Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

ERIE INDEMNITY COMPANY

(ERIE)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news

Erie Indemnity : Reports Second Quarter 2021 Results

07/29/2021 | 04:16pm EDT

ERIE, Pa., July 29, 2021 /PRNewswire/ -- Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter and six months ending June 30, 2021.  Net income was $79.0 million, or $1.51 per diluted share, in the second quarter of 2021, compared to $82.0 million, or $1.57 per diluted share, in the second quarter of 2020.  Net income was $152.6 million, or $2.92 per diluted share, in the first six months of 2021, compared to $141.3 million, or $2.70 per diluted share, in the first six months of 2020.

The uncertainty resulting from the COVID-19 pandemic continues to evolve and the pandemic's ultimate impact and duration remain uncertain at this time. 

2Q and First Half 2021

(in thousands)

2Q'21

2Q'20


1H21

1H20


Operating income

$

85,065


$

91,189



$

161,160


$

176,880



Investment income

16,418


11,553



34,406


2,358



Interest and other expense, net

1,587


260



3,115


629



Income before income taxes

99,896


102,482



192,451


178,609



Income tax expense

20,867


20,505



39,856


37,306



Net income

$

79,029


$

81,977



$

152,595


$

141,303










 

               2Q 2021 Highlights               

Operating income before taxes decreased $6.1 million, or 6.7 percent, in the second quarter of 2021 compared to the second quarter of 2020.

  • Management fee revenue - policy issuance and renewal services increased $18.5 million, or 3.8 percent, in the second quarter of 2021 compared to the second quarter of 2020.
  • Management fee revenue - administrative services decreased $0.1 million, or 1.0 percent, in the second quarter of 2021 compared to the second quarter of 2020.
  • Cost of operations - policy issuance and renewal services
    • Commissions increased $14.7 million in the second quarter of 2021 compared to the second quarter of 2020, driven by the growth in direct and affiliated assumed written premium, primarily in lines of business that pay a higher commission rate. To a lesser extent, there was also an increase in agent incentive compensation for the second quarter of 2021 compared to the second quarter of 2020.
    • Non-commission expense increased $9.2 million in the second quarter of 2021 compared to the second quarter of 2020. Underwriting and policy processing expense increased $3.3 million primarily due to increased personnel costs and underwriting report costs. Information technology costs increased $2.9 million primarily due to increased hardware and software costs as well as increased personnel costs. Administrative and other costs increased $3.6 million primarily driven by increased building and equipment depreciation and professional fees in the second quarter of 2021 compared to the same period in 2020. Personnel costs in all expense categories for the second quarter of 2021 were impacted by higher medical costs compared to the prior year as the COVID-19 pandemic reduced elective procedures in 2020.

Income from investments before taxes totaled $16.4 million in the second quarter of 2021 compared to $11.6 million in the second quarter of 2020.  Net investment income was $13.7 million in the second quarter of 2021 compared to $5.0 million in the second quarter of 2020.  Included in net investment income is $6.2 million of limited partnership earnings in the second quarter of 2021 and $2.3 million of limited partnership losses in the second quarter of 2020.  Net realized gains on investments were $2.8 million in the second quarter of 2021 compared to $6.5 million in the second quarter of 2020.

               First Half 2021 Highlights               

Operating income before taxes decreased $15.7 million, or 8.9 percent, in the first six months of 2021 compared to the first six months of 2020.

  • Management fee revenue - policy issuance and renewal services increased $30.4 million, or 3.3 percent, in the first six months of 2021 compared to the first six months of 2020.
  • Management fee revenue - administrative services decreased $0.1 million, or 0.2 percent, in the first six months of 2021 compared to the first six months of 2020.
  • Cost of operations - policy issuance and renewal services
    • Commissions increased $24.1 million in the first six months of 2021 compared to the first six months of 2020, driven by the growth in direct and affiliated assumed written premium, primarily in lines of business that pay a higher commission rate. To a lesser extent, there was also an increase in agent incentive compensation for the first six months 2021 compared to the first six months of 2020.
    • Non-commission expense increased $20.8 million for the six months ended June 30, 2021 compared to the same period in 2020. Underwriting and policy processing costs increased $2.5 million primarily due to increased underwriting report costs and personnel costs. Information technology costs increased $7.2 million primarily due to increased hardware and software costs and personnel costs. Administrative and other costs increased $12.1 million primarily driven by increased personnel costs and professional fees compared to the same period in 2020. Personnel costs in all expense categories were impacted by higher pension costs and higher medical costs compared to the prior year as the COVID-19 pandemic reduced elective procedures in 2020.

Income from investments before taxes totaled $34.4 million in the first six months of 2021 compared to $2.4 million in the first six months of 2020.  Net investment income was $30.7 million in the first six months of 2021 compared to $9.7 million in the first six months of 2020.  Included in net investment income is $15.2 million of limited partnership earnings in the first six months of 2021 and $6.0 million of limited partnership losses in the first six months of 2020.  Net realized gains on investments were $3.6 million in the first six months of 2021 compared to net realized losses of $4.3 million in the first six months of 2020.

Webcast Information
Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on July 30, 2021.  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 16th 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 6 million policies in force and operates in 12 states and the District of Columbia. 

