Erie Indemnity Company (NASDAQ:ERIE) Q4 2020 Results Conference Call February 26, 2021 10:00 AM ET Company Participants Scott Beilharz - Vice President of Investor Relations Timothy NeCastro - President and Chief Executive Officer Gregory Gutting - Executive Vice President and Chief Financial Officer Operator Good morning, and welcome to the Erie Indemnity Company’s Fourth Quarter and Year-End 2020 Earnings Conference Call. This call was prerecorded, and there will be no question-and-answer session followin ...

Revenue and Income - Management fee revenue for administrative services increased by 4.0% to $59.5 million in 2020 compared to $57.2 million in 2019[171]. - Operating income decreased by 5.4% to $338.2 million in 2020, as growth in operating expenses outpaced the growth in operating revenues[168]. - Net income decreased by 7.4% to $293.3 million in 2020, with diluted net income per share also decreasing by 7.4% to $5.61[168]. - Management fee revenue for policy issuance and renewal services increased by 1.7% to $1,841,794 thousand in 2020, compared to $1,810,457 thousand in 2019[225]. - The management fee rate was maintained at 25% for 2020, 2019, and 2018, significantly impacting revenue and net income[208]. Premiums and Policy Growth - Direct and affiliated assumed premiums written by the Exchange increased by 1.7% to $7.6 billion in 2020, following a 5.2% increase to $7.5 billion in 2019[169]. - New business premiums grew by 10.8% in the second half of 2020 compared to the same period in 2019, primarily driven by growth in personal auto and homeowners lines[164]. - Premiums generated from new business decreased by 1.2% to $852 million in 2020, despite a 5.0% increase in new business policies written[213]. - Renewal business premiums increased by 2.1% to $6.8 billion in 2020, supported by steady policy retention ratios[214]. - Total personal lines premiums written increased by 1.3% to $5.4 billion in 2020, with a 2.2% increase in total personal lines policies in force[216]. - Total commercial lines premiums written increased by 2.6% to $2.2 billion in 2020, driven by a 1.6% increase in total commercial lines policies in force[217]. Investment Income and Financial Position - Total investment income decreased by $7.1 million in 2020, primarily due to higher impairments and lower net investment income reflecting lower interest rates caused by COVID-19 market volatility[172]. - Total investment income decreased by 17.8% in 2020, amounting to $32,867 thousand, primarily due to lower net investment income and higher impairment losses[237]. - Net investment income fell by $4.3 million in 2020 to $29,753 thousand, influenced by decreased income from cash and cash equivalents[238]. - The company recorded a market-related asset experience gain of $146.3 million in 2020, which will be recognized over a four-year period[201]. - Policyholders' surplus increased to $10.7 billion in 2020 from $9.5 billion in 2019, reflecting a strong financial position[243]. Expenses and Costs - Cost of operations for policy issuance and renewal services increased by 3.3% to $1.6 billion in 2020, driven by higher commissions and agent incentive compensation[170]. - Total commissions increased by $26.6 million in 2020 compared to 2019, reaching $1,051,272 thousand, driven by higher premiums and agent incentive compensation[228]. - Non-commission expenses rose by $24.3 million in 2020, totaling $537,625 thousand, with significant increases in underwriting, IT, and administrative costs[229]. - Increased personnel costs across all categories were noted, contributing to higher administrative expenses in 2020[229]. Tax and Pension Costs - Income tax expense decreased to $75.2 million in 2020 from $79.9 million in 2019, with a reduction of $4.0 million in 2019 due to settling an uncertain tax position, lowering the effective tax rate by 1.0%[173]. - The company anticipates net pension benefit costs to rise from $45.1 million in 2020 to $56.6 million in 2021, primarily due to a decrease in the discount rate[204]. - The discount rate for the projected benefit obligation was set at 2.96% for December 31, 2020, compared to 3.59% in 2019 and 4.47% in 2018[199]. - A 25 basis point decrease in the discount rate assumption would increase pension costs by $6.8 million, with the company's share being approximately $2.8 million, and would raise the pension benefit obligation by $61.6 million[199]. - The expected long-term rate of return on pension plan assets was reduced from 6.00% to 5.50% for 2021, with a 25 basis point change impacting net pension benefit cost by an estimated $2.3 million[200]. Cash Flow and Liquidity - Net cash provided by operating activities was $342.6 million in 2020, a decrease of 6% from $364.5 million in 2019, primarily due to increased agent commissions and operating expenses[258]. - Net cash used in investing activities increased to $243.2 million in 2020, up from $124.6 million in 2019, largely due to higher purchases of available-for-sale securities[259]. - Net cash used in financing activities totaled $274.9 million in 2020, compared to $169.6 million in 2019, driven by increased dividends paid to shareholders[260]. - The company maintains a $100 million line of credit that does not expire until October 2023, ensuring liquidity for future operational needs[255]. - The company has access to a $100 million bank revolving line of credit, which includes a $25 million letter of credit sublimit expiring on October 30, 2023[268]. Market Conditions and Future Outlook - The COVID-19 pandemic is estimated to decrease premiums by $110 million and management fee revenue by $28 million in 2021 due to rate reductions[222]. - The Exchange plans to expand its agency force to increase market penetration, contributing to future growth despite potential challenges from the COVID-19 pandemic[218]. - Changes in premium levels due to rate changes directly affect the profitability of the Exchange and its management fee[221]. - Deteriorating market conditions may hinder the ability to obtain additional financing or increase financing costs[109]. - Accurate estimation of capital needs is crucial to avoid adverse effects on financial condition[107].

