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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 1, 2023

ERIE INDEMNITY COMPANY
(Exact name of registrant as specified in its charter)

Pennsylvania 0-24000 25-0466020
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)

100 Erie Insurance Place, Erie, Pennsylvania 16530
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: 814 870-2000

Not applicable
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Class A common stock,  stated value $0.0292 per share ERIE NASDAQ Stock Market, LLC
(Title of each class) (Trading Symbol) (Name of each exchange on which registered)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐





Item 2.02 Results of Operations and Financial Condition.

On March 1, 2023, Erie Indemnity Company (the "Company") issued a press release announcing financial results for the quarter and year ended December 31, 2022. Copies of the press release and financial information are attached hereto and are incorporated herein by reference as Exhibit 99.1 and Exhibit 99.2, respectively.

On March 2, 2023 at 10:00 a.m. the Company will provide a pre-recorded Webcast that is complementary to the press release announcing financial results for the quarter and year ended December 31, 2022.



Item 8.01 Other Events.

At its meeting on February 16, 2023, the Company's Board of Directors approved the following quarterly dividend on shares of Erie Indemnity Company Class A common stock:

Dividend Number: 371
Class A Rate Per Share: $1.19
Declaration Date: February 16, 2023
Ex-Dividend Date: April 4, 2023
Record Date: April 5, 2023
Payable Date: April 20, 2023



Item 9.01 Financial Statements and Exhibits.

Exhibit 99.1 Press Release
Exhibit 99.2 Financial Information
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)


Exhibit Index

     
Exhibit No.   Description
 
99.1  
99.2  
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
    Erie Indemnity Company
          
March 1, 2023   By:   /s/ Gregory J. Gutting
      Name: Gregory J. Gutting
        Title: Executive Vice President & CFO



EX-99.1 2 ex-99112312022.htm EX-99.1 Document
Exhibit 99.1
ex991image12312021a.gif

Erie Indemnity Reports Full Year and Fourth Quarter 2022 Results
Net Income per Diluted Share was $1.25 for the Quarter and $5.71 for the Year

Erie, Pa. - March 1, 2023 - Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the full year and quarter ending December 31, 2022. Net income was $298.6 million, or $5.71 per diluted share, in 2022, compared to $297.9 million, or $5.69 per diluted share, in 2021. Net income was $65.5 million, or $1.25 per diluted share, in the fourth quarter of 2022, compared to $55.0 million, or $1.05 per diluted share, in the fourth quarter of 2021.
The uncertainty resulting from post-pandemic conditions and the current economic environment continues to evolve and the duration or extent of financial impacts remain uncertain.
4Q and Full Year 2022
(dollars in thousands) 4Q'22 4Q'21 2022 2021
Operating income $ 81,430  $ 61,834  $ 376,214  $ 318,097 
Investment income 288  12,328  632  67,332 
Interest expense and other, net (243) 4,335  394  9,025 
Income before income taxes
81,961  69,827  376,452  376,404 
Income tax expense 16,471  14,785  77,883  78,544 
Net income
$ 65,490  $ 55,042  $ 298,569  $ 297,860 

2022 Full Year Highlights
Operating income before taxes increased $58.1 million, or 18.3 percent, in 2022 compared to 2021.
◦Management fee revenue - policy issuance and renewal services increased $174.7 million, or 9.1 percent, in 2022 compared to 2021.
◦Management fee revenue - administrative services remained consistent at $58.3 million in both 2022 and 2021.
◦Cost of operations - policy issuance and renewal services
–Commissions increased $71.1 million in 2022 compared to 2021 driven by direct and affiliated assumed written premium growth, partially offset by a reduction in agent incentive compensation.
–Non-commission expense increased $47.1 million in 2022 compared to 2021. Underwriting and policy processing costs increased $6.4 million primarily due to increased underwriting report, printing, and personnel costs. Information technology costs increased $13.1 million primarily due to increased hardware and software costs and professional fees, partially offset by decreased personnel costs. Sales and advertising costs increased $7.5 million primarily due to increased advertising and agent-related expenses. Administrative and other expenses increased $22.5 million primarily due to an increase in personnel costs related to compensation and increased professional fees.
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◦The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $668.3 million in 2022 and $638.5 million in 2021, but had no net impact on operating income.

Income from investments before taxes totaled $0.6 million in 2022 compared to $67.3 million in 2021. Net investment income was $28.6 million in 2022 compared to $62.2 million in 2021. Included in net investment income is $10.4 million of limited partnership losses in 2022 compared to earnings of $31.7 million in 2021. Net realized and unrealized losses on investments were $27.3 million in 2022 compared to gains of $4.9 million in 2021.


4Q 2022 Highlights
Operating income before taxes increased $19.6 million, or 31.7 percent, in the fourth quarter of 2022 compared to the fourth quarter of 2021.
◦Management fee revenue - policy issuance and renewal services increased $53.3 million, or 11.8 percent, in the fourth quarter of 2022 compared to the fourth quarter of 2021.
◦Management fee revenue - administrative services increased $0.6 million, or 4.0 percent in the fourth quarter of 2022 compared to the fourth quarter of 2021.
◦Cost of operations - policy issuance and renewal services
–Commissions increased $15.6 million in the fourth quarter of 2022 compared to the fourth quarter of 2021 primarily driven by direct and affiliated assumed written premium growth, partially offset by a reduction in agent incentive compensation.
–Non-commission expense increased $19.3 million in the fourth quarter of 2022 compared to the fourth quarter of 2021. Underwriting and policy processing costs increased $3.5 million primarily due to increased personnel costs, postage and underwriting report costs. Information technology costs increased $5.1 million primarily due to increased hardware and software costs and professional fees. Sales and advertising costs increased $4.4 million primarily due to increased advertising and agent-related expenses. Administrative and other expenses increased $7.5 million primarily due to increased personnel costs.
◦The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $175.6 million in the fourth quarter of 2022 and $165.4 million in the fourth quarter of 2021, but had no net impact on operating income.

