Erie Indemnity Co 10-Q for FY2026 Q3
Erie Indemnity Co (ERIE)
10-Q
2026-10-29
For: 2026-09-30
View Original
Added on
October 29, 2026
About this 10-Q
Erie Indemnity Co filed this 10-Q on October 29, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Erie Indemnity Company reported third-quarter 2026 management fee revenue for policy issuance and renewal services of $847.0 million, up 2.6%, while related operating costs rose 3.6% to $665.0 million. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.07B
- up 0.3% from $1.07B a year earlier
- Net income
- $181.99M
- down 0.5% from net income of $182.85M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended September 30, 2026
OR
For the transition period from___to___
Commission file number 0-24000
| (Exact name of registrant as specified in its charter) | ||||||||
| (State or other jurisdiction of | (IRS Employer | |||||||||||||
| incorporation or organization) | Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||||||||
| (Registrant’s telephone number, including area code) | |||||||||||
| Not applicable | ||||||||
| (Former name, former address and former fiscal year, if changed since last report) | ||||||||
Securities registered pursuant to Section 12(b) of the Act:
| stated value $0.0292 per share | ||||||||||||||||||||
| (Title of each class) | (Trading Symbol) | (Name of each exchange on which registered) | ||||||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
| ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | ||||||||||||||||||||||
| Smaller reporting company | 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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares outstanding of the registrant’s Class A Common Stock as of the latest practicable date was 46,189,068 at October 23, 2026.
The number of shares outstanding of the registrant’s Class B Common Stock as of the latest practicable date was 2,542 at October 23, 2026.
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ERIE INDEMNITY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands, except per share data)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating revenue | |||||||||||||||||||||||
Management fee revenue - policy issuance and renewal services | $ | $ | $ | $ | |||||||||||||||||||
| Management fee revenue - administrative services | |||||||||||||||||||||||
| Administrative services reimbursement revenue | |||||||||||||||||||||||
| Service agreement revenue | |||||||||||||||||||||||
| Total operating revenue | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Cost of operations - policy issuance and renewal services | |||||||||||||||||||||||
| Cost of operations - administrative services | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
| Net investment income | |||||||||||||||||||||||
| Net realized and unrealized investment (losses) gains | ( | ( | |||||||||||||||||||||
| Net impairment losses recognized in earnings | ( | ( | ( | ( | |||||||||||||||||||
| Total investment income | |||||||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Net income per share | |||||||||||||||||||||||
| Class A common stock – basic | $ | $ | $ | $ | |||||||||||||||||||
| Class A common stock – diluted | $ | $ | $ | $ | |||||||||||||||||||
| Class B common stock – basic | $ | $ | $ | $ | |||||||||||||||||||
| Class B common stock – diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding – Basic | |||||||||||||||||||||||
| Class A common stock | |||||||||||||||||||||||
| Class B common stock | |||||||||||||||||||||||
Weighted average shares outstanding – Diluted | |||||||||||||||||||||||
| Class A common stock | |||||||||||||||||||||||
| Class B common stock | |||||||||||||||||||||||
| Dividends declared per share | |||||||||||||||||||||||
| Class A common stock | $ | $ | $ | $ | |||||||||||||||||||
| Class B common stock | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to Consolidated Financial Statements. See Note 12, "Accumulated Other Comprehensive Income (Loss)", for amounts reclassified out of accumulated other comprehensive income (loss) into the Consolidated Statements of Operations.
3
ERIE INDEMNITY COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(in thousands)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive (loss) income, net of tax | |||||||||||||||||||||||
| Change in unrealized holding (losses) gains on available-for-sale securities | ( | ( | |||||||||||||||||||||
| Pension and other postretirement plans | ( | ( | |||||||||||||||||||||
| Total other comprehensive (loss) income, net of tax | ( | ( | |||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to Consolidated Financial Statements. See Note 12, "Accumulated Other Comprehensive Income (Loss)", for amounts reclassified out of accumulated other comprehensive income (loss) into the Consolidated Statements of Operations.
4
ERIE INDEMNITY COMPANY
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(dollars in thousands, except per share data)
| September 30, | December 31, | |||||||||||||
| 2026 | 2025 | |||||||||||||
| Assets | (Unaudited) | |||||||||||||
| Current assets: | ||||||||||||||
Cash and cash equivalents (includes restricted cash of $ | $ | $ | ||||||||||||
| Available-for-sale securities | ||||||||||||||
| Available-for-sale securities lent | ||||||||||||||
| Receivables from Erie Insurance Exchange and affiliates, net | ||||||||||||||
| Prepaid expenses and other current assets, net | ||||||||||||||
| Accrued investment income | ||||||||||||||
| Total current assets | ||||||||||||||
| Available-for-sale securities, net | ||||||||||||||
| Equity securities | ||||||||||||||
| Available-for-sale and equity securities lent | ||||||||||||||
| Fixed assets, net | ||||||||||||||
| Agent loans, net | ||||||||||||||
| Defined benefit pension plan | ||||||||||||||
| Other assets, net | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Liabilities and shareholders' equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Commissions payable | $ | $ | ||||||||||||
| Agent incentive compensation | ||||||||||||||
| Accounts payable and accrued liabilities | ||||||||||||||
| Dividends payable | ||||||||||||||
| Contract liability | ||||||||||||||
| Deferred executive compensation | ||||||||||||||
| Securities lending payable | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Defined benefit pension plan | ||||||||||||||
| Contract liability | ||||||||||||||
| Deferred executive compensation | ||||||||||||||
| Deferred income taxes, net | ||||||||||||||
| Other long-term liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| Shareholders’ equity | ||||||||||||||
Class A common stock, stated value $ | ||||||||||||||
Class B common stock, convertible at a rate of | ||||||||||||||
| Additional paid-in-capital | ||||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
| Retained earnings | ||||||||||||||
| Total contributed capital and retained earnings | ||||||||||||||
Treasury stock, at cost; | ( | ( | ||||||||||||
| Deferred compensation | ||||||||||||||
| Total shareholders’ equity | ||||||||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||||||||
See accompanying notes to Consolidated Financial Statements.
5
ERIE INDEMNITY COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
Three and nine months ended September 30, 2026 and 2025
(dollars in thousands, except per share data)
| Class A common stock | Class B common stock | Additional paid-in-capital | Accumulated other comprehensive (loss) income | Retained earnings | Treasury stock | Deferred compensation | Total shareholders' equity | |||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||
| Net income | ||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||
Class A $ | ( | ( | ||||||||||||||||||||||||
Class B $ | ( | ( | ||||||||||||||||||||||||
Net purchase of treasury stock (1) | ||||||||||||||||||||||||||
| Deferred compensation | ( | |||||||||||||||||||||||||
Rabbi trust distribution (2) | ( | |||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||
Class A $ | ( | ( | ||||||||||||||||||||||||
Class B $ | ( | ( | ||||||||||||||||||||||||
Net purchase of treasury stock (1) | ||||||||||||||||||||||||||
| Deferred compensation | ( | |||||||||||||||||||||||||
Rabbi trust distribution (2) | ( | |||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Other comprehensive loss | ( | ( | ||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||
Class A $ | ( | ( | ||||||||||||||||||||||||
Class B $ | ( | ( | ||||||||||||||||||||||||
Net purchase of treasury stock (1) | ||||||||||||||||||||||||||
| Deferred compensation | ( | |||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||
(1)Net purchases of treasury stock in 2026 include the repurchase of our Class A common stock in the open market that were subsequently distributed to satisfy stock-based compensation awards.
(2)Distributions of our Class A shares were made from the rabbi trust to one outside director stock compensation plan participant and four incentive compensation deferral plan participants in 2026.
6
| Class A common stock | Class B common stock | Additional paid-in-capital | Accumulated other comprehensive (loss) income | Retained earnings | Treasury stock | Deferred compensation | Total shareholders' equity | |||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||
Class A $ | ( | ( | ||||||||||||||||||||||||
Class B $ | ( | ( | ||||||||||||||||||||||||
Net purchase of treasury stock (1) | ||||||||||||||||||||||||||
| Deferred compensation | ( | |||||||||||||||||||||||||
Rabbi trust distribution (2) | ( | |||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||
Class A $ | ( | ( | ||||||||||||||||||||||||
Class B $ | ( | ( | ||||||||||||||||||||||||
Net purchase of treasury stock (1) | ||||||||||||||||||||||||||
| Deferred compensation | ( | |||||||||||||||||||||||||
Rabbi trust distribution (2) | ( | |||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||
| Net income | ||||||||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||
Class A $ | ( | ( | ||||||||||||||||||||||||
Class B $ | ( | ( | ||||||||||||||||||||||||
| Deferred compensation | ( | |||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||
(1)Net purchases of treasury stock in 2025 include the repurchase of our Class A common stock in the open market that were subsequently distributed to satisfy stock-based compensation awards.
(2)Distributions of our Class A shares were made from the rabbi trust to three incentive compensation deferral plan participants in 2025.
See accompanying notes to Consolidated Financial Statements.
7
ERIE INDEMNITY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
| Nine months ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Management fee received | $ | $ | ||||||||||||
| Administrative services reimbursements received | ||||||||||||||
| Service agreement revenue received | ||||||||||||||
| Net investment income received | ||||||||||||||
| Commissions paid to agents | ( | ( | ||||||||||||
| Incentive compensation paid to agents | ( | ( | ||||||||||||
| Salaries and wages paid | ( | ( | ||||||||||||
| Pension contribution and employee benefits paid | ( | ( | ||||||||||||
| General operating expenses paid | ( | ( | ||||||||||||
| Administrative services expenses paid | ( | ( | ||||||||||||
| Income taxes paid | ( | ( | ||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Purchase of investments: | ||||||||||||||
| Available-for-sale securities | ( | ( | ||||||||||||
| Equity securities | ( | ( | ||||||||||||
| Other investments | ( | |||||||||||||
| Proceeds from investments: | ||||||||||||||
| Available-for-sale securities sales | ||||||||||||||
| Available-for-sale securities maturities/calls | ||||||||||||||
| Equity securities | ||||||||||||||
| Other investments | ||||||||||||||
| Purchase of fixed assets | ( | ( | ||||||||||||
Loans to agents and others | ( | ( | ||||||||||||
Collections on agent and other loans | ||||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Dividends paid to shareholders | ( | ( | ||||||||||||
| Net changes in cash collateral for securities lent | ( | |||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Net increase in cash, cash equivalents, and restricted cash | ||||||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | ||||||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | $ | ||||||||||||
| Supplemental disclosure of noncash transactions | ||||||||||||||
| Liability incurred to purchase fixed assets | $ | $ | ||||||||||||
| Operating lease assets obtained in exchange for lease liabilities | $ | $ | ||||||||||||
| Receipt of donated equipment | $ | $ | ||||||||||||
| Liability recognized for financing arrangement | $ | $ | ||||||||||||
See accompanying notes to Consolidated Financial Statements.
8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1. Nature of Operations
Erie Indemnity Company ("Indemnity", "we", "us", "our") is a publicly held Pennsylvania business corporation that has since its incorporation in 1925 served as the attorney-in-fact for the subscribers (policyholders) at the Erie Insurance Exchange ("Exchange"). The Exchange, which also commenced business in 1925, is a Pennsylvania-domiciled reciprocal insurer that writes property and casualty insurance.
Our primary function as attorney-in-fact is to perform policy issuance and renewal services on behalf of the subscribers at the Exchange. We also act as attorney-in-fact on behalf of the subscribers at the Exchange with respect to all claims handling and investment management services, as well as the service provider for all claims handling, life insurance, and investment management services for the Exchange's insurance subsidiaries, collectively referred to as "administrative services". Acting as attorney-in-fact in these two capacities is done in accordance with a subscriber's agreement (a limited power of attorney) executed individually by each subscriber (policyholder), which appoints Indemnity as each subscriber's attorney-in-fact to transact certain business on their behalf. In accordance with the subscriber's agreement for acting as attorney-in-fact in these two capacities, we retain a management fee calculated as a percentage of the direct and affiliated assumed premiums written by the Exchange.
The policy issuance and renewal services we provide on behalf of the subscribers at the Exchange are related to the sales, underwriting, and issuance of policies. The sales related services we provide include agent compensation and certain sales and advertising support services. Agent compensation includes scheduled commissions to agents based upon premiums written as well as incentive compensation, which is earned by achieving targeted measures. The underwriting services we provide include underwriting and policy processing. The remaining services we provide include customer service and administrative support. We also provide information technology services that support all the functions listed above. See Note 4, "Segment Information", for the significant expense categories related to providing these services. Included in expenses for these services are allocations of costs for departments that support these policy issuance and renewal functions.
Consistent with its legal structure as a reciprocal insurer, the Exchange does not have any employees or officers. Therefore, it enters into contractual relationships by and through the subscribers' attorney-in-fact. Indemnity serves as the attorney-in-fact on behalf of the subscribers at the Exchange with respect to its administrative services as enumerated in the subscriber's agreement. The Exchange's insurance subsidiaries also utilize Indemnity for these services in accordance with the service agreements between each of the subsidiaries and Indemnity. Claims handling services include costs incurred in the claims process, including the adjustment, investigation, defense, recording, and payment functions. Life insurance management services include costs incurred in the management and processing of life insurance business. Investment management services are related to investment trading activity, accounting, and all other functions attributable to the investment of funds. Included in these expenses are allocations of costs for departments that support these administrative functions. The subscriber's agreement and service agreements provide for reimbursement of amounts incurred for these services to Indemnity. Reimbursements are settled at cost. State insurance regulations require that intercompany service agreements and any material amendments be approved in advance by the state insurance department.
Our results of operations are tied to the growth and financial condition of the Exchange. We continually monitor the financial strength of the Exchange. If any events occurred that impaired the Exchange’s ability to grow or sustain its financial condition, including but not limited to a significant downgrade in financial strength ratings, disruption in the independent agency relationships, significant catastrophe losses, or products not meeting customer demands, the Exchange could find it more difficult to retain its existing business and attract new business. A decline in the business of the Exchange almost certainly could have as a consequence a decline in the total premiums paid and a correspondingly adverse effect on the amount of the management fee revenue we receive. We also have an exposure to a concentration of credit risk related to the unsecured receivables due from the Exchange for net management fee and other reimbursements. See Note 13, "Concentrations of Credit Risk".
9
Note 2. Significant Accounting Policies
Basis of presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X, and include the accounts of Indemnity and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. For further information, refer to the consolidated financial statements and footnotes included in our Form 10-K for the year ended December 31, 2025 as filed with the Securities and Exchange Commission ("SEC") on February 23, 2026.
Use of estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recently issued accounting standards
In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", which requires entities to disclose disaggregated information about certain income statement expense line items. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments can be applied on either a prospective or retrospective basis. This will have no impact on our consolidated financial statements, and we are currently evaluating the impact of adoption on our disclosures.
In September 2025, the FASB issued ASU 2025-06, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software", which removes all references to prescriptive and sequential software development project stages and requires an entity to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. The amendments can be applied on a prospective, modified or retrospective basis. We are currently evaluating the impact of adoption on our consolidated financial statements and disclosures.
In December 2025, the FASB issued ASU 2025-11 "Interim Reporting (Topic 270) - Narrow-Scope Improvements", which clarifies current interim disclosure requirements and provides a comprehensive list of required interim disclosures. The guidance also incorporates a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in this ASU are required to be adopted for interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments can be applied on a prospective or retrospective basis. We do not expect the standard will have a material impact on our disclosures, and will have no other impact on our consolidated financial statements.
Investments
Equity securities – Equity securities primarily include non-redeemable preferred stocks and exchange-traded funds with underlying holdings of fixed maturity securities. Equity securities with readily determinable fair values are reported at fair value, with changes in fair value recognized in net realized and unrealized investment gains (losses). Certain equity securities that do not have readily determinable fair values are accounted for using the measurement alternative at cost, less impairment, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. Any adjustments to carrying value of these investments are recognized in net realized and unrealized investment gains (losses). Securities that we intend to sell as of the reporting date are classified as current assets.
