2025 Full Year Highlights
Operating income before taxes increased $40.7 million, or 6.0 percent, in 2025 compared to 2024.
- Management fee revenue - policy issuance and renewal services increased $237.7 million, or 8.2 percent, in 2025 compared to 2024.
- Management fee revenue - administrative services increased $5.7 million, or 8.3 percent in 2025 compared to 2024.
- Cost of operations - policy issuance and renewal services
- Commissions – Commissions increased $175.6 million in 2025 compared to 2024, primarily driven by the growth in direct and affiliated assumed written premium and an increase in agent incentive compensation due to improved property and casualty underwriting profitability for the three-year period ended 2025 compared to the three-year period ended 2024.
- Non-commission expense increased $25.5 million in 2025 compared to 2024. Underwriting and policy processing expense increased $4.8 million primarily due to increased postage and personnel costs, partially offset by a decrease in underwriting report costs. Information technology costs increased $24.3 million primarily due to an increase in personnel costs and hardware and software costs. Customer service costs increased $3.5 million primarily due to increased credit card processing fees and personnel costs. Administrative and other costs decreased $7.1 million primarily due to decreased professional fees and personnel costs. Personnel costs in 2025 were impacted by increased healthcare costs compared to 2024. Personnel costs in 2025 were also impacted by decreased incentive compensation compared to 2024. Decreases in incentive plan costs were primarily driven by lower performance metrics compared to 2024 and a decrease in company stock price during 2025 compared to an increase during 2024.
- The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $836.6 million in 2025 and $806.3 million in 2024, but had no net impact on operating income.
Income from investments before taxes totaled $84.9 million in 2025 compared to $69.3 million in 2024. Net investment income was $85.8 million in 2025 compared to $70.2 million in 2024. Net investment income included limited partnership earnings of $3.5 million in 2025 compared to $2.0 million in 2024. Net realized and unrealized gains on investments were $2.3 million in 2025 compared to $3.2 million in 2024. Net impairment losses recognized in earnings were $3.3 million in 2025 compared to $4.1 million in 2024.
4Q 2025 Highlights
Operating income before taxes decreased $9.6 million, or 5.7 percent, in the fourth quarter of 2025 compared to the fourth quarter of 2024.
- Management fee revenue - policy issuance and renewal services increased $29.3 million, or 4.2 percent, in the fourth quarter of 2025 compared to the fourth quarter of 2024.
- Management fee revenue - administrative services increased $2.1 million, or 12.0 percent in the fourth quarter of 2025 compared to the fourth quarter of 2024.
- Cost of operations - policy issuance and renewal services
- Commissions increased $30.1 million in the fourth quarter of 2025 compared to the fourth quarter of 2024, primarily driven by the growth in direct and affiliated assumed written premium and an increase in agent incentive compensation due to improved property and casualty underwriting profitability for the three-year period ended 2025 compared to the three-year period ended 2024.
- Non-commission expense increased $10.4 million in the fourth quarter of 2025 compared to the fourth quarter of 2024.Underwriting and policy processing expense decreased $1.2 million primarily due to a decrease in underwriting report costs, partially offset by an increase in personnel costs. Information technology costs increased $4.5 million primarily due to an increase in personnel costs and hardware and software costs. Sales and advertising expense increased $1.4 million primarily due to increased costs from community development initiatives. Administrative and other costs increased $5.8 million primarily due to increased personnel costs, partially offset by decreased professional fees. Personnel costs in the fourth quarter of 2025 were impacted by increased incentive compensation compared to the fourth quarter of 2024.Increases in incentive plan costs were primarily driven by improved performance metrics in the fourth quarter of 2025 compared to the fourth quarter of 2024.
- The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $198.0 million in the fourth quarter of 2025 and $202.0 million in the fourth quarter of 2024, but had no net impact on operating income.
Income from investments before taxes totaled $24.2 million in the fourth quarter of 2025 compared to $20.8 million in the fourth quarter of 2024. Net investment income was $24.8 million in the fourth quarter of 2025 compared to $20.9 million in the fourth quarter of 2024. Net investment income included limited partnership earnings of $2.3 million in the fourth quarter of 2025 compared to $1.8 million in the fourth quarter of 2024. Net impairment losses recognized in earnings were $0.7 million in the fourth quarter of 2025 compared to $0.4 million in the fourth quarter of 2024.
Webcast Information
Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on February 24, 2026. Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com.
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