Form 8-K - Current report

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):			July 23, 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. ☐

Top of the Form

Item 2.02 Results of Operations and Financial Condition.

On July 25, 2024, Erie Indemnity Company (the “Company”) issued a press release announcing financial results for the quarter and six months ended June 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 July 26, 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 six months ended June 30, 2024.

Item 8.01 Other Events.

At its meeting on July 23, 2024, the Company's Board of Directors approved the following quarterly dividend on shares of Erie Indemnity Company Class A common stock:

Dividend Number: 377

Class A Rate Per Share: $1.275

Declaration Date: July 23, 2024

Ex-Dividend Date: October 7, 2024

Record Date: October 7, 2024

Payable Date: October 22, 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)

Top of the Form

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)

Top of the Form

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

July 25, 2024

By:

/s/ Julie M. Pelkowski

Name: Julie M. Pelkowski

Title: Executive Vice President & CFO

Exhibit 99.1

Erie Indemnity Reports Second Quarter 2024 Results

Net Income per Diluted Share was $3.13 for the Quarter and $5.52 for the Six Months of 2024

Erie, Pa., July 25, 2024 - Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter and six months ending June 30, 2024. Net income was $163.9 million, or $3.13 per diluted share, in the second quarter of 2024, compared to $117.9 million, or $2.25 per diluted share, in the second quarter of 2023. Net income was $288.5 million, or $5.52 per diluted share, in the first six months of 2024, compared to $204.1 million, or $3.90 per diluted share, in the first six months of 2023.



2Q and First Half 2024


(in thousands)	2Q'24		2Q'23		1H'24	1H'23
Operating income	$	190,208	$	134,158		$	329,020	$	244,701
Investment income	13,827		11,627			28,906		6,895
Other income	3,292		3,305			6,703		6,642
Income before income taxes	207,327		149,090			364,629		258,238
Income tax expense	43,424		31,238			76,174		54,145
Net income	$	163,903	$	117,852		$	288,455	$	204,093

2Q 2024 Highlights

Operating income before taxes increased $56.1 million, or 41.8 percent, in the second quarter of 2024 compared to the second quarter of 2023.

•Management fee revenue - policy issuance and renewal services increased $127.5 million, or 20.1 percent, in the second quarter of 2024 compared to the second quarter of 2023.

•Management fee revenue - administrative services increased $1.4 million, or 9.0 percent, in the second quarter of 2024 compared to the second quarter of 2023.

•Cost of operations - policy issuance and renewal services

◦Commissions increased $68.8 million in the second quarter of 2024 compared to the second 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 profitable growth.

◦Non-commission expense increased $4.1 million in the second quarter of 2024 compared to the second quarter of 2023. Underwriting and policy processing expense increased $4.2 million primarily due to increased underwriting report and personnel costs. Information technology costs decreased $3.8 million primarily due to a decrease in professional fees and personnel costs. Customer service costs increased $2.0 million primarily due to increased personnel costs and credit card processing fees.

Income from investments before taxes totaled $13.8 million in the second quarter of 2024 compared to $11.6 million in the second quarter of 2023. Net investment income was $16.0 million in the second quarter of 2024 compared to $13.5 million in the second quarter of 2023.

First Half 2024 Highlights

Operating income before taxes increased $84.3 million, or 34.5 percent, in the first six months of 2024 compared to the first six months of 2023.

•Management fee revenue - policy issuance and renewal services increased $235.1 million, or 19.7 percent, in the first six months of 2024 compared to the first six months of 2023.

•Management fee revenue - administrative services increased $3.2 million, or 10.3 percent, in the first six months of 2024 compared to the first six months of 2023.

•Cost of operations - policy issuance and renewal services

◦Commissions increased $135.8 million in the first six months of 2024 compared to the first six 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 profitable growth.

◦Non-commission expense increased $18.4 million in the first six months of 2024 compared to the first six months of 2023. Underwriting and policy processing expense increased $8.7 million primarily due to increased underwriting report and personnel costs. Information technology costs decreased $7.5 million primarily due to a decrease in professional fees and personnel costs largely driven by an increase in capitalized labor costs related to technology initiatives. Sales and advertising expense increased $5.2 million primarily due to increased agent-related and advertising costs. Customer service costs increased $4.0 million primarily due to increased personnel costs and credit card processing fees. Administrative and other costs increased $8.0 million primarily due to increased personnel costs, charitable contributions and professional fees.

