Erie Indemnity Reports Second Quarter 2025 Results

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Erie Indemnity Company (NASDAQ: ERIE) reported strong financial results for Q2 2025, with net income reaching $174.7 million ($3.34 per diluted share), up from $163.9 million ($3.13 per diluted share) in Q2 2024. For the first half of 2025, net income was $313.1 million ($5.99 per diluted share), compared to $288.5 million in 1H 2024.

Operating income before taxes increased 4.7% to $199.2 million in Q2 2025. Management fee revenue from policy issuance and renewal services grew 8.3% to $823.9 million. Investment income improved significantly to $19.6 million from $13.8 million in Q2 2024, while commission expenses rose due to premium growth and increased agent incentives.

Insights

Financial Analyst

Erie Indemnity delivered solid Q2 2025 results with 6.7% EPS growth, driven by management fee increases and investment income improvements.

Erie Indemnity's Q2 2025 earnings show steady growth across key financial metrics. Net income increased to $174.7 million ($3.34 per diluted share), representing a 6.7% improvement over Q2 2024's $163.9 million ($3.13 per share).

The core management fee revenue from policy issuance and renewal services grew 8.3% to $823.9 million, outpacing the 4.7% growth in operating income. This revenue expansion reflects healthy premium growth in Erie's insurance business, indicating successful policy retention and pricing strategies.

Operating expenses increased as well, with commissions rising $43.5 million, primarily due to premium growth. Non-commission expenses grew by $10.6 million, with information technology costs up $7.1 million due to increased personnel costs and reduced capitalization of tech initiative expenses.

Investment income showed significant improvement, reaching $19.6 million in Q2 2025 compared to $13.8 million in Q2 2024 - a 42% increase. Net investment income rose to $20 million from $16 million, while the company posted small realized and unrealized gains of $0.5 million versus losses of $1.8 million in the year-ago period.

The balance sheet remains robust with $358 million in cash and cash equivalents as of June 30, 2025, up from $298.4 million at the end of 2024. Total assets increased to $3.13 billion from $2.89 billion.

Erie maintained its shareholder returns, declaring a quarterly dividend of $1.365 per Class A share, a 7.1% increase from $1.275 in Q2 2024, demonstrating management's confidence in continued financial stability.

Net Income per Diluted Share was $3.34 for the Quarter and $5.99 for the Six Months of 2025

ERIE, Pa., Aug. 7, 2025 /PRNewswire/ -- Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter and six months ending June 30, 2025.  Net income was $174.7 million, or $3.34 per diluted share, in the second quarter of 2025, compared to $163.9 million, or $3.13 per diluted share, in the second quarter of 2024.  Net income was $313.1 million, or $5.99 per diluted share, in the first six months of 2025, compared to $288.5 million, or $5.52 per diluted share, in the first six months of 2024.

2Q and First Half 2025
(in thousands)	2Q'25	2Q'24	1H'25	1H'24
Operating income	$      199,173	$      190,208	$      350,549	$      329,020
Investment income	19,600	13,827	39,136	28,906
Other income	1,974	3,292	5,808	6,703
Income before income taxes	220,747	207,327	395,493	364,629
Income tax expense	46,062	43,424	82,391	76,174
Net income	$      174,685	$      163,903	$      313,102	$      288,455
2Q 2025 Highlights

Operating income before taxes increased $9.0 million, or 4.7 percent, in the second quarter of 2025 compared to the second quarter of 2024.

• Management fee revenue - policy issuance and renewal services increased $63.0 million, or 8.3 percent, in the second quarter of 2025 compared to the second quarter of 2024.
• Management fee revenue - administrative services increased $1.2 million, or 7.3 percent, in the second quarter of 2025 compared to the second quarter of 2024.
• Cost of operations - policy issuance and renewal services
  • Commissions increased $43.5 million in the second quarter of 2025, compared to the second quarter of 2024, primarily driven by the growth in direct and affiliated assumed written premium and, to a lesser extent, an increase in agent incentive compensation.
  • Non-commission expense increased $10.6 million in the second quarter of 2025 compared to the second quarter of 2024. Information technology costs increased $7.1 million primarily due to an increase in personnel costs and a decrease in capitalized professional fees related to technology initiatives. Sales and advertising expense increased $2.8 million primarily due to increased agent-related and advertising costs. Personnel costs were impacted by increased healthcare costs compared to 2024.

Income from investments before taxes totaled $19.6 million in the second quarter of 2025 compared to $13.8 million in the second quarter of 2024.  Net investment income was $20.0 million in the second quarter of 2025 compared to $16.0 million in the second quarter of 2024.  Net realized and unrealized gains on investments were $0.5 million in the second quarter of 2025 compared to losses of $1.8 million in the second quarter of 2024. 

First Half 2025 Highlights

Operating income before taxes increased $21.5 million, or 6.5 percent, in the first six months of 2025 compared to the first six months of 2024.

