| Metric [USD Million] | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Management Fee Revenue - Policy Issuance and Renewal Services | **558.1**  **[0000922621-23-000010_ex-99103312023.htm:0]**  | **633.3**  **[0000922621-23-000016_ex-99106302023.htm:0]**  | **649.0**  **[0000922621-23-000021_ex-99109302023.htm:0]**  | N/A | **665.7**  **[0000922621-24-000009_ex-99103312024.htm:0]**  | **760.9**  **[0000922621-24-000018_ex-99106302024.htm:0]**  | **769.2**  **[0000922621-24-000022_ex-99109302024.htm:0]**  | N/A |
| Management Fee Revenue - Administrative Services | **15.2**  **[0000922621-23-000010_ex-99103312023.htm:0]**  | **15.6**  **[0000922621-23-000016_ex-99106302023.htm:0]**  | **16.2**  **[0000922621-23-000021_ex-99109302023.htm:0]**  | N/A | **16.9**  **[0000922621-24-000009_ex-99103312024.htm:0]**  | **17.1**  **[0000922621-24-000018_ex-99106302024.htm:0]**  | **17.2**  **[0000922621-24-000022_ex-99109302024.htm:0]**  | N/A |
| Administrative Services Reimbursement Revenue | **172.8**  **[0000922621-23-000010_ex-99103312023.htm:0]**  | **184.5**  **[0000922621-23-000016_ex-99106302023.htm:0]**  | **187.1**  **[0000922621-23-000021_ex-99109302023.htm:0]**  | N/A | **191.6**  **[0000922621-24-000009_ex-99103312024.htm:0]**  | **206.0**  **[0000922621-24-000018_ex-99106302024.htm:0]**  | **206.8**  **[0000922621-24-000022_ex-99109302024.htm:0]**  | N/A |
| Service Agreement Revenue | **6.4**  **[0000922621-23-000010_ex-99103312023.htm:0]**  | N/A | **6.6**  **[0000922621-23-000021_ex-99109302023.htm:0]**  | N/A | **6.5**  **[0000922621-24-000009_ex-99103312024.htm:0]**  | **6.5**  **[0000922621-24-000018_ex-99106302024.htm:0]**  | **6.8**  **[0000922621-24-000022_ex-99109302024.htm:0]**  | N/A |
| Total Operating Revenue | **752.5**  **[0000922621-23-000010_ex-99103312023.htm:0]**  | **839.9**  **[0000922621-23-000016_ex-99106302023.htm:0]**  | **858.9**  **[0000922621-23-000021_ex-99109302023.htm:0]**  | N/A | **880.7**  **[0000922621-24-000009_ex-99103312024.htm:0]**  | **990.4**  **[0000922621-24-000018_ex-99106302024.htm:0]**  | **999.9**  **[0000922621-24-000022_ex-99109302024.htm:0]**  | N/A |

9e28ea3beacc1efb32d1f7fae0421130a65f05a06177d30b93c9c06cf595aaf2

Erie Indemnity Company primarily serves as the attorney-in-fact for the subscribers at the Erie Insurance Exchange, a reciprocal insurer specializing in property and casualty insurance. The company is responsible for policy issuance, renewal services, and administrative tasks, including claims handling and investment management for the Exchange and its subsidiaries **[0000922621-24-000006_erie-20231231.htm:37]** **[0000922621-24-000010_erie-20240331.htm:6]**. Erie Indemnity's revenue is closely linked to the Exchange's performance, as it earns management fees based on a percentage of the premiums written by the Exchange, with a set rate of 25% for 2023 and 2024 **[0001193125-24-074594_d942821ddef14c.htm:4]** **[0000922621-24-000006_erie-20231231.htm:37]**. The Exchange's insurance offerings are divided into personal and commercial lines, with personal lines making up the majority of the business **[0000922621-24-000010_erie-20240331.htm:26]** **[0000922621-24-000006_erie-20231231.htm:5]** **[0000922621-24-000006_erie-20231231.htm:38]**.

