Net Income per Diluted Share up 24 percent for the Quarter
Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter ending March 31, 2021. Net income was $73.6 million, or $1.41 per diluted share, in the first quarter of 2021, compared to $59.3 million, or $1.13 per diluted share, in the first quarter of 2020.
The uncertainty resulting from the COVID-19 pandemic continues to evolve and the pandemic's ultimate impact and duration remain uncertain at this time.
1Q 2021
|
(in thousands) |
1Q'21 | 1Q'20 |
|---|---|---|
|
Operating income |
$76,095 |
$85,691 |
|
Investment income(loss) |
17,988 |
(9,195) |
|
Interest expense and other income, net |
1,528 |
369 |
|
Income before income taxes |
92,555 |
76,127 |
|
Income tax expense |
18,989 |
16,801 |
|
Net income |
$73,566 |
$59,326 |
1Q 2021 Highlights
Operating income before taxes decreased $9.6 million, or 11.2 percent, in the first quarter of 2021 compared to the first quarter of 2020.
- Management fee revenue - policy issuance and renewal services increased $12.0 million, or 2.7 percent, in the first quarter of 2021 compared to the first quarter of 2020.
- Management fee revenue - administrative services increased $0.1 million, or 0.5 percent, in the first quarter of 2021 compared to the first quarter of 2020.
- Cost of operations - policy issuance and renewal services
- Commissions increased $9.4 million in the first quarter of 2021 compared to the first quarter of 2020, driven by the growth in direct and affiliated assumed written premium, primarily in lines of business that pay a higher commission rate.To a lesser extent, there was also an increase in agent incentive compensation for the first quarter of 2021 compared to the first quarter of 2020.
- Non-commission expense increased $11.7 million in the first quarter of 2021 compared to the first quarter of 2020.Underwriting and policy processing expense decreased $0.8 million primarily due to lower personnel costs.Information technology costs increased $4.2 million primarily due to increased hardware and software costs and professional fees.Administrative and other costs increased $8.5 million primarily driven by increased professional fees and higher incentive plan award accruals due to improved performance in the first quarter of 2021 compared to the same period in 2020.
Income from investments before taxes totaled $18.0 million in the first quarter of 2021 compared to a loss from investments of $9.2 million in the first quarter of 2020. Net investment income was $17.1 million in the first quarter of 2021 compared to $4.7 million in the first quarter of 2020. Included in net investment income is $9.0 million of limited partnership earnings in the first quarter of 2021 and $3.7 million of limited partnership losses in the first quarter of 2020. Net realized gains on investments were $0.8 million in the first quarter of 2021 compared to net realized losses of $10.8 million in the first quarter of 2020. Investment losses experienced during the first quarter of 2020 were primarily due to the significant financial market volatility resulting from the COVID-19 pandemic.
Webcast Information
Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on April 30, 2021. Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com.