Erie Indemnity Reports Full Year and Fourth Quarter 2024 Results

Rhea-AI Summary

Erie Indemnity (NASDAQ: ERIE) reported strong financial results for 2024, with net income reaching $600.3 million ($11.48 per diluted share), up from $446.1 million ($8.53 per diluted share) in 2023. Fourth quarter 2024 net income was $152.0 million ($2.91 per diluted share), compared to $110.9 million in Q4 2023.

Operating income before taxes increased 30.0% year-over-year. Management fee revenue from policy issuance and renewal services grew 18.5% to $452.0 million, while administrative services revenue rose 7.4%. Investment income improved significantly, with net investment income of $70.2 million in 2024 versus $44.6 million in 2023.

Cost increases were noted in commissions ($252.9 million increase) and non-commission expenses ($47.9 million increase), primarily driven by premium growth and higher operational costs.

Positive

• Net income increased 34.6% to $600.3M in 2024
• EPS grew 34.6% to $11.48 in 2024
• Management fee revenue up 18.5% to $452.0M
• Operating income before taxes increased 30.0%
• Net investment income rose 57.4% to $70.2M

Negative

• Commission expenses increased significantly by $252.9M
• Non-commission expenses rose by $47.9M
• Information technology costs increased in Q4
• Higher personnel and operational costs across departments

Insights

Financial Analyst

Erie Indemnity (NASDAQ: ERIE) has delivered exceptional financial results for 2024, with net income surging 34.6% to $600.3 million ($11.48 per diluted share) compared to 2023's $446.1 million. Fourth quarter performance was similarly robust, with net income increasing 37.1% to $152.0 million.

The company's performance demonstrates the significant operating leverage in its business model. While management fee revenue from policy issuance and renewal services increased 18.5%, operating income before taxes grew at a much faster rate of 30.0%, indicating improved operational efficiency despite rising costs. This revenue growth reflects strong premium expansion at the Erie Insurance Exchange, which ERIE manages and from which it derives its primary revenue stream.

Cost increases were led by commissions, which rose $252.9 million – a direct reflection of the premium growth. Non-commission expenses increased $47.9 million, primarily in underwriting and policy processing ($18.5 million) and administrative costs ($14.5 million). Despite these higher expenses, the revenue growth created substantial margin expansion.

Investment performance also strengthened considerably, with income from investments before taxes more than doubling to $69.3 million from $29.0 million. The company's partnership investments swung from losses of $11.3 million in 2023 to gains of $2.0 million in 2024, while impairment losses decreased significantly.

As a management company for the Exchange, ERIE's results reflect both its operational efficiency and the Exchange's growth trajectory. The Exchange maintains strong market positions as the 12th largest homeowners insurer and 13th largest auto and commercial lines insurer in the U.S., providing ERIE with a solid foundation for continued revenue growth.

Net Income per Diluted Share was $2.91 for the Quarter and $11.48 for the Year

ERIE, Pa., Feb. 27, 2025 /PRNewswire/ -- Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the full year and quarter ending December 31, 2024. Net income was $600.3 million, or $11.48 per diluted share, in 2024, compared to $446.1 million, or $8.53 per diluted share, in 2023. Net income was $152.0 million, or $2.91 per diluted share, in the fourth quarter of 2024, compared to $110.9 million, or $2.12 per diluted share, in the fourth quarter of 2023.

4Q and Full Year 2024
(in thousands)	4Q'24	4Q'23		2024	2023
Operating income	$      167,310	$      127,084		$      676,455	$      520,256
Investment income	20,805	9,771		69,260	28,968
Other income	3,693	3,069		11,564	12,712
Income before income taxes	191,808	139,924		757,279	561,936
Income tax expense	39,779	28,996		156,965	115,875
Net income	$      152,029	$      110,928		$      600,314	$      446,061

 

2024 Full Year Highlights

 

Operating income before taxes increased $156.2 million, or 30.0 percent, in 2024 compared to 2023.

• Management fee revenue - policy issuance and renewal services increased $452.0 million, or 18.5 percent, in 2024 compared to 2023.
• Management fee revenue - administrative services increased $4.7 million, or 7.4% in 2024 compared to 2023.
• Cost of operations - policy issuance and renewal services
  • Commissions increased $252.9 million in 2024 compared to 2023 primarily driven by the growth in direct and affiliated assumed written premium.
  • Non-commission expense increased $47.9 million in 2024 compared to 2023. Underwriting and policy processing expense increased $18.5 million primarily due to increased underwriting report and personnel costs. Information technology costs decreased $1.3 million primarily due to a decrease in professional fees and personnel costs, partially offset by an increase in hardware and software costs. Sales and advertising expense increased $7.6 million primarily due to increased agent-related costs and costs from community development initiatives. Customer service costs increased $8.7 million primarily due to increased personnel costs and credit card processing fees. Administrative and other costs increased $14.5 million primarily due to increased personnel costs, charitable contributions and professional fees. Personnel costs in 2024 were impacted by increased compensation.
• The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $806.3 million in 2024 and $737.1 million in 2023, but had no net impact on operating income. 

