Form 8-K - Current report

0000922621false00009226212024-10-312024-10-31

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):			October 31, 2024

			ERIE INDEMNITY COMPANY
			(Exact name of registrant as specified in its charter)

Pennsylvania

0-24000

25-0466020

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

100 Erie Insurance Place,

Erie,

Pennsylvania

16530

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

814

870-2000

			Not applicable
			Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Class A common stock,

stated value $0.0292 per share

ERIE

NASDAQ Stock Market, LLC

(Title of each class)

(Trading Symbol)

(Name of each exchange on which registered)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02 Results of Operations and Financial Condition.

On October 31, 2024, Erie Indemnity Company (the “Company”) issued a press release announcing financial results for the quarter and nine months ended September 30, 2024. Copies of the press release and financial information are attached hereto and are incorporated herein by reference as Exhibit 99.1 and Exhibit 99.2, respectively.

On November 1, 2024 at 10:00 a.m. the Company will provide a pre-recorded Webcast that is complementary to the press release announcing financial results for the quarter and nine months ended September 30, 2024.

Item 9.01 Financial Statements and Exhibits.

Exhibit 99.1 Press Release

Exhibit 99.2 Financial Information

Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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Exhibit Index

Exhibit No.						Description
99.1						Press Release
99.2						Financial Information
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Erie Indemnity Company

October 31, 2024

By:

/s/ Julie M. Pelkowski

Name: Julie M. Pelkowski

Title: Executive Vice President & CFO

Exhibit 99.1

Erie Indemnity Reports Third Quarter 2024 Results

Net Income per Diluted Share was $3.06 for the Quarter and $8.57 for the Nine Months of 2024

Erie, Pa., October 31, 2024 - Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter and nine months ending September 30, 2024. Net income was $159.8 million, or $3.06 per diluted share, in the third quarter of 2024, compared to $131.0 million, or $2.51 per diluted share, in the third quarter of 2023. Net income was $448.3 million, or $8.57 per diluted share, in the first nine months of 2024, compared to $335.1 million, or $6.41 per diluted share, in the first nine months of 2023.

3Q and Nine Months 2024
(in thousands)			3Q'24			3Q'23						2024			2023
Operating income			$	180,125		$	148,471								$	509,145		$	393,172
Investment income			19,549			12,302									48,455			19,197
Other income			1,168			3,001									7,871			9,643
Income before income taxes			200,842			163,774									565,471			422,012
Income tax expense			41,012			32,734									117,186			86,879
Net income			$	159,830		$	131,040								$	448,285		$	335,133

3Q 2024 Highlights

Operating income before taxes increased $31.7 million, or 21.3 percent, in the third quarter of 2024 compared to the third quarter of 2023.

•Management fee revenue - policy issuance and renewal services increased $120.1 million, or 18.5 percent, in the third quarter of 2024 compared to the third quarter of 2023.

•Management fee revenue - administrative services increased $1.0 million, or 6.2 percent, in the third quarter of 2024 compared to the third quarter of 2023.

•Cost of operations - policy issuance and renewal services

◦Commissions increased $66.3 million in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by the growth in direct and affiliated assumed written premium and, to a lesser extent, an increase in agent incentive compensation related to the profitability component.

◦Non-commission expense increased $23.3 million in the third quarter of 2024 compared to the third quarter of 2023. Underwriting and policy processing expense increased $5.1 million primarily due to increased underwriting report and personnel costs. Information technology costs increased $3.6 million primarily due to an increase in hardware and software costs and personnel costs, partially offset by a decrease in professional fees. Sales and advertising expense increased $4.4 million primarily due to increased costs from community development initiatives and agent-related costs. Administrative and other costs increased $7.6 million primarily due to increased personnel costs.

Income from investments before taxes totaled $19.5 million in the third quarter of 2024 compared to $12.3 million in the third quarter of 2023. Net investment income was $17.3 million in the third quarter of 2024 compared to $14.6 million in the third quarter of 2023. Net realized and unrealized gains were $2.9 million in the third quarter of 2024 compared to losses of $2.2 million in the third quarter of 2023.

Nine Months 2024 Highlights

Operating income before taxes increased $116.0 million, or 29.5 percent, in the first nine months of 2024 compared to the first nine months of 2023.

•Management fee revenue - policy issuance and renewal services increased $355.3 million, or 19.3 percent, in the first nine months of 2024 compared to the first nine months of 2023.

•Management fee revenue - administrative services increased $4.2 million, or 8.9 percent, in the first nine months of 2024 compared to the first nine months of 2023.

•Cost of operations - policy issuance and renewal services

◦Commissions increased $202.1 million in the first nine months of 2024 compared to the first nine months of 2023, primarily driven by the growth in direct and affiliated assumed written premium and, to a lesser extent, an increase in agent incentive compensation related to the profitability component.

◦Non-commission expense increased $41.7 million in the first nine months of 2024 compared to the first nine months of 2023. Underwriting and policy processing expense increased $13.7 million primarily due to increased underwriting report and personnel costs. Information technology costs decreased $3.9 million primarily due to a decrease in professional fees, partially offset by an increase in hardware and software costs. Sales and advertising expense increased $9.6 million primarily due to increased agent-related costs and costs from community development initiatives. Customer service costs increased $6.7 million primarily due to increased personnel costs and credit card processing fees. Administrative and other costs increased $15.6 million primarily due to increased personnel costs, professional fees and charitable contributions.

