Net Income per Diluted Share was $2.12 for the Quarter and $8.53 for the Year
Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the full year and quarter ending December 31, 2023. Net income was $446.1 million, or $8.53 per diluted share, in 2023, compared to $298.6 million, or $5.71 per diluted share, in 2022. Net income was $110.9 million, or $2.12 per diluted share, in the fourth quarter of 2023, compared to $65.5 million, or $1.25 per diluted share, in the fourth quarter of 2022.
4Q 2023
|
(in thousands) |
4Q'23 |
4Q'22 |
|---|---|---|
|
Operating income |
$127,084 |
$81,430 |
|
Investment income |
9,771 |
288 |
|
Interest expense and other (income), net |
(3,069) |
(243) |
|
Income before income taxes |
139,924 |
81,961 |
|
Income tax expense |
28,996 |
16,471 |
|
Net income |
$110,928 |
$65,490 |
Full year 2023
|
(in thousands) |
2023 |
2022 |
|---|---|---|
|
Operating income |
$520,256 |
$376,214 |
|
Investment income |
28,968 |
632 |
|
Interest expense and other (income), net |
(12,712) |
394 |
|
Income before income taxes |
561,936 |
376,452 |
|
Income tax expense |
115,875 |
77,883 |
|
Net Income |
$446,061 |
$298,569 |
2023 Full Year Highlights
Operating income before taxes increased $144.0 million, or 38.3 percent, in 2023 compared to 2022.
- Management fee revenue - policy issuance and renewal services increased $354.2 million, or 17.0 percent, in 2023 compared to 2022.
- Management fee revenue - administrative services increased $5.3 million, or 9.2% in 2023 compared to 2022.
- Cost of operations - policy issuance and renewal services
-
- Commissions increased $169.0 million in 2023 compared to 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 $46.9 million in 2023 compared to 2022. Underwriting and policy processing costs increased $9.4 million primarily due to policies in force growth. Information technology costs increased $18.6 million primarily due to increased professional fees, personnel costs, and hardware and software costs. Administrative and other expenses increased $20.0 million primarily due to an increase in personnel costs. Personnel costs in 2023 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 premium and policies in force growth and Indemnity's higher stock price at year-end 2023 compared to 2022.
- The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $737.1 million in 2023 and $668.3 million in 2022, but had no net impact on operating income.
Income from investments before taxes totaled $29.0 million in 2023 compared to $0.6 million in 2022. Net investment income was $44.6 million in 2023 compared to $28.6 million in 2022. Net investment income included limited partnership losses of $11.3 million in 2023 compared to $10.4 million in 2022. Net realized and unrealized losses on investments were $5.8 million in 2023 compared to $27.3 million in 2022. Net impairment losses recognized in earnings were $9.8 million in 2023 compared to $0.7 million in 2022.
4Q 2023 Highlights
Operating income before taxes increased $45.7 million, or 56.1 percent, in the fourth quarter of 2023 compared to the fourth quarter of 2022.
- Management fee revenue - policy issuance and renewal services increased $98.0 million, or 19.5 percent, in the fourth quarter of 2023 compared to the fourth quarter of 2022.
- Management fee revenue - administrative services increased $1.8 million, or 12.2 percent in the fourth quarter of 2023 compared to the fourth quarter of 2022.
- Cost of operations - policy issuance and renewal services
-
- Commissions increased $53.1 million in the fourth quarter of 2023 compared to the fourth quarter of 2022 primarily driven by the growth in direct and affiliated assumed written premium.
- Non-commission expense increased $1.2 million in the fourth quarter of 2023 compared to the fourth quarter of 2022.Information technology costs increased $2.9 million primarily due to increased professional fees and personnel costs. Sales and advertising costs decreased $2.4 million primarily due to decreased advertising expenses. Customer service costs increased $0.8 million primarily due to increased bank charges and personnel costs.
- The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $192.7 million in the fourth quarter of 2022 and $175.6 million in the fourth quarter of 2022, but had no net impact on operating income.
Income from investments before taxes totaled $9.8 million in the fourth quarter of 2023 compared to $0.3 million in the fourth quarter of 2022. Net investment income was $14.2 million in the fourth quarter of 2023 compared to $4.0 million in the fourth quarter of 2022. Net investment income included limited partnership losses of $0.6 million in the fourth quarter of 2023 compared to $8.3 million in the fourth quarter of 2022. Net realized and unrealized gains on investments were $3.4 million in the fourth quarter of 2023 compared to losses of $3.5 million in the fourth quarter of 2022. Net impairment losses recognized in earnings were $7.8 million in the fourth quarter of 2023 compared to $0.2 million in the fourth quarter of 2022.
Webcast Information
Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on February 27, 2024. Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com.