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 12^th largest homeowners insurer, 12^th largest automobile insurer and 13^th 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 19^th 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

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SOURCE Erie Indemnity Company

Erie Indemnity Reports First Quarter 2024 Results