Core Points - Erie Indemnity Company will host a pre-recorded audio webcast to discuss its third-quarter financial results on October 31, 2025 [1] - A press release with the financial results will be issued after market close on October 30, 2025 [1] Company Overview - Erie Insurance Group is the 11th largest homeowners insurer, 12th largest automobile insurer, and 13th largest commercial lines insurer in the U.S. based on direct premiums written [3] - Founded in 1925, Erie Insurance is a Fortune 500 company and ranks as the 16th largest property/casualty insurer in the U.S. based on total lines net premium written [3] - The company has over 7 million policies in force and operates in 12 states and the District of Columbia [3]

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Company Overview - Erie Indemnity Company (ERIE) has a market capitalization of $15 billion and operates as the managing attorney-in-fact for the Erie Insurance Exchange, providing services such as sales, underwriting, policy issuance, and claims handling [1] - Established in 1925, the company generates revenue primarily through management fees based on a percentage of the Exchange's premiums [1] Earnings Expectations - Analysts anticipate that ERIE will report a profit of $3.37 per share for fiscal Q3, reflecting a 10.1% increase from $3.06 per share in the same quarter last year [2] - For fiscal 2025, the expected profit is projected to be $12.44 per share, an 8.4% increase from $11.48 per share in fiscal 2024, with further growth expected to $14.49 per share in fiscal 2026, representing a 16.5% year-over-year increase [3] Recent Performance - In the past 52 weeks, ERIE's shares have declined by 40.3%, underperforming compared to the S&P 500 Index's return of 14.4% and the Financial Select Sector SPDR Fund's increase of 13.2% [4] - Following the announcement of its second-quarter earnings on August 7, where net income rose 6.6% year-over-year to $174.7 million ($3.34 per share), shares increased by 1.3% in the subsequent trading session [5] Analyst Ratings - Wall Street analysts maintain a "Moderate Buy" rating for ERIE, with one analyst recommending a "Strong Buy" and two advising a "Hold" rating [6]

Company Overview - Erie Indemnity Company, based in Erie, Pennsylvania, acts as the attorney-in-fact for the Erie Insurance Exchange, a reciprocal insurer focused on property and casualty insurance. The company has a market capitalization of $14.7 billion, providing issuance, renewal, sales-related, and underwriting services [1] Stock Performance - Shares of Erie Indemnity have decreased by 41.9% from their 52-week high of $547. Over the past three months, ERIE stock has dropped 8.8%, underperforming the SPDR S&P Insurance ETF (KIE), which has gained 1.2% during the same period [2] - Year-to-date, ERIE stock has declined by 22.9%, while KIE has increased by 4.4%. In the past 52 weeks, ERIE shares have fallen by 39.6%, significantly lagging behind KIE's 4% return. The stock has been trading below its 50-day moving average since late April and under its 200-day moving average since mid-May [3] Earnings Report - On August 7, Erie Indemnity announced its second-quarter earnings, resulting in a 1.3% increase in shares during the following trading session. The company's net income rose by 6.6% year-over-year to $174.7 million, or $3.34 per share, although this was slightly below analyst expectations. Revenue increased by 7% to $1.06 billion, driven by higher management fees and administrative services revenue, but also fell short of forecasts [4] Peer Comparison - Compared to its peer, Willis Towers Watson Public Limited Company (WTW), which has seen a 7.5% increase year-to-date and a 16.6% gain over the past 52 weeks, Erie Indemnity has underperformed. ERIE has a consensus rating of "Moderate Buy" from three analysts, and it is currently trading above the mean price target of $73 [5]