1. **Personal Lines** - Comprises private passenger automobile and homeowners insurance, accounting for the majority of the direct and affiliated assumed written premiums.
2. **Commercial Lines** - Includes commercial multi-peril, commercial automobile, and workers compensation insurance, contributing to the remaining portion of the business.

4168e3a2ceb79178e001e8966fecb247cabae5ea7a37d401a1bb14b736c9c35c

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

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1. Given that the Exchange's combined ratio remains high at 113.7% in Q3 despite significant rate increases, what specific underwriting measures are you implementing to improve profitability, and when do you anticipate these efforts will reflect in a lower combined ratio?
2. With the Exchange's direct written premiums growing over 18% due to rate increases but policies in force growing only 6%, how are you addressing the risk of potential policyholder pushback or diminished retention in the face of rising premiums?
3. Non-commission expenses have risen by 13.8% in Q3, driven by higher personnel costs and technology investments; can you elaborate on these increases and explain how they will enhance efficiency and profitability moving forward?
4. Considering that your management fee revenue is heavily dependent on the Exchange's premium growth amidst its profitability challenges, how sustainable is your current revenue growth if loss cost pressures persist?
5. Since it takes up to 24 months for rate increases to fully impact the combined ratio due to your 12-month policies, what strategies are you employing to mitigate this lag effect on profitability in the near term?

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Management Fee Revenue - Administrative Services (USD)

Administrative Services Reimbursement Revenue (USD)

Investment Management Services Revenue (USD)

Management Fee Revenue - Policy Issuance and Renewal Services (USD)

Service Agreement Revenue (USD)

Management Fee Rate (%)

Policy Retention Ratio (%)

Year-over-Year Policies in Force (%)

Year-over-Year Average Premium per Policy (%)

Premiums Generated from New Business (USD)

Premiums Generated from Renewal Business (USD)

2fedc53b433926bed8facadec9af9d984ec85320f66823825fcf2eb2e89de988

Total Revenue (USD, thousands)

Cost of Goods Sold (COGS) (USD, thousands)

Selling, General, and Administrative Expenses (USD, thousands)

Research and Development (R&D) (USD, thousands)

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Interest Expense (USD, thousands)

Operating Income (EBIT) (USD, thousands)

Net Income (USD, thousands)

Earnings Per Share (EPS) - Basic (USD)

Earnings Per Share (EPS) - Diluted (USD)

ff7ef8b62606e6933c0f8da727f41833a50afcd274480a325474de844b8010eb

| Name                  | Position                                                | Start Date       | Short Bio                                                                                                                                                                                                 |
|-----------------------|---------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Timothy G. NeCastro   | President & Chief Executive Officer                     | August 2016      | Timothy G. NeCastro has been serving as the President and Chief Executive Officer of Erie Indemnity Company since August 2016. He is also a director at several Erie insurance companies  **[0000922621-24-000006_erie-20231231.htm:108]** .             |
| Brian W. Bolash       | Executive Vice President, Secretary, and General Counsel| January 2022     | Brian W. Bolash has been serving in his current role since January 2022. He previously held various senior positions at Erie Indemnity Company since 2016  **[0000922621-24-000006_erie-20231231.htm:108]** .                                           |
| Sean D. Dugan         | Executive Vice President, Human Resources and Corporate Services | January 2023     | Sean D. Dugan has been the Executive Vice President, Human Resources and Corporate Services since January 2023. He has held various HR roles at Erie since 2018  **[0000922621-24-000006_erie-20231231.htm:108]** .                                     |
| Lorianne Feltz        | Executive Vice President, Claims & Customer Service     | November 2016    | Lorianne Feltz has served as the Executive Vice President, Claims & Customer Service since November 2016, having been with the company for over seven years in this role  **[0000922621-24-000006_erie-20231231.htm:108]** .                           |
| Julie M. Pelkowski    | Executive Vice President and Chief Financial Officer    | May 1, 2023      | Julie M. Pelkowski has been serving as the Executive Vice President and Chief Financial Officer since May 1, 2023. She has held various financial roles at Erie since 2016  **[0000922621-24-000006_erie-20231231.htm:108]** **[0000922621-23-000007_erie-20221231.htm:105]** .                       |
| Douglas E. Smith      | Executive Vice President, Sales & Products              | November 2016    | Douglas E. Smith has been serving as the Executive Vice President, Sales & Products since November 2016, with extensive experience in sales and product management at Erie  **[0000922621-24-000006_erie-20231231.htm:108]** .                          |
| Parthasarathy Srinivasa| Executive Vice President and Chief Information Officer | April 2022       | Parthasarathy Srinivasa joined Erie as the Executive Vice President and Chief Information Officer in April 2022. He previously held senior roles at Verisk Analytics and Safe Auto Insurance  **[0000922621-24-000006_erie-20231231.htm:108]** **[0000922621-23-000007_erie-20221231.htm:105]** .    |