Income from investments before taxes totaled $48.5 million in the first nine months of 2024 compared to $19.2 million in the first nine months of 2023. Net investment income was $49.2 million in the first nine months of 2024 compared to $30.4 million in the first nine months of 2023. Net investment income included $0.1 million of limited partnership earnings in the first nine months of 2024 compared to losses of $10.7 million in the first nine months of 2023. Net realized and unrealized gains were $3.0 million in the first nine months of 2024 compared to losses of $9.2 million in the first nine months of 2023. Net impairment losses recognized in earnings were $3.8 million in the first nine months of 2024 compared to $1.9 million in the first nine months of 2023.

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Webcast Information

Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on November 1, 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, 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 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.

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Exhibit 99.2

Erie Indemnity Company

Statements of Operations

(dollars in thousands, except per share data)

						Three months ended September 30,												Nine months ended September 30,
						2024						2023						2024						2023
						(Unaudited)												(Unaudited)
Operating revenue
Management fee revenue - policy issuance and renewal services						$	769,162					$	649,049					$	2,195,734					$	1,840,478
Management fee revenue - administrative services						17,154						16,151						51,139						46,976
Administrative services reimbursement revenue						206,754						187,118						604,349						544,411
Service agreement revenue						6,816						6,620						19,803						19,408
Total operating revenue						999,886						858,938						2,871,025						2,451,273
Operating expenses
Cost of operations - policy issuance and renewal services						613,007						523,349						1,757,531						1,513,690
Cost of operations - administrative services						206,754						187,118						604,349						544,411
Total operating expenses						819,761						710,467						2,361,880						2,058,101
Operating income						180,125						148,471						509,145						393,172
Investment income
Net investment income						17,322						14,642						49,235						30,360
Net realized and unrealized investment gains (losses)						2,925						(2,227)						2,983						(9,246)
Net impairment losses recognized in earnings						(698)						(113)						(3,763)						(1,917)
Total investment income						19,549						12,302						48,455						19,197
Other income						1,168						3,001						7,871						9,643
Income before income taxes						200,842						163,774						565,471						422,012
Income tax expense						41,012						32,734						117,186						86,879
Net income						$	159,830					$	131,040					$	448,285					$	335,133
Net income per share
Class A common stock – basic						$	3.43					$	2.81					$	9.63					$	7.20
Class A common stock – diluted						$	3.06					$	2.51					$	8.57					$	6.41
Class B common stock – basic and diluted						$	515					$	422					$	1,444					$	1,079
Weighted average shares outstanding – Basic
Class A common stock						46,189,059						46,189,037						46,189,038						46,188,962
Class B common stock						2,542						2,542						2,542						2,542
Weighted average shares outstanding – Diluted
Class A common stock						52,306,514						52,299,369						52,301,001						52,298,655
Class B common stock						2,542						2,542						2,542						2,542
Dividends declared per share
Class A common stock						$	1.275					$	1.19					$	3.825					$	3.57
Class B common stock						$	191.25					$	178.50					$	573.75					$	535.50

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Erie Indemnity Company

Statements of Financial Position

(in thousands)

						September 30, 2024						December 31, 2023
						(Unaudited)
Assets
Current assets:
Cash and cash equivalents (includes restricted cash of $23,547 and $12,542, respectively)						$	221,213					$	144,055
Available-for-sale securities						48,575						82,017
Receivables from Erie Insurance Exchange and affiliates, net						736,973						625,338
Prepaid expenses and other current assets, net						80,141						69,321
Accrued investment income						10,456						9,458
Total current assets						1,097,358						930,189
Available-for-sale securities, net						1,000,282						879,224
Available-for-sale securities lent						8,135						0
Equity securities						85,346						84,253
Fixed assets, net						480,707						442,610
Agent loans, net						79,829						58,434
Defined benefit pension plan						64,172						34,320
Other assets, net						48,318						42,934
Total assets						$	2,864,147					$	2,471,964
Liabilities and shareholders' equity
Current liabilities:
Commissions payable						$	426,341					$	353,709
Agent incentive compensation						60,073						68,077
Accounts payable and accrued liabilities						194,649						175,622
Dividends payable						59,377						59,377
Contract liability						42,754						41,210
Deferred executive compensation						15,836						10,982
Securities lending payable						7,905						0
Total current liabilities						806,935						708,977
Defined benefit pension plan						27,757						26,260
Contract liability						21,220						19,910
Deferred executive compensation						24,010						20,936
Deferred income taxes, net						12,777						11,481
Other long-term liabilities						23,493						21,565
Total liabilities						916,192						809,129
Shareholders’ equity						1,947,955						1,662,835
Total liabilities and shareholders’ equity						$	2,864,147					$	2,471,964

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Document and Entity Information	Oct. 31, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Oct. 31, 2024
Entity Registrant Name	ERIE INDEMNITY COMPANY
Entity Incorporation, State or Country Code	PA
Entity File Number	0-24000
Entity Tax Identification Number	25-0466020
Entity Address, Address Line One	100 Erie Insurance Place,
Entity Address, City or Town	Erie,
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	16530
City Area Code	814
Local Phone Number	870-2000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A common stock,
Trading Symbol	ERIE
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000922621
Amendment Flag	false

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