Erie Indemnity Reports Second Quarter 2024 Results

About this update from Erie Indemnity Company

Net Income per Diluted Share was $3.13 for the Quarter and $5.52 for the Six Months of 2024 ERIE, Pa. , July 25, 2024 /PRNewswire/ -- Erie Indemnity Company (NASDAQ: ERIE ) today announced financial results for the quarter and six months ending June 30, 2024 . Net income was $163.9 million , or $3.13 per diluted share, in the second quarter of 2024, compared to $117.9 million , or $2.25 per diluted share, in the second quarter of 2023. Net income was $288.5 million , or $5.52 per diluted share, in the first six months of 2024, compared to $204.1 million , or $3.90 per diluted share, in the first six months of 2023. 2Q and First Half 2024 (in thousands) 2Q'24 2Q'23 1H'24 1H'23 Operating income $ 190,208 $ 134,158 $ 329,020 $ 244,701 Investment income 13,827 11,627 28,906 6,895 Other income 3,292 3,305 6,703 6,642 Income before income taxes 207,327 149,090 364,629 258,238 Income tax expense 43,424 31,238 76,174 54,145 Net income $ 163,903 $ 117,852 $ 288,455 $ 204,093 2Q 2024 Highlights Operating income before taxes increased $56.1 million , or 41.8 percent, in the second quarter of 2024 compared to the second quarter of 2023. Management fee revenue - policy issuance and renewal services increased $127.5 million , or 20.1 percent, in the second quarter of 2024 compared to the second quarter of 2023. Management fee revenue - administrative services increased $1.4 million , or 9.0 percent, in the second quarter of 2024 compared to the second quarter of 2023. Cost of operations - policy issuance and renewal services Commissions increased $68.8 million in the second quarter of 2024 compared to the second quarter of 2023, primarily driven by the growth in direct and affiliated assumed written premium and, to a lesser extent, an increase in agent incentive compensation related to profitable growth. Non-commission expense increased $4.1 million in the second quarter of 2024 compared to the second quarter of 2023. Underwriting and policy processing expense increased $4.2 million primarily due to increased underwriting report and personnel costs. Information technology costs decreased $3.8 million primarily due to a decrease in professional fees and personnel costs. Customer service costs increased $2.0 million primarily due to increased personnel costs and credit card processing fees. Income from investments before taxes totaled $13.8 million in the second quarter of 2024 compared to $11.6 million in the second quarter of 2023. Net investment income was $16.0 million in the second quarter of 2024 compared to $13.5 million in the second quarter of 2023. First Half 2024 Highlights Operating income before taxes increased $84.3 million , or 34.5 percent, in the first six months of 2024 compared to the first six months of 2023. Management fee revenue - policy issuance and renewal services increased $235.1 million , or 19.7 percent, in the first six months of 2024 compared to the first six months of 2023. Management fee revenue - administrative services increased $3.2 million , or 10.3 percent, in the first six months of 2024 compared to the first six months of 2023. Cost of operations - policy issuance and renewal services Commissions increased $135.8 million in the first six months of 2024 compared to the first six months of 2023, primarily driven by the growth in direct and affiliated assumed written premium and, to a lesser extent, an increase in agent incentive compensation related to profitable growth. Non-commission expense increased $18.4 million in the first six months of 2024 compared to the first six months of 2023. Underwriting and policy processing expense increased $8.7 million primarily due to increased underwriting report and personnel costs. Information technology costs decreased $7.5 million primarily due to a decrease in professional fees and personnel costs largely driven by an increase in capitalized labor costs related to technology initiatives. Sales and advertising expense increased $5.2 million primarily due to increased agent-related and advertising costs. Customer service costs increased $4.0 million primarily due to increased personnel costs and credit card processing fees. Administrative and other costs increased $8.0 million primarily due to increased personnel costs, charitable contributions and professional fees. Income from investments before taxes totaled $28.9 million in the first six months of 2024 compared to $6.9 million in the first six