ERIE INDEMNITY CO Q3 FY2024 earnings call

• Hurricane Helene and other weather-related activity impacted the combined ratio of Erie Insurance Exchange, but Erie Indemnity Company had strong performance due to new business growth and solid retention. - The strong operating performance of Indemnity is driven by increased management fee revenue from Erie Insurance Exchange's premium growth. - Business Auto 2.0, a refreshed Business Auto product, is being piloted in Indiana with agent feedback driving its design. - A 10-state rollout of a new capability to automatically enroll customers in the online account platform at point of sale was successful. - Erie Insurance donated $450,000 in grants to nine non-profits in August through the Investing in Our Future initiative. - Erie Insurance was named to the Forbes list of America's Best-in-State Employers for 2024 for the fifth straight year and awarded four 2024 Diversity Impact Awards.

For Erie Insurance Exchange, in the third quarter, direct and affiliated assumed written premiums grew over 18%, and year-to-date through 2024 was just over 19% compared to the prior period of 2023. The year-over-year average written premium per policy was 12.8% higher. Policies in force grew 6% year-over-year with a 90.8% policyholder retention. The Exchange's combined ratio was impacted by Hurricane Helene, contributing 5.3 points to the third quarter 2024 combined ratio of 113.7 and 1.9 points to the year-to-date combined ratio of 112. For Erie Indemnity Company, in the third quarter, net income was $160 million or $3.06 per diluted share compared to $131 million or $2.51 per diluted share in the third quarter of 2023. For the first nine months of 2024, net income was $448 million or $8.57 per diluted share compared to $335 million or $6.41 per diluted share for the same period in 2023. Indemnity's management fee revenue for policy issuance and renewal services increased $120 million or 18.5% in the third quarter of 2024 compared to the third quarter of 2023, and $355 million or 19.3% for the first nine months of 2024 compared to the same period of 2023. Commissions, the largest expense, increased $66 million or 18.7% in the third quarter and $202 million or 19.9% in the first nine months of 2024. Non-commission expenses increased $23 million or 13.8% in the third quarter of 2024 and nearly $42 million or 8.4% for the first nine months of 2024.

• The insurance industry faces increased loss cost pressures and weather-related activity which impact profitability. - There is a lag in timing (up to 24 months) for rate increases to fully impact the combined ratio.