Erie Indemnity (ERIE) 1 Nov 242024 Q3 Earnings call transcript

Good morning, and welcome to the Erie Indemnity Company Third Quarter 2024 Earnings Conference Call. This call was prerecorded, and there will be no question-and-answer session following the recording.

Now I'd like to introduce your host for the call, Vice President of Investor Relations, Scott Beilharz.

Thank you, and welcome, everyone. We appreciate you joining us for this recorded discussion about our third quarter results. remarks Julie NeCastro, and Pelkowski, Officer. include Executive and Chief will and Officer; Executive recording from President Tim Chief Financial This Vice President

earnings Investor Relations yesterday of our were close Our are section financial erieinsurance.com. the and the after market issued within available website, and release afternoon supplement

known to assumptions I These to unexpected current today's views may and future everyone events. discussion subject reflect may These we begin, uncertainties remarks. those remind that company's Before contain are differ described the on based remarks to would like uncertainties. and and that forward-looking remarks from risks these materially about in risks results cause

with on safe yesterday and the please For factors release. cause may in see the important related harbor these our the in press differences, filing SEC information statements filed that XX-Q Form

This prior property prerecorded Company. party not be Erie any consent or Company. It written without Indemnity of may Indemnity other call rebroadcast Erie by the reproduced the of is the

will With remarks. move Tim? that, on we Tim's to

Thanks, quarter Scott, about the of you country in for Erie's storms impacted weeks. performance thanks learn in third devastating of in on our certainly disasters these minds to in of our Hurricane our areas in listening recent those have particular, XXXX. all The been and the ravaging by of more been The have parts to of and aftermath been Helene, has all footprint.

policyholders. areas deployed much and teams providing experiencing Many employees to themselves assist are impacted claims been in service difficult additional losses the needed facing circumstances. them Our our of and agents have to incredibly while

is and the hard businesses The lives to in devastation destroyed lost, those the and communities comprehend. homes

situation, efforts and our in prayers can. and this they way you the in relief them support challenging please as keep please and navigate any thoughts Let's heartbreaking

donating the Red far, Erie. lean match been donations Kitchen relief funds more than Cross, by Erie been was by and for Team matching has program. Erie's gifts matched shareable and pleased hurricane bolstered generous American to on relief for $XX,XXX to so Typical to have the employees that XXX% Rubicon. causes I'm by employees giving Erie Our doubled donated World share

Early charitable to communities and Responder local contribution thing -- Red working $XXX,XXX territory. and Disaster on American do other of Cross program, need to it can, especially the made most. but our donations always our right our affected it's we're give rescue the in September, to people additional We portions Erie a and the how you and important on causes believe

time on past and other have Turning to had quarter our Indemnity Erie the a Erie over weather-related was thanks first growth Index continued S&P to for Exchange, performance, negative new recently the ratio retention. with solid now. A addition business for September. continues represented strong lean to This activity Company financials Insurance XXX and impact the but combined its in the growth Erie's in

provide Julie around context to Financial our results third additional quarter Chief some Pelkowski, Here Julie? is Officer,

you, and everyone. Thank good Tim, morning,

quarter. likely addition Erie Indemnity to company to this S&P XXX of to Company strong the our As contributed which Tim performance, operating mentioned, the Index experience continues

increases previously, operating primary driven revenue is fee highlighted significant strong the management our the we've recent As or performance revenue. of in by source

which as administrative the serve Insurance well for as policy attorney Erie As fact services the includes policyholders renewal of reminder, subscribers or and the as a in issuance Exchange, services. we providing

exceed a affiliated effect will management Thus, and the any have the a calculated receive. fee XX% not direct assumed of a the services premiums the For provided, to changes Exchange's premiums corresponding we Exchange. written by of the fees as amount the on to percentage, we management retain

write combat taken the in activity not significant Exchange have premium been to we've pressures, costs. loss impact resulted rate profitability pressures loss months from increased these realized weather-related the Because rate increases XX-month intended the that cost of The ratio, increased rate to premium is these in has resulting the there combined immune measure cover increases rates. challenge. and earn XX a up lag to insurance to The profitability. industry Exchange's has we fully to been to to increases experiencing and increases timing policies, can The take significant

it to increases, both XXXX are and XX.X%. quarter, of when despite as largely increases, relates written Now policyholder reflected the maintained grew force per attributed prior assumed can of average period at with growth the retention XX% third realization for Exchange's to direct in year-to-date X% XXXX. and Year-over-year affiliated XX.X%. tremendous XX% in the premium and year-over-year policy compared policies periods the over premiums significant the in in the rate over in Exchange be quarter written The a which rate premium the grew continued a strong of increase the just

to [ by X.X The contributed to XXXX and points and Exchange's was combined Helene, points ratio the combined combined of year-to-date impacted XXX.X% XXX Exchange's third Tim referenced, ratio X.X Hurricane as of ratio the ]. quarter

year, XXX certain While continues pose from at ratio XXXX billion combined measured end of the XXXX. events taken, this the at actions improvement lower showing compared at XXXX Exchange's to this XXXX time as in financial relatively challenges, billion of The incremental by overall rating at policyholder and in weather current the has resulted this XXX.X. stable to combined September year-to-date other surplus addition $X.X of we've remained to ratio end strength, $X.X of the

of share $XXX quarter, or indemnity million $XXX net Turning in million per income indemnity. share third diluted $X.XX the the or third to per generated In diluted $X.XX the compared to of quarter XXXX. the

be income or per net diluted compared $X.XX from significant share X same income increases million written management quarter to or to the to Operating million Exchange's months or of XXXX to first higher first premium $XXX XX% third the $X.XX revenue in while third compared months The or For of growth. continues increased period income resulting in operating increased XXXX. XX.X% for driver the direct XXXX. million XXXX of of $XXX share main per quarter X diluted fee was year-to-date compared XXXX, these of $XXX $XX the million the the

