Erie Indemnity Reports Second Quarter 2024 Results

2Q 2024

Operating income	$190,208	$134,158
Investment income	13,827	11,627
Other income	3,292	3,305
Income before income taxes	207,327	149,090
Income tax expense	43,424	31,238
Net income	$163,903	$117,852

first half 2024

Operating income	$329,020	$244,701
Investment income	28,906	6,895
Other income	6,703	6,642
Income before income taxes	364,629	258,238
Income tax expense	76,174	54,145
Net income	$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.