10
Note 3. Revenue
The majority of our revenue is derived from the subscriber’s agreement between us and the subscribers (policyholders) at the Exchange. In accordance with the subscriber’s agreement, we retain a management fee calculated as a percentage, not to exceed 25 %, of all direct and affiliated assumed written premiums of the Exchange. We allocate a portion of our management fee revenue, currently 25 % of the direct and affiliated assumed written premiums of the Exchange, between the two performance obligations we have under the subscriber’s agreement. The first performance obligation is to provide policy issuance and renewal services to the subscribers (policyholders) at the Exchange, and the second is to act as attorney-in-fact on behalf of the subscribers at the Exchange, as well as the service provider for the Exchange's insurance subsidiaries, with respect to all administrative services.
The transaction price, including management fee revenue and administrative services reimbursement revenue, includes variable consideration and is allocated based on the estimated standalone selling prices developed using industry information and other available information for similar services. A constraining estimate of variable consideration exists related to the potential for management fees to be returned if a policy were to be cancelled mid-term. Management fees are returned to the Exchange when policyholders cancel their insurance coverage mid-term and premiums are refunded to them. The constraining estimate is determined using the expected value method, based on both historical and current information. The estimated transaction price, as reduced by the constraint, reflects consideration expected for performance of our services. We update the transaction price and the related allocation at least annually based upon the most recent information available or more frequently if there have been significant changes in any components considered in the transaction price.
The first performance obligation is to provide policy issuance and renewal services that result in executed insurance policies between the Exchange or one of its insurance subsidiaries and the subscriber (policyholder). The subscriber (policyholder) receives economic benefits when substantially all the policy issuance or renewal services are complete and an insurance policy is issued or renewed by the Exchange or one of its insurance subsidiaries. It is at the time of policy issuance or renewal that the allocated portion of revenue is recognized.
Indemnity records a receivable from the Exchange for management fee revenue when the premium is written or assumed from affiliates by the Exchange. Indemnity collects the management fee from the Exchange when the Exchange collects the premiums from the subscribers (policyholders). As the Exchange issues policies almost exclusively with annual terms, cash collections generally occur within one year.
The following table disaggregates revenue by our two performance obligations:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Management fee revenue - policy issuance and renewal services | $ | $ | $ | $ | |||||||||||||||||||
| Management fee revenue - administrative services | |||||||||||||||||||||||
| Administrative services reimbursement revenue | |||||||||||||||||||||||
| Total revenue from administrative services | $ | $ | $ | $ | |||||||||||||||||||
11
Note 4. Segment Information
We have one reportable segment: management operations. All segment revenue is derived in the United States, the majority of which is from the subscriber’s agreement between us and the subscribers (policyholders) at the Exchange, our sole customer, as further described in Note 3, "Revenue". Our chief operating decision maker ("CODM") is our Executive Council, which includes our Chief Executive Officer ("CEO"), Chief Financial Officer, executive vice presidents and certain senior vice presidents reporting directly to the CEO as applicable. The CODM evaluates performance and decides how to allocate resources for the management operations segment based on net income, as reported in our Consolidated Statements of Operations. Net income is used to monitor budget versus actual results. Total assets as reported in our Consolidated Statements of Financial Position, all of which are located in the United States, are reviewed by the CODM for purposes of decision making. The accounting policies of our management operations segment are the same as those described in Note 2, "Significant Accounting Policies, of Notes to Consolidated Financial Statements" included in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on February 23, 2026.
Beginning in the first quarter of 2026, the significant segment expense categories included in the financial information regularly provided to the CODM were revised to align with the current manner in which the CODM reviews expenses in evaluating performance and allocating resources. Prior-period segment expense disclosures have been recast to conform to the current period presentation. This change did not affect our determination that we have one reportable segment and did not affect the measure of net income.
The following table presents our management operations segment revenue, significant segment expenses regularly provided to the CODM, and net income:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Management fee revenue | $ | $ | $ | $ | |||||||||||||||||||
| Administrative services reimbursement revenue | |||||||||||||||||||||||
| Service agreement revenue | |||||||||||||||||||||||
| Total operating revenue | |||||||||||||||||||||||
| Commissions | |||||||||||||||||||||||
Personnel costs (1) | |||||||||||||||||||||||
Sales and advertising (1) | |||||||||||||||||||||||
Acquisition and underwriting support costs (1) | |||||||||||||||||||||||
Technology infrastructure costs (1) | |||||||||||||||||||||||
Professional fees (1) | |||||||||||||||||||||||
Administrative and other (1) | |||||||||||||||||||||||
| Cost of operations - policy issuance and renewal services | |||||||||||||||||||||||
| Cost of operations - administrative services | |||||||||||||||||||||||
Total operating expenses (2) | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Total investment income | |||||||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
(1) 2025 amounts have been recast to conform to the current presentation.
(2) Management operations segment depreciation and amortization expense included primarily in "Total operating expenses" as reported on our Consolidated Statements of Operations totaled $20.7 million and $18.4 million for the three months ended September 30, 2026 and 2025, respectively, and $61.5 million and $50.3 million for the nine months ended September 30, 2026 and 2025, respectively. The Exchange and its insurance subsidiaries reimbursed us approximately 33 % and 30 % in the nine months ended September 30, 2026 and 2025, respectively, for depreciation and amortization expense on assets supporting administrative services. See our Consolidated Statements of Cash Flows for segment expenditures on fixed asset additions.
12
Note 5. Earnings Per Share
Class A and Class B basic earnings per share and Class B diluted earnings per share are calculated under the two-class method. The two-class method allocates earnings to each class of stock based upon its dividend rights. Class B shares are convertible into Class A shares at a conversion ratio of 2,400 to 1. See Note 11, "Capital Stock".
Class A diluted earnings per share is calculated under the if-converted method, which reflects the conversion of Class B shares to Class A shares. Diluted earnings per share calculations include the dilutive effect of assumed issuance of stock-based awards under compensation plans that have the option to be paid in stock using the treasury stock method.
A reconciliation of the numerators and denominators used in the basic and diluted per-share computations is presented as follows for each class of common stock:
| Three months ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||
| (dollars in thousands, except per share data) | Allocated net income (numerator) | Weighted shares (denominator) | Per-share amount | Allocated net income (numerator) | Weighted shares (denominator) | Per-share amount | ||||||||||||||||||||||||||||||||
| Class A – Basic EPS: | ||||||||||||||||||||||||||||||||||||||
| Income available to Class A stockholders | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Dilutive effect of stock-based awards | — | — | ||||||||||||||||||||||||||||||||||||
| Assumed conversion of Class B shares | — | — | ||||||||||||||||||||||||||||||||||||
| Class A – Diluted EPS: | ||||||||||||||||||||||||||||||||||||||
Income available to Class A stockholders on Class A equivalent shares | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Class B – Basic EPS: | ||||||||||||||||||||||||||||||||||||||
| Income available to Class B stockholders | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Class B – Diluted EPS: | ||||||||||||||||||||||||||||||||||||||
| Income available to Class B stockholders | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Nine months ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||
| (dollars in thousands, except per share data) | Allocated net income (numerator) | Weighted shares (denominator) | Per-share amount | Allocated net income (numerator) | Weighted shares (denominator) | Per-share amount | ||||||||||||||||||||||||||||||||
| Class A – Basic EPS: | ||||||||||||||||||||||||||||||||||||||
| Income available to Class A stockholders | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Dilutive effect of stock-based awards | — | |||||||||||||||||||||||||||||||||||||
| Assumed conversion of Class B shares | — | — | ||||||||||||||||||||||||||||||||||||
| Class A – Diluted EPS: | ||||||||||||||||||||||||||||||||||||||
Income available to Class A stockholders on Class A equivalent shares | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Class B – Basic EPS: | ||||||||||||||||||||||||||||||||||||||
| Income available to Class B stockholders | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Class B – Diluted EPS: | ||||||||||||||||||||||||||||||||||||||
| Income available to Class B stockholders | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
13
Note 6. Fair Value
Financial instruments carried at fair value
Our available-for-sale and equity securities are recorded at fair value, which is the price that would be received to sell the asset in an orderly transaction between willing market participants as of the measurement date.
Valuation techniques used to derive the fair value of our available-for-sale and equity securities are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources. Unobservable inputs reflect our own assumptions regarding fair market value for these securities. Financial instruments are categorized based upon the following characteristics or inputs to the valuation techniques:
•Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
•Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
•Level 3 – Unobservable inputs for the asset or liability.
Estimates of fair values for our investment portfolio are obtained primarily from a nationally recognized pricing service. Our Level 1 securities are valued using an exchange traded price provided by the pricing service. Pricing service valuations for Level 2 securities include multiple verifiable, observable inputs including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. Pricing service valuations for Level 3 securities are based upon proprietary models and are used when observable inputs are not available or in illiquid markets.
Although virtually all of our prices are obtained from third party sources, we also perform internal pricing reviews, including evaluating the methodology and inputs used to ensure that we determine the proper classification level of the financial instrument and reviewing securities with price changes that vary significantly from current market conditions or independent price sources. Price variances are investigated and corroborated by market data and transaction volumes. We have reviewed the pricing methodologies of our pricing service as well as other observable inputs and believe that the prices adequately consider market activity in determining fair value.
In limited circumstances we adjust the price received from the pricing service when, in our judgment, a better reflection of fair value is available based upon corroborating information and our knowledge and monitoring of market conditions such as a disparity in price of comparable securities and/or non-binding broker quotes. In other circumstances, certain securities are internally priced because prices are not provided by the pricing service.
When a price from the pricing service is not available, values are determined by obtaining broker/dealer quotes and/or market comparables. When available, we obtain multiple quotes for the same security. The ultimate value for these securities is determined based upon our best estimate of fair value using corroborating market information. As of September 30, 2026, nearly all of our available-for-sale and equity securities were priced using a third party pricing service.
14
The following tables present our fair value measurements on a recurring and nonrecurring basis by asset class and level of input as of:
| September 30, 2026 | ||||||||||||||||||||||||||
| (in thousands) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
| Recurring fair value measurements: | ||||||||||||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | ||||||||||||||||||||||
| Collateralized debt obligations | ||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||||||||||||||
| Other debt securities | ||||||||||||||||||||||||||
| U.S. Treasury | ||||||||||||||||||||||||||
Total available-for-sale securities (1) | ||||||||||||||||||||||||||
| Equity securities: | ||||||||||||||||||||||||||
| Exchange-traded funds | ||||||||||||||||||||||||||
| Non-redeemable preferred stocks: | ||||||||||||||||||||||||||
| Financial services sector | ||||||||||||||||||||||||||
| Utilities sector | ||||||||||||||||||||||||||
| Energy sector | ||||||||||||||||||||||||||
| Consumer sector | ||||||||||||||||||||||||||
| Technology sector | ||||||||||||||||||||||||||
| Communications sector | ||||||||||||||||||||||||||
Total non-redeemable preferred stocks (2) | ||||||||||||||||||||||||||
| Total equity securities | ||||||||||||||||||||||||||
| Total recurring fair value measurements | $ | $ | $ | $ | ||||||||||||||||||||||
Nonrecurring fair value measurements-equity securities (3) | $ | $ | $ | $ | ||||||||||||||||||||||
(1)This includes $42.3 million of securities lent under a securities lending agreement.
(2)This includes $14.1 million of securities lent under a securities lending agreement.
(3)This excludes $11.7 million of equity securities without readily determinable fair values that were not remeasured at fair value during the reporting period.
15
| December 31, 2025 | ||||||||||||||||||||||||||
| (in thousands) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
| Recurring fair value measurements: | ||||||||||||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | ||||||||||||||||||||||
| Collateralized debt obligations | ||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||||||||||||||
| Other debt securities | ||||||||||||||||||||||||||
| U.S. Treasury | ||||||||||||||||||||||||||
Total available-for-sale securities (1) | ||||||||||||||||||||||||||
| Equity securities: | ||||||||||||||||||||||||||
| Non-redeemable preferred stocks: | ||||||||||||||||||||||||||
Financial services sector (2) | ||||||||||||||||||||||||||
| Utilities sector | ||||||||||||||||||||||||||
| Energy sector | ||||||||||||||||||||||||||
Consumer sector (2) | ||||||||||||||||||||||||||
Technology sector (2) | ||||||||||||||||||||||||||
| Communications sector | ||||||||||||||||||||||||||
Total non-redeemable preferred stocks (3) | ||||||||||||||||||||||||||
| Total equity securities | ||||||||||||||||||||||||||
Total recurring fair value measurements (2) | $ | $ | $ | $ | ||||||||||||||||||||||
Nonrecurring fair value measurements-equity securities (2) | $ | $ | $ | $ | ||||||||||||||||||||||
(1) This includes $44.4 million of securities lent under a securities lending agreement.
(2) Prior-period amounts have been revised to separately present nonrecurring fair value measurements and to exclude $8.7 million of equity securities without readily determinable fair values that were not remeasured at fair value during the reporting period. These revisions are not material and the impact was limited to our financial statement footnote disclosures.
(3) This includes $20.1 million of securities lent under a securities lending agreement.
Equity securities without readily determinable fair values
We hold investments in privately held companies with carrying amounts of $16.2 million at September 30, 2026 and $11.9 million at December 31, 2025 that do not have readily determinable fair values and are accounted for using the measurement alternative described within Note 2, "Significant Accounting Policies". Included in the tables above are investments that were remeasured at fair value on a nonrecurring basis using prices from recent financing transactions at various dates during the nine months ended September 30, 2026 and the year ended December 31, 2025. The nonrecurring fair value measurements include only those investments remeasured during the respective periods and reflect fair value as of the applicable remeasurement dates rather than as of September 30, 2026 and December 31, 2025, respectively. During the nine months ended September 30, 2026 and the year ended December 31, 2025, upward adjustments resulting from observable price changes totaled $0.9 million and $0.7 million, respectively. Cumulative upward adjustments were $2.0 million at September 30, 2026 and $1.1 million at December 31, 2025. No
16
We review the fair value hierarchy classifications of recurring fair value measurements each reporting period. Transfers between hierarchy levels may occur due to changes in available market observable inputs.
Level 3 Assets – 2026 Quarterly Change:
(in thousands) | Beginning balance at June 30, 2026 | Included in earnings(1) | Included in other comprehensive income (loss) | Purchases | Sales | Transfers into Level 3(2) | Transfers out of Level 3(2) | Ending balance at September 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | $ | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Equity securities (3) | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Level 3 securities | $ | $ | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Level 3 Assets – 2026 Year-to-Date Change:
| (in thousands) | Beginning balance at December 31, 2025 | Included in earnings(1) | Included in other comprehensive income (loss) | Purchases | Sales | Transfers into Level 3(2) | Transfers out of Level 3(2) | Ending balance at September 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale securities | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Equity securities (3) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total Level 3 securities | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Level 3 Assets – 2025 Quarterly Change:
| (in thousands) | Beginning balance at June 30, 2025 | Included in earnings(1) | Included in other comprehensive income (loss) | Purchases | Sales | Transfers into Level 3(2) | Transfers out of Level 3(2) | Ending balance at September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Equity securities (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Level 3 securities | $ | $ | ( | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
17
Level 3 Assets – 2025 Year-to-Date Change:
| (in thousands) | Beginning balance at December 31, 2024 | Included in earnings(1) | Included in other comprehensive income (loss) | Purchases | Sales | Transfers into Level 3(2) | Transfers out of Level 3(2) | Ending balance at September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Collateralized debt obligations | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Equity securities (3) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total Level 3 securities | $ | $ | ( | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
(1)These amounts are reported as net investment income and net realized and unrealized investment gains (losses) for each of the periods presented above.
(2)Transfers into and/or (out) of Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs.
(3)Prior-period amounts have been revised to exclude equity securities without readily determinable fair values. These revisions are not material and the impact was limited to our financial statement footnote disclosures.
