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3rd Quarter 2024 Earnings Supplemental

ERIE INDEMNITY COMPANY

Investor Supplement

Third Quarter 2024

This report is for informational purposes only and includes financial statements and financial exhibits that are unaudited. This report should be read in conjunction with documents filed with the U.S. Securities and Exchange Commission, including the most recent Annual Report on Form 10-K for 2023.

Erie Indemnity Company

Investor Supplement - Third Quarter 2024

Table of Contents

Definitions

Page

1

Indemnity Income Statements

2

Indemnity Balance Sheet Information

3

Property and Casualty Group Direct Written Premium Growth Measures

4

Property and Casualty Group Statutory Basis Combined Ratio - Direct Business

5

Erie Indemnity Company

Investor Supplement - Third Quarter 2024

Definitions

Indemnityis a publicly held Pennsylvania business corporation that has since its incorporation in 1925 served as the attorney-in-fact for the subscribers (policyholders) at the Erie Insurance Exchange ("Exchange"). Our primary function as attorney-in-fact is to perform policy issuance and renewal services on behalf of the subscribers at the Exchange. We also act as attorney-in-fact on behalf of the subscribers at the Exchange with respect to all claims handling and investment management services, as well as the service provider for all claims handling, life insurance, and investment management services for the Exchange's insurance subsidiaries, collectively referred to as "administrative services".

Exchange, which also commenced business in 1925, is a Pennsylvania-domiciled reciprocal insurer that writes property and casualty insurance.

Property and Casualty Group

The Property and Casualty Group ("P&C Group") is a regional insurance group operating in 12 Midwestern, Mid-Atlantic, and Southeastestates and the District of Columbia. The P&C Group is comprised of the Exchange and its wholly owned property and casualty subsidiaries. Certain operating and statistical measures have been incorporated herein to provide supplemental data that indicate current trends in the P&C Group's business. These measures include revenue, policies in-force and policyholder retention. Policyholder retention is defined as renewal policies in the current period divided by total policies in the prior period.

The P&C Group, along with others in the property and casualty insurance industry, use statutory underwriting ratios as measures of performance. The loss and loss expense ratio is the ratio of incurred losses and loss adjustment expenses to earned premiums. The statutory underwriting expense ratio is the ratio of underwriting expenses to written premiums. The combined ratio is the sum of the loss and loss expense ratio, the underwriting expense ratio and the policyholder dividend ratio. A combined ratio below 100% demonstrates underwriting profit; a combined ratio above 100% demonstrates underwriting losses.

  • The calendar year ratio represents the combined ratio for the current calendar year.
  • Loss reserve development is the increase or decrease in incurred losses and loss adjustment expenses as a result of the re-estimation of loss and loss adjustment expense reserves at successive valuation dates for a group of claims. Loss reserve development may be related to one or more prior years. The prior year reserve development ratio represents the ratio of prior years' incurred losses and loss adjustment expenses to earned premiums.
  • The current accident year catastrophe loss ratio represents the ratio of current accident year incurred catastrophe losses and loss adjustment expenses to earned premiums.
  • The current accident year excluding catastrophes ratio represents the sum of the current accident year incurred losses and loss adjustment expenses to earned premiums ratio, the underwriting expense ratio, and the policyholder dividend ratio.

1

Erie Indemnity Company

Investor Supplement - Third Quarter 2024 (Unaudited)

Indemnity

Income Statements

(dollars in thousands, except per share data)

Operating revenue

Management fee revenue - policy issuance and renewal services Management fee revenue - administrative services Administrative services reimbursement revenue

Service agreement revenue Total operating revenue

Three Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

2024

2024

2024

2023

2023

$

769,162

$

760,886

$

665,686

$

601,595

$

649,049

17,154

17,051

16,934

16,693

16,151

206,754

206,028

191,567

192,728

187,118

6,816

6,473

6,514

6,651

6,620

999,886

990,438

880,701

817,667

858,938

Nine Months Ended

September 30,

September 30,

2024

2023

$

2,195,734

$

1,840,478

51,139

46,976

604,349

544,411

19,803

19,408

2,871,025

2,451,273

Operating expenses

420,516

419,951

375,760

334,409

354,169

1,216,227

1,014,121

Commissions

Non-commission expenses

192,491

174,251

174,562

163,446

169,180

541,304

499,569

Cost of operations - policy issuance and renewal services

613,007

594,202

550,322

497,855

523,349

1,757,531

1,513,690

Cost of operations - administrative services

206,754

206,028

191,567

192,728

187,118

604,349

544,411

Total operating expenses

819,761

800,230

741,889

690,583

710,467

2,361,880

2,058,101

Operating income

180,125

190,208

138,812

127,084

148,471

509,145

393,172

Investment income

Interest and dividend income, net

17,449

16,274

15,378

14,795

14,655

49,101

41,085

Equity in (losses) earnings of limited partnerships

(127)