Income from investments before taxes totaled $28.9 million in the first six months of 2024 compared to $6.9 million in the first six months of 2023. Net investment income was $31.9 million in the first six months of 2024 compared to $15.7 million in the first six months of 2023. Net investment income included $0.3 million of limited partnership earnings in the first six months of 2024 compared to losses of $10.7 million in the first six months of 2023. Net realized and unrealized gains were $0.1 million in the first six months of 2024 compared to losses of $7.0 million in the first six months of 2023.

Webcast Information

Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on July 26, 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.

Exhibit 99.2

Erie Indemnity Company

Statements of Operations

(dollars in thousands, except per share data)


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
	(Unaudited)				(Unaudited)
Operating revenue
Management fee revenue - policy issuance and renewal services	$	760,886	$	633,339	$	1,426,572	$	1,191,429
Management fee revenue - administrative services	17,051		15,636		33,985		30,825
Administrative services reimbursement revenue	206,028		184,466		397,595		357,293
Service agreement revenue	6,473		6,429		12,987		12,788
Total operating revenue	990,438		839,870		1,871,139		1,592,335

Operating expenses
Cost of operations - policy issuance and renewal services	594,202		521,246		1,144,524		990,341
Cost of operations - administrative services	206,028		184,466		397,595		357,293

Total operating expenses	800,230		705,712		1,542,119		1,347,634
Operating income	190,208		134,158		329,020		244,701

Investment income
Net investment income	16,010		13,535		31,913		15,718
Net realized and unrealized investment (losses) gains	(1,795)		(1,737)		58		(7,019)
Net impairment losses recognized in earnings	(388)		(171)		(3,065)		(1,804)

Total investment income	13,827		11,627		28,906		6,895


Other income	3,292		3,305		6,703		6,642
Income before income taxes	207,327		149,090		364,629		258,238
Income tax expense	43,424		31,238		76,174		54,145
Net income	$	163,903	$	117,852	$	288,455	$	204,093


Net income per share
Class A common stock – basic	$	3.52	$	2.53	$	6.19	$	4.38
Class A common stock – diluted	$	3.13	$	2.25	$	5.52	$	3.90
Class B common stock – basic and diluted	$	528	$	380	$	929	$	657


Weighted average shares outstanding – Basic
Class A common stock	46,189,042		46,189,026		46,189,028		46,188,923
Class B common stock	2,542		2,542		2,542		2,542

Weighted average shares outstanding – Diluted
Class A common stock	52,305,299		52,299,974		52,303,551		52,298,298
Class B common stock	2,542		2,542		2,542		2,542

Dividends declared per share
Class A common stock	$	1.275	$	1.19	$	2.55	$	2.38
Class B common stock	$	191.25	$	178.50	$	382.50	$	357.00

Erie Indemnity Company

Statements of Financial Position

(in thousands)


	June 30, 2024		December 31, 2023
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents (includes restricted cash of $14,027 and $12,542, respectively)	$	170,634	$	144,055
Available-for-sale securities	47,734		82,017

Receivables from Erie Insurance Exchange and affiliates, net	708,171		625,338
Prepaid expenses and other current assets	83,529		69,321

Accrued investment income	10,204		9,458
Total current assets	1,020,272		930,189

Available-for-sale securities, net	946,525		879,224
Available-for-sale securities lent	6,125		0
Equity securities	80,128		84,253

Fixed assets, net	469,145		442,610
Agent loans, net	56,813		58,434

Defined benefit pension plan	65,221		34,320
Other assets, net	47,731		42,934
Total assets	$	2,691,960	$	2,471,964

Liabilities and shareholders' equity
Current liabilities:
Commissions payable	$	413,205	$	353,709
Agent incentive compensation	44,870		68,077
Accounts payable and accrued liabilities	198,689		175,622
Dividends payable	59,377		59,377
Contract liability	41,570		41,210
Deferred executive compensation	8,216		10,982



Securities lending payable	6,345		0
Total current liabilities	772,272		708,977

Defined benefit pension plan	26,591		26,260

Contract liability	20,645		19,910
Deferred executive compensation	16,341		20,936
Deferred income taxes, net	5,192		11,481
Other long-term liabilities	22,106		21,565
Total liabilities	863,147		809,129










Shareholders’ equity	1,828,813		1,662,835
Total liabilities and shareholders’ equity	$	2,691,960	$	2,471,964

Document and Entity Information	Jul. 23, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jul. 23, 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