months of 2023. Net investment income was $31.9 million in the first six months of 2024 compared to $15.7 million in the first six months of 2023. Net investment income included $0.3 million of limited partnership earnings in the first six months of 2024 compared to losses of $10.7 million in the first six months of 2023. Net realized and unrealized gains were $0.1 million in the first six months of 2024 compared to losses of $7.0 million in the first six months of 2023. Webcast Information Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on July 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, 13th 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 17th largest property/casualty insurer in the United States based on total lines net premium written. Rated A+ (Superior) by A. M. Best , ERIE has more than 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 June 30 , Six months ended June 30 , 2024 2023 2024 2023 (Unaudited) (Unaudited) Operating revenue Management fee revenue - policy issuance and renewal services $ 760,886 $ 633,339 $ 1,426,572 $ 1,191,429 Management fee revenue - administrative services 17,051 15,636 33,985 30,825 Administrative services reimbursement revenue 206,028 184,466 397,595 357,293 Service agreement revenue 6,473 6,429 12,987 12,788 Total operating revenue 990,438 839,870 1,871,139 1,592,335 Operating expenses Cost of operations - policy issuance and renewal services 594,202 521,246 1,144,524 990,341 Cost of operations - administrative services 206,028 184,466 397,595 357,293 Total operating expenses 800,230 705,712 1,542,119 1,347,634 Operating income 190,208 134,158 329,020 244,701 Investment income Net investment income 16,010 13,535 31,913 15,718 Net realized and unrealized investment (losses) gains (1,795) (1,737) 58 (7,019) Net impairment losses recognized in earnings (388) (171) (3,065) (1,804) Total investment income 13,827 11,627 28,906 6,895 Other income 3,292 3,305 6,703 6,642 Income before income taxes 207,327 149,090 364,629 258,238 Income tax expense 43,424 31,238 76,174 54,145 Net income $ 163,903 $ 117,852 $ 288,455 $ 204,093 Net income per share Class A common stock – basic $ 3.52 $ 2.53 $ 6.19 $ 4.38 Class A common stock – diluted $ 3.13 $ 2.25 $ 5.52 $ 3.90 Class B common stock – basic and diluted $ 528 $ 380 $ 929 $ 657 Weighted average shares outstanding – Basic Class A common stock 46,189,042 46,189,026 46,189,028 46,188,923 Class B common stock 2,542 2,542 2,542 2,542 Weighted average shares outstanding – Diluted Class A common stock 52,305,299 52,299,974 52,303,551 52,298,298 Class B common stock 2,542 2,542 2,542 2,542 Dividends declared per share Class A common stock $ 1.275 $ 1.19 $ 2.55 $ 2.38 Class B common stock $ 191.25 $ 178.50 $ 382.50 $ 357.00 Erie Indemnity Company Statements of Financial Position (in thousands) June 30 , 2024 December 31 ,2023 (Unaudited) Assets Current assets: Cash and cash equivalents (includes restricted cash of $14,027 and $12,542 , respectively) $ 170,634 $ 144,055 Available-for-sale securities 47,734 82,017 Receivables from Erie Insurance Exchange and affiliates, net 708,171 625,338 Prepaid expenses and other current assets 83,529 69,321 Accrued investment income 10,204 9,458 Total current assets 1,020,272 930,189 Available-for-sale securities, net 946,525 879,224 Available-for-sale securities lent 6,125 0 Equity securities 80,128 84,253 Fixed assets, net 469,145 442,610 Agent loans, net 56,813 58,434 Defined benefit pension plan 65,221 34,320 Other assets, net 47,731 42,934 Total assets $ 2,691,960 $ 2,471,964 Liabilities and shareholders' equity Current liabilities: Commissions payable $ 413,205 $ 353,709 Agent incentive compensation 44,870 68,077 Accounts payable and accrued liabilities 198,689 175,622 Dividends payable 59,377 59,377 Contract liability 41,570 41,210 Deferred executive compensation 8,216 10,982 Securities lending payable 6,345 0 Total current liabilities 772,272 708,977 Defined benefit pension plan 26,591 26,260 Contract liability 20,645 19,910 Deferred executive compensation 16,341 20,936 Deferred income taxes, net 5,192 11,481 Other long-term liabilities 22,106 21,565 Total liabilities 863,147 809,129 Shareholders' equity 1,828,813 1,662,835 Total liabilities and shareholders' equity $ 2,691,960 $ 2,471,964 View original content to download multimedia: https://www.prnewswire.com/news-releases/erie-indemnity-reports-second-quarter-2024-results-302206563.html SOURCE Erie Indemnity Company

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