Financial Data and Key Metrics Changes - The company's net income for Q2 2025 was $175 million or $3.34 per diluted share, compared to $164 million or $3.13 per diluted share in Q2 2024, showing an increase [11] - Year-to-date net income reached $313 million or $5.99 per diluted share, up from $289 million or $5.52 per diluted share in the same period last year [11] - Operating income increased nearly 5% to almost $200 million in Q2 2025, with year-to-date operating income at $350 million, a nearly 7% increase compared to 2024 [12] Business Line Data and Key Metrics Changes - The Erie Insurance Exchange's direct and assumed written premiums grew by nearly 9.2% in Q2 2025 and 11.4% year-to-date compared to the same periods in the prior year [9] - Average premium per policy increased by 11.9%, with policies in force growing by 1.7% and a strong policy retention ratio of 89.7% [9] - The Exchange's combined ratio was 116.9 in Q2 2025 compared to 115.9 in Q2 2024, with catastrophic weather events contributing significantly to the ratio [10] Market Data and Key Metrics Changes - The company experienced higher weather losses in the first half of the year, with catastrophic weather events contributing 18.5 points to the combined ratio in the first six months of 2025, compared to 12.7 points in the same period of 2024 [10] - The company moved up 52 spots on the 2025 Fortune 500 list, improving its position from 376 to 323 based on total revenue for the 2024 fiscal year [18] Company Strategy and Development Direction - The company is focused on strengthening its cybersecurity measures following a recent information security incident, emphasizing the importance of safeguarding systems and data [7] - The establishment of the Erie Insurance Foundation with a $100 million donation aims to create long-term sustainability for charitable contributions and grant making [16] - The company continues to prioritize service excellence, as evidenced by being named the highest-rated auto insurance provider by Consumer Reports [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the cyber incident did not materially impact financial statements, income, or cash flows, and highlighted the effectiveness of business continuity protocols [8] - The company acknowledged the increasing sophistication of cyber threats and is implementing lessons learned to enhance cybersecurity protections [7] - Management remains optimistic about the growth driven by significant rate increases implemented in 2023 and 2024 [9] Other Important Information - The company celebrated its 100th anniversary and the 30th anniversary of its NASDAQ listing, marking significant milestones in its history [15] - The company has paid over $127 million in dividends to shareholders in the first six months of 2025 [15] Summary of Q&A Session Questions and Answers - There was no question and answer session following the recorded remarks, as indicated at the beginning of the call [1][2]

Core Viewpoint - Erie Indemnity reported quarterly earnings of $3.34 per share, missing the Zacks Consensus Estimate of $3.55 per share, representing an earnings surprise of -5.92% [1] - The company posted revenues of $1.06 billion for the quarter, missing the Zacks Consensus Estimate by 2.55% [2] Financial Performance - Year-over-year earnings increased from $3.13 per share to $3.34 per share [1] - Revenues increased from $990.44 million a year ago to $1.06 billion [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Erie Indemnity shares have lost approximately 12.9% since the beginning of the year, while the S&P 500 has gained 7.9% [3] - The current Zacks Rank for the stock is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $3.34 on revenues of $1.08 billion, and for the current fiscal year, it is $12.62 on revenues of $4.16 billion [7] - The estimate revisions trend for Erie Indemnity was mixed ahead of the earnings release [6] Industry Context - The Zacks Industry Rank for Insurance - Brokerage is currently in the bottom 35% of over 250 Zacks industries, which may impact stock performance [8]

PART I. FINANCIAL INFORMATION Presents the company's unaudited consolidated financial statements and management's analysis of financial condition and operational results [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements show increased net income, total assets, and operating cash flow for the first half of 2025 [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Total operating revenue and net income increased significantly for the six months ended June 30, 2025, driven by higher management fees | Financial Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Operating Revenue** | $2,049,496 thousand | $1,871,139 thousand | +9.5% | | **Operating Income** | $350,549 thousand | $329,020 thousand | +6.5% | | **Net Income** | $313,102 thousand | $288,455 thousand | +8.5% | | **Diluted EPS (Class A)** | $5.99 | $5.52 | +8.5% | - Dividends declared per Class A common stock share increased to **$2.73** for the first six months of 2025, up from **$2.55** in the same period of 2024[12](index=12&type=chunk) [Consolidated Statements of Financial Position](index=6&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) Total