• Management fee revenue - policy issuance and renewal services increased $152.3 million, or 10.7 percent, in the first six months of 2025 compared to the first six months of 2024.
• Management fee revenue - administrative services increased $2.0 million, or 5.8 percent, in the first six months of 2025 compared to the first six months of 2024.
• Cost of operations - policy issuance and renewal services
  • Commissions increased $104.6 million in the first six months of 2025 compared to the first six months of 2024, primarily driven by the growth in direct and affiliated assumed written premium and, to a lesser extent, an increase in agent incentive compensation.
  • Non-commission expense increased $26.9 million for the first six months of compared to the first six months of 2024. Underwriting and policy processing expense increased $4.3 million primarily due to increased personnel costs and printing and postage costs. Information technology costs increased $18.4 million primarily due to an increase in personnel costs and hardware and software costs and a decrease in capitalized professional fees related to technology initiatives. Customer service costs increased $2.7 million primarily due to increased personnel costs. Sales and advertising expense increased $3.0 million primarily due to increased advertising and personnel costs. Personnel costs were impacted by increased healthcare costs compared to 2024.

Income from investments before taxes totaled $39.1 million in the first six months of 2025 compared to $28.9 million in the first six months of 2024.  Net investment income was $40.0 million in the first six months of 2025 compared to $31.9 million in the first six months of 2024.  Net investment income included $1.2 million of limited partnership earnings in the first six months of 2025 compared to $0.3 million in the first six months of 2024.  Net realized and unrealized gains were $1.0 million in the first six months of 2025 compared to $0.1 million in the first six months of 2024.  Net impairment losses recognized in earnings were $1.8 million in the first six months of 2025 compared to $3.1 million in the first six months of 2024.

Webcast Information

Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on August 8, 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 11^th largest homeowners insurer, 12^th largest automobile insurer and 10^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 16^th largest property/casualty insurer in the United States based on net premiums 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 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, economic or social inflation, and changes in tariff policies;
  • 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 Company Consolidated Statements of Operations (dollars in thousands, except per share data)
		Three months ended June 30,				Six months ended June 30,
		2025		2024		2025		2024
		(Unaudited)				(Unaudited)
Operating revenue
Management fee revenue - policy issuance and renewal services		$        823,853		$        760,886		$       1,578,902		$       1,426,572
Management fee revenue - administrative services		18,296		17,051		35,941		33,985
Administrative services reimbursement revenue		212,644		206,028		422,917		397,595
Service agreement revenue		5,304		6,473		11,736		12,987
Total operating revenue		1,060,097		990,438		2,049,496		1,871,139
Operating expenses
Cost of operations - policy issuance and renewal services		648,280		594,202		1,276,030		1,144,524
Cost of operations - administrative services		212,644		206,028		422,917		397,595
Total operating expenses		860,924		800,230		1,698,947		1,542,119
Operating income		199,173		190,208		350,549		329,020
Investment income
Net investment income		20,030		16,010		39,978		31,913
Net realized and unrealized investment gains (losses)		479		(1,795)		981		58
Net impairment losses recognized in earnings		(909)		(388)		(1,823)		(3,065)
Total investment income		19,600		13,827		39,136		28,906
Other income		1,974		3,292		5,808		6,703
Income before income taxes		220,747		207,327		395,493		364,629
Income tax expense		46,062		43,424		82,391		76,174
Net income		$        174,685		$        163,903		$          313,102		$          288,455
Net income per share
Class A common stock – basic		$              3.75		$              3.52		$                6.72		$                6.19
Class A common stock – diluted		$              3.34		$              3.13		$                5.99		$                5.52
Class B common stock – basic and diluted		$               563		$               528		$              1,008		$                 929
Weighted average shares outstanding – Basic
Class A common stock		46,189,063		46,189,042		46,188,984		46,189,028
Class B common stock		2,542		2,542		2,542		2,542
Weighted average shares outstanding – Diluted
Class A common stock		52,304,407		52,305,299		52,304,397		52,303,551
Class B common stock		2,542		2,542		2,542		2,542
Dividends declared per share
Class A common stock		$            1.365		$            1.275		$                2.73		$                2.55
Class B common stock		$          204.75		$          191.25		$            409.50		$            382.50

 

Erie Indemnity Company Consolidated Statements of Financial Position (in thousands)
		June 30, 2025		December 31, 2024
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents (includes restricted cash of $25,923 and $23,559, respectively)		$        358,027		$        298,397
Available-for-sale securities		59,162		44,604
Receivables from Erie Insurance Exchange and affiliates, net		769,148		707,060
Prepaid expenses and other current assets, net		71,133		83,902
Accrued investment income		11,998		11,069
Total current assets		1,269,468		1,145,032
Available-for-sale securities, net		1,048,584		991,726
Equity securities		68,095		85,891
Available-for-sale and equity securities lent		35,535		7,285
Fixed assets, net		519,834		513,494
Agent loans, net		85,027		80,597
Defined benefit pension plan		54,650		21,311
Other assets, net		47,021		43,278
Total assets		$     3,128,214		$     2,888,614
Liabilities and shareholders' equity
Current liabilities:
Commissions payable		$        446,424		$        408,309
Agent incentive compensation		70,101		75,458
Accounts payable and accrued liabilities		193,032		190,028
Dividends payable		63,569		63,569
Contract liability		46,213		42,761
Deferred executive compensation		7,181		14,874
Securities lending payable		35,159		7,513
Total current liabilities		861,679		802,512
Defined benefit pension plan		26,820		28,070
Contract liability		22,594		21,170
Deferred executive compensation		18,471		19,721
Deferred income taxes, net		476		6,418
Other long-term liabilities		13,629		23,465
Total liabilities		943,669		901,356
Shareholders' equity		2,184,545		1,987,258
Total liabilities and shareholders' equity		$     3,128,214		$     2,888,614

 

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SOURCE Erie Indemnity Company