Financial instruments not carried at fair value
The following table presents the carrying values and fair values of financial instruments categorized as Level 3 in the fair value hierarchy that are recorded at carrying value as of:
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| (in thousands) | Carrying value | Fair value | Carrying value | Fair value | ||||||||||||||||||||||
Agent loans, net (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Other loans receivable, net (2) | ||||||||||||||||||||||||||
Held-to-maturity securities, net (3) | ||||||||||||||||||||||||||
(1) The current portion of agent loans is included in the line item "Prepaid expenses and other current assets, net" in the Consolidated Statements of Financial Position.
(2) The current and long-term portions of other loans receivable are included in the line items "Prepaid expenses and other current assets, net" and "Other assets, net", respectively, in the Consolidated Statements of Financial Position.
(3) Held-to-maturity securities are included in the line item "Other assets, net" in the Consolidated Statements of Financial Position.
18
Note 7. Investments
Fixed maturity securities
See Note 6, "Fair Value" for additional fair value disclosures. The following tables summarize the amortized cost and estimated fair value, net of credit loss allowance, of our fixed maturity securities as of:
| September 30, 2026 | ||||||||||||||||||||||||||
| (in thousands) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | ||||||||||||||||||||||
| Collateralized debt obligations | ||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||||||||||||||
| Other debt securities | ||||||||||||||||||||||||||
| U.S. Treasury | ||||||||||||||||||||||||||
Total available-for-sale securities, net (1) | ||||||||||||||||||||||||||
| Held-to-maturity securities - states & political subdivisions | ||||||||||||||||||||||||||
| Total fixed maturity securities, net | $ | $ | $ | $ | ||||||||||||||||||||||
(1)This includes an estimated fair value of $42.3 million of securities lent under a securities lending agreement.
| December 31, 2025 | ||||||||||||||||||||||||||
| (in thousands) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||||||||||||
| Available-for-sale securities: | ||||||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | ||||||||||||||||||||||
| Collateralized debt obligations | ||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||||||||||||||
| Other debt securities | ||||||||||||||||||||||||||
| U.S. Treasury | ||||||||||||||||||||||||||
Total available-for-sale securities, net (1) | ||||||||||||||||||||||||||
| Held-to-maturity securities - states & political subdivisions | ||||||||||||||||||||||||||
| Total fixed maturity securities, net | $ | $ | $ | $ | ||||||||||||||||||||||
(1)This includes an estimated fair value of $44.4 million of securities lent under a securities lending agreement.
The amortized cost and estimated fair value of our fixed maturity securities at September 30, 2026 are shown below by remaining contractual term to maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
| September 30, 2026 | ||||||||||||||
| Amortized | Estimated | |||||||||||||
| (in thousands) | cost | fair value | ||||||||||||
| Available-for-sale securities: | ||||||||||||||
| Due in one year or less | $ | $ | ||||||||||||
| Due after one year through five years | ||||||||||||||
| Due after five years through ten years | ||||||||||||||
| Due after ten years | ||||||||||||||
Total available-for-sale securities, net (1) (2) | ||||||||||||||
| Held-to-maturity securities - due after ten years | ||||||||||||||
| Total fixed maturity securities, net | $ | $ | ||||||||||||
(1)The contractual maturities of our available-for-sale securities are included in the table. However, given our intent to sell certain impaired securities, these securities are classified as current assets in our Consolidated Statement of Financial Position at September 30, 2026.
(2)This includes an estimated fair value of $42.3 million of securities lent under a securities lending agreement.
19
The following tables present available-for-sale securities based on length of time in a gross unrealized loss position as of:
| September 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | No. of holdings | |||||||||||||||||||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Collateralized debt obligations | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||||||||||||||||||||||||||||||||
| Other debt securities | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury | ||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Quality breakdown of available-for-sale securities: | ||||||||||||||||||||||||||||||||||||||||||||
| Investment grade | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Non-investment grade | ||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | No. of holdings | |||||||||||||||||||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Collateralized debt obligations | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | ||||||||||||||||||||||||||||||||||||||||||||
| Other debt securities | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury | ||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Quality breakdown of available-for-sale securities: | ||||||||||||||||||||||||||||||||||||||||||||
| Investment grade | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Non-investment grade | ||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
20
Credit loss allowances
The following tables present a roll-forward of the allowances for credit losses on investments:
| Three months ended September 30, 2026 | ||||||||||||||||||||||||||
| (in thousands) | Available-for-sale securities | Held-to-maturity securities | Other loans receivable | Agent loans | ||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
| Provision and recoveries | ( | |||||||||||||||||||||||||
| Sales/collections and write-offs | ||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | ||||||||||||||||||||||
| Nine months ended September 30, 2026 | ||||||||||||||||||||||||||
| (in thousands) | Available-for-sale securities | Held-to-maturity securities | Other loans receivable | Agent loans | ||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
| Provision and recoveries | ||||||||||||||||||||||||||
| Sales/collections and write-offs | ( | |||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | ||||||||||||||||||||||
| Three months ended September 30, 2025 | ||||||||||||||||||||||||||
| (in thousands) | Available-for-sale securities | Held-to-maturity securities | Other loans receivable | Agent loans | ||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
| Provision and recoveries | ||||||||||||||||||||||||||
| Sales/collections and write-offs | ( | ( | ||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | ||||||||||||||||||||||
| Nine months ended September 30, 2025 | ||||||||||||||||||||||||||
| (in thousands) | Available-for-sale securities | Held-to-maturity securities | Other loans receivable | Agent loans | ||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
| Provision and recoveries | ||||||||||||||||||||||||||
| Sales/collections and write-offs | ( | ( | ||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | ||||||||||||||||||||||
Net investment income
Investment income, net of expenses, was generated from the following portfolios:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Available-for-sale securities | $ | $ | $ | $ | |||||||||||||||||||||||||
| Equity securities | |||||||||||||||||||||||||||||
Limited partnerships (1) | |||||||||||||||||||||||||||||
| Agent loans | |||||||||||||||||||||||||||||
| Cash equivalents and other | |||||||||||||||||||||||||||||
| Total investment income | |||||||||||||||||||||||||||||
| Less: investment expenses | |||||||||||||||||||||||||||||
| Net investment income | $ | $ | $ | $ | |||||||||||||||||||||||||
(1)Limited partnership income includes both realized gains (losses) and unrealized valuation changes. Our limited partnership investments are included in the line item "Other assets, net" in the Consolidated Statements of Financial Position. We have made no new significant limited partnership commitments since 2006, and the balance of limited partnership investments is expected to decline over time as additional distributions are received.
21
Net realized and unrealized investment gains (losses)
Realized and unrealized gains (losses) on investments were as follows:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Available-for-sale securities: | |||||||||||||||||||||||||||||
| Gross realized gains | $ | $ | $ | $ | |||||||||||||||||||||||||
| Gross realized losses | ( | ( | ( | ( | |||||||||||||||||||||||||
| Net realized (losses) gains on available-for-sale securities | ( | ( | ( | ||||||||||||||||||||||||||
| Equity securities | ( | ( | |||||||||||||||||||||||||||
| Miscellaneous | |||||||||||||||||||||||||||||
| Net realized and unrealized investment (losses) gains | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||
The portion of net unrealized gain (losses) recognized during the reporting period related to equity securities held at the reporting date is calculated as follows:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Equity securities: | |||||||||||||||||||||||||||||
| Net (losses) gains recognized during the period | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||
| Less: net gains (losses) recognized on securities sold | ( | ||||||||||||||||||||||||||||
| Net unrealized (losses) gains recognized on securities held at reporting date | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||
Net impairment recoveries (losses) recognized in earnings
Impairment recoveries (losses) on investments were as follows:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Available-for-sale securities: | |||||||||||||||||||||||||||||
| Intent to sell | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Credit impaired | ( | ( | ( | ||||||||||||||||||||||||||
| Total available-for-sale securities | ( | ( | ( | ( | |||||||||||||||||||||||||
| Expected credit recoveries (losses): | |||||||||||||||||||||||||||||
| Agent loans | ( | ( | ( | ||||||||||||||||||||||||||
| Other loans receivable | ( | ( | ( | ( | |||||||||||||||||||||||||
| Net impairment losses recognized in earnings | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
Securities lending transactions
As of September 30, 2026, the estimated fair value of loaned securities was $56.4 million, consisting of $42.3 million of available- for-sale securities and $14.1 million of equity securities. As of December 31, 2025, the estimated fair value of loaned securities was $64.5 million consisting of $44.4 million of available-for-sale securities and $20.1 million of equity securities. Cash collateral received in connection with these securities lending transactions totaled $54.3 million and $61.9 million as of September 30, 2026 and December 31, 2025 respectively. The cash collateral was reinvested in cash equivalents and is included with "Cash and cash equivalents" in our Consolidated Statements of Financial Position. We also received $3.9 million and $4.5 million of non-cash collateral as of September 30, 2026 and December 31, 2025, respectively, which we are not permitted to sell or repledge. There were no securities lending transactions outstanding with contractual maturities extending beyond one year from the reporting date.
If we have to return cash collateral on short notice, we may have difficulty selling investments in a timely manner, be forced to sell them for less than we otherwise would have been able to realize, or both. In addition, in the event of such forced sale, for securities in an unrealized loss position, realized losses would be incurred on securities sold and impairments would be incurred, if there is a need to sell securities prior to recovery, which may negatively impact our financial condition.
22
Note 8. Bank Line of Credit
We have access to a $100 million bank revolving line of credit with a $25 million letter of credit sublimit that expires on November 1, 2029. As of September 30, 2026, a total of $99.2 million remains available under the facility due to $0.8 million outstanding letters of credit, which reduce the availability for letters of credit to $24.2 million. We had no borrowings outstanding on our line of credit as of September 30, 2026. Investments with a fair value of $108.6 million were pledged as collateral on the line of credit at September 30, 2026. These investments have no trading restrictions and are reported as available-for-sale securities and cash and cash equivalents on our Consolidated Statement of Financial Position as of September 30, 2026. The bank requires compliance with certain covenants, which include leverage ratios and debt restrictions. We are in compliance with all covenants at September 30, 2026.
Note 9. Postretirement Benefits
Pension plans
Our pension plans consist of a noncontributory defined benefit pension plan covering substantially all employees and an unfunded supplemental employee retirement plan ("SERP") for certain members of executive and senior management. The pension plan provides benefits to covered individuals satisfying certain age and service requirements. The defined benefit pension plan and SERP each provide benefits through a final average earnings formula.
Although we are the sponsor of these postretirement plans and record the funded status of these plans, there are reimbursements between us and the Exchange and its insurance subsidiaries for their allocated share of pension cost. These reimbursements represent pension benefits for employees performing administrative services and an allocated share of plan cost for employees in departments that support the administrative functions. For the nine months ended September 30, 2026, the Exchange and its insurance subsidiaries reimbursed us for approximately 61 % of the annual defined benefit pension cost and 33 % of the annual SERP cost. For our funded pension plan, amounts are settled in cash for the portion of pension cost allocated to the Exchange and its insurance subsidiaries. For our unfunded SERP, we pay the obligations when due and amounts are settled in cash between entities when there is a payout.
Our defined benefit pension plan funding policy is generally to contribute an amount equal to the greater of the target normal cost for the plan year, or the amount necessary to fund the plan to 100 %. Accordingly, we made a $47 million contribution in January 2026. We made an additional discretionary contribution of $30 million in August 2026, which further improved the plan's funded status. The funded pension plan is presented separately from the unfunded plan as a non-current asset on the Consolidated Statements of Financial Position.
Pension plan cost includes the following components:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Service cost for benefits earned | $ | $ | $ | $ | |||||||||||||||||||
| Interest cost on benefit obligation | |||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||
| Prior service cost amortization | |||||||||||||||||||||||
| Net actuarial gain amortization | ( | ( | ( | ( | |||||||||||||||||||
Settlement gain (1) | ( | ( | |||||||||||||||||||||
Pension plan cost (2) | $ | $ | $ | $ | |||||||||||||||||||
(1)Settlement accounting was required due to lump sum payments made under the SERP to former officers in 2025.
(2)Pension plan cost represents total plan cost before reimbursements between Indemnity and the Exchange and its insurance subsidiaries. The components of pension plan cost other than the service cost components are included in the line item "" in the Consolidated Statements of Operations, net of reimbursements between Indemnity and the Exchange and its insurance subsidiaries.
23
Note 10. Income Taxes
Income tax expense is provided on an interim basis based upon our estimate of the annual effective income tax rate, adjusted each quarter for discrete items. For the three months ended September 30, 2026 and 2025, our effective tax rate was 21.8 % and 21.4 %, respectively. For the nine months ended September 30, 2026 and 2025, our effective tax rate was 21.3 % and 21.1 %, respectively.
Note 11. Capital Stock
Class A and B common stock
Holders of Class B shares may, at their option, convert their shares into Class A shares at the rate of 2,400 Class A shares per Class B share. There were no
Stock repurchases
In 2011, our Board of Directors approved a continuation of the current stock repurchase program of $150 million, with no time limitation. There were no 17.8 million of repurchase authority remaining under this program at September 30, 2026.
24
Note 12. Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income ("AOCI") (loss) by component, including amounts reclassified to other comprehensive income ("OCI") (loss) and the related line item in the Consolidated Statements of Operations where net income is presented, are as follows:
| Three months ended | Three months ended | |||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||||
| (in thousands) | Before Tax | Income Tax | Net | Before Tax | Income Tax | Net | ||||||||||||||||||||
| Investment securities: | ||||||||||||||||||||||||||
| AOCI (loss), beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||
| OCI (loss) before reclassifications | ( | ( | ( | |||||||||||||||||||||||
| Realized investment losses (gains) | ( | ( | ( | |||||||||||||||||||||||
| Impairment losses | ||||||||||||||||||||||||||
| OCI (loss) | ( | ( | ( | |||||||||||||||||||||||
| AOCI (loss), end of period | $ | ( | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||
| Pension and other postretirement plans: | ||||||||||||||||||||||||||
| AOCI (loss), beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||
| OCI (loss) before reclassifications | ( | ( | ( | |||||||||||||||||||||||
| Amortization of prior service costs | ||||||||||||||||||||||||||
| Amortization of net actuarial gain | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||
| Settlement gain | ( | ( | ( | |||||||||||||||||||||||
| OCI (loss) | ( | ( | ( | |||||||||||||||||||||||
| AOCI (loss), end of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Total | ||||||||||||||||||||||||||
| AOCI (loss), beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Investment securities | ( | ( | ( | |||||||||||||||||||||||
| Pension and other postretirement plans | ( | ( | ( | |||||||||||||||||||||||
| OCI (loss) | ( | ( | ( | |||||||||||||||||||||||
| AOCI (loss), end of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Nine months ended | Nine months ended | |||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||||
| (in thousands) | Before Tax | Income Tax | Net | Before Tax | Income Tax | Net | ||||||||||||||||||||
| Investment securities: | ||||||||||||||||||||||||||
| AOCI (loss), beginning of period | $ | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||
OCI (loss) before reclassifications | ( | ( | ( | |||||||||||||||||||||||
| Realized investment losses | ||||||||||||||||||||||||||
| Impairment losses | ||||||||||||||||||||||||||
OCI (loss) | ( | ( | ( | |||||||||||||||||||||||
| AOCI (loss), end of period | $ | ( | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||
| Pension and other postretirement plans: | ||||||||||||||||||||||||||
AOCI (loss), beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||
| OCI (loss) before reclassifications | ( | ( | ( | |||||||||||||||||||||||
| Amortization of prior service costs | ||||||||||||||||||||||||||
| Amortization of net actuarial gain | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||
| Settlement gain | ( | ( | ( | |||||||||||||||||||||||
| OCI (loss) | ( | ( | ( | |||||||||||||||||||||||
AOCI (loss), end of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Total | ||||||||||||||||||||||||||
| AOCI (loss), beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Investment securities | ( | ( | ( | |||||||||||||||||||||||
| Pension and other postretirement plans | ( | ( | ( | |||||||||||||||||||||||
OCI (loss) | ( | ( | ( | |||||||||||||||||||||||
| AOCI (loss), end of period | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||
25
Note 13. Concentrations of Credit Risk
Financial instruments could potentially expose us to concentrations of credit risk, including our unsecured receivables from the Exchange. The majority of our revenue and receivables are from the Exchange and its affiliates. See also Note 1, "Nature of Operations". Net management fee amounts and other reimbursements due from the Exchange and its affiliates were $781.2 million and $735.6 million at September 30, 2026 and December 31, 2025, respectively, which includes a current expected credit loss allowance of $0.7
Note 14. Commitments and Contingencies
We have an agreement with a bank for an agent loan participation program. The maximum amount of loans and guarantees that could be funded by us through this program is $150 million. We have committed to fund a minimum of 30 % of each loan executed under the program. As of September 30, 2026, our portion of the outstanding loans executed under this agreement is $68.7 million. Additionally, we have agreed to guarantee a portion of the funding provided by the other participants in the program in the event of default. As of September 30, 2026, our maximum potential amount of future payments on the guaranteed portion is $24.5 million. All loan payments under the participation program are current as of September 30, 2026.
