Erie Indemnity Reports Full Year and Fourth Quarter 2024 Results

Net Income per Diluted Share was $2.91 for the Quarter and $11.48 for the Year

Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the full year and quarter ending December 31, 2024. Net income was $600.3 million, or $11.48 per diluted share, in 2024, compared to $446.1 million, or $8.53 per diluted share, in 2023. Net income was $152.0 million, or $2.91 per diluted share, in the fourth quarter of 2024, compared to $110.9 million, or $2.12 per diluted share, in the fourth quarter of 2023.

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4Q and Full Year 2024(in thousands) 4Q'24 4Q'23 2024 2023Operating income $ 167,310 $ 127,084 $ 676,455 $ 520,256Investment income 20,805 9,771 69,260 28,968Other income 3,693 3,069 11,564 12,712Income before income taxes 191,808 139,924 757,279 561,936Income tax expense 39,779 28,996 156,965 115,875Net income $ 152,029 $ 110,928 $ 600,314 $ 446,0612024 Full Year Highlights

Operating income before taxes increased $156.2 million, or 30.0 percent, in 2024 compared to 2023.

— Management fee revenue – policy issuance and renewal services increased $452.0 million, or 18.5 percent, in 2024 compared to 2023.

— Management fee revenue – administrative services increased $4.7 million, or 7.4% in 2024 compared to 2023.

— Cost of operations – policy issuance and renewal services

— Commissions increased $252.9 million in 2024 compared to 2023 primarily driven by the growth in direct and affiliated assumed written premium.

— Non-commission expense increased $47.9 million in 2024 compared to 2023. Underwriting and policy processing expense increased $18.5 million primarily due to increased underwriting report and personnel costs. Information technology costs decreased $1.3 million primarily due to a decrease in professional fees and personnel costs, partially offset by an increase in hardware and software costs. Sales and advertising expense increased $7.6 million primarily due to increased agent-related costs and costs from community development initiatives. Customer service costs increased $8.7 million primarily due to increased personnel costs and credit card processing fees. Administrative and other costs increased $14.5 million primarily due to increased personnel costs, charitable contributions and professional fees. Personnel costs in 2024 were impacted by increased compensation.

— The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $806.3 million in 2024 and $737.1 million in 2023, but had no net impact on operating income.

Income from investments before taxes totaled $69.3 million in 2024 compared to $29.0 million in 2023. Net investment income was $70.2 million in 2024 compared to $44.6 million in 2023. Net investment income included limited partnership earnings of $2.0 million in 2024 compared to losses of $11.3 million in 2023. Net realized and unrealized gains on investments were $3.2 million in 2024 compared to losses of $5.8 million in 2023. Net impairment losses recognized in earnings were $4.1 million in 2024 compared to $9.8 million in 2023.

4Q 2024 Highlights

Operating income before taxes increased $40.2 million, or 31.7 percent, in the fourth quarter of 2024 compared to the fourth quarter of 2023.

— Management fee revenue – policy issuance and renewal services increased $96.7 million, or 16.1 percent, in the fourth quarter of 2024 compared to the fourth quarter of 2023.

— Management fee revenue – administrative services increased $0.5 million, or 3.1 percent in the fourth quarter of 2024 compared to the fourth quarter of 2023.

— Cost of operations – policy issuance and renewal services

— Commissions increased $50.8 million in the fourth quarter of 2024 compared to the fourth quarter of 2023 primarily driven by the growth in direct and affiliated assumed written premium.

— Non-commission expense increased $6.2 million in the fourth quarter of 2024 compared to the fourth quarter of 2023. Underwriting and policy processing expense increased $4.8 million primarily due to increased underwriting report and personnel costs. Information technology costs increased $2.6 million primarily due to increased hardware and software costs, partially offset by a decrease in professional fees. Sales and advertising expense decreased $2.0 million primarily due to decreased agent-related and advertising costs. Customer service costs increased $2.0 million primarily due to increased personnel costs and credit card processing fees. Administrative and other costs decreased $1.2 million primarily due to decreased personnel costs.

— The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $202.0 million in the fourth quarter of 2024 and $192.7 million in the fourth quarter of 2023, but had no net impact on operating income.