fbbc641e2f4f9afd11b550954f37ef84ad94b3e18e151afe1cded792107b968a

| Program Details           | Program 1          |
|---------------------------|--------------------|
| Approval Date             | **2011**  **[0000922621-24-000023_erie-20240930.htm:54]** **[0000922621-24-000023_erie-20240930.htm:25]**     |
| End Date/Duration         | **No time limitation**  **[0000922621-24-000023_erie-20240930.htm:54]** **[0000922621-24-000023_erie-20240930.htm:25]**  |
| Total additional amount   | **$150 million**  **[0000922621-24-000023_erie-20240930.htm:54]** **[0000922621-24-000023_erie-20240930.htm:25]**  |
| Remaining authorization   | **$17.8 million**  **[0000922621-24-000023_erie-20240930.htm:54]** **[0000922621-24-000023_erie-20240930.htm:25]**  |
| Details                   | Repurchases conducted in the open market or through privately negotiated transactions.  **[0000922621-23-000017_erie-20230630.htm:46]** **[0000922621-24-000019_erie-20240630.htm:52]** **[0000922621-24-000010_erie-20240331.htm:44]** **[0000922621-23-000022_erie-20230930.htm:47]** **[0000922621-23-000007_erie-20221231.htm:27]** **[0000922621-24-000023_erie-20240930.htm:54]** **[0000922621-23-000017_erie-20230630.htm:19]** **[0000922621-23-000022_erie-20230930.htm:20]** **[0000922621-24-000006_erie-20231231.htm:97]** **[0000922621-24-000006_erie-20231231.htm:32]**  |

07c2a32a49c5bc697c26269a99cb97dcd636ad5c396e17d0aba47b6783e4898c

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 2003  **[0000922621-24-000006_erie-20231231.htm:64]**    | Present  | Current auditor   |

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23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $999.886 million (+16% YoY)  **[0000922621-24-000023_erie-20240930.htm:2]** **[0000922621-23-000022_erie-20230930.htm:2]** **[0000922621-23-000022_erie-20230930.htm:5]** **[0000922621-23-000022_erie-20230930.htm:4]**   
- Management Fee Revenue: $17.154 million (+6% YoY)  **[0000922621-24-000023_erie-20240930.htm:2]** **[0000922621-24-000023_erie-20240930.htm:14]** **[0000922621-23-000022_erie-20230930.htm:12]**   
- Administrative Services Reimbursement Revenue: $206.754 million (+10% YoY)  **[0000922621-24-000023_erie-20240930.htm:2]** **[0000922621-24-000023_erie-20240930.htm:14]** **[0000922621-23-000022_erie-20230930.htm:12]**   
- Cost of Goods Sold: $819.761 million (+15% YoY)  **[0000922621-24-000023_erie-20240930.htm:2]** **[0000922621-23-000022_erie-20230930.htm:2]** **[0000922621-23-000022_erie-20230930.htm:5]** **[0000922621-23-000022_erie-20230930.htm:4]**   
- **Operating Income**: $180.125 million (+21% YoY)  **[0000922621-24-000023_erie-20240930.htm:2]** **[0000922621-23-000022_erie-20230930.htm:2]** **[0000922621-23-000022_erie-20230930.htm:5]** **[0000922621-23-000022_erie-20230930.htm:4]**   
- **Net Income**: $159.83 million (+22% YoY)  **[0000922621-24-000023_erie-20240930.htm:2]** **[0000922621-23-000022_erie-20230930.htm:2]** **[0000922621-23-000022_erie-20230930.htm:5]** **[0000922621-23-000022_erie-20230930.htm:4]**   
- Earnings Per Share (Basic): $3.44 (+22% YoY)  **[0000922621-24-000023_erie-20240930.htm:2]** **[0000922621-23-000022_erie-20230930.htm:2]** **[0000922621-23-000022_erie-20230930.htm:5]** **[0000922621-23-000022_erie-20230930.htm:4]**   
- Dividend Payments: $59.378 thousand (+7% YoY)  **[0000922621-24-000023_erie-20240930.htm:6]** **[0000922621-23-000022_erie-20230930.htm:6]**   