We also have guarantees and lending commitments related to certain real estate development projects supporting revitalization efforts in our community. As of September 30, 2026, our maximum potential obligation related to guarantees is $6.0 million and our remaining lending commitments are $15.4 million.
We are involved in litigation arising in the ordinary course of conducting business. In accordance with current accounting standards for loss contingencies and based upon information currently known to us, we establish reserves for litigation when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss or range of loss can be reasonably estimated. When no amount within the range of loss is a better estimate than any other amount, we accrue the minimum amount of the estimable loss. We believe our accruals for legal proceedings are appropriate and that, to the extent such litigation may result in losses in excess of amounts accrued, any such excess, individually or in the aggregate, would not be material to our consolidated financial condition, results of operations or cash flows. Legal fees are expensed as incurred.
We review all litigation on an ongoing basis when making accrual and disclosure decisions. For certain legal proceedings, we cannot reasonably estimate losses or a range of loss, if any, particularly for proceedings that are in their early stages of development or where the plaintiffs seek indeterminate damages. Various factors, including, but not limited to, the outcome of potentially lengthy discovery and the resolution of important factual questions, may need to be determined before probability can be established or before a loss or range of loss can be reasonably estimated. If the loss contingency in question is not both probable and reasonably estimable, we do not establish an accrual and the matter will continue to be monitored for any developments that would make the loss contingency both probable and reasonably estimable. In the event that a legal proceeding results in a substantial judgment against, or settlement by, us, there can be no assurance that any resulting liability or financial commitment would not have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
Note 15. Subsequent Events
No items were identified in this period subsequent to the financial statement date that required adjustment or additional disclosure.
26
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of financial condition and results of operations highlights significant factors influencing Erie Indemnity Company ("Indemnity", "we", "us", "our"). This discussion should be read in conjunction with the historical consolidated financial statements and the related notes thereto included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q, and with Part II, Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" for the year ended December 31, 2025, as contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 23, 2026.
INDEX
| Page Number | |||||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
"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, economic or social inflation, and changes in tariff policies;
◦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, develop, retain, and protect 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;
27
•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.
RECENT ACCOUNTING STANDARDS
See Part I, Item 1. "Financial Statements - Note 2, Significant Accounting Policies, of Notes to Consolidated Financial Statements" contained within this report for a discussion of recently issued accounting standards, and the impact on our consolidated financial statements if known.
OPERATING OVERVIEW
Overview
We serve as the attorney-in-fact for the subscribers (policyholders) at the Exchange, a reciprocal insurer that writes property and casualty insurance. Our primary function as attorney-in-fact is to perform policy issuance and renewal services on behalf of the subscribers at the Exchange. We also act as attorney-in-fact on behalf of the subscribers at the Exchange, as well as the service provider for the Exchange's insurance subsidiaries, with respect to all administrative services.
The Exchange is a reciprocal insurance exchange, which is an unincorporated association of individuals, partnerships, and corporations that agree to insure one another. Each applicant for insurance (a subscriber) to the Exchange signs a subscriber's agreement, which contains an appointment of Indemnity as their attorney-in-fact to transact the business of the Exchange on their behalf. In accordance with the subscriber’s agreement for acting as attorney-in-fact in these two capacities, we retain a management fee calculated as a percentage of the direct and affiliated assumed premiums written by the Exchange.
Our earnings are primarily driven by the management fee revenue generated for the services we provide on behalf of the subscribers at the Exchange. The policy issuance and renewal services we provide are related to the sales, underwriting, and issuance of policies. The sales related services we provide include agent compensation and certain sales and advertising support services. Agent compensation includes scheduled commissions to agents based upon premiums written as well as incentive compensation, which is earned by achieving targeted measures. Agent compensation generally comprises approximately two-thirds of our policy issuance and renewal expenses. The underwriting services we provide include underwriting and policy processing. The remaining services we provide include customer service and administrative support. We also provide information technology services that support all the functions listed above. See Part I, Item 1. "Financial Statements - Note 4, Segment Information, of Notes to Consolidated Financial Statements" contained within this report for the significant expense categories related to providing these services. Included in expenses for these services are allocations of costs for departments that support these policy issuance and renewal functions.
Consistent with its legal structure as a reciprocal insurer, the Exchange does not have any employees or officers. Therefore, it enters into contractual relationships by and through the subscribers' attorney-in-fact. Indemnity serves as the attorney-in-fact on behalf of the subscribers at the Exchange with respect to its administrative services as enumerated in the subscriber's agreement. The Exchange's insurance subsidiaries also utilize Indemnity for these services in accordance with the service agreements between each of the subsidiaries and Indemnity. Claims handling services include costs incurred in the claims process, including the adjustment, investigation, defense, recording, and payment functions. Life insurance management services include costs incurred in the management and processing of life insurance business. Investment management services are related to investment trading activity, accounting, and all other functions attributable to the investment of funds. In 2025, approximately 71% of the administrative services expenses were entirely attributable to the respective administrative functions (claims handling, life insurance management, and investment management), while the remaining 29% of these expenses were allocations of costs for departments that support these administrative functions. The expenses we incur and related reimbursements we receive for administrative services are presented gross in our Consolidated Statements of Operations. The subscriber's agreement and service agreements provide for reimbursement of amounts incurred for these services to Indemnity. Reimbursements are settled at cost on a monthly basis. State insurance regulations require that intercompany service agreements and any material amendments be approved in advance by the state insurance department.
28
Our results of operations are tied to the growth and financial condition of the Exchange as the Exchange is our sole customer, and our earnings are largely generated from management fees based on the direct and affiliated assumed premiums written by the Exchange. The Exchange generates revenue by insuring preferred and standard risks, with personal lines comprising 71% of the 2025 direct and affiliated assumed written premiums and commercial lines comprising the remaining 29%. The principal personal lines products are private passenger auto and homeowners. The principal commercial lines products are commercial multi-peril, commercial auto, and workers compensation.
Information security incident
In 2025, we experienced an information security incident that has been remediated and did not have a material impact on our consolidated financial condition, results of operations, or cash flows. As of September 30, 2026 we have recognized $4.0 million of recoveries under our cybersecurity insurance policy, which is included in the line item "Other Income" in the Consolidated Statements of Operations, and continue to pursue recovery of additional lost income due to business interruption and related expenses under the policy.
Financial Overview
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands, except per share data) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 207,382 | $ | 208,921 | (0.7) | % | $ | 578,292 | $ | 559,470 | 3.4 | % | ||||||||||||||||||||||||||||||||
| Total investment income | 19,877 | 21,554 | (7.8) | 64,549 | 60,690 | 6.4 | ||||||||||||||||||||||||||||||||||||||
| Other income | 5,496 | 2,286 | NM | 8,317 | 8,094 | 2.8 | ||||||||||||||||||||||||||||||||||||||
| Income before income taxes | 232,755 | 232,761 | NM | 651,158 | 628,254 | 3.6 | ||||||||||||||||||||||||||||||||||||||
| Income tax expense | 50,766 | 49,908 | 1.7 | 138,401 | 132,299 | 4.6 | ||||||||||||||||||||||||||||||||||||||
| Net income | $ | 181,989 | $ | 182,853 | (0.5) | % | $ | 512,757 | $ | 495,955 | 3.4 | % | ||||||||||||||||||||||||||||||||
| Net income per share – diluted | $ | 3.48 | $ | 3.50 | (0.5) | % | $ | 9.80 | $ | 9.48 | 3.4 | % | ||||||||||||||||||||||||||||||||
NM = not meaningful
Operating income decreased slightly in the third quarter and increased for the nine months ended September 30, 2026, compared to the same periods in 2025. Management fee revenue for policy issuance and renewal services increased 2.6% to $847.0 million in the third quarter of 2026 and 3.8% to $2.5 billion for the nine months ended September 30, 2026, compared to the same periods in 2025. Management fee revenue is based upon the management fee rate we charge and the direct and affiliated assumed premiums written by the Exchange. The management fee rate was 25% for both 2026 and 2025. The direct and affiliated assumed premiums written by the Exchange increased 1.8% to $3.5 billion in the third quarter of 2026 and 2.9% to $10.2 billion for the nine months ended September 30, 2026, compared to the same periods in 2025.
Cost of operations for policy issuance and renewal services increased 3.6% to $665.0 million in the third quarter of 2026 and 4.0% to $2.0 billion for the nine months ended September 30, 2026, compared to the same periods in 2025, primarily due to increased agent incentive compensation due to improved underwriting profitability, higher scheduled commissions driven by direct and affiliated assumed written premium growth, and increased technology costs, partially offset by lower underwriting report and postage costs. The year-to-date increase was also partially offset by lower professional fees.
Management fee revenue for administrative services increased 4.7% to $19.7 million in the third quarter of 2026 and 7.4% to $58.8 million for the nine months ended September 30, 2026, compared to the same periods in 2025. The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $197.6 million in the third quarter of 2026 and $599.2 million for the nine months ended September 30, 2026, but had no net impact on operating income.
Total investment income decreased $1.7 million in the third quarter of 2026 and increased $3.9 million for the nine months ended September 30, 2026, compared to the same periods in 2025. The decrease in the third quarter of 2026 was primarily due to net realized and unrealized investment losses compared to net gains in 2025, partially offset by an increase in net investment income. The increase for the nine months ended September 30, 2026 was primarily due to an increase in net investment income, partially offset by net realized and unrealized investment losses compared to net gains in 2025.
29
General Conditions and Trends Affecting Our Business
Economic conditions
Unfavorable changes in economic conditions, including declining consumer confidence, inflation, high unemployment, and the threat of recession, among others, may lead the Exchange’s customers to modify coverage, not renew policies, or even cancel policies, which could adversely affect the premium revenue of the Exchange, and consequently our management fee revenue. Elevated inflation, supply chain disruptions, or changes in tariff policies could impact the Exchange's operations. In particular, unanticipated increased inflation costs including medical cost inflation, building material cost inflation, auto repair and replacement cost inflation, and social inflation may impact adequacy of estimated loss reserves and future premium rates of the Exchange. If any of these items impacted the financial condition or operations of the Exchange, it could have an impact on our financial results. For a discussion of the potential impacts to our operations or those of the Exchange, see Financial Condition and Liquidity and Capital Resources contained within this report, as well as Part I. Item 1A. "Risk Factors" included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on February 23, 2026.
Financial market volatility
Our portfolio of available-for-sale and equity security investments is subject to market volatility, especially in periods of instability in the worldwide financial markets. Net investment income is impacted by the general level of interest rates, which impact reinvested cash flow from the portfolio and business operations. Depending upon market conditions, considerable fluctuation could occur in the fair value of our investment portfolio and reported total investment income, which could have an adverse impact on our consolidated financial condition, results of operations and cash flows. Various ongoing geopolitical events, the uncertain tariff, inflationary, and interest rate environment, and a potential economic slowdown could have a significant impact on the global financial markets with the potential for future losses and/or impairments on our investment portfolio.
30
RESULTS OF OPERATIONS
Management fee revenue
We have two performance obligations in the subscriber’s agreement, providing policy issuance and renewal services and acting as attorney-in-fact for the subscribers at the Exchange, as well as the service provider for the Exchange's insurance subsidiaries with respect to all administrative services. We retain management fees for acting as the attorney-in-fact for the subscribers at the Exchange in these two capacities and allocate our revenues between our performance obligations.
The management fee is calculated by multiplying all direct and affiliated assumed premiums written by the Exchange by the management fee rate, which is set by our Board of Directors at least annually. The management fee rate was set at 25% for both 2026 and 2025. Changes in the management fee rate can affect our revenue and net income significantly. The transaction price, including management fee revenue and administrative services reimbursement revenue, includes variable consideration and is allocated based on the estimated standalone selling prices developed using industry information and other available information for similar services. We update the transaction price and the related allocation at least annually based upon the most recent information available or more frequently if there have been significant changes in any components considered in the transaction price. Our current transaction price allocation review resulted in a minor change in the allocation between the two performance obligations in 2026 compared to 2025, which did not have a material impact on our consolidated financial statements.
The following table presents the allocation and disaggregation of revenue for our two performance obligations:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||
| Policy issuance and renewal services | |||||||||||||||||||||||||||||
Direct and affiliated assumed premiums written by the Exchange | $ | 3,463,007 | $ | 3,402,438 | 1.8 | % | $ | 10,231,573 | $ | 9,947,314 | 2.9 | % | |||||||||||||||||
| Management fee rate | 24.41 | % | 24.37 | % | 24.41 | % | 24.37 | % | |||||||||||||||||||||
| Management fee revenue | 845,320 | 829,174 | 1.9 | 2,497,527 | 2,424,160 | 3.0 | |||||||||||||||||||||||
Change in estimate for management fee returned on cancelled policies (1) | 1,660 | (3,899) | NM | (1,269) | (19,983) | 93.6 | |||||||||||||||||||||||
| Management fee revenue - policy issuance and renewal services | $ | 846,980 | $ | 825,275 | 2.6 | % | $ | 2,496,258 | $ | 2,404,177 | 3.8 | % | |||||||||||||||||
| Administrative services | |||||||||||||||||||||||||||||
Direct and affiliated assumed premiums written by the Exchange | $ | 3,463,007 | $ | 3,402,438 | 1.8 | % | $ | 10,231,573 | $ | 9,947,314 | 2.9 | % | |||||||||||||||||
| Management fee rate | 0.59 | % | 0.63 | % | 0.59 | % | 0.63 | % | |||||||||||||||||||||
| Management fee revenue | 20,431 | 21,435 | (4.7) | 60,366 | 62,668 | (3.7) | |||||||||||||||||||||||
Change in contract liability (2) | (629) | (2,510) | 74.9 | (1,217) | (7,694) | 84.2 | |||||||||||||||||||||||
Change in estimate for management fee returned on cancelled policies (1) | (82) | (94) | 12.1 | (335) | (202) | (66.0) | |||||||||||||||||||||||
| Management fee revenue - administrative services | 19,720 | 18,831 | 4.7 | 58,814 | 54,772 | 7.4 | |||||||||||||||||||||||
Administrative services reimbursement revenue | 197,562 | 215,694 | (8.4) | 599,212 | 638,611 | (6.2) | |||||||||||||||||||||||
Total revenue from administrative services | $ | 217,282 | $ | 234,525 | (7.4) | % | $ | 658,026 | $ | 693,383 | (5.1) | % | |||||||||||||||||
NM = not meaningful
(1)A constraining estimate of variable consideration exists related to the potential for management fees to be returned if a policy were to be cancelled mid-term. See Part I, Item 1. "Financial Statements - Note 3, Revenue, of Notes to Consolidated Financial Statements" contained within this report.