(264)

525

(583)

(13)

134

(10,725)

Net investment income

17,322

16,010

15,903

14,212

14,642

49,235

30,360

Net realized and unrealized investment gains (losses)

2,925

(1,795)

1,853

3,408

(2,227)

2,983

(9,246)

Net impairment losses recognized in earnings

(698)

(388)

(2,677)

(7,849)

(113)

(3,763)

(1,917)

Total investment income

19,549

13,827

15,079

9,771

12,302

48,455

19,197

Other income

1,168

3,292

3,411

3,069

3,001

7,871

9,643

Income before income taxes

200,842

207,327

157,302

139,924

163,774

565,471

422,012

Income tax expense

41,012

43,424

32,750

28,996

32,734

117,186

86,879

Net income

$

159,830

$

163,903

$

124,552

$

110,928

$

131,040

$

448,285

$

335,133

Net income per share - diluted

$

3.06

$

3.13

$

2.38

$

2.12

$

2.51

$

8.57

$

6.41

2

Erie Indemnity Company

Investor Supplement - Third Quarter 2024 (Unaudited)

Indemnity

Balance Sheet Information

(in thousands)

September 30,

June 30,

March 31,

December 31,

September 30,

2024

2024

2024

2023

2023

Assets

Cash, cash equivalents and restricted cash

$

221,213

$

170,634

$

144,872

$

144,055

$

102,873

Receivables from Erie Insurance Exchange and affiliates, net

736,973

708,171

641,691

625,338

620,683

Investments, net (1)

1,169,600

1,108,139

1,084,597

1,068,520

1,011,949

Fixed assets, net

480,707

469,145

461,914

442,610

434,975

Agent loans, net

91,636

66,280

67,448

67,787

68,192

Defined benefit pension plan

64,172

65,221

66,270

34,320

65,163

Other assets, net (1)

99,846

104,370

89,002

89,334

90,714

Total assets

$

2,864,147

$

2,691,960

$

2,555,794

$

2,471,964

$

2,394,549

Liabilities and shareholders' equity

Liabilities

Commissions payable

$

426,341

$

413,205

$

384,613

$

353,709

$

357,614

Agent incentive compensation

60,073

44,870

26,968

68,077

50,252

Defined benefit pension plan

27,757

26,591

23,792

26,260

27,744

Contract liability

63,974

62,215

60,555

61,120

60,484

Other liabilities

338,047

316,266

333,686

299,963

286,566

Total liabilities

916,192

863,147

829,614

809,129

782,660

Shareholders' equity

1,947,955

1,828,813

1,726,180

1,662,835

1,611,889

Total liabilities and shareholders' equity

$

2,864,147

$

2,691,960

$

2,555,794

$

2,471,964

$

2,394,549

(1) Historical periods have been restated to conform to current period presentation.

3

Erie Indemnity Company

Investor Supplement - Third Quarter 2024 (Unaudited)

Property and Casualty Group

Direct Written Premium Growth Measures

Three Months Ended

Nine Months Ended

(dollars in thousands)

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

2024

2024

2024

2023

2023

2024

2023

Direct written premiums of the P&C Group

Private passenger auto

$

1,339,707

$

1,287,418

$

1,154,951

$

1,037,831

$

1,143,337

$

3,782,076

$

3,202,687

Homeowners

956,385

917,549

680,642

689,679

767,335

2,554,576

2,030,982

Commercial multi-peril

414,132

438,806

418,799

356,948

346,600

1,271,737

1,062,532

Workers compensation

111,935

123,369

138,986

105,105

121,333

374,290

393,879

Commercial auto

250,801

272,548

263,055

212,116

219,119

786,404

678,901

All other lines of business

89,342

95,496

84,587

67,620

72,462

269,425

218,204

P&C Group direct written premiums - total

$

3,162,302

$

3,135,186

$

2,741,020

$

2,469,299

$

2,670,186

$

9,038,508

$

7,587,185

Property and Casualty Group

Direct Written Premium Growth Measures

September 30,

June 30,

March 31,

December 31,

September 30,

12 month growth rate policies in force

2024

2024

2024

2023

2023

Total all lines

6.0 %

6.8 %

7.1 %

6.9 %

6.1 %

Total personal lines

6.2 %

7.1 %

7.5 %

7.4 %

6.6 %

Total commercial lines

4.8 %

4.9 %

4.2 %

3.2 %

2.7 %

Retention trends (1)

Total all lines

90.8 %

91.1 %

91.2 %

91.2 %

91.1 %

Total personal lines

91.9 %

92.1 %

92.2 %

92.1 %

91.9 %

Total commercial lines

82.7 %

83.5 %

84.6 %

85.3 %

85.4 %

12 month % change average premiums

Total all lines

12.8 %

11.9 %

10.6 %

9.4 %

8.7 %

Total personal lines

14.7 %

13.7 %

12.0 %

10.5 %

9.2 %

Total commercial lines

9.3 %

9.0 %

9.4 %

9.5 %

10.0 %
  1. Policyholder retention rates are impacted when a policyholder cancels an existing policy and enters into a new policy due to various factors, including buying a new home or changing the policy type. When this occurs, the cancelled policy reduces the reported retention rate.

