Erie, Pa. - April 30, 2015 - Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter ending March 31, 2015. Net income per diluted share in the first quarter of 2015 was $0.74 compared to $0.88 in the first quarter of 2014.
"As we celebrate our 90th anniversary, we are proud of surpassing 5 million policies in force in the first quarter of 2015", said Terry Cavanaugh, president and chief executive officer. "We remain committed to helping and rewarding agents for profitable growth and making it easier to do business with ERIE."
Income from management operations before taxes decreased $5 million, or 10.3 percent, in the first quarter of 2015 compared to the first quarter of 2014.
- Revenue from management operations increased $25 million, or 7.5 percent, in the first quarter of 2015 compared to the first quarter of 2014.
- Commissions increased $20 million in the first quarter of 2015, compared to the same period in 2014. The majority of the increase was driven by the 7.7% increase in direct written premiums of the Property and Casualty Group, while about one-third of the increase was due to an increase in agent incentive costs related to profitable growth, compared to the prior year quarter. The estimated agent incentive payout, at the end of each quarter, is based on actual underwriting results for the two prior years and the current year-to-date period. Therefore, fluctuations in the current quarter underwriting results can impact the estimated incentive payout on a quarter-to-quarter basis.
- Non-commission expense increased $10 million in the first quarter of 2015, compared to the first quarter of 2014. Information technology costs increased $5 million while administrative and other expenses increased $4 million.
- The gross margin in the first quarter of 2015 was 14.9%, compared to 17.9% in the first quarter of 2014. The majority of the 3.0 point decrease in gross margin was driven by the increased estimated agent incentive payout discussed above. The remaining decrease in gross margin was the result of increased information technology and administrative and other costs.
Income from investment operations before taxes totaled $6 million in the first quarter of 2015, compared to $11 million in the first quarter of 2014. Earnings from limited partnerships were $2 million in the first quarter of 2015 compared to earnings of $6 million in the first quarter of 2014.
Indemnity has scheduled a conference call and live audio broadcast on the Web for 10:00 AM ET on May 1, 2015. Investors may access the live audio broadcast by logging on to www.erieinsurance.com. Indemnity recommends visiting the website at least 15 minutes prior to the Webcast to download and install any necessary software. A Webcast audio replay will be available on the Investor Relations page of the Erie Insurance Group's website by 12:30 PM ET.