(2)Management fee revenue - administrative services is recognized over time as the services are provided. See Part I, Item 1. "Financial Statements - Note 3, Revenue, of Notes to Consolidated Financial Statements" contained within this report.
31
Direct and affiliated assumed premiums written by the Exchange
Direct and affiliated assumed premiums include premiums written directly by the Exchange and premiums assumed from its wholly owned property and casualty subsidiaries. Direct and affiliated assumed premiums written by the Exchange increased 1.8% to $3.5 billion in the third quarter of 2026 compared to the third quarter of 2025, primarily driven by increased commercial lines and homeowners premiums written, partially offset by decreased private passenger auto premiums written. The year-over-year average premium per policy for all lines of business increased 5.4% at September 30, 2026 compared to 10.7% at September 30, 2025. Year-over-year policies in force for all lines of business decreased 1.9% in the third quarter of 2026 compared to an increase of 0.2% in the third quarter of 2025.
Premiums generated from new business increased 10.2% to $386 million in the third quarter of 2026 compared to the same period in 2025, primarily driven by increased premiums written in the private passenger auto line. Contributing to this change was a 11.1% increase in new business policies written and a 1.3% increase in year-over-year average premium per policy on new business at September 30, 2026.
Premiums generated from renewal business increased 0.8% to $3.1 billion in the third quarter of 2026 compared to the third quarter of 2025 resulting from an increase of 5.9% in year-over-year average premium per policy at September 30, 2026, partially offset by a decrease in year-over-year policies in force of 2.0% in the third quarter of 2026.
Personal lines – Total personal lines premiums written increased 0.4% to $2.5 billion in the third quarter of 2026, compared to the third quarter of 2025, driven by a 4.2% increase in total personal lines year-over-year average premium per policy, partially offset by a 2.4% decrease in total personal lines policies in force.
Commercial lines – Total commercial lines premiums written increased 5.5% to $952 million in the third quarter of 2026, compared to the third quarter of 2025, driven by a 5.7% increase in total commercial lines year-over-year average premium per policy and a 1.6% increase in total commercial lines policies in force.
Future trends-premium revenue – The Exchange plans to continue its efforts to grow premiums and improve its competitive position in the marketplace. Expanding the size of its agency force through a careful agency selection and monitoring process and increased market penetration in our existing operating territories is expected to contribute to future growth .
Premium levels impacted by changes in policies in force and rate actions affect the profitability of the Exchange and have a direct bearing on our management fee revenue. Future rate actions could be impacted by potential changes in regulation, inflationary trends, geopolitical factors, and tariff policies, among others. As the Exchange writes policies almost exclusively with annual terms, premium rate actions take 12 months to be fully recognized in written premiums, or longer for policies with a rate locking feature. See also Part I. Item 1A. "Risk Factors" included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on February 23, 2026.
32
Policy issuance and renewal services
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||
| Management fee revenue - policy issuance and renewal services | $ | 846,980 | $ | 825,275 | 2.6 | % | $ | 2,496,258 | $ | 2,404,177 | 3.8 | % | |||||||||||||||||
| Service agreement revenue | 5,655 | 6,939 | (18.5) | 17,340 | 18,675 | (7.1) | |||||||||||||||||||||||
| 852,635 | 832,214 | 2.5 | 2,513,598 | 2,422,852 | 3.7 | ||||||||||||||||||||||||
| Cost of operations - policy issuance and renewal services | 664,973 | 642,124 | 3.6 | 1,994,120 | 1,918,154 | 4.0 | |||||||||||||||||||||||
| Operating income - policy issuance and renewal services | $ | 187,662 | $ | 190,090 | (1.3) | % | $ | 519,478 | $ | 504,698 | 2.9 | % | |||||||||||||||||
Policy issuance and renewal services
The management fee revenue allocated for providing policy issuance and renewal services was 24.41% of the direct and affiliated assumed premiums written by the Exchange for the three and nine month periods ended September 30, 2026 and 24.37% for the same periods in 2025. This portion of the management fee is recognized as revenue when the policy is issued or renewed because it is at that time that the services we provide are substantially complete and the executed insurance policy is transferred to the customer. The increase in management fee revenue for policy issuance and renewal services was primarily driven by the increase in the direct and affiliated assumed premiums written by the Exchange discussed previously.
Service agreement revenue
Service agreement revenue primarily consists of service charges we collect from subscribers (policyholders) for providing multiple payment plans on policies written by the Exchange and its property and casualty subsidiaries and also includes late payment and policy reinstatement fees. The service charges are fixed dollar amounts per billed installment. Service agreement revenue also includes fees received from the Exchange for the use of shared office space.
Cost of policy issuance and renewal services
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||
| Commissions: | |||||||||||||||||||||||||||||
| Total commissions | $ | 485,486 | $ | 461,513 | 5.2 | % | $ | 1,458,439 | $ | 1,361,815 | 7.1 | % | |||||||||||||||||
| Non-commission expense: | |||||||||||||||||||||||||||||
Personnel costs (1) | $ | 87,013 | $ | 85,417 | 1.9 | % | $ | 267,885 | $ | 261,195 | 2.6 | % | |||||||||||||||||
Sales and advertising (1) | 6,848 | 5,056 | 35.4 | 19,814 | 21,737 | (8.8) | |||||||||||||||||||||||
Acquisition and underwriting support costs (1) | 24,036 | 29,819 | (19.4) | 72,128 | 83,660 | (13.8) | |||||||||||||||||||||||
Technology infrastructure costs (1) | 30,384 | 23,455 | 29.5 | 81,273 | 73,837 | 10.1 | |||||||||||||||||||||||
Professional fees (1) | 19,707 | 19,842 | (0.7) | 58,219 | 70,310 | (17.2) | |||||||||||||||||||||||
Administrative and other (1) | 11,499 | 17,022 | (32.4) | 36,362 | 45,600 | (20.3) | |||||||||||||||||||||||
| Total non-commission expense | 179,487 | 180,611 | (0.6) | 535,681 | 556,339 | (3.7) | |||||||||||||||||||||||
| Total cost of operations - policy issuance and renewal services | $ | 664,973 | $ | 642,124 | 3.6 | % | $ | 1,994,120 | $ | 1,918,154 | 4.0 | % | |||||||||||||||||
(1)2025 amounts have been recast to conform to the current presentation. See Part I, Item 1. "Financial Statements - Note 4, Segment Information, of Notes to Consolidated Financial Statements" contained within this report for additional information on the revised expense categories.
Commissions – Commissions increased $24.0 million in the third quarter of 2026 and $96.6 million for the nine months ended September 30, 2026, compared to the same periods in 2025, primarily driven by an increase in agent incentive compensation. The estimated agent incentive payouts at September 30, 2026 are based on actual underwriting results for the two prior years and current year-to-date actual results and forecasted results for the remainder of 2026. The profitability component of agent incentive compensation increased due to improved actual and forecasted loss ratios for the three-year period ended 2026 compared to the three-year period ended 2025. Commission expense is also impacted by the growth in direct and affiliated assumed written premium.
33
Non-commission expense – Non-commission expense decreased $1.1 million in the third quarter of 2026 compared to the third quarter of 2025. Personnel costs increased $1.6 million primarily due to higher healthcare costs. Sales and advertising increased $1.8 million primarily due to an increase in agent-related costs. Acquisition and underwriting support costs decreased $5.8 million primarily due to lower postage and underwriting report costs. Technology and infrastructure costs increased $6.9 million primarily due to higher costs associated with technology initiatives, including internal-use software impairments, depreciation and amortization expense, and cloud usage costs. Administrative and other costs decreased $5.5 million primarily due to lower credit card processing fees.
Non-commission expense decreased $20.7 million for the nine months ended September 30, 2026 compared to the same period in 2025. Personnel costs increased $6.7 million primarily due to increased incentive compensation driven by stronger performance metrics, and higher base compensation. The increase is partially offset by bonuses awarded to all employees in 2025 in recognition of our 100th anniversary. Acquisition and underwriting support costs decreased $11.5 million primarily due to lower underwriting report and postage costs. Technology and infrastructure costs increased $7.4 million primarily due to higher depreciation and amortization expense from technology initiatives. Professional fees decreased $12.1 million primarily due to reduced use of third-party services related to technology initiatives. Administrative and other costs decreased $9.2 million primarily due to lower credit card processing fees and charitable contributions related to the transition of charitable giving through the Erie Insurance Foundation.
Administrative services
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||
| Management fee revenue - administrative services | $ | 19,720 | $ | 18,831 | 4.7 | % | $ | 58,814 | $ | 54,772 | 7.4 | % | |||||||||||||||||
Administrative services reimbursement revenue | 197,562 | 215,694 | (8.4) | 599,212 | 638,611 | (6.2) | |||||||||||||||||||||||
Total revenue allocated to administrative services | 217,282 | 234,525 | (7.4) | 658,026 | 693,383 | (5.1) | |||||||||||||||||||||||
Administrative services expenses | |||||||||||||||||||||||||||||
Claims handling services | 172,836 | 189,947 | (9.0) | 523,099 | 562,407 | (7.0) | |||||||||||||||||||||||
Investment management services | 8,753 | 7,560 | 15.8 | 25,892 | 24,598 | 5.3 | |||||||||||||||||||||||
Life management services | 15,973 | 18,187 | (12.2) | 50,221 | 51,606 | (2.7) | |||||||||||||||||||||||
Operating income - administrative services | $ | 19,720 | $ | 18,831 | 4.7 | % | $ | 58,814 | $ | 54,772 | 7.4 | % | |||||||||||||||||
Administrative services
The management fee revenue allocated for providing administrative services was 0.59% of the direct and affiliated assumed premiums written by the Exchange for the three and nine month periods ended September 30, 2026 and 0.63% for the same periods in 2025. This portion of the management fee is recognized as revenue over a four-year period representing the time over which the services are provided. We also report reimbursed costs as revenues, which are recognized monthly as services are provided. The administrative services expenses we incur and the related reimbursements we receive are recorded gross in the Consolidated Statements of Operations.
Cost of administrative services
Consistent with its legal structure as a reciprocal insurer, the Exchange does not have any employees or officers. Therefore, it enters into contractual relationships by and through the subscribers' attorney-in-fact. Indemnity serves as the attorney-in-fact on behalf of the subscribers at the Exchange with respect to its administrative services as enumerated in the subscriber's agreement. The Exchange's insurance subsidiaries also utilize Indemnity for these services in accordance with the service agreements between each of the subsidiaries and Indemnity. The subscriber's agreement and service agreements provide for reimbursement of amounts incurred for these services to Indemnity. Reimbursements due from the Exchange and its insurance subsidiaries are recorded as a receivable and settled at cost.
34
Total investment income
A summary of the results of our investment operations is as follows:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||
| (dollars in thousands) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||||||||||
| Net investment income | $ | 25,399 | $ | 21,033 | 20.8 | % | $ | 71,546 | $ | 61,011 | 17.3 | % | ||||||||||||||||||||||||||
| Net realized and unrealized investment (losses) gains | (5,450) | 1,331 | NM | (5,658) | 2,312 | NM | ||||||||||||||||||||||||||||||||
| Net impairment losses recognized in earnings | (72) | (810) | 91.0 | (1,339) | (2,633) | 49.1 | ||||||||||||||||||||||||||||||||
| Total investment income | $ | 19,877 | $ | 21,554 | (7.8) | % | $ | 64,549 | $ | 60,690 | 6.4 | % | ||||||||||||||||||||||||||
NM = not meaningful
Net investment income
Net investment income includes interest and dividends on our fixed maturity and equity security portfolios and the results of our limited partnership investments, net of investment expenses. Net investment income increased $4.4 million in the third quarter of 2026 and $10.5 million for the nine months ended September 30, 2026 compared to the same periods in 2025. The increase in both periods was primarily due to an increase in bond and exchange-traded fund income driven by higher average holdings, and an increase in agent loan interest income, partially offset by decreased cash and cash equivalent income due to lower yields and average holdings.
Net realized and unrealized investment gains (losses)
A breakdown of our net realized and unrealized investment gains (losses) is as follows:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Securities sold: | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||
| Available-for-sale securities | $ | (712) | $ | 571 | $ | (1,526) | $ | (122) | |||||||||||||||||||||
| Equity securities | 19 | 66 | (32) | 340 | |||||||||||||||||||||||||
| Change in fair value on remaining equity securities | (4,757) | 694 | (4,100) | 2,089 | |||||||||||||||||||||||||
| Miscellaneous | 0 | 0 | 0 | 5 | |||||||||||||||||||||||||
| Net realized and unrealized investment (losses) gains | $ | (5,450) | $ | 1,331 | $ | (5,658) | $ | 2,312 | |||||||||||||||||||||
Net impairment recoveries (losses) recognized in earnings
Net impairment losses recognized in earnings were lower during both the three and nine months ended September 30, 2026 compared to the same periods in 2025. The improvement was primarily driven by lower available-for-sale security impairments, reflecting reduced credit-related impairments, as well as lower current expected credit losses on agent loans and other loans receivable during the three and nine month periods.
35
Financial Condition of Erie Insurance Exchange
Serving in the capacity of attorney-in-fact for the subscribers at the Exchange, we are dependent on the growth and financial condition of the Exchange, who is our sole customer. The strength of the Exchange and its wholly owned subsidiaries is rated annually by AM Best through assessing its financial stability and ability to pay claims. The ratings are generally based upon factors relevant to policyholders and are not directed toward return to investors. The Exchange and each of its property and casualty insurance subsidiaries are rated A "Excellent". On September 11, 2026, the outlook for the financial strength rating was affirmed as stable. See Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on February 23, 2026 for a discussion of the Exchange's financial strength rating.
The financial statements of the Exchange are prepared in accordance with statutory accounting principles prescribed by the Commonwealth of Pennsylvania. Financial statements prepared under statutory accounting principles focus on the solvency of the insurer and generally provide a more conservative approach than under U.S. generally accepted accounting principles. Statutory direct written premiums of the Exchange and its wholly owned property and casualty insurance subsidiaries grew 2.9% to $10.2 billion in the first nine months of 2026 compared to the same period in 2025. These premiums, along with investment income, are the major sources of cash that support the operations of the Exchange. Policyholders’ surplus determined under statutory accounting principles was $10.7 billion and $10.1 billion at September 30, 2026 and December 31, 2025, respectively. The Exchange and its wholly owned property and casualty insurance subsidiaries' year-over-year policy retention ratio was 87.2% at September 30, 2026 and 88.4% at December 31, 2025.
We have prepared our consolidated financial statements considering the financial strength of the Exchange based on its AM Best rating and strong level of surplus. See Part I, Item 1A. "Risk Factors" included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on February 23, 2026 for possible outcomes that could impact that determination.
36
FINANCIAL CONDITION
Investments
Our investment portfolio is managed with the objective of maximizing after-tax returns on a risk-adjusted basis. The following table presents the carrying value of our investments as of:
| (dollars in thousands) | September 30, 2026 | % to total | December 31, 2025 | % to total | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
Available-for-sale securities (1) | $ | 1,411,389 | 81 | % | $ | 1,364,828 | 85 | % | ||||||||||||||||||
Equity securities (2) | 166,782 | 10 | 90,763 | 6 | ||||||||||||||||||||||
Agent loans (3) | 118,738 | 7 | 109,331 | 7 | ||||||||||||||||||||||
Other investments (4) | 41,924 | 2 | 37,342 | 2 | ||||||||||||||||||||||
| Total investments | $ | 1,738,833 | 100 | % | $ | 1,602,264 | 100 | % | ||||||||||||||||||
(1)This includes $42.3 million and $44.4 million of securities lent under a securities lending agreement as of September 30, 2026 and December 31, 2025, respectively.
(2)This includes $14.1 million and $20.1 million of securities lent under a securities lending agreement as of September 30, 2026 and December 31, 2025, respectively.
(3)The current portion of agent loans is included in the line item "Prepaid expenses and other current assets, net" in the Consolidated Statements of Financial Position.