4

Erie Indemnity Company

Investor Supplement - Third Quarter 2024 (Unaudited)

Property and Casualty Group

Statutory Basis Combined Ratio - Direct Business

Three Months Ended September 30, 2024

Three Months Ended September 30, 2023

Prior Year

Current

Current

Prior Year

Current

Current

Reserve

Accident

Accident

Reserve

Accident

Accident

Development

Year

Year

Development

Year

Year

Calendar

Deficiency

Catastrophe

Excluding

Calendar

Deficiency

Catastrophe

Excluding

Direct business only

Year

(Redundancy)

Losses

Catastrophes

Year

(Redundancy)

Losses

Catastrophes

Private passenger auto

116.9

%

0.4

%

1.6

%

114.9

%

129.4

%

(1.0) %

2.7

%

127.7

%

Homeowners

111.3

%

(1.2) %

32.4

%

80.1

%

139.5

%

0.1

%

54.9

%

84.5

%

Other personal lines

129.1

%

4.9

%

1.0

%

123.2

%

83.0

%

(10.8) %

0.5

%

93.3

%

Total personal lines

114.9 %

(0.2)%

13.6 %

101.5 %

132.5 %

(0.7)%

22.6 %

110.6 %

Commercial multi-peril

98.5

%

1.5

%

14.2

%

82.8

%

103.6

%

5.2

%

15.6

%

82.8

%

Commercial auto

141.4

%

15.0

%

0.8

%

125.6

%

124.0

%

8.8

%

2.0

%

113.2

%

Workers compensation

99.4

%

(15.9) %

0.0

%

115.3

%

88.4

%

(1.2) %

0.0

%

89.6

%

Other commercial lines

157.7

%

30.4

%

0.0

%

127.3

%

104.9

%

(12.8) %

0.0

%

117.7

%

Total commercial lines

115.1 %

4.7 %

7.2 %

103.2 %

107.2 %

4.2 %

7.9 %

95.1 %

Grand total

115.0 %

1.2 %

11.8 %

102.0 %

124.9 %

0.7 %

18.2 %

106.0 %

Nine Months Ended September 30, 2024

Nine Months Ended September 30, 2023

Prior Year

Current

Current

Prior Year

Current

Current

Reserve

Accident

Accident

Reserve

Accident

Accident

Development

Year

Year

Development

Year

Year

Calendar

Deficiency

Catastrophe

Excluding

Calendar

Deficiency

Catastrophe

Excluding

Direct business only

Year

(Redundancy)

Losses

Catastrophes

Year

(Redundancy)

Losses

Catastrophes

Private passenger auto

117.1

%

(1.2) %

1.4

%

116.9

%

124.5

%

0.6

%

1.8

%

122.1

%

Homeowners

116.2

%

(2.5) %

37.1

%

81.6

%

141.7

%

3.1

%

52.8

%

85.8

%

Other personal lines

133.1

%

21.7

%

0.7

%

110.7

%

84.3

%

(6.3) %

0.7

%

89.9

%

Total personal lines

117.0 %

(1.3)%

15.2 %

103.1 %

130.3 %

1.4 %

21.2 %

107.7 %

Commercial multi-peril

94.3

%

(1.5) %

11.9

%

83.9

%

112.5

%

13.9

%

13.9

%

84.7

%

Commercial auto

124.5

%

8.6

%

0.9

%

115.0

%

120.1

%

5.5

%

1.2

%

113.4

%

Workers compensation

86.2

%

(15.8) %

0.0

%

102.0

%

76.9

%

(14.7) %

0.0

%

91.6

%

Other commercial lines

132.7

%

12.2

%

0.0

%

120.5

%

82.9

%

(27.1) %

0.0

%

110.0

%

Total commercial lines

104.4 %

0.1 %

6.1 %

98.2 %

106.7 %

4.0 %

6.8 %

95.9 %

Grand total

113.4 %

(0.9)%

12.6 %

101.7 %

123.2 %

2.2 %

16.9 %

104.1 %

5

Disclaimer

Erie Indemnity Company published this content on November 01, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 01, 2024 at 11:37:35.570.

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