$XXX for issuance third renewal and XX.X% million XXXX revenue to increased services the indemnity's management the compared in XXXX. policy fee of quarter of The quarter third or

For same or direct first compared of months saw of premium increase growth XXXX, which million the written period the in the XXXX, to indemnity in XX.X% with $XXX an X Exchange period. of the is of the similar line

expense, period Looking $XXX months to compared were XX.X% first policy of of by, million quarter indemnity's at services, X and million and line in issuance or increase for and direct a cost largest by the the extent, with, periods profitability in assumed the To both $XX the component our commissions, contributed in in the XXXX the driven and third the renewal in lesser XX.X% affiliated growth increased incentive or increases to driven The of in the same compensation incentive. XXXX. premium. Exchange's the written operations agent

expenses the include or technology. in XX.X% policy higher personnel increased underwriting costs Noncommission tied Primary to $XX processing costs, as investments third million of such XXXX the production, of quarter our increase and in XXXX. compared additional higher drivers to expenses, and

community-related highlighted as make to continue Tim also earlier. We investments,

or months in X.X%. noncommission personnel and costs For of processing expenses increase tied XXXX, million of an production, saw $XX costs, higher nearly expenses underwriting the increased saw quarter, community-related indemnity and to higher investments. we including Similar X to the policy first

fees we personnel higher due the through plan year-to-date higher compensation to awards, related lower estimated was throughout costs. which technology increases and basis, by increased agent we our substantial and long-term September while costs primarily card also the the year-to-date were credit had had a price in incentive in impacted information including third cost On both stock costs quarter processing The for XXXX. increase

the Turning steady current consistent in company to and the to downside future per dividend operations share, as portfolio conservative earnings investment well protecting arise. reinvesting in our a objectives as our business if from risks maintains operations. of its opportunities growth Indemnity growth, and in support

In XXXX, totaled to income quarter the XXXX. investment $XX just $XX.X over the third of in of million, third compared before million quarter taxes

to of the first XXXX. million income over of investment $XX months was million before XXXX, first $XX.X taxes the X months X Over in compared just

a take and maintain approach always, As capital measured our strong a to we very balance sheet. we management,

our XXXX, dividends. to in our For X financial pay million $XXX performance over months the of shareholders first enabled us

Thank you time your today. again for

the back to over Tim? Tim. call I'll turn Now

Thanks, Julie.

customer have being and with to the features, policy. agents rating quoting risks appropriately new it's helping which products also increasingly already X.X, Auto our their in grow, services Business business sure and all and competitive business to we valuable is piloting have on agents . Agents efficient led Erie's of meet pricing pricing to feedback, It for developed conceived personalized to that several processing that continues It most agency product the based all the and is the states at customers, our back. make refreshed provide equip important ensure several unique options and priced tools and newly with sharing base meet and for experience recent and A on As Indiana. enhanced new enhanced to Business new enhancements. has the ability and been their offering design including sustainably. Auto example aims includes favorable helps One needs one and currently piloted multiple refreshed plan factors needs vehicles service.

other any pilot XXXX. expanding our states with needed interaction determine into adjustments help us rollout through early additional will year-end before Continued agents the in

enroll spend XX-state point customers and also agents to interactions. a allowing bills ability this leverage the new our New us ] will and tool data. access a efficiencies We also rollout pay information, sale. automatically in track our launched to and to increase online account account staff successfully claims, increasing meaningful time of more center at important can call capability to better customer Online on of that enhances adoption customers' more platform and capabilities of [ help complex helping and

of platforms, like capabilities. data are Enhancements to part strategy programs modernize a broader these and our

and platforms capability cloud made legacy to of quarter are migrations the past and improvements ongoing. over been Additional have the digital other

communities awarded to Credit company's by August, ] always between through Insurance the in our $XX of city Brand home the customers, footprint. $X.X programming $XXX,XXX the strengthening of grant with extends Since grants launched the At to Pennsylvania. commitment out-of-school to addition Tax aimed service program. Erie program education and but initiative. Insurance Erie, our the more have nonprofits to in time is poverty education. nonprofits we've than been and through that just is also the Educational donated to over more Improvement our activities in at Pennsylvania's In This around XXXX, our million for donated to academic than Erie, was causes Investing Educational in in Future our educational X million eliminating grants not [ goal years connection believed Erie in within Program to

pleased also I'm to recent accolades. workplace X share

impact for employers XX in-state of that Insurance Insurance First, straight XXX the for named among XXXX councils. Forbes list was XXXX of best ERT, Global employers list. the largest the made Erie resource the and out ranked Pennsylvania top groups, was Erie awarded Erie's business employee the to of also fifth X resource diversity America's awards the from year. groups world's diversity network in with

Alliance, Our equity and Veterans recognized African-American for champions organization. inclusion our being Affinity Pride and Networks and diversity, in Women's were

my also for I our support. employees you call to third I'd all circumstance. Erie. your share Thanks to for Above agents shareholders any our appreciation and for independent your trust close there day for interest and Thank on quarter, and Service in you promise the of uphold our all in every As our like who to