Erie Indemnity Company (NASDAQ:ERIE) Q3 2020 Earnings Conference Call October 30, 2020 10:00 AM ET Company Participants Scott Beilharz – Vice President-Investor Relations Tim NeCastro – President and Chief Executive Officer Greg Gutting – Executive Vice President and Chief Financial Officer Conference Call Participants Operator Good morning and welcome to the Erie Indemnity Company Third Quarter 2020 Earnings Conference Call. This call was prerecorded, and there will be no question-and-answer session follow ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from___to___ Commission file number 0-24000 ERIE INDEMNITY COMPANY (Exact name of registrant as specified in its charter) | --- | --- | --- | --- | |--- ...

Financial Performance - Operating income decreased by 5.6% to $91.2 million in Q2 2020 compared to Q2 2019, and by 3.2% to $176.9 million for the six months ended June 30, 2020[137]. - Net income decreased by 6.6% to $82.0 million in Q2 2020, and by 13.3% to $141.3 million for the six months ended June 30, 2020[137]. - Total investment income increased by 19.7% to $11.6 million in Q2 2020 compared to Q2 2019, but decreased by 87.9% to $2.4 million for the six months ended June 30, 2020[137]. - Net investment income decreased by $0.7 million to $7.373 million in Q2 2020, and by $0.8 million to $15.742 million for the six months ended June 30, 2020, compared to the same periods in 2019[179]. - Total investment income increased by 19.7% to $11.553 million in Q2 2020, but decreased by 87.9% to $2.358 million for the six months ended June 30, 2020, compared to the same periods in 2019[179]. Revenue and Premiums - Management fee revenue for policy issuance and renewal services increased by 0.7% to $483.8 million in Q2 2020, and by 1.8% to $927.5 million for the six months ended June 30, 2020[139]. - Premiums generated from new business decreased by 18.6% to $190 million in Q2 2020, while renewal business premiums increased by 3.0% to $1.8 billion[157]. - Direct and affiliated assumed premiums written by the Exchange increased by 0.5% to $2.0 billion in Q2 2020, and by 1.9% to $3.9 billion for the six months ended June 30, 2020[147]. - Total commercial lines premiums written decreased by 0.1% to $579 million in Q2 2020 compared to Q2 2019, with a 1.2% increase in policies in force and a 3.3% increase in average premium per policy[159]. - Statutory direct written premiums grew by 1.9% to $3.9 billion for the six months ended June 30, 2020, compared to the same period in 2019[187]. Costs and Expenses - Cost of operations for policy issuance and renewal services increased by 2.2% to $413.9 million in Q2 2020, primarily due to higher agent incentives[140]. - Non-commission expenses increased by $3.6 million in Q2 2020, with information technology costs rising by $2.3 million due to remote work support[173]. - Claims handling services expenses increased by 3.3% to $131.474 million in Q2 2020 compared to $127.296 million in Q2 2019[175]. Impact of COVID-19 - The ongoing COVID-19 pandemic has created uncertainty in economic conditions, potentially affecting premium revenue and management fees[143]. - The ongoing COVID-19 pandemic may negatively impact the Exchange's premiums and management fees due to recessionary conditions and changes in consumer activity[161]. - The company incurred additional technology costs to support remote working conditions, which may continue to increase due to the pandemic[135]. Investment and Cash Flow - The carrying value of total investments increased to $963.173 million as of June 30, 2020, from $893.735 million at December 31, 2019[191]. - Net cash provided by operating activities was $127.3 million in the first six months of 2020, an increase of 11.6% compared to $114.4 million in the same period in 2019[201][204]. - Net cash used in investing activities was $115.4 million in the first six months of 2020, compared to net cash provided of $42.2 million in the same period in 2019[202][204]. - Net cash used in financing activities totaled $90.9 million in the first six months of 2020, with dividends paid to shareholders amounting to $89.9 million, a 7.2% increase from $83.8 million in 2019[203][204]. Shareholder Information - The company purchased 26,410 shares of Class A nonvoting common stock at a total cost of $4.6 million during the first six months of 2020[208]. - There were no repurchases of Class A nonvoting common stock under the stock repurchase program in the first six months of 2020[207]. - The company remains in compliance with bank covenants as of June 30, 2020[212].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from___to___ Commission file number 0-24000 ERIE INDEMNITY COMPANY (Exact name of registrant as specified in its charter) | --- | --- | --- | --- | --- | -- ...

Erie Indemnity Company (NASDAQ:ERIE) Q4 2019 Earnings Conference Call February 28, 2020 10:00 AM ET Company Participants Scott Beilharz – Vice President-Investor Relations, Tim NeCastro – President and Chief Executive Officer Greg Gutting – Executive Vice President and Chief Financial Officer Conference Call Participants Operator Good morning and welcome to the Erie Indemnity Company’s Fourth Quarter and Year-End 2019 Earnings Conference Call. This call was prerecorded and there will be no question-and-answ ...

Table of Contents (Title of each class) (Trading Symbol) (Name of each exchange on which registered) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-24000 ERIE INDEMNITY COMPANY (Exact name of registrant as specified in its char ...

Erie Indemnity Co (NASDAQ:ERIE) Q3 2019 Earnings Conference Call October 25, 2019 10:00 AM ET Company Participants Scott Beilharz - VP, Capital Management & IR Timothy NeCastro - President & CEO Gregory Gutting - EVP & CFO Conference Call Participants Operator Good morning, and welcome to the Erie Indemnity Company Third Quarter 2019 Earnings Conference Call. This call was prerecorded, and there will be no question-and-answer session following the recording. Now I'd like to introduce your host for the call, ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from___to___ Commission file number 0-24000 ERIE INDEMNITY COMPANY (Exact name of registrant as specified in its charter) | --- | --- | --- | --- | --- ...