Income from investments before taxes totaled $69.3 million in 2024 compared to $29.0 million in 2023. Net investment income was $70.2 million in 2024 compared to $44.6 million in 2023. Net investment income included limited partnership earnings of $2.0 million in 2024 compared to losses of $11.3 million in 2023. Net realized and unrealized gains on investments were $3.2 million in 2024 compared to losses of $5.8 million in 2023. Net impairment losses recognized in earnings were $4.1 million in 2024 compared to $9.8 million in 2023. 

4Q 2024 Highlights

 

Operating income before taxes increased $40.2 million, or 31.7 percent, in the fourth quarter of 2024 compared to the fourth quarter of 2023.

• Management fee revenue - policy issuance and renewal services increased $96.7 million, or 16.1 percent, in the fourth quarter of 2024 compared to the fourth quarter of 2023.
• Management fee revenue - administrative services increased $0.5 million, or 3.1 percent in the fourth quarter of 2024 compared to the fourth quarter of 2023.
• Cost of operations - policy issuance and renewal services
  • Commissions increased $50.8 million in the fourth quarter of 2024 compared to the fourth quarter of 2023 primarily driven by the growth in direct and affiliated assumed written premium.
  • Non-commission expense increased $6.2 million in the fourth quarter of 2024 compared to the fourth quarter of 2023. Underwriting and policy processing expense increased $4.8 million primarily due to increased underwriting report and personnel costs. Information technology costs increased $2.6 million primarily due to increased hardware and software costs, partially offset by a decrease in professional fees. Sales and advertising expense decreased $2.0 million primarily due to decreased agent-related and advertising costs. Customer service costs increased $2.0 million primarily due to increased personnel costs and credit card processing fees. Administrative and other costs decreased $1.2 million primarily due to decreased personnel costs.
• The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $202.0 million in the fourth quarter of 2024 and $192.7 million in the fourth quarter of 2023, but had no net impact on operating income. 

Income from investments before taxes totaled $20.8 million in the fourth quarter of 2024 compared to $9.8 million in the fourth quarter of 2023. Net investment income was $20.9 million in the fourth quarter of 2024 compared to $14.2 million in the fourth quarter of 2023. Net investment income included limited partnership earnings of $1.8 million in the fourth quarter of 2024 compared to losses of $0.6 million in the fourth quarter of 2023. Net realized and unrealized gains on investments were $0.2 million in the fourth quarter of 2024 compared to $3.4 million in the fourth quarter of 2023. Net impairment losses recognized in earnings were $0.4 million in the fourth quarter of 2024 compared to $7.8 million in the fourth quarter of 2023.

Webcast Information

Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on February 28, 2025. Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com.

Erie Insurance Group

According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 12th largest homeowners insurer, 13th largest automobile insurer and 13th largest commercial lines insurer in the United States based on direct premiums written. Founded in 1925, Erie Insurance is a Fortune 500 company and the 17th largest property/casualty insurer in the United States based on total lines net premium written. Rated A+ (Superior) by A.M. Best, ERIE has more than 7 million policies in force and operates in 12 states and the District of Columbia.

News releases and more information are available on ERIE's website at www.erieinsurance.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
Statements contained herein that are not historical fact are forward-looking statements and, as such, are subject to risks and uncertainties that could cause actual events and results to differ, perhaps materially, from those discussed herein. Forward-looking statements relate to future trends, events or results and include, without limitation, statements and assumptions on which such statements are based that are related to our plans, strategies, objectives, expectations, intentions, and adequacy of resources. Examples of forward-looking statements are discussions relating to premium and investment income, expenses, operating results, and compliance with contractual and regulatory requirements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Among the risks and uncertainties, in addition to those set forth in our filings with the Securities and Exchange Commission, that could cause actual results and future events to differ from those set forth or contemplated in the forward-looking statements include the following:

• dependence upon our relationship with the Erie Insurance Exchange ("Exchange") and the management fee under the agreement with the subscribers at the Exchange;
• dependence upon our relationship with the Exchange and the growth of the Exchange, including:
  • general business and economic conditions;
  • factors impacting the timing of premium rates charged for policies;
  • factors affecting insurance industry competition, including technological innovations;
  • dependence upon the independent agency system; and
  • ability to maintain our brand, including our reputation for customer service;
• dependence upon our relationship with the Exchange and the financial condition of the Exchange, including:
  • the Exchange's ability to maintain acceptable financial strength ratings;
  • factors affecting the quality and liquidity of the Exchange's investment portfolio;
  • changes in government regulation of the insurance industry;
  • litigation and regulatory actions;
  • emergence of significant unexpected events, including pandemics and economic or social inflation;
  • emerging claims and coverage issues in the industry; and
  • severe weather conditions or other catastrophic losses, including terrorism;
• costs of providing policy issuance and renewal services to the subscribers at the Exchange under the subscriber's agreement;
• ability to attract and retain talented management and employees;
• ability to ensure system availability and effectively manage technology initiatives;
• difficulties with technology, data or network security breaches, including cyber attacks;
• ability to maintain uninterrupted business operations;
• compliance with complex and evolving laws and regulations and outcome of pending and potential litigation;
• factors affecting the quality and liquidity of our investment portfolio; and
• ability to meet liquidity needs and access capital.