(4)The current and long-term portions of other investments are included in the line items "Prepaid expenses and other current assets, net" and "Other assets, net", respectively, in the Consolidated Statements of Financial Position.
Available-for-sale securities
Under our investment strategy, we maintain an available-for-sale security portfolio that is of high quality and well diversified within each market sector. This investment strategy also achieves a balanced maturity schedule. Our available-for-sale security portfolio is managed with the goal of achieving reasonable returns while limiting exposure to risk.
Available-for-sale securities are carried at fair value with unrealized gains and losses, net of deferred taxes, included in shareholders’ equity. Net unrealized losses on available-for-sale securities, net of deferred taxes, totaled $38.8 million at September 30, 2026, compared to unrealized gains of $1.3 million at December 31, 2025.
The following table presents a breakdown of the fair value of our available-for-sale portfolio by industry sector and rating as of:
| (in thousands) | September 30, 2026 (1) | |||||||||||||||||||||||||||||||||||||
| AAA | AA | A | BBB | Non- investment grade | Fair value | |||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Basic materials | $ | 0 | $ | 0 | $ | 2,436 | $ | 4,763 | $ | 1,406 | $ | 8,605 | ||||||||||||||||||||||||||
| Communications | 0 | 2,844 | 11,204 | 8,719 | 14,461 | 37,228 | ||||||||||||||||||||||||||||||||
| Consumer | 0 | 13,523 | 58,231 | 70,922 | 15,558 | 158,234 | ||||||||||||||||||||||||||||||||
| Diversified | 0 | 0 | 0 | 1,003 | 0 | 1,003 | ||||||||||||||||||||||||||||||||
| Energy | 0 | 0 | 8,358 | 42,361 | 9,654 | 60,373 | ||||||||||||||||||||||||||||||||
| Financial | 0 | 0 | 138,789 | 182,600 | 6,195 | 327,584 | ||||||||||||||||||||||||||||||||
| Industrial | 0 | 972 | 17,827 | 36,594 | 3,579 | 58,972 | ||||||||||||||||||||||||||||||||
Structured securities (2) | 207,532 | 323,888 | 58,491 | 41,283 | 1,340 | 632,534 | ||||||||||||||||||||||||||||||||
| Technology | 0 | 6,707 | 2,219 | 14,875 | 307 | 24,108 | ||||||||||||||||||||||||||||||||
| U.S. Treasury | 0 | 840 | 0 | 0 | 0 | 840 | ||||||||||||||||||||||||||||||||
| Utilities | 0 | 0 | 12,454 | 67,014 | 22,440 | 101,908 | ||||||||||||||||||||||||||||||||
Total | $ | 207,532 | $ | 348,774 | $ | 310,009 | $ | 470,134 | $ | 74,940 | $ | 1,411,389 | ||||||||||||||||||||||||||
(1)Ratings are supplied by S&P, Moody’s, and Fitch. The table is based upon the lowest rating for each security.
(2)Structured securities include residential and commercial mortgage-backed securities, collateralized debt obligations and asset-backed securities.
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Equity securities
Equity securities primarily include non-redeemable preferred stocks and exchange-traded funds, and investments in privately held companies that do not have readily determinable fair values. See Part 1, Item 1. "Financial Statements - Note 2, Significant Accounting Policies, of Notes to Consolidated Financial Statements" contained within this report for information on the measurement and accounting of our equity securities.
The following table presents an analysis of our equity securities as of:
| (in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Exchange-traded funds | $ | 79,803 | $ | — | ||||||||||||||||||||||
| Non-redeemable preferred stocks: | ||||||||||||||||||||||||||
| Financial services | 67,871 | 74,614 | ||||||||||||||||||||||||
| Utilities | 545 | 3,696 | ||||||||||||||||||||||||
| Energy | 3,530 | 2,713 | ||||||||||||||||||||||||
| Consumer | 6,047 | 5,563 | ||||||||||||||||||||||||
| Technology | 7,546 | 3,224 | ||||||||||||||||||||||||
| Communications | 1,440 | 953 | ||||||||||||||||||||||||
Total non-redeemable preferred stocks (1) | 86,979 | 90,763 | ||||||||||||||||||||||||
| Total | $ | 166,782 | $ | 90,763 | ||||||||||||||||||||||
(1)Includes $16.2 million and $11.9 million at September 30, 2026 and December 31, 2025, respectively, of equity securities that do not have readily determinable fair values.
LIQUIDITY AND CAPITAL RESOURCES
We continue to monitor the sufficiency of our liquidity and capital resources given the potential impact of current economic conditions, including the uncertain tariff, inflationary, and interest rate environment. While we did not see a significant impact on our sources or uses of cash in the third quarter of 2026, future market disruptions could occur, which may affect our liquidity position. If our normal operating and investing cash activities were to become insufficient to meet future funding requirements, we believe we have sufficient access to liquidity through our cash position, diverse liquid marketable securities, and our $100 million bank revolving line of credit that does not expire until November 2029. See broader discussions of potential risks to our operations in "Operating Overview" contained within this report and Part I. Item 1A. "Risk Factors" included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on February 23, 2026.
Sources and Uses of Cash
Liquidity is a measure of a company’s ability to generate sufficient cash flows to meet the short- and long-term cash requirements of its business operations and growth needs. Our liquidity requirements have been met primarily by funds generated from management fee revenue and income from investments. Cash provided from these sources is used primarily to fund the costs of our management operations including commissions, salaries and wages, pension plans, share repurchases, dividends to shareholders, the purchase and development of information technology, and other capital expenditures. See Part I, Item 1. "Financial Statements - Note 9, Postretirement Benefits, of Notes to Consolidated Financial Statements" contained within this report for the funding policy and contributions for our defined benefit pension plan. We expect that our operating cash needs will be met by funds generated from operations. Cash in excess of our operating needs is primarily invested in investment grade fixed maturities. As part of our liquidity review, we regularly evaluate our capital needs based on current and projected results and consider the potential impacts to our liquidity, borrowing capacity, financial covenants, and capital availability.
We maintain relationships and cash balances at diversified and well-capitalized financial institutions and have established processes to monitor them. We believe that our current cash, cash equivalents and marketable securities, and cash generated from operations will be sufficient to meet our current and future cash requirements.
Volatility in the financial markets presents challenges to us as we do occasionally access our investment portfolio as a source of cash. Some of our fixed income investments, despite being publicly traded, may be illiquid. Additionally, if we require significant amounts of cash on short notice in excess of anticipated cash requirements, or if we are required to return cash
38
collateral in connection with our securities lending program, we may have difficulty selling investments in a timely manner, or be forced to sell at deep discounts. We believe we have sufficient liquidity to meet our needs from sources other than the liquidation of securities.
Cash flow activities
The following table provides condensed cash flow information as follows for the nine months ended September 30:
| (in thousands) | 2026 | 2025 | ||||||||||||
| (Unaudited) | ||||||||||||||
| Net cash provided by operating activities | $ | 520,219 | $ | 515,100 | ||||||||||
| Net cash used in investing activities | (291,449) | (101,052) | ||||||||||||
| Net cash used in financing activities | (211,956) | (143,894) | ||||||||||||
| Net increase in cash, cash equivalents, and restricted cash | $ | 16,814 | $ | 270,154 | ||||||||||
Net cash provided by operating activities was $520.2 million in the first nine months of 2026, compared to $515.1 million for the same period in 2025. Increased cash provided by operating activities was primarily due to an increase in management fees received of $101.9 million driven by growth in direct and affiliated assumed premiums written by the Exchange, and decreases in administrative services expenses paid of $41.9 million and general operating expenses paid of $36.2 million. This was partially offset by increases in incentive compensation paid to agents of $51.7 million from improved underwriting profitability, income taxes paid of $43.6 million, and cash paid for agent commissions of $36.3 million driven by premium growth. We also made an additional discretionary pension contribution of $30 million in the third quarter of 2026, which further improved the plan's funded status.
Net cash used in investing activities was $291.4 million in the first nine months of 2026, compared to $101.1 million for the same period in 2025. The increase in cash used in investing activities was primarily driven by an increase in purchases of investments of $556.8 million and an increase in fixed asset purchases of $22.0 million mostly related to software and home office renovations. This increase was partially offset by an increase in proceeds from investments of $378.9 million.
Net cash used in financing activities was $212.0 million in the first nine months of 2026, compared to $143.9 million for the same period in 2025. Increased cash used in financing activities was primarily due to net repayments of cash collateral under our securities lending program during the first nine months of 2026 compared to net cash collateral received during the same period in 2025, reflecting lower securities lending activity.
Capital Outlook
We regularly prepare forecasts evaluating the current and future cash requirements for both normal and extreme risk events. Should an extreme risk event result in a cash requirement exceeding normal cash flows, we have the ability to meet our future funding requirements through various alternatives available to us.
Outside of our normal operating and investing cash activities, future funding requirements could be met through: 1) unrestricted and unpledged cash and cash equivalents, which totaled approximately $317.3 million at September 30, 2026, 2) $100 million available bank revolving line of credit, and 3) liquidation of unrestricted and unpledged assets held in our investment portfolio, including equity securities and investment grade bonds, which totaled approximately $1.3 billion at September 30, 2026. Additionally, we have the ability to curtail or modify discretionary cash outlays such as those related to shareholder dividends and share repurchase activities. See Part I, Item 1. "Financial Statements - Note 8, Bank Line of Credit, of Notes to Consolidated Financial Statements" contained within this report for additional information related to our bank revolving line of credit.
Off-Balance Sheet Arrangements
See Part I, Item 1. "Financial Statements - Note 14, Commitments and Contingencies, of Notes to Consolidated Financial Statements" contained within this report for additional information on our guarantees and lending commitments. We do not believe that these guarantees and commitments will have a material current or future effect on our consolidated financial condition, results of operations, or cash flows.
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CRITICAL ACCOUNTING ESTIMATES
We make estimates and assumptions that have a significant effect on the amounts and disclosures reported in the consolidated financial statements. The most significant estimates relate to investment valuation and the retirement benefit plan for employees. While management believes its estimates are appropriate, the ultimate amounts may differ from estimates provided. Our most critical accounting estimates are described in Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" for the year ended December 31, 2025 of our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on February 23, 2026. See Part I, Item 1. "Financial Statements - Note 6, Fair Value, of Notes to Consolidated Financial Statements" contained within this report for additional information on our valuation of investments.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposure to market risk is primarily related to fluctuations in interest rates and prices. Quantitative and qualitative disclosures about market risk resulting from changes in interest rates, prices, and other risk exposures for the year ended December 31, 2025 are included in Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on February 23, 2026.
Ongoing geopolitical events, the uncertain tariff, inflationary, and interest rate environment, and a potential economic slowdown may create future volatility; however, there have been no material impacts on our portfolio during the nine months ended September 30, 2026. We continue to closely monitor the economic environment and financial markets and will take appropriate measures, when necessary, to minimize potential risk exposure to our cash and investment balances. For a recent discussion of conditions surrounding our investment portfolio, see the "Operating Overview", "Results of Operations" and "Financial Condition" discussions contained in Part I, Item 2. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" contained within this report.
ITEM 4. CONTROLS AND PROCEDURES
We carried out an evaluation, with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (pursuant to Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.
Our management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, any change in our internal control over financial reporting and determined there has been no change in our internal control over financial reporting during the nine months ended September 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Erie Indemnity Company ("Indemnity") was named as a defendant in a complaint filed on August 24, 2021, by alleged subscribers of the Erie Insurance Exchange (the "Exchange") in the Court of Common Pleas Civil Division of Allegheny County, Pennsylvania captioned TROY STEPHENSON, CHRISTINA STEPHENSON, SUSAN RUBEL and STEVEN BARNETT, individually and on behalf of all others similarly situated (Plaintiffs) v. Erie Indemnity Company (Defendant).
The complaint seeks relief for alleged breaches of fiduciary duty by Indemnity in connection with the setting of the management fee it receives, in accordance with the terms of the Subscribers Agreement executed between Indemnity and all policyholders of the Exchange, as compensation for acting as the attorney-in-fact in the management of the Exchange. The relief sought is for the period beginning two years prior to the date of the filing of the complaint and continuing through 2021.
The complaint seeks (i) a finding that Indemnity has breached its fiduciary duties; (ii) an award of damages in an amount to be determined at trial; and (iii) such other relief, including disgorgement of profits or other injunctive relief, that the Court deems just and proper.
Service of the complaint was effectuated on September 20, 2021. A Notice of Removal to the United States District Court for the Western District of Pennsylvania was filed on October 20, 2021. On November 2, 2021, Plaintiffs filed a Notice of Voluntary Dismissal. As a result, the action was dismissed without prejudice.
On December 6, 2021, another Complaint was filed in the Court of Common Pleas of Allegheny County, Pennsylvania captioned ERIE INSURANCE EXCHANGE, an unincorporated association, by TROY STEPHENSON, CHRISTINA STEPHENSON and STEVEN BARNETT, trustees ad litem, and alternatively, ERIE INSURANCE EXCHANGE, by TROY STEPHENSON, CHRISTINA STEPHENSON and STEVEN BARNETT, (Plaintiff), v. ERIE INDEMNITY COMPANY, (Defendant).
This most recent complaint has the same allegation of breach of fiduciary duty by Indemnity in connection with the setting of the management fee it receives, in accordance with the terms of the Subscribers Agreement executed between Indemnity and all policyholders of the Exchange, as compensation for acting as the attorney-in-fact in the management of the Exchange.
This most recent complaint seeks the same relief, specifically, (i) a finding that Indemnity has breached its fiduciary duties; (ii) an award of damages in an amount to be determined at trial; and (iii) such other relief, including disgorgement of profits or other injunctive relief, that the Court deems just and proper.
A Notice of Removal to the United States District Court for the Western District of Pennsylvania was filed on January 27, 2022. By Memorandum Opinion and Order dated September 28, 2022, the Court granted the Motion for Remand and directed the case be remanded to the Court of Common Pleas of Allegheny County, Pennsylvania. On September 30, 2022, Indemnity filed a Motion to Stay the Remand Order pending an appeal to the United States Court of Appeals for the Third Circuit. On October 3, 2022, the Court granted the Stay. On October 11, 2022, Indemnity filed a Petition for Permission to Appeal the Remand Order with the Third Circuit. By Order dated November 7, 2022, a three judge panel of the Court denied the Petition to Appeal.
On November 21, 2022, Indemnity filed a Petition for Rehearing requesting that the Third Circuit permit the appeal. By Order dated January 9, 2023, the Court granted the petition for rehearing and vacated the prior Order of October 7, 2022, denying permission to appeal. On April 20, 2023, argument was held before a three-judge panel of the Third Circuit. By Opinion dated May 22, 2023, the Court affirmed the decision of the District Court finding that there was no basis for federal court jurisdiction and that the matter had been properly remanded to state court. On June 5, 2023, Indemnity filed a Petition for Panel Rehearing or Rehearing En Banc. By Order dated June 22, 2023, the Court denied the Petition. The United States District Court thereafter extended its stay of the issuance of the remand order through the conclusion of any proceedings in the United States Supreme Court challenging the decision of the United States Court of Appeals for the Third Circuit that no federal jurisdiction exists in this case.
On October 20, 2023, Indemnity filed a Petition for Writ of Certiorari with the Supreme Court of the United States. The Petition sought a determination from the Court that the lower courts improperly denied federal jurisdiction. By order dated February 26, 2024, the United States Supreme Court denied Indemnity's Petition for Writ of Certiorari. By order dated February 28, 2024, the action was remanded to the Court of Common Pleas of Allegheny County.
