Net Income per Diluted Share was $1.05 for the Quarter and $5.69 for the Year
Erie, Pa. - February 24, 2022 - Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the full year and quarter ending December 31, 2021. Net income was $297.9 million, or $5.69 per diluted share, in 2021, compared to $293.3 million, or $5.61 per diluted share, in 2020. Net income was $55.0 million, or $1.05 per diluted share, in the fourth quarter of 2021, compared to $62.8 million, or $1.20 per diluted share, in the fourth quarter of 2020.
The uncertainty resulting from COVID-19 and subsequent resulting conditions continues to evolve and the ultimate impact and duration remain uncertain at this time.
4Q 2021
|
(in thousands) |
4Q'21 | 4Q'20 |
|---|---|---|
|
Operating income |
$61,834 |
$65,052 |
|
Investment income |
12,328 |
14,071 |
|
Interest expense and other income, net |
4,335 |
913 |
|
Income before income taxes |
69,827 |
78,210 |
|
Income tax expense |
14,785 |
15,425 |
|
Net income |
$55,042 |
$62,785 |
|
Net Income |
$55,042 |
$62,785 |
Full Year 2021
|
(in thousands) |
2021 | 2020 |
|---|---|---|
|
Operating income |
$318,097 |
$338,157 |
|
Investment income |
67,332 |
32,867 |
|
Interest expense and other income, net |
9,025 |
2,509 |
|
Income before income taxes |
376,404 |
368,515 |
|
Income tax expense |
78,544 |
75,211 |
|
Net income |
$297,860 |
$293,304 |
|
Net income |
$297,860 |
$293,304 |
2021 Full Year Highlights
Operating income before taxes decreased $20.1 million, or 5.9 percent, in 2021 compared to 2020.
- Management fee revenue - policy issuance and renewal services increased $71.4 million, or 3.9 percent, in 2021 compared to 2020.
- Management fee revenue allocated to administrative services decreased $1.2 million, or 2.0 percent, in 2021 compared to 2020.
- Cost of operations - policy issuance and renewal services
- Commissions increased $57.2 million in 2021 compared to 2020 resulting from higher direct and affiliated assumed premiums written by the Exchange and higher agent incentive compensation.
- Non-commission expense increased $31.3 million in 2021 compared to 2020.Underwriting and policy processing costs increased $4.5 million primarily due to increased personnel costs and underwriting report costs. Information technology costs increased $11.3 million primarily due to increased hardware and software costs and personnel costs. Administrative and other expenses increased $14.2 million primarily driven by increased professional fees and building and equipment depreciation. Personnel costs in all categories were impacted by higher medical costs compared to the prior year as the COVID-19 pandemic reduced elective procedures in 2020.
- The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $638.5 million in 2021 and $609.4 million in 2020, but had no net impact on operating income.
Income from investments before taxes totaled $67.3 million in 2021 compared to $32.9 million in 2020. Net investment income was $62.2 million in 2021 compared to $29.8 million in 2020. Included in net investment income is $31.7 million of limited partnership earnings in 2021 compared to limited partnership losses of $0.6 million in 2020. Net realized and unrealized gains on investments were $4.9 million in 2021 compared to $6.4 million in 2020.
4Q 2021 Highlights
Operating income before taxes decreased $3.2 million, or 4.9 percent, in the fourth quarter of 2021 compared to the fourth quarter of 2020.
- Management fee revenue - policy issuance and renewal services increased $20.6 million, or 4.8 percent, in the fourth quarter of 2021 compared to the fourth quarter of 2020.
- Management fee revenue allocated to administrative services decreased $0.7 million, or 4.5 percent in the fourth quarter of 2021 compared to the fourth quarter of 2020.
- Cost of operations - policy issuance and renewal services
- Commissions increased $18.2 million in the fourth quarter of 2021 compared to the fourth quarter of 2020 primarily driven by direct and affiliated assumed written premium growth.
- Non-commission expense increased $4.6 million in the fourth quarter of 2021 compared to the fourth quarter of 2020 driven by increases in underwriting and policy processing costs, administrative and other expenses, and customer service costs.
- The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $165.4 million and $158.2 million in the fourth quarter of 2021 and 2020, respectively, but had no net impact on operating income.
Income from investments before taxes totaled $12.3 million in the fourth quarter of 2021 compared to $14.1 million in the fourth quarter of 2020. Net investment income was $12.6 million in the fourth quarter of 2021 compared to $9.4 million in the fourth quarter of 2020. Included in net investment income is $5.0 million of limited partnership earnings in the fourth quarter of 2021 compared to $1.8 million in the fourth quarter of 2020. Net realized and unrealized losses on investments were $0.2 million in the fourth quarter of 2021 compared to net realized and unrealized gains of $4.8 million in the fourth quarter of 2020.
Webcast Information
Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on February 25, 2022. Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com.