Net Income per Diluted Share was $1.25 for the Quarter and $5.71 for the Year
Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the full year and quarter ending December 31, 2022. Net income was $298.6 million, or $5.71 per diluted share, in 2022, compared to $297.9 million, or $5.69 per diluted share, in 2021. Net income was $65.5 million, or $1.25 per diluted share, in the fourth quarter of 2022, compared to $55.0 million, or $1.05 per diluted share, in the fourth quarter of 2021.
The uncertainty resulting from post-pandemic conditions and the current economic environment continues to evolve and the duration or extent of financial impacts remain uncertain.
4Q and Full Year 2022
|
(dollars in thousands) |
4Q'22 |
4Q'21 |
2022 |
2021 |
|---|---|---|---|---|
|
Operating income |
$81,430 |
$61,834 |
$376,214 |
$318,097 |
|
Investment income |
288 |
12,328 |
632 |
67,332 |
|
Interest expense and other, net |
(243) |
4,335 |
394 |
9,025 |
|
Income before income taxes |
81,961 |
69,827 |
376,452 |
376,404 |
|
Income tax expense |
16,471 |
14,785 |
77,883 |
78,544 |
|
Net income |
$65,490 |
$55,042 |
$298,569 |
$297,860 |
2022 Full Year Highlights
Operating income before taxes increased $58.1 million, or 18.3 percent, in 2022 compared to 2021.
- Management fee revenue - policy issuance and renewal services increased $174.7 million, or 9.1 percent, in 2022 compared to 2021.
- Management fee revenue - administrative services remained consistent at $58.3 million in both 2022 and 2021.
- Cost of operations - policy issuance and renewal services
- Commissions increased $71.1 million in 2022 compared to 2021 driven by direct and affiliated assumed written premium growth, partially offset by a reduction in agent incentive compensation.
- Non-commission expense increased $47.1 million in 2022 compared to 2021.Underwriting and policy processing costs increased $6.4 million primarily due to increased underwriting report, printing, and personnel costs. Information technology costs increased $13.1 million primarily due to increased hardware and software costs and professional fees, partially offset by decreased personnel costs. Sales and advertising costs increased $7.5 million primarily due to increased advertising and agent-related expenses. Administrative and other expenses increased $22.5 million primarily due to an increase in personnel costs related to compensation and increased professional fees.
- The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $668.3 million in 2022 and $638.5 million in 2021, but had no net impact on operating income.
Income from investments before taxes totaled $0.6 million in 2022 compared to $67.3 million in 2021. Net investment income was $28.6 million in 2022 compared to $62.2 million in 2021. Included in net investment income is $10.4 million of limited partnership losses in 2022 compared to earnings of $31.7 million in 2021. Net realized and unrealized losses on investments were $27.3 million in 2022 compared to gains of $4.9 million in 2021.
4Q 2022 Highlights
Operating income before taxes increased $19.6 million, or 31.7 percent, in the fourth quarter of 2022 compared to the fourth quarter of 2021.
- Management fee revenue - policy issuance and renewal services increased $53.3 million, or 11.8 percent, in the fourth quarter of 2022 compared to the fourth quarter of 2021.
- Management fee revenue - administrative services increased $0.6 million, or 4.0 percent in the fourth quarter of 2022 compared to the fourth quarter of 2021.
- Management fee revenue - administrative services increased $0.6 million, or 4.0 percent in the fourth quarter of 2022 compared to the fourth quarter of 2021.
- Cost of operations - policy issuance and renewal services
- Commissions increased $15.6 million in the fourth quarter of 2022 compared to the fourth quarter of 2021 primarily driven by direct and affiliated assumed written premium growth, partially offset by a reduction in agent incentive compensation.
- Non-commission expense increased $19.3 million in the fourth quarter of 2022 compared to the fourth quarter of 2021.Underwriting and policy processing costs increased $3.5 million primarily due to increased personnel costs, postage and underwriting report costs. Information technology costs increased $5.1 million primarily due to increased hardware and software costs and professional fees. Sales and advertising costs increased $4.4 million primarily due to increased advertising and agent-related expenses. Administrative and other expenses increased $7.5 million primarily due to increased personnel costs.
- The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $175.6 million in the fourth quarter of 2022 and $165.4 million in the fourth quarter of 2021, but had no net impact on operating income.
Income from investments before taxes totaled $0.3 million in the fourth quarter of 2022 compared to $12.3 million in the fourth quarter of 2021. Net investment income was $4.0 million in the fourth quarter of 2022 compared to $12.6 million in the fourth quarter of 2021. Included in net investment income is $8.3 million of limited partnership losses in the fourth quarter of 2022 compared to earnings of $5.0 million in the fourth quarter of 2021. Net realized and unrealized losses on investments were $3.5 million in the fourth quarter of 2022 compared to $0.2 million in the fourth quarter of 2021.
Webcast Information
Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on March 2, 2023. Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com.