Net Income per Diluted Share was $1.61 for the Quarter and $4.46 for the Nine Months of 2022
ERIE, Pa., October 27, 2022 - Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter and nine months ending September 30, 2022. Net income was $84.3 million, or $1.61 per diluted share, in the third quarter of 2022, compared to $90.2 million, or $1.72 per diluted share, in the third quarter of 2021. Net income was $233.1 million, or $4.46 per diluted share, in the first nine months of 2022, compared to $242.8 million, or $4.64 per diluted share, in the first nine months of 2021.
3Q 2022
|
(in thousands) |
3Q'22 |
3Q'21 |
|---|---|---|
|
Operating Income |
$106,472 |
$95,103 |
|
Investment income (loss) |
(571) |
20,598 |
|
Interest and other expense, net |
(447) |
1,575 |
|
Income before income taxes |
106,348 |
114,126 |
|
Income tax expense |
22,035 |
23,903 |
|
Net income |
$84,313 |
$90,223 |
Nine Months 2022
|
(in thousands) |
2022 |
2021 |
|---|---|---|
|
Operating Income |
$294,784 |
$256,263 |
|
Investment Income (loss) |
344 |
55,004 |
|
Interest and other expense, net |
637 |
4,690 |
|
Income before income taxes |
294,491 |
306,577 |
|
Income tax expense |
61,412 |
63,759 |
|
Net income |
$233,079 |
$242,818 |
3Q 2022 Highlights
Operating income before taxes increased $11.4 million, or 12.0 percent, in the third quarter of 2022 compared to the third quarter of 2021.
- Management fee revenue - policy issuance and renewal services increased $46.8 million, or 9.3 percent, in the third quarter of 2022 compared to the third quarter of 2021.
- Management fee revenue - administrative services increased $0.2 million, or 1.3 percent, in the third quarter of 2022 compared to the third quarter of 2021.
- Cost of operations - policy issuance and renewal services
- Commissions increased $21.6 million in the third quarter of 2022 compared to the third quarter of 2021, primarily driven by the growth in direct and affiliated assumed written premium, partially offset by a decrease in agent incentive compensation.
- Non-commission expense increased $14.2 million in the third quarter of 2022 compared to the third quarter of 2021.Underwriting and policy processing expense increased $2.9 million primarily due to increased postage and underwriting report costs. Information technology costs increased $3.7 million primarily due to increased professional fees and hardware and software costs, partially offset by decreased personnel costs. Administrative and other costs increased $6.4 million primarily due to an increase in personnel costs related to compensation and increased professional fees.
Loss from investments before taxes totaled $0.6 million in the third quarter of 2022 compared to income from investments before taxes of $20.6 million in the third quarter of 2021. Net investment income was $5.8 million in the third quarter of 2022 compared to $18.9 million in the third quarter of 2021. Included in net investment income is $4.6 million of limited partnership losses in the third quarter of 2022 compared to earnings of $11.5 million in the third quarter of 2021. Net realized and unrealized losses on investments were $6.2 million in the third quarter of 2022 compared to net realized and unrealized gains of $1.6 million in the third quarter of 2021.
Nine Months 2022 Highlights
Operating income before taxes increased $38.5 million, or 15.0 percent, in the first nine months of 2022 compared to the first nine months of 2021.
- Management fee revenue - policy issuance and renewal services increased $121.3 million, or 8.3 percent, in the first nine months of 2022 compared to the first nine months of 2021.
- Management fee revenue - administrative services decreased $0.5 million, or 1.2 percent, in the first nine months of 2022 compared to the first nine months of 2021.
- Cost of operations - policy issuance and renewal services
- Commissions increased $55.6 million in the first nine months of 2022 compared to the first nine months of 2021, primarily driven by the growth in direct and affiliated assumed written premium, partially offset by a decrease in agent incentive compensation.
- Non-commission expense increased $27.8 million in the first nine months of 2022 compared to the first nine months of 2021.Underwriting and policy processing expense increased $3.0 million primarily driven by increased underwriting report costs. Information technology costs increased $7.9 million primarily due to increased hardware and software costs and professional fees, partially offset by decreased personnel costs. Sales and advertising increased $3.1 million primarily due to agent related expenses. Administrative and other costs increased $15.0 million primarily driven by increased professional fees and personnel costs related to compensation. Personnel costs in all expense categories were also impacted by lower estimated costs for incentive plan awards related to underwriting performance.
Income from investments before taxes totaled $0.3 million in the first nine months of 2022 compared to $55.0 million in the first nine months of 2021. Net investment income was $24.6 million in the first nine months of 2022 compared to $49.6 million in the first nine months of 2021. Included in net investment income is $2.2 million of limited partnership losses in the first nine months of 2022 compared to earnings of $26.7 million in the first nine months of 2021. Net realized and unrealized losses on investments totaled $23.8 million in the first nine months of 2022 compared to net realized and unrealized gains of $5.2 million in the first nine months of 2021.
Webcast Information
Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on October 28, 2022. Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com.