assets grew to $3.13 billion by June 30, 2025, primarily due to increases in cash and receivables, with shareholders' equity also rising | Balance Sheet Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $3,128,214 thousand | $2,888,614 thousand | | Cash and cash equivalents | $358,027 thousand | $298,397 thousand | | Available-for-sale securities, net | $1,048,584 thousand | $991,726 thousand | | **Total Liabilities** | $943,669 thousand | $901,356 thousand | | **Total Shareholders' Equity** | $2,184,545 thousand | $1,987,258 thousand | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased significantly in the first half of 2025, while investing and financing activities used cash | Cash Flow Activity (Six months ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $295,694 thousand | $218,620 thousand | | **Net cash used in investing activities** | ($136,572) thousand | ($79,632) thousand | | **Net cash used in financing activities** | ($99,492) thousand | ($112,409) thousand | | **Net increase in cash** | $59,630 thousand | $26,579 thousand | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Details the company's operations as attorney-in-fact for Erie Insurance Exchange, revenue recognition, segment information, and investment accounting - The company's primary function is to act as the attorney-in-fact for the subscribers at the Erie Insurance Exchange, performing policy issuance, renewal, and administrative services[24](index=24&type=chunk)[25](index=25&type=chunk) - The company has one reportable segment: management operations. The chief operating decision maker assesses performance based on net income[40](index=40&type=chunk) - The majority of revenue and receivables are from the Erie Insurance Exchange and its affiliates, representing a significant concentration of credit risk. Net receivables from the Exchange were **$769.1 million** as of June 30, 2025[89](index=89&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the 6.5% operating income increase, driven by higher management fee revenue and premium growth, alongside an information security incident and strong liquidity [Operating Overview](index=29&type=section&id=Operating%20Overview) Operating income and net income grew in the first half of 2025, fueled by premium growth, despite a non-material information security incident - On June 7, 2025, the company identified an information security incident. A forensics investigation found no evidence that sensitive personal or financial data was breached. Full business operations resumed on July 7, 2025. The financial impact is not expected to be material[106](index=106&type=chunk)[107](index=107&type=chunk) | Metric (Six months ended June 30) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Operating income** | $350,549 thousand | $329,020 thousand | 6.5% | | **Net income** | $313,102 thousand | $288,455 thousand | 8.5% | | **Net income per share – diluted** | $5.99 | $5.52 | 8.5% | [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Management fee revenue increased 10.7% due to 11.4% premium growth at the Exchange, while total investment income rose 35.4% - Direct and affiliated assumed premiums written by the Exchange, the primary driver of revenue, increased **11.4%** to **$6.5 billion** for the six months ended June 30, 2025[118](index=118&type=chunk) - Total commissions expense for the six months ended June 30, 2025, increased **13.1%** to **$900.3 million**, driven by premium growth and higher agent incentive compensation due to improved profitability[130](index=130&type=chunk) - Net investment income for the first six months of 2025 increased by **25.3%** to **$40.0 million**, primarily due to higher income from bonds and cash equivalents[136](index=136&type=chunk)[137](index=137&type=chunk) [Financial Condition](index=39&type=section&id=Financial%20Condition) The company's financial condition is linked to the Erie Insurance Exchange's A+ rating, with its investment portfolio growing to $1.35 billion - The Erie Insurance Exchange is rated A+ "Superior" by A.M. Best. However, on August 8, 2024, the financial strength rating outlook was revised from stable to negative, driven by recent profitability challenges[140](index=140&type=chunk) | Investment Type | June 30, 2025 | % of Total | | :--- | :--- | :--- | | Available-for-sale securities | $1,126,148 thousand | 84% | | Equity securities | $85,228 thousand | 6% | | Agent loans | $99,572 thousand | 7% | | Other investments | $35,225 thousand | 3% | | **Total