erie-20230425

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):			April 25, 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. ☐

Top of the Form

Item 2.02 Results of Operations and Financial Condition.

On April 27, 2023, Erie Indemnity Company (the “Company”) issued a press release announcing financial results for the quarter ended March 31, 2023. 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 April 28, 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 ended March 31, 2023.

Item 5.07 Submission of Matters to a Vote of Security Holders.

(a) The Company held its 98th Annual Meeting of Shareholders (the “Annual Meeting”) on April 25, 2023. On the record date for the Annual Meeting, the Company had 2,542 shares of Class B common stock outstanding, which had the exclusive right to vote on all matters presented for consideration at the meeting.

(b) At the Annual Meeting, shareholders of the Company re-elected all 11 incumbent directors to serve on the Company's Board of Directors for a one-year term. The names of the elected directors and voting results appear below. None of the shareholders who voted for the election of Directors withheld authority or abstained.


			For
J. Ralph Borneman, Jr.			2,539
Eugene C. Connell			2,539
Salvatore Correnti			2,539
LuAnn Datesh			2,539
Jonathan Hirt Hagen			2,539
Thomas B. Hagen			2,539
C. Scott Hartz			2,539
Brian A. Hudson, Sr.			2,539
George R. Lucore			2,539
Thomas W. Palmer			2,539
Elizabeth Hirt Vorsheck			2,539

In accordance with the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, shareholders were asked to (i) approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in the Company’s 2023 Information Statement, and (ii) select “every year,” “every two years,” “every three years” or “abstain” as the preferred frequency of future advisory votes on executive compensation. The compensation of the named executive officers was unanimously approved by the 2,539 votes cast, and a majority (2,509) of the voted shares selected “every three years” as the preferred frequency of future advisory votes on executive compensation, with 20 votes selecting “every year,” 10 votes selecting “every two years” and no abstentions.

Shareholders were also asked to approve the adoption of the Company’s Deferred Stock Plan for Outside Directors, as Amended and Restated (the “Plan”). The adoption of the Plan was approved by a majority (2,529) of the votes cast, with 10 abstentions.

Top of the Form

Item 8.01 Other Events.

At its meeting on April 25, 2023, the Company's Board of Directors approved the following quarterly dividend on shares of Erie Indemnity Company Class A common stock:

Dividend Number: 372

Class A Rate Per Share: $1.19

Declaration Date: April 25, 2023

Ex-Dividend Date: July 5, 2023

Record Date: July 6, 2023

Payable Date: July 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)

Top of the Form

Exhibit Index



Exhibit No.						Description

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

Top of the Form

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

April 27, 2023

By:

/s/ Gregory J. Gutting

Name: Gregory J. Gutting

Title: Executive Vice President & CFO

Exhibit 99.1

Erie Indemnity Reports First Quarter 2023 Results

Net Income was $86.2 million, Earnings per Diluted Share was $1.65

Erie, Pa., April 27, 2023 - Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter ending March 31, 2023. Net income was $86.2 million, or $1.65 per diluted share, in the first quarter of 2023, compared to $68.6 million, or $1.31 per diluted share, in the first quarter of 2022.



1Q 2023


(in thousands)	1Q'23		1Q'22
Operating income	$	110,543	$	84,312
Investment (loss) income	(4,732)		3,009
Interest expense and other (income), net	(3,337)		526
Income before income taxes	109,148		86,795
Income tax expense	22,907		18,176
Net income	$	86,241	$	68,619

1Q 2023 Highlights

Operating income before taxes increased $26.2 million, or 31.1 percent, in the first quarter of 2023 compared to the first quarter of 2022.

•Management fee revenue - policy issuance and renewal services increased $70.1 million, or 14.4 percent, in the first quarter of 2023 compared to the first quarter of 2022.

•Management fee revenue - administrative services increased $0.9 million, or 6.1 percent, in the first quarter of 2023 compared to the first quarter of 2022.

•Cost of operations - policy issuance and renewal services

◦Commissions increased $27.7 million in the first quarter of 2023 compared to the first quarter of 2022, primarily driven by the growth in direct and affiliated assumed written premium, partially offset by a decrease in agent incentive compensation.