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Separately, Indemnity filed a Complaint in Federal Court to invoke certain provisions of the “All Writs Act” and the “Anti-Injunction Act.” By filing this complaint, Indemnity seeks to protect the federal court's prior binding, final judgments in favor of Indemnity and thereby foreclose further litigation of the claims and issues pertaining to the compensation practices that were the subject of the prior judgments. After the denial of certiorari, the district court, by Opinion and Order dated February 28, 2024, granted Indemnity's motion for a preliminary injunction under the All Writs Act after determining that the gravamen of the plaintiff's state court action “is the same” as two actions previously dismissed in federal court, that Indemnity would be irreparably harmed if it is forced to relitigate those same issues in state court, plaintiffs had a full and fair opportunity to litigate the same issues in prior litigation, and that an injunction would serve the public interest. The Court’s order preliminarily enjoined the named plaintiffs from pursuing the Erie Ins. Exch. v. Erie Indem. Co. action and enjoined the state court from conducting further proceedings in that action. The court ordered Indemnity to file a motion to convert the preliminary injunction into a permanent injunction. In the meantime, plaintiffs filed a Notice of Appeal with the United States Court of Appeals for the Third Circuit. As a result of the filing of the appeal, the trial court stayed the order issuing an injunction.
On October 14, 2025, the Third Circuit issued an Opinion and concluded that “the District Court abused its discretion in granting Indemnity’s motion for preliminary injunction.” The Court determined that the Complaint in Stephenson only sought to challenge the management fee established in December 2019 and 2020. The Court went on to conclude that the issues were not litigated in either Ritz or Beltz and, therefore, the Stephenson plaintiffs were not precluded from challenging the management fee for those years. On October 28, 2025, Indemnity filed a Petition for Reargument before the Court en banc. On November 12, 2025, the Third Circuit denied the Petition for Reargument. On January 12, 2026, Indemnity filed a Petition for Writ of Certiorari with the United States Supreme Court. On March 23, 2026, the United States Supreme Court denied the Petition for Writ of Certiorari. On April 27, 2026, Indemnity voluntarily dismissed the action.
On June 11, 2026, an Amended Complaint was filed in the Court of Common Pleas of Allegheny County. The Amended Complaint added two additional plaintiffs, Rosemarie Perrotta and Rachel Stewart. In addition, the Amended Complaint seeks to challenge the amount of the management fee for additional years, specifically for calendar years 2020 to the present.
On August 10, 2026, Indemnity filed Preliminary Objections to the Amended Complaint. The Preliminary Objections seek dismissal of the action. The Court has scheduled argument on the Preliminary Objections for November 19, 2026.
Indemnity intends to vigorously defend against all allegations and requests for relief sought by plaintiffs.
For additional information on contingencies, see Part I, Item 1. "Financial Statements - Note 14, Commitment and Contingencies, of Notes to Consolidated Financial Statements" contained within this report.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on February 23, 2026.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
In 2011, our Board of Directors approved a continuation of the current stock repurchase program, authorizing repurchases for a total of $150 million with no time limitation. This repurchase authority included, and was not in addition to, any unspent amounts remaining under the prior authorization.
The following table provides information regarding our Class A nonvoting common stock share repurchases during the quarter ending September 30, 2026:
| (dollars in thousands, except per share data) | ||||||||||||||||||||||||||
| Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced program | Dollar value of shares that may yet be purchased under the program | ||||||||||||||||||||||
| July 1-31, 2026 | — | $ | — | — | $ | 17,754 | ||||||||||||||||||||
August 1-31, 2026 (1) | 1,774 | 246.82 | — | 17,754 | ||||||||||||||||||||||
| September 1-30, 2026 | — | — | — | 17,754 | ||||||||||||||||||||||
| Total | 1,774 | 246.82 | — | |||||||||||||||||||||||
(1)Represents shares purchased on the open market to fund the rabbi trust for both the outside director deferred stock compensation plan (1,513 shares at an average price of $246.82 per share) and the incentive compensation deferral plan (261 shares at an average price of $246.82 per share).
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ITEM 6. EXHIBITS
| Exhibit | |||||||||||
| Number | Description of Exhibit | ||||||||||
| 10.1+ | |||||||||||
| 14.1+ | |||||||||||
| 31.1+ | |||||||||||
| 31.2+ | |||||||||||
| 32++ | |||||||||||
| 101.INS+ | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||||||||
| 101.SCH+ | Inline XBRL Taxonomy Extension Schema Document. | ||||||||||
| 101.CAL+ | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||||||||
| 101.DEF+ | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||||||||
| 101.LAB+ | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||||||||
| 101.PRE+ | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||||||||
| 104+ | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||||||||
+ Filed herewith.
++ Furnished herewith.
44
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 thereunto duly authorized.
| Erie Indemnity Company | ||||||||||||||
| (Registrant) | ||||||||||||||
| Date: | October 29, 2026 | By: | /s/ Timothy G. NeCastro | |||||||||||
| Timothy G. NeCastro, President & CEO | ||||||||||||||
| By: | /s/ Julie M. Pelkowski | |||||||||||||
| Julie M. Pelkowski, Executive Vice President & CFO | ||||||||||||||
45
Exhibit 10.1
FOURTH AMENDMENT TO LEASE AGREEMENT
This FOURTH AMENDMENT TO LEASE AGREEMENT ("Amendment"), effective as of October 1, 2026 (for purposes of this Amendment, the "Effective Date"), is entered into between ERIE INSURANCE EXCHANGE ("Tenant"), a reciprocal insurance exchange organized under the laws of Pennsylvania with principal offices and place of business at 100 Erie Insurance Place, Erie, PA 16530, acting by and through its attorney-in-fact, ERIE INDEMNITY COMPANY; and ERIE INDEMNITY COMPANY ("Landlord"), a Pennsylvania business corporation, with its principal offices and place of business also at 100 Erie Insurance Place, Erie, PA 16530 collectively referred to herein as the "Parties").
WHEREAS, Landlord and Tenant entered into that certain Home Office Agreement of Lease dated July 1, 2021 relating to certain premises located in Erie Pennsylvania (collectively, the "Lease");
WHEREAS, Landlord and Tenant have agreed to amend the Lease, upon the terms and conditions hereinafter described; and
WHEREAS, all capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Lease.
NOW, THEREFORE, for good and valuable consideration paid by Tenant to Landlord and the mutual covenants, terms, and conditions set forth herein, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby amend the Lease on the terms hereof as of the Effective Date as follows:
1.Appendix A to the Lease shall be replaced in its entirety with the appendix attached to this Amendment.
2.No Default. Landlord and Tenant hereby affirm that as of the Effective Date, no breach, default or other act, error, or omission which, with the giving of notice or passage of time or both, would constitute a breach or default by either party has occurred and is continuing under the Lease.
3.Affirmation of Lease Terms. Except as modified by this Amendment, Landlord and Tenant hereby ratify the Lease and agree that the Lease shall remain unchanged and shall continue in full force and effect. In the event there is any conflict between the terms of the Lease and the terms set forth in this Amendment, the terms specifically set out in this Amendment shall control. From and after the Effective Date, any and all references to "the Lease" or "this Lease" in the Lease shall mean the Lease as modified by this Amendment.
4.Miscellaneous.
(a)Entire Agreement. This Amendment contains the entire understanding between the Parties with respect to the matters being amended as contained herein.
(b)Amendment and Modification. This Amendment may not be changed or modified orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, or modification is sought.
(c)Further Assurances. Each of the Parties shall deliver to the other any further instruments or documents which may be reasonably required to establish to the satisfaction of the other party that it has agreed to be bound by and become liable under the terms and conditions of the Lease and this Amendment.
[Continues with signatures on next page.]
- 2 -
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth above.
TENANT:
ERIE INSURANCE EXCHANGE, a reciprocal insurance exchange organized under the laws of Pennsylvania with principal offices and place of business at 100 Erie Insurance Place, Erie, PA 16530, acting by and through its attorney-in-fact, ERIE INDEMNITY COMPANY
By: /s/ Sean D. Dugan
Sean D. Dugan
Executive Vice President
LANDLORD:
ERIE INDEMNITY COMPANY, a Pennsylvania business corporation, with its principal offices and place of business at 100 Erie Insurance Place, Erie, PA 16530
By: /s/ Brian W. Bolash
Brian W. Bolash
Executive Vice President, Secretary and
General Counsel
- 3 -
Appendix A
Buildings
SIZE ABOVE/BELOW GROUND BASE
NAME LOCATION RENT ABOVE/BELOW GROUND YEAR
717 State Street 717 State Street 54,203 / 11,097 10/01/2026-
Erie, PA 16501 $9.31 / $4.37 06/30/2027
Sixth Street Tower 125 East 6th Street 293,139 / 35,770 07/01/2021-
Erie, PA 16501 $10.75 / $4.20 06/30/2022
Westport 4950 West 23rd Street 77,260 / n/a 07/01/2021-
Erie, PA 16505 $8.50/ n/a 06/30/2022
H.O Hirt Building 100 Erie Insurance Place 93,127/28,217 01/01/2022-
Erie, PA 16530 $8.95/$4.20 06/30/2022
F.W. Hirt-Perry Square 100 Erie Insurance Place 162,002/41,065 01/01/2022-
Building Erie, PA 16530 $8.95/$4.20 06/30/2022
Petersen Center 100 Erie Insurance Place 30,724/ n/a 01/01/2022-
Erie, PA 16530 $8.95/ n/a 06/30/2022
Holland Street Building 100 Erie Insurance Place 66,114/27,364 01/01/2022-
Erie, PA 16530 $8.95/$4.20 06/30/2022
Lafayette Place 400 French Street 17,052/5,392 01/01/2022-
Erie, PA 16507 $8.95/$4.20 06/30/2022
Gideon Ball House 135 East 6th Street 9,200/ n/a 01/01/2022-
Erie, PA 16501 $8.95/ n/a 06/30/2022
Armory 360 East 6th Street 21,737/12,605 01/01/2022-
Erie, PA 16507 $8.95/$4.20 06/30/2022
C.F Adams/Heritage Center 101 East 6th Street 6,036/4,325 01/01/2022-
Erie, PA 16501 $8.95/$4.20 06/30/2022
O’Donnell House 410 French Street 762/711 01/01/2022-
Erie, PA 16507 $8.95//$4.20 06/30/2022
Firehouse 414 French Street 8,073/2,480 01/01/2022-
Erie, PA 16507 $8.95/$4.20 06/30/2022
French Street Ramp/ 100 Erie Insurance Place 11,760/38,616 01/01/2022-
Mail Facility Erie, PA 16530 $8.95/$4.20 06/30/2022
Code of Conduct Fall 2026
– Founder H.O. Hirt as near perfect as near perfect protection, serviceas is humanly possible, provide our Policyholders with and to do so at the To lowest possible cost “ ”
Table of Contents Introduction������������������������������������������������������2 Why do we have a Code?���������������������������������������������2 How does our Code apply to me?�����������������������������2 Messages from ERIE ������������������������������������3 Our Employees����������������������������������������������� 4 What are my responsibilities under our Code?�������������������������������������������������������������������������4 Ethical Decision Making: Four Pillars�������������������������5 Conflicts of Interest�������������������������������������������������������6 Gifts & Entertainment���������������������������������������������������6 Our Culture ��������������������������������������������������������7 Environmental, Social & Governance�����������������������8 Inclusion & Belonging ���������������������������������������������������8 Harassment Free Workplace���������������������������������������9 Safety in Our Workplace��������������������������������������������� 10 Our Stakeholders������������������������������������������� 11 Insider Information���������������������������������������������������������11 Anti-Bribery���������������������������������������������������������������������11 Fair Competition������������������������������������������������������������12 Customer Service & Fair Claims Handling��������������13 Our Agency Force��������������������������������������������������������13 Our Assets������������������������������������������������������14 ERIE’s Assets����������������������������������������������������������������� 14 Privacy & Information Security��������������������������������� 14 Records Management������������������������������������������������� 16 Intellectual Property������������������������������������������������������17 Financial Statements����������������������������������������������������17 Our Reputation���������������������������������������������� 18 Communication with the Public������������������������������� 18 Social Media������������������������������������������������������������������� 18 Political Activity������������������������������������������������������������� 19 Our Conduct �������������������������������������������������20 What happens if someone violates our Code?����������������������������������������������������������������������20 What will happen after I make a report?����������������21 What happens if the company becomes the subject of an investigation?��������������������������������21 Conclusion����������������������������������������������������� 22 Closing Thoughts���������������������������������������������������������22 Key Contacts�����������������������������������������������������������������23 1
Introduction Why do we have a Code? At Erie Insurance (“ERIE”) we believe in doing the right thing as stated in our Founding Purpose: “To provide Policyholders with as near perfect protection, as near perfect service as is humanly possible and to do so at the lowest possible cost.” We value ethical business conduct, accountability, respectful treatment and teamwork. We have a Code of Conduct (“Code”) because it provides a roadmap to help us act not only in compliance with laws and regulations, but also in the spirit of our purpose and values. Our Code helps us to clearly understand how to deliver on our promise to do the right thing. How does our Code apply to me? All those who work for ERIE have a responsibility to understand and follow our Code. Those who interact with ERIE or do work on behalf of ERIE are expected to uphold the values stated in our Code. Our Code applies to all Employees, including officers, and the Board of Directors. Everyone associated with ERIE has an obligation to demonstrate ethical behavior that is consistent with our Code. This includes our Agents, contractors, vendors and others with whom we do business. Our Code does not address every legal or ethical situation, but it helps guide us by supporting our good judgment when we have questions. When we have more specific questions about laws or policies, we can consult additional resources. These resources include: • Employee Handbook • Privacy & Information Security Handbook • Company policies, standards, and manuals available on the company intranet • Online compliance courses Call the ERIE Ethicsline at 1 (866) 469-5708 or visit erieinsurance.ethicspoint.com for Anonymous Reporting 24/7. “The ERIE is Above all in SERVICE®” – H.O. Hirt 2
Messages from ERIE Our commitment to being Above all in Service is one we take seriously in all aspects of our business. How we uphold that promise matters, and our Code of Conduct serves as a guidepost for doing so in the right ways. Our Code provides the ethical and professional standards for how we do business. It offers clear direction for making decisions and taking actions that are legal, fair and aligned with our purpose and core values. Being Above all in SERVICE, practicing the Golden Rule and sharing the ERIE Family Spirit aren’t just words; they guide everything we do and are key to our success. — Tim NeCastro President and CEO When you face an ethical decision in business, Founder H.O. Hirt's belief in “simple common sense, mixed with just plain decency” remains a guiding principle. There may be times when the right choice is not immediately clear or when a decision carries ethical, legal or business implications. In those moments, I encourage you to turn to ERIE's Code of Conduct. It's designed to help you navigate difficult situations with confidence and integrity. Our Compliance Department is here to build and support a culture of compliance and ethics by providing guidance that helps Employees make sound business decisions. We work closely with Human Resources, Internal Audit, Law and Public Relations, all of which play an important role in protecting ERIE and the trust we've built with our customers, Agents and one another. But creating an ethical culture isn't the responsibility of one department alone. It belongs to all of us, and it starts with each Employee and every leader. Please take the time to read and understand our Code of Conduct. It outlines what ERIE expects when it comes to legal and ethical behavior and points you to resources when you're unsure of the right path. And if something doesn't seem right, please speak up. You can always reach out to me or anyone on the Compliance team. We're here to listen, answer questions and provide guidance. — Mandy Elder Vice President, Compliance & Ethics 3
Our Employees What are my responsibilities under our Code? We are all responsible to “be above all” when it comes to our Code. This means reading our Code, taking time to understand it and asking questions if they arise. Depending on your role at ERIE, you may have different responsibilities under our Code. For example: Employee Responsibilities • Comply with all laws, rules, regulations and court orders. • Know and follow our Code and company policies. • Conduct business truthfully and fairly. • Demonstrate professional behavior at all times. • Exhibit responsible financial management. • Never use a business relationship or company assets, including non-public company information, for personal gain. • Ask questions. Use the Four Pillars of Ethical Decision Making on the next page to guide you when you are unsure of a situation. • Report actual or suspected violations of our Code or company policies. • Notify your leader and your Employee Relations Consultant (ERC) or HR Business Partner (HRBP) if you are charged with or convicted of a misdemeanor or a felony. Refer to ERIE’s Employee Improprieties Policy for more information. • Never use non-public information to trade securities or transact on a predictive market. Leader Responsibilities • Lead by example. • Demonstrate a commitment to comply with all laws, rules, regulations, court orders, and company policies. • Establish and maintain procedures in your work area that are consistent with our Code. • Listen to Employees’ ethical concerns and take action to report these concerns. • Explain the options to Employees on how to report concerns and encourage them to do so. • Guide Employees through the Four Pillars of Ethical Decision Making described in the next section. • Never influence an Employee to behave or act in a way that is not consistent with our Code or company policies. • Establish and follow controls in your area that protect company assets. • Protect Employees from retaliation for reporting concerns by following the Anti-Retaliation Policy. • Demonstrate accountability and responsibility. • Notify your ERC or HRBP if you or an Employee who reports to you becomes aware of, are charged with, or are convicted of a misdemeanor or felony. Refer to ERIE’s Employee Improprieties Policy for more information. If an Employee in the insurance industry is convicted of a felony, federal law requires felonies to be reported to certain regulatory entities. Employees are required to contact their ERC or HRBP to disclose this information. Call the ERIE Ethicsline at 1 (866) 469-5708 or visit erieinsurance.ethicspoint.com for Anonymous Reporting 24/7. 4
