarter of 2023. Cost of operations - policy issuance and renewal services Commissions increased $67.0 million in the first quarter of 2024 compared to the first quarter of 2023, primarily driven by the growth in direct and affiliated assumed written premium and an increase in agent incentive compensation. Non-commission expense increased $14.3 million in the first quarter of 2024 compared to the first quarter of 2023. Underwriting and policy processing expense increased $4.4 million primarily due to increased underwriting report and personnel costs. Information technology costs decreased $3.7 million primarily due to an increase in capitalized professional fees and personnel costs related to technology initiatives. Sales and advertising expense increased $4.3 million primarily due to increased agent-related costs. Administrative and other costs increased $7.2 million primarily due to an increase in personnel and travel costs. Income from investments before taxes totaled $15.1 million in the first quarter of 2024 compared to loss from investments before taxes of $4.7 million in the first quarter of 2023. Net investment income was $15.9 million in the first quarter of 2024 compared to $2.2 million in the first quarter of 2023. Net investment income included $0.5 million of limited partnership earnings in the first quarter of 2024 compared to losses of $10.8 million in the first quarter of 2023. Net realized and unrealized gains on investments were $1.9 million in the first quarter of 2024 compared to losses of $5.3 million in the first quarter of 2023. Net impairment losses recognized in earnings were $2.7 million in the first quarter of 2024 compared to $1.6 million in the first quarter of 2023. Webcast Information Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on April 26, 2024 . Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com . Erie Insurance Group According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania , is the 12th largest homeowners insurer, 12th largest automobile insurer and 13th largest commercial lines insurer in the United States based on direct premiums written. Founded in 1925, Erie Insurance is a Fortune 500 company and the 19th largest property/casualty insurer in the United States based on total lines net premium written. Rated A+ (Superior) by A.M. Best , ERIE has nearly 7 million policies in force and operates in 12 states and the District of Columbia. News releases and more information are available on ERIE's website at www.erieinsurance.com . "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements contained herein that are not historical fact are forward-looking statements and, as such, are subject to risks and uncertainties that could cause actual events and results to differ, perhaps materially, from those discussed herein. Forward-looking statements relate to future trends, events or results and include, without limitation, statements and assumptions on which such statements are based that are related to our plans, strategies, objectives, expectations, intentions, and adequacy of resources. Examples of forward-looking statements are discussions relating to premium and investment income, expenses, operating results, and compliance with contractual and regulatory requirements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Among the risks and uncertainties, in addition to those set forth in our filings with the Securities and Exchange Commission , that could cause actual results and future events to differ from those set forth or contemplated in the forward-looking statements include the following: dependence upon our relationship with the Erie Insurance Exchange ("Exchange") and the management fee under the agreement with the subscribers at the Exchange; dependence upon our relationship with the Exchange and the growth of the Exchange, including: general business and economic conditions; factors affecting insurance industry competition, including technological innovations; dependence upon the independent agency system; and ability to maintain our brand, including our reputation for customer service; dependence upon our relationship with the Exchange and the financial condition of the Exchange, including: the Exchange's ability to maintain acceptable financial strength ratings; factors affecting the quality and liquidity of the Exchange's investment portfolio; changes in government regulation of the insurance industry; litigation and regulatory actions; emergence of significant unexpected events, including pandemics and economic or social inflation; emerging claims and coverage issues in the industry; and severe weather conditions or other catastrophic losses, including terrorism; costs of providing policy issuance and renewal services to the subscribers at the Exchange under the subscriber's agreement; ability to attract and retain talented management and employees; ability to ensure system availability and effectively manage technology initiatives; difficulties with technology or data security breaches, including cyber attacks; ability to maintain uninterrupted business operations; compliance with complex and evolving laws and regulations and outcome of pending and potential litigation; factors affecting the quality and liquidity of our investment portfolio; and ability to meet liquidity needs and access capital. A forward-looking statement speaks only as of the date on which it is made and reflects our analysis only as of that date. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changes in assumptions, or otherwise. Erie Indemnity Company Statements of Operations (dollars in thousands, except per share data) Three months ended March 31 , 2024 2023 (Unaudited) Operating revenue Management fee revenue - policy issuance and renewal services $ 665,686 $ 558,090 Management fee revenue - administrative services 16,934 15,189 Administrative services reimbursement revenue 191,567 172,827 Service agreement revenue 6,514 6,359 Total operating revenue 880,701 752,465 Operating expenses Cost of operations - policy issuance and renewal services 550,322 469,095 Cost of operations - administrative services 191,567 172,827 Total operating expenses 741,889 641,922 Operating income 138,812 110,543 Investment income Net investment income 15,903 2,183 Net realized and unrealized investment gains (losses) 1,853 (5,282) Net impairment losses recognized in earnings (2,677) (1,633) Total investment income (loss) 15,079 (4,732) Other income 3,411 3,337 Income before income taxes 157,302 109,148 Income tax expense 32,750 22,907 Net income $ 124,552 $ 86,241 Net income per share Class A common stock – basic $ 2.67 $ 1.85 Class A common stock – diluted $ 2.38 $ 1.65 Class B common stock – basic and diluted $ 401 $ 278 Weighted average shares outstanding – Basic Class A common stock 46,189,014 46,188,819 Class B common stock 2,542 2,542 Weighted average shares outstanding – Diluted Class A common stock 52,301,803 52,296,621 Class B common stock 2,542 2,542 Dividends declared per share Class A common stock $ 1.275 $ 1.190 Class B common stock $ 191.25 $ 178.50 Erie Indemnity Company Statements of Financial Position (in thousands) March 31, 2024 December 31, 2023 (Unaudited) Assets Current assets: Cash and cash equivalents (includes restricted cash of $13,331 and $12,542 , respectively) $ 144,872 $ 144,055 Available-for-sale securities 76,693 82,017 Receivables from Erie Insurance Exchange and affiliates, net 641,691 625,338 Prepaid expenses and other current assets 69,050 69,321 Accrued investment income 9,465 9,458 Total current assets 941,771 930,189 Available-for-sale securities, net 892,952 879,224 Equity securities 86,578 84,253 Fixed assets, net 461,914 442,610 Agent loans, net 57,470 58,434 Defined benefit pension plan 66,270 34,320 Other assets, net 48,839 42,934 Total assets $ 2,555,794 $ 2,471,964 Liabilities and shareholders' equity Current liabilities: Commissions payable $ 384,613 $ 353,709 Agent incentive compensation 26,968 68,077 Accounts payable and accrued liabilities 213,062 175,622 Dividends payable 59,377 59,377 Contract liability 40,555 41,210 Deferred executive compensation 2,941 10,982 Total current liabilities 727,516 708,977 Defined benefit pension plan 23,792 26,260 Contract liability 20,000 19,910 Deferred executive compensation 23,216 20,936 Deferred income taxes, net 6,593 11,481 Other long-term liabilities 28,497 21,565 Total liabilities 829,614 809,129 Shareholders' equity 1,726,180 1,662,835 Total liabilities and shareholders' equity $ 2,555,794 $ 2,471,964 View original content to download multimedia: https://www.prnewswire.com/news-releases/erie-indemnity-reports-first-quarter-2024-results-302127567.html SOURCE Erie Indemnity Company

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