Income from investments before taxes totaled $20.8 million in the fourth quarter of 2024 compared to $9.8 million in the fourth quarter of 2023. Net investment income was $20.9 million in the fourth quarter of 2024 compared to $14.2 million in the fourth quarter of 2023. Net investment income included limited partnership earnings of $1.8 million in the fourth quarter of 2024 compared to losses of $0.6 million in the fourth quarter of 2023. Net realized and unrealized gains on investments were $0.2 million in the fourth quarter of 2024 compared to $3.4 million in the fourth quarter of 2023. Net impairment losses recognized in earnings were $0.4 million in the fourth quarter of 2024 compared to $7.8 million in the fourth quarter of 2023.

Webcast Information

Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on February 28, 2025. 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 informationare available on ERIE's website atwww.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 impacting the timing of premium rates charged for policies;

— 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, data or network 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 CompanyConsolidated Statements of Operations(dollars in thousands, except per share data) Three months ended Twelve months ended December 31, December 31, 2024 2023 2024 2023 (Unaudited)Operating revenueManagement fee revenue – policy issuance and renewal services $ 698,340 $ 601,595 $ 2,894,074 $ 2,442,073Management fee revenue – administrative services 17,216 16,693 68,355 63,669Administrative services reimbursement revenue 201,987 192,728 806,336 737,139Service agreement revenue 6,547 6,651 26,350 26,059Total operating revenue 924,090 817,667 3,795,115 3,268,940Operating expensesCost of operations – policy issuance and renewal services 554,793 497,855 2,312,324 2,011,545Cost of operations – administrative services 201,987 192,728 806,336 737,139Total operating expenses 756,780 690,583 3,118,660 2,748,684Operating income 167,310 127,084 676,455 520,256Investment incomeNet investment income 20,920 14,212 70,155 44,572Net realized and unrealized investment gains (losses) 246 3,408 3,229 (5,838)Net impairment losses recognized in earnings (361) (7,849) (4,124) (9,766)Total investment income 20,805 9,771 69,260 28,968Other income 3,693 3,069 11,564 12,712Income before income taxes 191,808 139,924 757,279 561,936Income tax expense 39,779 28,996 156,965 115,875Net income $ 152,029 $ 110,928 $ 600,314 $ 446,061Net income per shareClassA common stock – basic $ 3.26 $ 2.38 $ 12.89 $ 9.58ClassA common stock – diluted $ 2.91 $ 2.12 $ 11.48 $ 8.53ClassB common stock – basic $ 490 $ 357 $ 1,934 $ 1,437ClassB common stock – diluted $ 490 $ 357 $ 1,933 $ 1,437Weighted average shares outstanding – BasicClassA common stock 46,189,060 46,189,041 46,189,044 46,188,981ClassB common stock 2,542 2,542 2,542 2,542Weighted average shares outstanding – DilutedClassA common stock 52,310,894 52,301,676 52,306,266 52,299,411ClassB common stock 2,542 2,542 2,542 2,542Dividends declared per shareClassA common stock $ 1.365 $ 1.275 $ 5.190 $ 4.845ClassB common stock $ 204.75 $ 191.25 $ 778.50 $ 726.75Erie Indemnity CompanyConsolidated Statements of Financial Position(in thousands) December 31, 2024 December 31, 2023AssetsCurrent assets:Cash and cash equivalents (includes restricted cash of $23,559 and $12,542, respectively) $ 298,397 $ 144,055Available-for-sale securities 44,604 82,017Receivables from Erie Insurance Exchange and affiliates, net 707,060 625,338Prepaid expenses and other current assets, net 83,902 69,321Accrued investment income 11,069 9,458Total current assets 1,145,032 930,189Available-for-sale securities, net 991,726 879,224Available-for-sale securities lent 7,285 -Equity securities 85,891 84,253Fixed assets, net 513,494 442,610Agent loans, net 80,597 58,434Defined benefit pension plan 21,311 34,320Other assets, net 43,278 42,934Total assets $ 2,888,614 $ 2,471,964Liabilities and shareholders' equityCurrent liabilities:Commissions payable $ 408,309 $ 353,709Agent incentive compensation 75,458 68,077Accounts payable and accrued liabilities 190,028 175,622Dividends payable 63,569 59,377Contract liability 42,761 41,210Deferred executive compensation 14,874 10,982Securities lending payable 7,513 -Total current liabilities 802,512 708,977Defined benefit pension plan 28,070 26,260Contract liability 21,170 19,910Deferred executive compensation 19,721 20,936Deferred income taxes, net 6,418 11,481Other long-term liabilities 23,465 21,565Total liabilities 901,356 809,129Shareholders' equity 1,987,258 1,662,835Total liabilities and shareholders' equity $ 2,888,614 $ 2,471,964

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SOURCE Erie Indemnity Company

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