investments** | **$1,346,173 thousand** | **100%** | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Strong liquidity is maintained through operating cash flows and a diverse investment portfolio, with a planned $100 million donation to a new foundation - The company announced the formation of the Erie Insurance Foundation and plans to donate **$100 million** to its endowment, expected to be funded in the next twelve months[156](index=156&type=chunk) | Cash Flow (Six months ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $295,694 thousand | $218,620 thousand | | Net cash used in investing activities | ($136,572) thousand | ($79,632) thousand | | Net cash used in financing activities | ($99,492) thousand | ($112,409) thousand | - Future funding requirements can be met through unrestricted cash of **$329.6 million**, a **$100 million** credit line, and liquidation of **$882.9 million** in unpledged investment assets as of June 30, 2025[161](index=161&type=chunk) PART II. OTHER INFORMATION Addresses legal proceedings, updated risk factors, and details on unregistered equity sales and share repurchases [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending against a fiduciary duty lawsuit and several class action complaints related to a June 2025 information security incident - A complaint alleges breach of fiduciary duty by the company in connection with setting the management fee it receives from the Erie Insurance Exchange. The company is vigorously defending against these allegations[170](index=170&type=chunk)[174](index=174&type=chunk)[176](index=176&type=chunk) - Following the June 2025 information security incident, 14 putative class action complaints were filed. As of the report date, 11 have been voluntarily dismissed, leaving three pending. The company plans to vigorously defend these claims, noting no evidence of a sensitive data breach was found[181](index=181&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors, except for expanded disclosure on extensive regulation, including cybersecurity, data privacy, DEI, and ESG matters - The company highlights increased risks from complex and evolving laws and regulations, particularly concerning cybersecurity, data privacy, diversity, equity, and inclusion (DEI), and ESG matters[187](index=187&type=chunk)[189](index=189&type=chunk) - Failure to comply with new regulations or manage stakeholder expectations, especially around DEI and ESG, could expose the company to litigation, fines, and reputational damage[189](index=189&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a $150 million stock repurchase program, with approximately $17.8 million remaining, and repurchased 139 shares in Q2 2025 for stock-based awards | Period (2025) | Total Shares Purchased | Average Price Paid | Value Remaining in Program | | :--- | :--- | :--- | :--- | | April 1-30 | 0 | $— | $17,754 thousand | | May 1-31 | 139 | $359.85 | $17,754 thousand | | June 1-30 | 0 | $— | $17,754 thousand | - The shares repurchased during the quarter were acquired on the open market to satisfy stock-based awards under the company's equity compensation plan[192](index=192&type=chunk)

[Financial Statements](index=1&type=section&id=Financial%20Statements) [Consolidated Statements of Operations](index=1&type=section&id=Consolidated%20Statements%20of%20Operations) Erie Indemnity Company reported increased operating revenue and net income for both the three and six months ended June 30, 2025, compared to the same periods in 2024, driven by management fee revenue and net investment income [Three Months Ended June 30](index=1&type=section&id=Three%20months%20ended%20June%2030) - Total operating revenue for the three months ended June 30, 2025, increased by **7.03%** to **$1,060,097 thousand** from **$990,438 thousand** in the prior year[2](index=2&type=chunk) - Net income for the three-month period grew by **6.58%** to **$174,685 thousand** in 2025, up from **$163,903 thousand** in 2024[2](index=2&type=chunk) - Diluted EPS for Class A common stock rose to **$3.34** in 2025 from **$3.13** in 2024, an increase of **6.71%**[2](index=2&type=chunk) [Six Months Ended June 30](index=1&type=section&id=Six%20months%20ended%20June%2030) - Total operating revenue for the six months ended June 30, 2025, increased by **9.53%** to **$2,049,496 thousand** from **$1,871,139 thousand** in the prior year[2](index=2&type=chunk) - Net income for the six-month period increased by **8.55%** to **$313,102 thousand** in 2025, compared to **$288,455 thousand** in 2024[2](index=2&type=chunk) - Diluted