◦Non-commission expense increased $17.0 million in the first quarter of 2023 compared to the first quarter of 2022. Underwriting and policy processing expense increased $2.7 million primarily due to increased personnel and underwriting report costs. Information technology costs increased $11.5 million primarily due to increased professional fees, hardware and software costs, and personnel costs. Administrative and other costs increased $2.9 million primarily due to an increase in personnel costs related to compensation and building occupancy costs, partially offset by a decrease in professional fees. Personnel costs in all expense categories were also impacted by lower pension costs due to an increase in the discount rate compared to 2022.

Loss from investments before taxes totaled $4.7 million in the first quarter of 2023 compared to income from investments before taxes of $3.0 million in the first quarter of 2022. Net investment income was $2.2 million in the first quarter of 2023 compared to $10.5 million in the same period of 2022. Included in net investment income is $10.8 million of limited partnership losses in the first quarter of 2023 compared to earnings of $2.8 million in the first quarter of 2022. Net realized and unrealized losses on investments were $5.3 million in the first quarter of 2023 compared to $7.3 million in the first quarter of 2022.

Webcast Information

Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on April 28, 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.

Exhibit 99.2

Erie Indemnity Company

Statements of Operations

(dollars in thousands, except per share data)


	Three months ended March 31,
	2023		2022
	(Unaudited)
Operating revenue
Management fee revenue - policy issuance and renewal services	$	558,090	$	487,992
Management fee revenue - administrative services	15,189		14,313
Administrative services reimbursement revenue	172,827		163,327
Service agreement revenue	6,359		6,478
Total operating revenue	752,465		672,110

Operating expenses
Cost of operations - policy issuance and renewal services	469,095		424,471
Cost of operations - administrative services	172,827		163,327

Total operating expenses	641,922		587,798
Operating income	110,543		84,312

Investment income
Net investment income	2,183		10,504
Net realized and unrealized investment losses	(5,282)		(7,279)
Net impairment losses recognized in earnings	(1,633)		(216)

Total investment (loss) income	(4,732)		3,009

Interest expense	—		999
Other income	3,337		473
Income before income taxes	109,148		86,795
Income tax expense	22,907		18,176
Net income	$	86,241	$	68,619


Net income per share
Class A common stock – basic	$	1.85	$	1.47
Class A common stock – diluted	$	1.65	$	1.31
Class B common stock – basic and diluted	$	278	$	221


Weighted average shares outstanding – Basic
Class A common stock	46,188,819		46,188,761
Class B common stock	2,542		2,542

Weighted average shares outstanding – Diluted
Class A common stock	52,296,621		52,300,501
Class B common stock	2,542		2,542

Dividends declared per share
Class A common stock	$	1.19	$	1.11
Class B common stock	$	178.50	$	166.50

Erie Indemnity Company

Statements of Financial Position

(in thousands)


	March 31, 2023		December 31, 2022
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	122,376	$	142,090
Available-for-sale securities	57,470		24,267

Receivables from Erie Insurance Exchange and affiliates, net	533,306		524,937
Prepaid expenses and other current assets	62,738		79,201

Accrued investment income	8,191		8,301
Total current assets	784,081		778,796

Available-for-sale securities, net	858,196		870,394
Equity securities	72,963		72,560

Fixed assets, net	417,339		413,874
Agent loans, net	59,315		60,537

Other assets	32,075		43,295
Total assets	$	2,223,969	$	2,239,456

Liabilities and shareholders' equity
Current liabilities:
Commissions payable	$	322,910	$	300,028
Agent bonuses	20,565		95,166
Accounts payable and accrued liabilities	168,142		165,915
Dividends payable	55,419		55,419
Contract liability	37,187		36,547
Deferred executive compensation	7,345		12,036



Total current liabilities	611,568		665,111

Defined benefit pension plans	53,522		51,224

Contract liability	18,142		17,895
Deferred executive compensation	12,634		13,724
Deferred income taxes, net	16,081		14,075
Other long-term liabilities	25,055		29,019
Total liabilities	737,002		791,048










Shareholders’ equity	1,486,967		1,448,408
Total liabilities and shareholders’ equity	$	2,223,969	$	2,239,456