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Erie Indemnity Reports Third Quarter 2020 Results

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Net Income per Diluted Share was $1.71 for the Quarter and $4.41 for the Nine Months of 2020

Erie, Pa. - October 29, 2020 - Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter and nine months ending September 30, 2020.  Net income was $89.2 million, or $1.71 per diluted share, in the third quarter of 2020, compared to $94.2 million, or $1.80 per diluted share, in the third quarter of 2019.  Net income was $230.5 million, or $4.41 per diluted share, in the first nine months of 2020, compared to $257.2 million, or $4.92 per diluted share, in the first nine months of 2019.

The significant disruption to the economy and financial markets resulting from the COVID-19 pandemic that began in the first quarter of 2020 continues to evolve and the pandemic's ultimate impact and duration remain highly uncertain at this time.  While the Exchange experienced declines in new business premium in the second quarter of 2020 due to the pandemic, new business premiums grew 10.4% in the third quarter of 2020 compared to the same period in 2019.  The financial markets substantially recovered in the third quarter from the financial volatility negatively impacting our portfolio in the first quarter of 2020, improving our investment results in the third quarter.

3Q 2020

(in thousands)

3Q'20

3Q'19

Operating income$96,225$105,907
Investment income16,43813,606
Interest expense and other income, net96711
Income before income taxes111,696119,502
Income tax expense22,48025,333
Net income$89,216$94,169

Nine Months 2020

(in thousands)

2020

2019

Operating income$273,105$288,639
Investment income18,79633,053
Interest expense and other income, net1,596637
Income before income taxes290,305321,055
Income tax expense59,78663,821
Net income$230,519$257,234

3Q 2020 Highlights

Operating income before taxes decreased $9.7 million, or 9.1 percent, in the third quarter of 2020 compared to the third quarter of 2019.

Income from investments before taxes totaled $16.4 million in the third quarter of 2020 compared to $13.6 million in the third quarter of 2019.  Net realized gains on investments were $5.9 million in the third quarter of 2020 compared to $1.7 million in the third quarter of 2019.  Net investment income was $7.0 million in the third quarter of 2020 compared to $8.7 million in the third quarter of 2019.  Earnings from limited partnerships were $3.6 million in the third quarter of 2020 compared to earnings of $3.3 million in the third quarter of 2019.

Nine Months 2020 Highlights

Operating income before taxes decreased $15.5 million, or 5.4 percent, in the first nine months of 2020 compared to the first nine months of 2019.

Income from investments before taxes totaled $18.8 million in the first nine months of 2020 compared to $33.1 million in the first nine months of 2019.  Net investment income was $22.8 million in the first nine months of 2020 compared to $25.2 million in the first nine months of 2019. Net realized gains on investments were $1.6 million in the first nine months of 2020 compared to $5.5 million in the first nine months of 2019.  Net impairment losses of $3.2 million in the first nine months of 2020 were driven by the COVID-19 pandemic's impact on the financial markets.  Losses from limited partnerships were $2.4 million in the first nine months of 2020 compared to earnings of $2.5 million in the first nine months of 2019.

Webcast Information

Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on October 30, 2020.  Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com.