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1. **Information Unavailable**  
   **Q:** N/A  
   **A:** The documents do not contain information regarding ERIE's earnings call Q&A session.

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- Despite improvements, the Exchange's combined ratio remained high at **115.9%** in Q2 2024, indicating continued underwriting losses.  **[ERIE_3394752_2]**
- Non-commission expenses increased by **6%** or **$18 million** in the first half of 2024 compared to the same period in 2023, driven by higher underwriting, policy processing, administrative, sales, and advertising expenses.  **[ERIE_3394752_3]**
- Commission expenses surged by nearly **21%** in the first half of 2024 compared to the same period in 2023 due to substantial growth in direct written premiums, potentially impacting profitability margins.  **[ERIE_3394752_2]**

b461b666e1d81901fb235f0abd04951b4ec33a9f0528932e55615eb86bc5e4dd

- Erie Indemnity Company's combined ratio, while improving, remains above 100%, at **106%** in the first quarter of 2024, indicating underwriting losses.  **[ERIE_3381210_2]**
- The company's non-commission expenses increased by **$14 million**, driven by increased personnel and agent-related costs.  **[ERIE_3381210_2]**
- Significant investments in technology modernization could lead to increased expenses in the short term, potentially impacting profitability.  **[ERIE_3381210_3]**

e1a8b956a7f4a53339a09d75fd6122e29a9daba6a83fc97e399eb0b22603d419

- **Erie Indemnity Company continues to experience strong operating performance**, driven by higher management fee revenue resulting from the Exchange's **direct written premium growth of over 18%** in Q3 2024 and **over 19% year-to-date**.  **[ERIE_3405428_2]**
- The Exchange's **policies in force grew 6%** despite rate increases, maintaining a strong policyholder retention rate of **90.8%**.  **[ERIE_3405428_2]**
- The company was added to the **S&P 500 Index** this quarter, reflecting its solid performance and market recognition.  **[ERIE_3405428_2]**

3e1b48edd7bfe1183f0559598751a6f790bf1fc046a4c1aea48b132d685f0ae7

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- **Combined ratio increased to 119.1% at year-end 2023**, which is **3 points higher than year-end 2022**, indicating worsening underwriting profitability.  **[ERIE_3375316_1]**
- **Weather-related claims rose to nearly 70,000 in 2023**, compared to **roughly 50,000 in 2022**, contributing to higher losses.  **[ERIE_3375316_1]**
- **Policyholder surplus decreased**, ending at **$9.3 billion at December 2023**, which was **lower than where we started the year**, indicating a weakened financial position.  **[ERIE_3375316_2]**

