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Erie Indemnity Reports First Quarter 2024 Results

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Erie Indemnity Company reported strong financial results for the first quarter of 2024, with a net income of $124.6 million and earnings per diluted share of $2.38. Operating income increased by 25.6%, while management fee revenue saw significant growth. The company's investment income improved, leading to a positive quarter compared to the same period in 2023.
La Erie Indemnity Company ha riportato ottimi risultati finanziari per il primo trimestre del 2024, con un reddito netto di 124,6 milioni di dollari e un utile per azione diluita di 2,38 dollari. Il reddito operativo è aumentato del 25,6%, mentre le entrate da commissioni di gestione hanno registrato una crescita significativa. I ricavi degli investimenti della compagnia sono migliorati, portando a un trimestre positivo rispetto allo stesso periodo del 2023.
Erie Indemnity Company reportó resultados financieros sólidos para el primer trimestre de 2024, con un ingreso neto de 124,6 millones de dólares y ganancias por acción diluida de 2,38 dólares. El ingreso operativo aumentó un 25,6%, mientras que los ingresos por tarifas de gestión experimentaron un crecimiento significativo. Los ingresos por inversiones de la empresa mejoraron, llevando a un trimestre positivo en comparación con el mismo período de 2023.
에리 인더미티 컴퍼니는 2024년 첫 분기에 강력한 재무 결과를 보고했는데, 순수익은 1억 2,460만 달러이며 희석 주당 이익은 2.38달러였습니다. 운영 소득은 25.6% 증가했으며 관리 수수료 수익은 크게 성장했습니다. 회사의 투자 수입이 개선되어 2023년 같은 기간에 비해 긍정적인 분기가 되었습니다.
La société Erie Indemnity a annoncé d'excellents résultats financiers pour le premier trimestre de 2024, avec un bénéfice net de 124,6 millions de dollars et un bénéfice par action diluée de 2,38 dollars. Le revenu d'exploitation a augmenté de 25,6%, tandis que les revenus des frais de gestion ont connu une croissance significative. Les revenus d'investissement de l'entreprise se sont améliorés, conduisant à un trimestre positif par rapport à la même période en 2023.
Die Erie Indemnity Company verzeichnete starke finanzielle Ergebnisse für das erste Quartal 2024, mit einem Nettogewinn von 124,6 Millionen Dollar und einem Gewinn pro verwässerte Aktie von 2,38 Dollar. Das Betriebsergebnis stieg um 25,6%, während die Einnahmen aus Verwaltungsgebühren deutlich wuchsen. Das Investitionseinkommen der Gesellschaft verbesserte sich, was zu einem positiven Quartal im Vergleich zum selben Zeitraum im Jahr 2023 führte.
Positive
  • Operating income increased by 25.6% in the first quarter of 2024 compared to the same period in 2023.
  • Management fee revenue for policy issuance and renewal services increased by 19.3% in the first quarter of 2024.
  • Investment income improved, with net investment income reaching $15.9 million in the first quarter of 2024.
  • Erie Insurance Group 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.
Negative
  • None.

Insights

Erie Indemnity's Q1 2024 results exhibit a notable increase in net income, jumping to $124.6 million from $86.2 million year-over-year. A sharp rise of 25.6% in operating income before taxes is a clear indicator of operational efficiency. The substantial 19.3% surge in management fee revenue reflects the company's growing policy issuance and renewal services, a vital stream of recurrent revenue. However, careful attention to the 11.5% increase in administrative services revenue is crucial, as it may signal scaling operations. The dynamic shifts in investment income—turning from a loss to a gain of $15.1 million—and the shift from limited partnership losses to earnings showcase a notable improvement in investment strategy or favorable market conditions. These factors, combined with a healthy underwriting process indicated by increased commissions and policy processing costs, bode well for stock stability and potential investor confidence.

Key metrics such as the growth in direct and affiliated assumed written premium, alongside increased agent incentive compensation, hint at Erie's proactive market engagement and competitive positioning within the insurance sector. The company's management adeptly contained information technology costs, possibly through strategic outsourcing or capitalizing on in-house technology developments. In contrast, increased personnel and travel expenses may reflect a post-pandemic normalization of business operations. It's also important to note Erie's A.M. Best A+ rating, which reinforces its reliability and potential attractiveness to new policyholders. With its solid positioning as a top insurer based on direct premiums written, Erie's operational growth could indicate a potential upside for long-term investors, provided it sustains its profitability and effectively manages operational costs.

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

 

 

Cision 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

FAQ

What was Erie Indemnity Company's net income for the first quarter of 2024?

Erie Indemnity Company reported a net income of $124.6 million for the first quarter of 2024.

What was the earnings per diluted share for Erie Indemnity Company in the first quarter of 2024?

Erie Indemnity Company reported earnings per diluted share of $2.38 for the first quarter of 2024.

How did Erie Indemnity Company's operating income change in the first quarter of 2024 compared to the same period in 2023?

Erie Indemnity Company's operating income increased by 25.6% in the first quarter of 2024 compared to the same period in 2023.

Where is Erie Insurance Group based?

Erie Insurance Group is based in Erie, Pennsylvania.

What is Erie Insurance Group's rating by A.M. Best Company?

Erie Insurance Group is rated A+ (Superior) by A.M. Best Company.

Erie Indemnity Co

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