Income from investments before taxes totaled $0.3 million in the fourth quarter of 2022 compared to $12.3 million in the fourth quarter of 2021. Net investment income was $4.0 million in the fourth quarter of 2022 compared to $12.6 million in the fourth quarter of 2021. Included in net investment income is $8.3 million of limited partnership losses in the fourth quarter of 2022 compared to earnings of $5.0 million in the fourth quarter of 2021. Net realized and unrealized losses on investments were $3.5 million in the fourth quarter of 2022 compared to $0.2 million in the fourth quarter of 2021.




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Webcast Information
Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on March 2, 2023.  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 11th 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 19th 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 6 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 affecting insurance industry competition;
◦dependence upon the independent agency system; and
◦ability to maintain 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 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 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 or data security breaches, including cyber attacks;
•ability to maintain uninterrupted business operations;
•outcome of pending and potential litigation;
•factors affecting the quality and liquidity of our investment portfolio; and
•our 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.
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EX-99.2 3 ex-99212312022.htm EX-99.2 Document

Exhibit 99.2

Erie Indemnity Company
Statements of Operations
(dollars in thousands, except per share data)
Three months ended December 31, Twelve months ended December 31,
2022 2021 2022 2021
(Unaudited)
Operating revenue
Management fee revenue - policy issuance and renewal services $ 503,633  $ 450,286  $ 2,087,846  $ 1,913,166 
Management fee revenue - administrative services 14,877  14,301  58,323  58,286 
Administrative services reimbursement revenue 175,613  165,350  668,268  638,483 
Service agreement revenue 6,512  5,994  25,687  24,042 
Total operating revenue 700,635  635,931  2,840,124  2,633,977 
Operating expenses
Cost of operations - policy issuance and renewal services 443,592  408,747  1,795,642  1,677,397 
Cost of operations - administrative services 175,613  165,350  668,268  638,483 
Total operating expenses 619,205  574,097  2,463,910  2,315,880 
Operating income
81,430  61,834  376,214  318,097 
Investment income
Net investment income 3,979  12,572  28,585  62,177 
Net realized and unrealized investment (losses) gains (3,453) (237) (27,286) 4,946 
Net impairment (losses) recoveries recognized in earnings (238) (7) (667) 209 
Total investment income
288  12,328  632  67,332 
Interest expense —  1,050  2,009  4,132 
Other income (expense) 243  (3,285) 1,615  (4,893)
Income before income taxes 81,961  69,827  376,452  376,404 
Income tax expense 16,471  14,785  77,883  78,544 
Net income
$ 65,490  $ 55,042  $ 298,569  $ 297,860 
Earnings Per Share
Net income per share
Class A common stock – basic $ 1.41  $ 1.18  $ 6.41  $ 6.40 
Class A common stock – diluted $ 1.25  $ 1.05  $ 5.71  $ 5.69 
Class B common stock – basic and diluted $ 211  $ 177  $ 962  $ 959 
Weighted average shares outstanding – Basic
Class A common stock 46,189,028  46,189,068  46,188,916  46,188,806 
Class B common stock 2,542  2,542  2,542  2,542 
Weighted average shares outstanding – Diluted
Class A common stock 52,298,903  52,305,628  52,297,990  52,307,302 
Class B common stock 2,542  2,542  2,542  2,542 
Dividends declared per share
Class A common stock $ 1.190  $ 1.110  $ 4.520  $ 4.215 
Class B common stock $ 178.50  $ 166.50  $ 678.00  $ 632.25 


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Erie Indemnity Company
Statements of Financial Position
(in thousands)
December 31, 2022 December 31, 2021
Assets
Current assets:
Cash and cash equivalents $ 142,090  $ 183,702 
Available-for-sale securities 24,267  38,396 
Receivables from Erie Insurance Exchange and affiliates, net 524,937  479,123 
Prepaid expenses and other current assets 79,201  56,206 
Accrued investment income 8,301  6,303 
Total current assets 778,796  763,730 
Available-for-sale securities, net 870,394  907,689 
Equity securities 72,560  87,743 
Fixed assets, net 413,874  374,802 
Agent loans, net 60,537  58,683 
Deferred income taxes, net 145 
Other assets 43,295  49,265 
Total assets $ 2,239,456  $ 2,242,057 
Liabilities and shareholders' equity
Current liabilities:
Commissions payable $ 300,028  $ 270,746 
Agent bonuses 95,166  120,437 
Accounts payable and accrued liabilities 165,915  138,317 
Dividends payable 55,419  51,693 
Contract liability 36,547  34,935 
Deferred executive compensation 12,036  12,637 
Current portion of long-term borrowings —  2,098 
Total current liabilities 665,111  630,863 
Defined benefit pension plans 51,224  130,383 
Long-term borrowings —  91,734 
Contract liability 17,895  17,686 
Deferred executive compensation 13,724  14,571 
Deferred income taxes, net 14,075 
Other long-term liabilities 29,019  14,342 
Total liabilities 791,048  899,579 
Shareholders' equity 1,448,408  1,342,478 
Total liabilities and shareholders' equity $ 2,239,456  $ 2,242,057 


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