News releases and more information about Erie Insurance Group are available 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
    • dependence upon the independent agency system; an
    • ability to maintain 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;
    • emerging claims and coverage issues in the industry; and
    • severe weather conditions or other catastrophic losses, including terrorism;
  • potential impacts of the COVID-19 pandemic on the growth and financial condition of the Exchange;
  • costs of providing policy issuance and renewal services to 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;
  • outcome of pending and potential litigation;
  • potential impacts of the COVID-19 pandemic on our operations, the business operations of our customers and/or independent agents, or our third-party vendor operations;
  • factors affecting the quality and liquidity of our investment portfolio; and
  • our 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 June 30,


Six months ended June 30,



2021


2020


2021


2020



(Unaudited)


(Unaudited)

Operating revenue









Management fee revenue - policy issuance and renewal services


$

502,271



$

483,795



$

957,989



$

927,545


Management fee revenue - administrative services


14,667



14,813



29,514



29,584


Administrative services reimbursement revenue


157,190



151,965



310,723



303,519


Service agreement revenue


5,902



6,446



11,981



13,108


Total operating revenue


680,030



657,019



1,310,207



1,273,756











Operating expenses









Cost of operations - policy issuance and renewal services


437,775



413,865



838,324



793,357


Cost of operations - administrative services


157,190



151,965



310,723



303,519


Total operating expenses


594,965



565,830



1,149,047



1,096,876


Operating income


85,065



91,189



161,160



176,880











Investment income









Net investment income


13,650



5,044



30,747



9,708


Net realized investment gains (losses)


2,769



6,526



3,573



(4,280)


Net impairment (losses) recoveries recognized in earnings


(1)



(17)



86



(3,070)


Total investment income


16,418



11,553



34,406



2,358











Interest expense, net


1,039



2



2,048



5


Other expense


548



258



1,067



624


Income before income taxes


99,896



102,482



192,451



178,609


Income tax expense


20,867



20,505



39,856



37,306


Net income


$

79,029



$

81,977



$

152,595



$

141,303











Net income per share









Class A common stock – basic


$

1.70



$

1.76



$

3.28



$

3.03


Class A common stock – diluted


$

1.51



$

1.57



$

2.92



$

2.70


Class B common stock – basic and diluted


$

255



$

264



$

491



$

455











Weighted average shares outstanding – Basic









Class A common stock


46,188,289



46,187,808



46,188,573



46,188,299


Class B common stock


2,542



2,542



2,542



2,542











Weighted average shares outstanding – Diluted









Class A common stock


52,302,370



52,302,981



52,309,163



52,313,667


Class B common stock


2,542



2,542



2,542



2,542











Dividends declared per share









Class A common stock


$

1.035



$

0.965



$

2.070



$

1.930


Class B common stock


$

155.25



$

144.75



$

310.50



$

289.50


 

 

Erie Indemnity Company

Statements of Financial Position

(in thousands)




June 30,
2021


December 31,
2020



(Unaudited)



Assets






Current assets:






Cash and cash equivalents


$

156,038



$

161,240


Available-for-sale securities


20,856



17,697


Equity securities


207



19


Receivables from Erie Insurance Exchange and affiliates, net


504,013



494,637


Prepaid expenses and other current assets


59,574



52,561


Accrued investment income


6,121



6,146


Total current assets


746,809



732,300







Available-for-sale securities, net


915,942



910,539


Equity securities


93,798



94,071


Fixed assets, net


280,402



265,341


Agent loans, net


60,070



62,449


Deferred income taxes, net


17,971



12,341


Other assets


48,652



40,081


Total assets


$

2,163,644



$

2,117,122







Liabilities and shareholders' equity





Current liabilities:





Commissions payable


$

284,234



$

262,338


Agent bonuses


62,694



110,158


Accounts payable and accrued liabilities


150,346



150,706


Dividends payable


48,200



48,200


Contract liability


35,742



36,917


Deferred executive compensation


8,581



17,319


Current portion of long-term borrowings


2,064



2,031


Total current liabilities


591,861



627,669







Defined benefit pension plans


184,111



164,346


Long-term borrowings


92,795



93,833


Contract liability


18,135



18,878


Deferred executive compensation


13,773



14,904


Other long-term liabilities


17,867



9,444


Total liabilities


918,542



929,074







Shareholders' equity


1,245,102



1,188,048


Total liabilities and shareholders' equity


$

2,163,644



$

2,117,122












 

Cision
View original content to download multimedia:https://www.prnewswire.com/news-releases/erie-indemnity-reports-second-quarter-2021-results-301344324.html

SOURCE Erie Indemnity Company


© PRNewswire 2021
All news about ERIE INDEMNITY COMPANY
09/15ERIE INDEMNITY : Insurance dedicates new office building in honor of Chairman of..
PU
09/08ERIE INDEMNITY : 5 Tips for Boarding the Bus Safely
PU
09/02ERIE INDEMNITY : Newsweek names Erie Insurance one of ‘America's Best Cust..
PU
08/30ERIE INDEMNITY CO : Other Events (form 8-K)
AQ
08/24ERIE INDEMNITY : Forbes names Erie Insurance one of America's Best-In-State Empl..
PU
08/12ERIE INDEMNITY : Insurance Giving Network awards $305,000 to eight local educati..
PU
08/12ERIE INDEMNITY : Robert Zehr SVP Actuarial
PU
08/09ERIE INDEMNITY : Insurance ranked among ‘Best Renters Insurance Companies ..
PU
08/06ERIE INDEMNITY : Insurance promotes Angelino Kramer to vice president and Canton..
PU
08/04ERIE INDEMNITY : Insurance and The Precisionists, Inc. launch neurodiversity emp..
PU
More news