EPS for Class A common stock increased to **$5.99** in 2025 from **$5.52** in 2024, representing an **8.51%** growth[2](index=2&type=chunk) **Consolidated Statements of Operations Highlights (dollars in thousands, except per share data):** | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | **Operating Revenue:** | | | | | | Management fee revenue - policy issuance and renewal services | $823,853 | $760,886 | $1,578,902 | $1,426,572 | | Total operating revenue | $1,060,097 | $990,438 | $2,049,496 | $1,871,139 | | **Operating Expenses:** | | | | | | Total operating expenses | $860,924 | $800,230 | $1,698,947 | $1,542,119 | | **Income:** | | | | | | Operating income | $199,173 | $190,208 | $350,549 | $329,020 | | Net investment income | $20,030 | $16,010 | $39,978 | $31,913 | | Net income | $174,685 | $163,903 | $313,102 | $288,455 | | **Per Share Data:** | | | | | | Class A common stock – diluted EPS | $3.34 | $3.13 | $5.99 | $5.52 | | Class A common stock – dividends declared per share | $1.365 | $1.275 | $2.73 | $2.55 | | Class B common stock – dividends declared per share | $204.75 | $191.25 | $409.50 | $382.50 | [Consolidated Statements of Financial Position](index=2&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) As of June 30, 2025, Erie Indemnity Company's total assets increased by 8.3% compared to December 31, 2024, driven by growth in cash, receivables, and available-for-sale securities, alongside increases in liabilities and shareholders' equity **Consolidated Statements of Financial Position Highlights (in thousands):** | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :------------------------------------------------ | :------------ | :---------------- | :--------- | | **Assets:** | | | | | Cash and cash equivalents | $358,027 | $298,397 | 20.0% | | Receivables from Erie Insurance Exchange and affiliates, net | $769,148 | $707,060 | 8.8% | | Available-for-sale securities, net | $1,048,584 | $991,726 | 5.7% | | Total assets | $3,128,214 | $2,888,614 | 8.3% | | **Liabilities:** | | | | | Commissions payable | $446,424 | $408,309 | 9.3% | | Securities lending payable | $35,159 | $7,513 | 368.0% | | Total liabilities | $943,669 | $901,356 | 4.7% | | **Shareholders' Equity:** | | | | | Shareholders' equity | $2,184,545 | $1,987,258 | 9.9% |

Core Insights - Erie Indemnity Company reported a net income of $174.7 million, or $3.34 per diluted share, for the second quarter of 2025, reflecting an increase from $163.9 million, or $3.13 per diluted share, in the same quarter of 2024 [1][2] - For the first half of 2025, net income was $313.1 million, or $5.99 per diluted share, compared to $288.5 million, or $5.52 per diluted share, in the first half of 2024 [1][2] Financial Performance - Operating income before taxes increased by $9.0 million, or 4.7 percent, in the second quarter of 2025 compared to the second quarter of 2024 [3] - For the first six months of 2025, operating income before taxes rose by $21.5 million, or 6.5 percent, compared to the first six months of 2024 [6] Revenue and Income Breakdown - Management fee revenue from policy issuance and renewal services increased by $63.0 million, or 8.3 percent, in the second quarter of 2025 compared to the same period in 2024 [7] - Total operating revenue for the second quarter of 2025 was $1,060.1 million, up from $990.4 million in the second quarter of 2024 [16] - Investment income before taxes totaled $19.6 million in the second quarter of 2025, compared to $13.8 million in the second quarter of 2024 [4] Expense Analysis - Cost of operations related to policy issuance and renewal services increased by $43.5 million in the second quarter of 2025, driven by growth in written premium and increased agent incentive compensation [7] - Non-commission expenses rose by $10.6 million in the second quarter of 2025, with significant increases in information technology costs and sales and advertising expenses [7] Investment Performance - Net investment income was $20.0 million in the second quarter of 2025, compared to $16.0 million in the second quarter of 2024 [4] - For the first half of 2025, net investment income was $40.0 million, up from $31.9 million in the first half of 2024 [9] Balance Sheet Highlights - Total assets as of June 30, 2025, were $3,128.2 million, an increase from $2,888.6 million as of December 31, 2024 [17][18] - Shareholders' equity increased to $2,184.5 million as of June 30, 2025, compared to $1,987.3 million at the end of 2024 [18]

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