67bc487840689223b9607037fc80de0862ab0ddd79da1e64014ec4909bfa1b0b

- **Improved Profitability and Combined Ratio**: The combined ratio improved significantly to **106%** in Q1 2024 from **122.7%** in Q1 2023, indicating better underwriting performance and profitability.  **[ERIE_3381210_2]**
- **Strong Premium Growth and Retention**: Direct and assumed written premium of the Exchange increased by **19%**, with new business premium growing **32.4%** compared to the same period last year. Policy retention remained solid at **91.2%**, demonstrating strong customer loyalty.  **[ERIE_3381210_2]**
- **Increasing Operating Income and Shareholder Returns**: Operating income increased over **25%** to nearly **$139 million** in Q1 2024. Additionally, the company paid over **$59 million** in dividends to shareholders in the first three months of 2024, reflecting strong financial performance and commitment to shareholder returns.  **[ERIE_3381210_2]**

75b2787385728d70135681a0f9d7b68a30eceb8eace5db2df9523801d2a0e8ee

- **Exceptional Growth in Direct Written Premiums**: Direct written premium grew **20%** in Q2 2024 compared to Q2 2023, driven by steady new policy growth and solid retention, with year-to-date growth also at **20%**.  **[ERIE_3394752_2]**
- **Significant Increase in Net Income and Operating Income**: Net income increased to **$164 million** or **$3.13** per diluted share in Q2 2024 from $118 million or $2.25 per diluted share in Q2 2023. Operating income increased nearly **42%** to over **$190 million**.  **[ERIE_3394752_2]**
- **Improved Profitability Trends**: The Exchange's combined ratio improved to **115.9%** in Q2 2024 from 118.9% in Q2 2023, with a more significant improvement in the year-to-date combined ratio of **111.1%** in 2024 compared to 120.8% in the same period of 2023, indicating better underwriting results.  **[ERIE_3394752_2]**

fe712a65b8bacf69060ede8c2ed64afb316f3688733e330f66940de30284af96

- **Record Financial Performance**: Erie Indemnity Company achieved an all-time high net income of over **$446 million** in 2023, with operating income increasing by **38.3%** compared to 2022. Revenue growth outpaced expense growth during the year.  **[ERIE_3375316_1]** **[ERIE_3375316_2]** **[ERIE_3375316_3]**
- **Strong Growth and Retention**: The company reached **$10 billion** in premium, with Erie Insurance Exchange experiencing a 20-year high growth rate of **17%**, moving towards **7 million policies in force**. New business premium grew over **43%** in Q4 and almost **38%** for the year compared to prior periods, while retention levels remained strong at **91.2%** despite rate increases.  **[ERIE_3375316_1]** **[ERIE_3375316_2]** **[ERIE_3375316_3]**
- **Technological Advancements and Industry Recognition**: ERIE is making significant progress in modernizing its technology platforms, resulting in a **75% reduction in system outage time** and reduced costs due to migration to the cloud. The company also received top rankings from **J.D. Power** for home insurance customer satisfaction.  **[ERIE_3375316_4]**

e31fa04d79b614290184ee65a4330b916ff5dbf23eb7f1d8e6a1056dbaa0f35d

- **High Combined Ratios Indicating Underwriting Losses**: The Exchange's combined ratio was **113.7%** in the third quarter of 2024 and **112%** year-to-date, suggesting underwriting losses and profitability challenges.  **[ERIE_3405428_2]** ,  **[ERIE_3405428_3]**
- **Significant Impact from Catastrophic Weather Events**: **Hurricane Helene** contributed **5.3 points** to the third quarter combined ratio and **1.9 points** to the year-to-date combined ratio, highlighting vulnerability to weather-related losses.  **[ERIE_3405428_2]** ,  **[ERIE_3405428_3]**
- **Increased Loss Cost Pressures Leading to Higher Premiums**: The company is experiencing **increased loss cost pressures** and has implemented **significant premium rate increases**. While premiums have grown, there is a risk that higher rates may affect customer retention and new business growth.  **[ERIE_3405428_2]** ,  **[ERIE_3405428_3]**

eb6fa96f1db3ad520b158d82924d6515f460e5721729ff1d76834548849a1fb8

Erie Indemnity Co (ERIE)

Financials