Net Income per Diluted Share was $1.51 for the Quarter and $2.92 for the Six Months of 2021
Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter and six months ending June 30, 2021. Net income was $79.0 million, or $1.51 per diluted share, in the second quarter of 2021, compared to $82.0 million, or $1.57 per diluted share, in the second quarter of 2020. Net income was $152.6 million, or $2.92 per diluted share, in the first six months of 2021, compared to $141.3 million, or $2.70 per diluted share, in the first six months 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.
2Q 2021
|
(in thousands) |
2Q'21 | 2Q'20 |
|---|---|---|
|
Operating income |
$85,065 |
$91,189 |
|
Investment income (loss) |
16,418 |
11,553 |
|
Interest expense and other income, net |
1,587 |
260 |
|
Income before income taxes |
99,896 |
102,482 |
|
Income tax expense |
20,867 |
20,505 |
|
Net income |
$79,029 |
$81,977 |
First Half 2021
|
(in thousands) |
1H'21 | 1H'20 |
|---|---|---|
|
Operating income |
$161,160 |
$176,880 |
|
Investment income (loss) |
34,406 |
2,358 |
|
Interest expense and other income, net |
3,115 |
629 |
|
Income before income taxes |
192,451 |
178,609 |
|
Income tax expense |
39,856 |
37,306 |
|
Net income |
$152,595 |
$141,303 |
2Q 2021 Highlights
Operating income before taxes decreased $6.1 million, or 6.7 percent, in the second quarter of 2021 compared to the second quarter of 2020.
- Management fee revenue - policy issuance and renewal services increased $18.5 million, or 3.8 percent, in the second quarter of 2021 compared to the second quarter of 2020.
- Management fee revenue - administrative services decreased $0.1 million, or 1.0 percent, in the second quarter of 2021 compared to the second quarter of 2020.
- Cost of operations - policy issuance and renewal services
- Commissions increased $14.7 million in the second quarter of 2021 compared to the second 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 second quarter of 2021 compared to the second quarter of 2020.
- Non-commission expense increased $9.2 million in the second quarter of 2021 compared to the second quarter of 2020.Underwriting and policy processing expense increased $3.3 million primarily due to increased personnel costs and underwriting report costs. Information technology costs increased $2.9 million primarily due to increased hardware and software costs as well as increased personnel costs. Administrative and other costs increased $3.6 million primarily driven by increased building and equipment depreciation and professional fees in the second quarter of 2021 compared to the same period in 2020.Personnel costs in all expense categories for the second quarter of 2021 were impacted by higher medical costs compared to the prior year as the COVID-19 pandemic reduced elective procedures in 2020.
Income from investments before taxes totaled $16.4 million in the second quarter of 2021 compared to $11.6 million in the second quarter of 2020. Net investment income was $13.7 million in the second quarter of 2021 compared to $5.0 million in the second quarter of 2020. Included in net investment income is $6.2 million of limited partnership earnings in the second quarter of 2021 and $2.3 million of limited partnership losses in the second quarter of 2020. Net realized gains on investments were $2.8 million in the second quarter of 2021 compared to $6.5 million in the second quarter of 2020.
First Half 2021 Highlights
Operating income before taxes decreased $15.7 million, or 8.9 percent, in the first six months of 2021 compared to the first six months of 2020.
- Management fee revenue - policy issuance and renewal services increased $30.4 million, or 3.3 percent, in the first six months of 2021 compared to the first six months of 2020.
- Management fee revenue - administrative services decreased $0.1 million, or 0.2 percent, in the first six months of 2021 compared to the first six months of 2020.
- Cost of operations - policy issuance and renewal services
- Commissions increased $24.1 million in the first six months of 2021 compared to the first six months 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 six months 2021 compared to the first six months of 2020.
- Non-commission expense increased $20.8 million for the six months ended June 30, 2021 compared to the same period in 2020.Underwriting and policy processing costs increased $2.5 million primarily due to increased underwriting report costs and personnel costs. Information technology costs increased $7.2 million primarily due to increased hardware and software costs and personnel costs. Administrative and other costs increased $12.1 million primarily driven by increased personnel costs and professional fees compared to the same period in 2020.Personnel costs in all expense categories were impacted by higher pension costs and higher medical costs compared to the prior year as the COVID-19 pandemic reduced elective procedures in 2020.
Income from investments before taxes totaled $34.4 million in the first six months of 2021 compared to $2.4 million in the first six months of 2020. Net investment income was $30.7 million in the first six months of 2021 compared to $9.7 million in the first six months of 2020. Included in net investment income is $15.2 million of limited partnership earnings in the first six months of 2021 and $6.0 million of limited partnership losses in the first six months of 2020. Net realized gains on investments were $3.6 million in the first six months of 2021 compared to net realized losses of $4.3 million in the first six months of 2020.
Webcast Information
Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on July 30, 2021. Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com.