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Erie Indemnity Reports First Quarter 2018 Results

 

Net Income per Diluted Share up 37.6 percent for the Quarter

View Investor Supplement | Statement of Operations

Erie, Pa. - April 26, 2018 - Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter ending March 31, 2018.  Net income was $65.8 million, or $1.26 per diluted share, in the first quarter of 2018, compared to $47.9 million, or $0.91 per diluted share, in the first quarter of 2017.

 

1Q 2018

(dollars in thousands)

1Q'18

1Q'17

 

Operating income

$

77,567

 

$

66,940

 

 

Investment income

6,163

 

6,589

 

 

Interest expense and other, net

509

 

575

 

 

Income before income taxes

83,221

 

72,954

 

 

Income tax expense

17,463

 

25,078

 

 

Net income

$

65,758

 

$

47,876

 

 

 

 

 

 

 

1Q 2018 Highlights

Operating income before taxes increased $10.6 million, or 15.9 percent, in the first quarter of 2018 compared to the first quarter of 2017, as the growth in total operating revenue outpaced the growth in total operating expenses.

Income from investments before taxes totaled $6.2 million in the first quarter of 2018 compared to $6.6 million in the first quarter of 2017.  Net investment income was $6.8 million in the first quarter of 2018 compared to $6.0 million in the first quarter of 2017, while net realized losses on investments were $0.5 million in the first quarter of 2018 compared to net realized gains of $0.5 million in the first quarter of 2017.

Income tax expense decreased by $11.4 million due the lower income tax rate of 21% that became effective January 1, 2018, partially offset by an increase in deferred tax expense.

 

Webcast Information

Indemnity has scheduled a conference call and live audio broadcast on the Web for 10:00 AM ET on April 27, 2018.  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 website by 12:30 PM ET.

Erie Insurance Group
According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 10th largest homeowners insurer and 11th largest automobile insurer in the United States based on direct premiums written and the 15th largest property/casualty insurer in the United States based on total lines net premium written. The Group, rated A+ (Superior) by A.M. Best Company, has more than 5 million policies in force and operates in 12 states and the District of Columbia. Erie Insurance Group is a FORTUNE 500 company.
News releases and more information about Erie Insurance Group are available 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:

  1. dependence upon our relationship with the Exchange and the management fee under the agreement with the subscribers at the Exchange;
  2. dependence upon our relationship with the Exchange and the growth of the Exchange, including:
    1. general business and economic conditions;
    2. factors affecting insurance industry competition;
    3. dependence upon the independent agency system; and
    4. ability to maintain our reputation for customer service;
  3. dependence upon our relationship with the Exchange and the financial condition of the Exchange, including:
    1. the Exchange's ability to maintain acceptable financial strength ratings;
    2. factors affecting the quality and liquidity of the Exchange's investment portfolio;
    3. changes in government regulation of the insurance industry;
    4. emerging claims and coverage issues in the industry; and
    5. severe weather conditions or other catastrophic losses, including terrorism;
  4. costs of providing policy issuance and renewal services to the Exchange under the subscriber's agreement;
  5. credit risk from the Exchange;
  6. ability to attract and retain talented management and employees;
  7. ability to ensure system availability and effectively manage technology initiatives;
  8. difficulties with technology or data security breaches, including cyber attacks;
  9. ability to maintain uninterrupted business operations;
  10. factors affecting the quality and liquidity of our investment portfolio;
  11. our ability to meet liquidity needs and access capital; and
  12. outcome of pending and potential litigation.

 

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.

CONTACT: Scott Beilharz, Investment Relations, 800-458-0811, x7312 or 814-870-7312, Scott.Beilharz@erieinsurance.com

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