Erie Indemnity(ERIE)2024-02-27 19:20Financial Data and Key Metrics - Net income for Erie Indemnity Company reached an all-time high of more than $446 million in 2023, compared to $299 million in 2022 [5] - Growth for Erie Insurance Exchange hit a 20-year high of 17%, reaching $10 billion in premiums in Q4 2023 [5] - Policyholder surplus ended at $9.3 billion in December 2023, with a $203 million increase in Q4 [6] - Combined ratio for the year ended at 119.1%, an improvement from September year-to-date but 3 points higher than year-end 2022 [6][19] - Management fee revenue increased by $98 million (19.5%) in Q4 2023 and $354 million (17%) for the full year compared to 2022 [7] - Pre-tax income from investments was $29 million in 2023, compared to $600,000 in 2022 [9] Business Line Data and Key Metrics - New business premium grew over 43% in Q4 2023 and almost 38% for the year compared to the prior year [7] - Non-commission expenses grew by $1 million in Q4 2023 and $47 million for the full year, driven by technology and customer service investments [8] - Commission expenses grew by $53 million in Q4 2023 and $169 million for the full year, driven by increased premiums [22] - Underwriting and policy processing costs increased by $9.4 million due to growth in the number of policies [23] Market Data and Key Metrics - Weather-related claims rose to nearly 70,000 in 2023, compared to roughly 50,000 in 2022 [19] - Retention levels remained strong at 91.2% despite rate increases [20] - Erie ranked number one in home insurance customer satisfaction by J.D. Power, with a score of 856, 37 points higher than the segment average [1][14] Company Strategy and Industry Competition - The company is modernizing legacy platforms, with a 75% reduction in system outage time after migrating Erie Claim Center to the cloud [11] - Investments in technology and customer service are aimed at long-term expense savings and innovation [25] - Erie Strategic Ventures, formed in 2022, focuses on investing in the personal and commercial insurance value chain [13] - The company is implementing rate increases and reinforcing underwriting standards to improve profitability [19] Management Commentary on Operating Environment and Future Outlook - The company faced significant challenges from economic and environmental pressures but achieved record growth [5] - Management expects long-term savings from modernization efforts and new digital capabilities [19] - The company is optimistic about the benefits of recent rate increases and strong retention levels [20] Other Important Information - The company paid $222 million in dividends in 2023 and approved a 7.1% increase in the 2024 regular quarterly cash dividend [24] - Erie launched a refreshed workers' compensation platform across all states in its footprint, with over 75 enhancements in 2023 [26][27] - Initial startup investments include Wagmo, Roots Automation, and Trust & Will, aimed at delivering value to Erie and its stakeholders [28] Q&A Session - No Q&A session was held as the call was prerecorded [4]