A forward-looking statement speaks only as of the date on which it is made and reflects our analysis only as of that date. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changes in assumptions, or otherwise.

Erie Indemnity Company Consolidated Statements of Operations (dollars in thousands, except per share data)
		Three months ended December 31,				Twelve months ended December 31,
		2024		2023		2024		2023
		(Unaudited)
Operating revenue
Management fee revenue - policy issuance and renewal services		$        698,340		$        601,595		$     2,894,074		$     2,442,073
Management fee revenue - administrative services		17,216		16,693		68,355		63,669
Administrative services reimbursement revenue		201,987		192,728		806,336		737,139
Service agreement revenue		6,547		6,651		26,350		26,059
Total operating revenue		924,090		817,667		3,795,115		3,268,940
Operating expenses
Cost of operations - policy issuance and renewal services		554,793		497,855		2,312,324		2,011,545
Cost of operations - administrative services		201,987		192,728		806,336		737,139
Total operating expenses		756,780		690,583		3,118,660		2,748,684
Operating income		167,310		127,084		676,455		520,256
Investment income
Net investment income		20,920		14,212		70,155		44,572
Net realized and unrealized investment gains (losses)		246		3,408		3,229		(5,838)
Net impairment losses recognized in earnings		(361)		(7,849)		(4,124)		(9,766)
Total investment income		20,805		9,771		69,260		28,968
Other income		3,693		3,069		11,564		12,712
Income before income taxes		191,808		139,924		757,279		561,936
Income tax expense		39,779		28,996		156,965		115,875
Net income		$        152,029		$        110,928		$        600,314		$        446,061
Net income per share
Class A common stock – basic		$              3.26		$              2.38		$            12.89		$              9.58
Class A common stock – diluted		$              2.91		$              2.12		$            11.48		$              8.53
Class B common stock – basic		$               490		$               357		$            1,934		$            1,437
Class B common stock – diluted		$               490		$               357		$            1,933		$            1,437
Weighted average shares outstanding – Basic
Class A common stock		46,189,060		46,189,041		46,189,044		46,188,981
Class B common stock		2,542		2,542		2,542		2,542
Weighted average shares outstanding – Diluted
Class A common stock		52,310,894		52,301,676		52,306,266		52,299,411
Class B common stock		2,542		2,542		2,542		2,542
Dividends declared per share
Class A common stock		$            1.365		$            1.275		$            5.190		$            4.845
Class B common stock		$          204.75		$          191.25		$          778.50		$          726.75

 

Erie Indemnity Company Consolidated Statements of Financial Position (in thousands)
		December 31, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents (includes restricted cash of $23,559 and $12,542, respectively)		$                   298,397		$                   144,055
Available-for-sale securities		44,604		82,017
Receivables from Erie Insurance Exchange and affiliates, net		707,060		625,338
Prepaid expenses and other current assets, net		83,902		69,321
Accrued investment income		11,069		9,458
Total current assets		1,145,032		930,189
Available-for-sale securities, net		991,726		879,224
Available-for-sale securities lent		7,285		—
Equity securities		85,891		84,253
Fixed assets, net		513,494		442,610
Agent loans, net		80,597		58,434
Defined benefit pension plan		21,311		34,320
Other assets, net		43,278		42,934
Total assets		$                2,888,614		$                2,471,964
Liabilities and shareholders' equity
Current liabilities:
Commissions payable		$                   408,309		$                   353,709
Agent incentive compensation		75,458		68,077
Accounts payable and accrued liabilities		190,028		175,622
Dividends payable		63,569		59,377
Contract liability		42,761		41,210
Deferred executive compensation		14,874		10,982
Securities lending payable		7,513		—
Total current liabilities		802,512		708,977
Defined benefit pension plan		28,070		26,260
Contract liability		21,170		19,910
Deferred executive compensation		19,721		20,936
Deferred income taxes, net		6,418		11,481
Other long-term liabilities		23,465		21,565
Total liabilities		901,356		809,129
Shareholders' equity		1,987,258		1,662,835
Total liabilities and shareholders' equity		$                2,888,614		$                2,471,964

 

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SOURCE Erie Indemnity Company

FAQ

What was Erie Indemnity's (ERIE) earnings per share for full year 2024?

ERIE reported earnings of $11.48 per diluted share for full year 2024, up from $8.53 in 2023.

How much did ERIE's management fee revenue grow in 2024?

Management fee revenue from policy issuance and renewal services increased by $452.0 million, or 18.5%, in 2024.

What was ERIE's net investment income for 2024?

Net investment income was $70.2 million in 2024, compared to $44.6 million in 2023.

How did ERIE's operating income perform in 2024?

Operating income before taxes increased by $156.2 million, representing a 30.0% growth compared to 2023.

What were ERIE's fourth quarter 2024 earnings results?

Q4 2024 net income was $152.0 million ($2.91 per diluted share), up from $110.9 million ($2.12 per diluted share) in Q4 2023.