Net Income per Diluted Share was $2.51 for the Quarter and $6.41 for the Nine Months of 2023
Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter and nine months ending September 30, 2023. Net income was $131.0 million, or $2.51 per diluted share, in the third quarter of 2023, compared to $84.3 million, or $1.61 per diluted share, in the third quarter of 2022. Net income was $335.1 million, or $6.41 per diluted share, in the first nine months of 2023, compared to $233.1 million, or $4.46 per diluted share, in the first nine months of 2022.
3Q 2023
|
(in thousands) |
3Q'23 |
3Q'22 |
|---|---|---|
|
Operating Income |
$148,471 |
$106,472 |
|
Investment income (loss) |
12,302 |
(571) |
|
Interest expense and other (income), net |
(3,001) |
(447) |
|
Income before income taxes |
163,774 |
106,348 |
|
Income tax expense |
32,734 |
22,035 |
|
Net Income |
$131,040 |
$84,313 |
3Q 2023 Highlights
Operating income before taxes increased $42.0 million, or 39.4 percent, in the third quarter of 2023 compared to the third quarter of 2022.
- Management fee revenue - policy issuance and renewal services increased $97.4 million, or 17.7 percent, in the third quarter of 2023 compared to the third quarter of 2022.
- Management fee revenue - administrative services increased $1.5 million, or 10.2 percent, in the third quarter of 2023 compared to the third quarter of 2022.
- Cost of operations - policy issuance and renewal services
- Commissions increased $44.6 million in the third quarter of 2023 compared to the third quarter of 2022, 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 $12.7 million in the third quarter of 2023 compared to the third quarter of 2022.Underwriting and policy processing expense increased $2.8 million primarily due to increased underwriting report costs. Information technology costs increased $0.9 million primarily due to increased professional fees. Administrative and other costs increased $9.7 million primarily due to an increase in personnel costs and professional fees. Personnel costs were impacted by increased compensation including higher estimated costs for incentive plan awards, partially offset by lower pension costs due to an increase in the discount rate compared to 2022.Increases in incentive plan costs were driven by improved direct written premiums and policies in force growth and a higher company stock price at September 30, 2023 compared to September 30, 2022.
Income from investments before taxes totaled $12.3 million in the third quarter of 2023 compared to loss from investments before taxes of $0.6 million in the third quarter of 2022. Net investment income was $14.6 million in the third quarter of 2023 compared to $5.8 million in the third quarter of 2022. Net investment income included less than $0.1 million of limited partnership losses in the third quarter of 2023 compared to $4.6 million in the third quarter of 2022. Net realized and unrealized losses on investments were $2.2 million in the third quarter of 2023 compared to $6.2 million in the third quarter of 2022.
Nine Months 2023
|
(in thousands) |
2023 |
2022 |
|---|---|---|
|
Operating Income |
$393,172 |
$294,784 |
|
Investment income (loss) |
19,197 |
344 |
|
Interest expense and other (income), net |
(9,643) |
637 |
|
Income before income taxes |
422,012 |
294,491 |
|
Income tax expense |
86,879 |
61,412 |
|
Net Income |
$335,133 |
$233,079 |
Nine Months 2023 Highlights
Operating income before taxes increased $98.4 million, or 33.4 percent, in the first nine months of 2023 compared to the first nine months of 2022.
- Management fee revenue - policy issuance and renewal services increased $256.3 million, or 16.2 percent, in the first nine months of 2023 compared to the first nine months of 2022.
- Management fee revenue - administrative services increased $3.5 million, or 8.1 percent, in the first nine months of 2023 compared to the first nine months of 2022.
- Cost of operations - policy issuance and renewal services
- Commissions increased $115.9 million in the first nine months of 2023 compared to the first nine months of 2022, 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 $45.7 million in first the nine months of 2023 compared to the first nine months of 2022.Underwriting and policy processing expense increased $9.1 million primarily due to increased underwriting report, personnel, and postage costs. Information technology costs increased $15.7 million primarily due to increased professional fees, hardware and software costs, and personnel costs. Administrative and other costs increased $20.3 million primarily due to an increase in personnel costs. Personnel costs were impacted by increased compensation including higher estimated costs for incentive plan awards, partially offset by lower pension costs due to an increase in the discount rate compared to 2022.Increases in incentive plan costs were driven by improved direct written premiums and policies in force growth and a higher company stock price at September 30, 2023 compared to September 30, 2022.
Income from investments before taxes totaled $19.2 million in the first nine months of 2023 compared to $0.3 million in the first nine months of 2022. Net investment income was $30.4 million in the first nine months of 2023 compared to $24.6 million in the first nine months of 2022. Net investment income included $10.7 million of limited partnership losses in the first nine months of 2023 compared to $2.2 million in the first nine months 2022. Net realized and unrealized losses on investments were $9.2 million in the first nine months of 2023 compared to $23.8 million in the first nine months of 2022.
Webcast Information
Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on October 27, 2023. Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com.
Erie Insurance Group
According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 12th largest homeowners insurer, 12th largest automobile insurer and 13th largest commercial lines insurer in the United States based on direct premiums written. Founded in 1925, Erie Insurance is a Fortune 500 company and the 19th largest property/casualty insurer in the United States based on total lines net premium written. Rated A+ (Superior) by A.M. Best, ERIE has more than 6 million policies in force and operates in 12 states and the District of Columbia.
News releases and more information are available on ERIE's website at www.erieinsurance.com.