ERIE
$161.20
Erie Indemnity
($2.14)
(1.31%)
Earnings Details
1st Quarter March 2022
Thursday, April 28, 2022 4:15:00 PM
Tweet Share Watch
Summary

Erie Indemnity (ERIE) Recent Earnings

Erie Indemnity (ERIE) reported 1st Quarter March 2022 earnings of $1.31 per share on revenue of $672.1 million. The consensus earnings estimate was $1.45 per share on revenue of $650.6 million. Revenue grew 6.7% on a year-over-year basis.

Erie Indemnity Co provides sales, underwriting and policy issuance services to the policyholders of Erie Insurance Exchange. It also operates as a property & casualty insurer through its wholly-owned subsidiaries.

Results
Reported Earnings
$1.31
Earnings Whisper
-
Consensus Estimate
$1.45
Reported Revenue
$672.1 Mil
Revenue Estimate
$650.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Erie Indemnity Reports First Quarter 2022 Results

Net Income was $68.6 million, Earnings per Diluted Share was $1.31

ERIE, Pa., April 28, 2022 /PRNewswire/ -- Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter ending March 31, 2022.  Net income was $68.6 million, or $1.31 per diluted share, in the first quarter of 2022, compared to $73.6 million, or $1.41 per diluted share, in the first quarter of 2021. 

1Q 2022

(in thousands)

1Q'22

1Q'21


Operating income

$        84,312

$        76,095


Investment income

3,009

17,988


Interest expense and other, net

526

1,528


     Income before income taxes

86,795

92,555


Income tax expense

18,176

18,989


     Net income

$        68,619

$        73,566







1Q 2022 Highlights



Operating income before taxes increased $8.2 million, or 10.8 percent, in the first quarter of 2022 compared to the first quarter of 2021.

  • Management fee revenue - policy issuance and renewal services increased $32.3 million, or 7.1 percent, in the first quarter of 2022 compared to the first quarter of 2021.
  • Management fee revenue - administrative services decreased $0.5 million, or 3.6 percent, in the first quarter of 2022 compared to the first quarter of 2021.
  • Cost of operations - policy issuance and renewal services
    •  
      • Commissions increased $19.8 million in the first quarter of 2022 compared to the first quarter of 2021, primarily driven by the growth in direct and affiliated assumed written premium, primarily in lines of business that pay a higher commission rate. 
      • Non-commission expense increased $4.2 million in the first quarter of 2022 compared to the first quarter of 2021.  Sales and advertising increased $1.8 million primarily due to agent related expenses.  Administrative and other costs increased $3.1 million primarily due to an increase in professional fees compared to the same period in 2021. 

Income from investments before taxes totaled $3.0 million in the first quarter of 2022 compared to $18.0 million in the first quarter of 2021.  Net investment income was $10.5 million in the first quarter of 2022 compared to $17.1 million in the first quarter of 2021.  Included in net investment income is $2.8 million of limited partnership earnings in the first  quarter of 2022 compared to $9.0 million in the first quarter of 2021.  Net realized and unrealized losses on investments were $7.3 million in the first quarter of 2022 compared to net realized and unrealized gains of $0.8 million in the first quarter of 2021.

Webcast Information
Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on April 29, 2022.  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 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;
    • dependence upon the independent agency system; and
    • 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;
    • emergence of significant unexpected events, including pandemics;
    • 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 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;
  • 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 March 31,



2022


2021



(Unaudited)

Operating revenue





     Management fee revenue - policy issuance and renewal services


$         487,992


$        455,718

     Management fee revenue - administrative services


14,313


14,847

     Administrative services reimbursement revenue


163,327


153,533

     Service agreement revenue


6,478


6,079

          Total operating revenue


672,110


630,177






Operating expenses





     Cost of operations - policy issuance and renewal services


424,471


400,549

     Cost of operations - administrative services


163,327


153,533

     Total operating expenses


587,798


554,082

          Operating income


84,312


76,095






Investment income





     Net investment income


10,504


17,097

     Net realized and unrealized investment (losses) gains


(7,279)


804

     Net impairment (losses) recoveries recognized in earnings


(216)


87

          Total investment income


3,009


17,988






Interest expense


999


1,009

Other income (expense)


473


(519)

Income before income taxes


86,795


92,555

Income tax expense


18,176


18,989

          Net income


$           68,619


$          73,566






Net income per share





     Class A common stock – basic


$                1.47


$               1.58

     Class A common stock – diluted


$                1.31


$               1.41

     Class B common stock – basic and diluted


$                 221


$                237






Weighted average shares outstanding – Basic





     Class A common stock


46,188,761


46,188,860

     Class B common stock


2,542


2,542






Weighted average shares outstanding – Diluted





     Class A common stock


52,300,501


52,315,958

     Class B common stock


2,542


2,542






Dividends declared per share





     Class A common stock


$              1.110


$             1.035

     Class B common stock


$           166.50


$          155.25

 

Erie Indemnity Company

Statements of Financial Position

(in thousands)




March 31, 2022


December 31, 2021



(Unaudited)



Assets





Current assets:





     Cash and cash equivalents


$         141,305


$         183,702

     Available-for-sale securities


46,155


38,396

     Receivables from Erie Insurance Exchange and affiliates, net


478,754


479,123

     Prepaid expenses and other current assets


78,877


56,206

     Accrued investment income


6,255


6,303

          Total current assets


751,346


763,730






     Available-for-sale securities, net


877,165


907,689

     Equity securities


78,069


87,743

     Fixed assets, net


396,072


374,802

     Agent loans, net


61,579


58,683

     Deferred income taxes, net


9,818


145

     Other assets


49,804


49,265

          Total assets


$      2,223,853


$     2,242,057






Liabilities and shareholders' equity





Current liabilities:





     Commissions payable


$         287,989


$         270,746

     Agent bonuses


31,507


120,437

     Accounts payable and accrued liabilities


186,386


138,317

     Dividends payable


51,693


51,693

     Contract liability


34,872


34,935

     Deferred executive compensation


6,752


12,637

     Current portion of long-term borrowings


2,132


2,098

          Total current liabilities


601,331


630,863






Defined benefit pension plans


139,231


130,383

Long-term borrowings


91,177


91,734

Contract liability


17,493


17,686

Deferred executive compensation


13,821


14,571

Other long-term liabilities


26,600


14,342

          Total liabilities


889,653


899,579






Shareholders' equity


1,334,200


1,342,478

          Total liabilities and shareholders' equity


$      2,223,853


$     2,242,057

 

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/erie-indemnity-reports-first-quarter-2022-results-301533593.html

SOURCE Erie Indemnity Company