Ethical Decision Making: Four Pillars When you are faced with situations that are confusing and perhaps do not feel “right,” consider these questions: • Is this action legal? • Is this action ethical? • Is this action in line with our Code and company policies? • Is this action upholding ERIE’s reputation? If you answered “no” to any of these questions: STOP and report the situation to any of the following resources: • Your leader or any ERIE leader • The Compliance Department • Your ERC or HRBP • Any of the Key Contacts at the end of our Code • ERIE Ethicsline 5
Conflicts of Interest A conflict of interest arises when our personal interests interfere, or even appear to interfere, with the Company’s interests. We all have a responsibility to protect ERIE and preserve our reputation for fairness and professionalism by avoiding conflicts of interest and disclosing anything that could appear to be a conflict. While having a conflict of interest is not necessarily a violation of our Code, a failure to disclose a potential conflict is always a violation. Did you know? A conflict can occur on or off the job. For example, a conflict could occur during the course of a second job, an outside activity, a financial investment or endeavor, or any interest that could influence your work and work-related decisions. A conflict of interest can also come from the actions of family members, if their actions or involvements could affect your business decisions. Review our Conflict of Interest and Outside Employment Policy for more information. Be Above All • Understand how to identify a conflict of interest. • Update your conflicts of interest form if something changes. • Avoid interests, activities or relationships that interfere with ERIE Customers' and/or shareholders’ best interests or with your ability to be fair and unbiased. • Never work for a competitor while you are an ERIE Employee. • Never process or service your own policy or claim, or the policy or claim of a family member or friend. • Review the conflicts of interest form document for further guidance. • Discuss any potential conflicts of interest with your leader or Compliance if you are unsure or need guidance. Gifts & Entertainment At ERIE, we should always use good judgment and only give or receive gifts and entertainment when we know that doing so will not compromise our ability to make objective business decisions. ERIE’s Gifts and Entertainment Policy provides guidance for us to follow. Remember that if a reasonable observer could question the particular gift or entertainment, even if it is acceptable per our policy, you should pause and seek advice from Compliance before accepting it. Be Above All • Be mindful that any gifts or entertainment given or received from business contacts should be aligned with our Gift and Entertainment Policy. See the policy job aid for more guidance. • Avoid situations that could reflect poorly on ERIE, such as giving or receiving inappropriate gifts or forms of entertainment. • Be sensitive to third party gift policies and do not offer anything that might violate those policies. Gifts of cash or cash equivalents, such as gift cards or gift certificates are generally not acceptable. Call the ERIE Ethicsline at 1 (866) 469-5708 or visit erieinsurance.ethicspoint.com for Anonymous Reporting 24/7. 6
Cody Cook EVP Tim NeCastro President & CEO Claims Experience & Customer Service Chief Information Officer HR & Corporate Services Sales & Products Secretary & General Counsel Chief Financial Officer Sarah Shine EVP Parthasarathy Srinivasa EVP Sean Dugan EVP Doug Smith EVP Brian Bolash EVP Julie Pelkowski EVP Our Culture What do we mean when we say “ethical”? Being ethical at ERIE means doing the right thing even when no one is looking. You can do this by upholding our Core Values and following our Code of Conduct to help you. 7
Environmental, Social & Governance We act in the best interest of our Employees, our communities, and our planet. Environmental and social criteria are considered in our business processes to make them sustainable and responsible. ERIE employs sound governance for better decision making and positive business impact. ERIE demonstrates good corporate citizenship when we support our communities through partnerships with others and by following our Founder H.O. Hirt’s tradition of giving generously. We remain committed to helping those around us by donating our time, talent, and financial resources. Be Above All • Recognize the importance of sustainable actions and share in ERIE’s strategic initiatives to make a positive impact on the environment. • Consider supporting our communities and those in need through the Erie Insurance Giving Network. • Volunteer your time and talent by participating in ERIE Service Corps events and skills-based opportunities with our nonprofit partners. Inclusion & Belonging At ERIE, we believe inclusivity of diverse experiences and perspectives, and fostering a sense of belonging for all individuals, contributes to a positive work environment. Our inclusive environment makes it possible for all Employees to make the most of opportunities, take ownership of performance, and realize their full potential. We prohibit and do not tolerate discrimination in our workplace. ERIE employs qualified people based on their ability to do their job. Did you know? The law is designed to protect individuals from discrimination based on certain characteristics. These characteristics include, but are not limited to, age, ancestry, citizenship, color, disability, gender identity, genetic information, military status, marital status, national origin, race, religion, sex, sexual orientation, pregnancy or breastfeeding. Be Above All • Make employment-related decisions such as recruiting, hiring, firing or promoting based on the individual’s qualifications, performance and capabilities to succeed in the job. • Never treat any individual differently or make employment-related decisions based on characteristics protected by the law. • Remember, ERIE values all the ways we are different including different perspectives or working styles. We have a responsibility to work collaboratively and respectfully with one another. Call the ERIE Ethicsline at 1 (866) 469-5708 or visit erieinsurance.ethicspoint.com for Anonymous Reporting 24/7. 8
Harassment Free Workplace At ERIE, we all have an obligation to treat one another with dignity and respect. ERIE strictly prohibits harassment, in any form, and will not tolerate disrespectful behavior or remarks. By fostering a culture of dignity and respect, we provide an environment where all team members are free to share ideas and work together to achieve better results. Did you know? When people hear the word harassment, they often think first of sexual harassment. But the term “harassment” actually refers to any conduct that is unwelcome or personally offensive to another individual. This includes threats, acts of violence, bullying and intimidation. Read ERIE’s Anti-Harassment Policy for more details. Be Above All • Consistently treat your colleagues with respect, even when there are business pressures or differences of opinion. • Refuse to act in a way that could threaten, bully or intimidate others. • Act professionally at all times, in person and online. • Speak up if you see someone being harassed or believe you are being harassed. • If someone tells you that your behavior is offensive or unwelcome, take responsibility, apologize and stop the behavior. Question: I overheard an offensive joke. Most of the group was laughing, but I wasn’t. Should I tell them I was offended? Answer: Yes, if you are comfortable doing so. Offensive or unwelcome behavior has no place in our workplace. If you are uncomfortable confronting the person(s) telling the joke, talk to your leader or any ERIE leader, or any of the other contacts listed throughout our Code. Our founder believed that all representatives of ERIE should conduct themselves according to the “Golden Rule,” treating others as you would like to be treated. 9
Safety in Our Workplace At ERIE we are committed to providing a safe and healthy work environment. We strive to maintain a workplace free of unsafe conditions, unsafe acts, violence or threats of violence. Read our Workplace Violence Policy for more information. Be Above All • Maintain an atmosphere of professionalism, courtesy and mutual respect for emotional well-being. • Do not tolerate threats of violence, harassment, or violent or intimidating words, messages or acts. • If someone makes a threat or you believe someone may be considering a violent action, report it immediately. • Never bring weapons into ERIE buildings and follow the state specific guidance in the Employee Handbook regarding weapons in vehicles and parking lots. • Never report to work under the influence of illegal drugs or alcohol. Read our Drug and Alcohol Policy for more information. If you are at a company event, use good judgement if alcohol is being served. If you see something, say something. Call Security at Home Office ext. 2700. Call the ERIE Ethicsline at 1 (866) 469-5708 or visit erieinsurance.ethicspoint.com for Anonymous Reporting 24/7. 10
Our Stakeholders Insider Information We comply with all laws and company policies that restrict how we trade in ERIE’s securities and we do not engage in transactions on predictive markets based on “inside information” that we learn of through the course of our job. This includes information about ERIE as well as information about our Customers, business partners or any other third parties. Did you know? Insider trading is the purchase or sale of a publicly traded security by someone who has material nonpublic information about the company issuing the security. For example, material information might include news of an expansion, a new strategic direction for a company or a change in corporate leadership. Be Above All • Never use material nonpublic information for your own financial gain. • Never provide a “tip” and pass on material nonpublic information to another person. • If you are giving a presentation to an outside group, make sure the details of the presentation do not disclose confidential or restricted ERIE information. • If you are questioning whether a securities transaction is appropriate, given your role at ERIE, see ERIE’s Securities Trades by Company Personnel Policy or talk to the Law Division before you proceed. Anti-Bribery At ERIE we conduct business fairly and do not give anyone anything of value in an attempt to gain an unfair business advantage. We prohibit bribery and kickbacks anywhere we do business. Agents and other third parties who work on our behalf should conduct themselves with the same level of integrity. Bribery and kickbacks are not just wrong, they are often illegal, and failure to comply with our Anti-Bribery and Anti-Corruption Policy can carry significant fines or even criminal charges for individuals and for ERIE. Did you know? Most laws define a bribe or kickback as any kind of money, fee, commission, credit, gift, gratuity, travel benefit, entertainment or compensation that is provided, with the hopes of improperly obtaining business or receiving favorable treatment from a government official. Be Above All • Never promise or give someone something that has value to them in an attempt to secure an unfair business advantage. • Decline offers of discounts on personal products or services from third parties who may be making the offer with the hope of receiving favorable treatment from you, or from ERIE in a future transaction. • Record all payments and transactions accurately, and never try to conceal the true nature of an expense. • Remember that ERIE may be held liable for the actions of our Agents and third parties, so it is important to alert your leader if something does not seem right. 11
Fair Competition We secure business based on our commitment to be Above all in SERVICE®. We make sure that our actions are ethical and in compliance with antitrust and unfair practice laws. Did you know? Antitrust and unfair competition laws are intended to protect consumers from corporate practices that might limit the free market and restrict their access to competitive products at competitive prices. Refer to the Antitrust Policy for a more detailed list of guidelines to avoid violations. Be Above All • Know how antitrust and competition laws apply to your job requirements. • Do not discuss any confidential ERIE information with competitors or others, and do not discuss competitors’ confidential information. • Do not collect information about competitors through illegal means, such as theft, spying, bribery or breach of a confidentiality agreement or contractual agreement. • Be careful about your conversations when attending trade association meetings where you may have contact with competitors. Stick to discussing general business practices and not ERIE-specific confidential company information. • When researching or requesting information from competitors for business purposes, identify yourself as an ERIE Employee. • Any requests by you to connect with another person or entity online for business purposes must not be misleading, deceptive or misrepresent a relationship with, or connection to, ERIE. Call the ERIE Ethicsline at 1 (866) 469-5708 or visit erieinsurance.ethicspoint.com for Anonymous Reporting 24/7. 12
Customer Service & Fair Claims Handling We treat our Customers and claimants respectfully and fairly every step of the way, from marketing to sales and service, to the underwriting and rating of each policy. We settle claims fairly, promptly and in good faith. Be Above All • Align your actions with ERIE’s Founding Purpose. • Always treat the Customer fairly and provide as near perfect service as is humanly possible. • Understand and follow company policies, laws and regulations that apply to the work you do. • Use ERIE’s underwriting guidelines and rules consistently. • Follow all ERIE claims handling policies and procedures. Our Agency Force Our Agents are a reflection of ERIE. Fostering relationships with trustworthy and dependable Agents enables us to provide near perfect service. Did you know? ERIE sells insurance exclusively through independent Agents. By entering into agency agreements, our Agents agree to follow ERIE’s business practices and all laws and regulations that apply to them as independent Agents. Agents are not Employees; rather, they are the face of ERIE in the community, and we value strong relationships with our Agents. Be Above All • If you work directly with our Agents, be sure to communicate and demonstrate ERIE’s standards for doing business legally and ethically. • The actions of our Agents reflect on our reputation. If you observe or suspect misconduct of an Agent, notify Compliance. 13
ERIE’s Assets At ERIE, our shareholders and Customers depend on us to use our assets responsibly. We all play a role in helping to protect ERIE assets from theft, loss and misuse. This includes everything from correctly reporting business expenses to protecting ERIE’s property. Did you know? Our assets include more than just physical property. ERIE assets include items such as our reputation, money, checks, records and documents, data and information, intellectual property, buildings and grounds, company vehicles, office equipment, furniture and our computer network. Be Above All • Use ERIE’s assets thoughtfully and responsibly. • Never use a business relationship or company assets, including non-public company information, for personal gain. • Report all expenses accurately and timely. • Obtain appropriate approvals for all contracts or purchases. If you are a senior financial officer, you have greater responsibilities and must follow our Code of Ethics for Senior Financial Officers. Privacy & Information Security At ERIE, we are responsible for protecting all restricted, confidential and nonpublic personally identifiable information, no matter whether it belongs to ERIE, our Employees, Customers or any third party. We must understand and uphold the rules and regulations that apply to this information. We must also be cautious not to disclose this information to others who are not authorized to receive it or who do not have a business need to know the information. Whether we are working in an office, in the field or remotely, we must all take proper steps to preserve the information that is gathered while performing our work. Privacy sets rules for accessing, using and sharing information. Information Security has administrative, technical and physical safeguards in place to protect the confidentiality, integrity and availability of this information, and lower the risk of cyberattacks, data breaches, and other threats. We must be vigilant and follow the company policies and standards to do our part to uphold, not only the law, but the trust of all with whom we do business. Read our Privacy & Information Security Handbook for more information on our policies and standards. Question: How does the Code relate to using Artificial Intelligence (AI) while working at ERIE? Answer: At ERIE, we strive to be Above All in Service, which means making sure that we use technology in ways that are ethical, free from unlawful and unintended bias, respectful of others, and do not violate ERIE’s Code of Conduct or any laws or regulations. The Artificial Intelligence Policy is a resource to turn to if you have any questions on if and how you should use AI for work. Only use approved AI systems and know that as an ERIE Employee, you are responsible for general review and editing of output from AI systems. Output needs to be checked for accuracy, validity, appropriateness, and relevance prior to using it or sharing it with others. Call the ERIE Ethicsline at 1 (866) 469-5708 or visit erieinsurance.ethicspoint.com for Anonymous Reporting 24/7. 14
Be Above All • Carefully protect all information that is in your care. If you have doubts, treat it with the highest level of security and handle it accordingly. • Never access or process your own policy or claim, that of a friend or family member, even if you are assigned to work on it. Alert your leader to have the work reassigned. • Access information only if you are authorized to do so, and if you need to use the information to do your job. • Know when you can share personal data and when you can’t. Never give someone information if you are not sure that you should be sharing it. • Shield information from the view of others, and do not lose, misplace or leave behind any information where any unauthorized individuals could access it. • Report any loss or breach of personal information to your leader, Privacy, Information Security or the ERIE Ethicsline as soon as possible. You may also use this form: Report a Privacy Incident—Unauthorized Access, Use or Disclosure of Information. • Remember that you have an obligation to protect information, even if you no longer work for ERIE. Question: My friend asked me to look something up to make sure it was documented properly on their claim. Is this okay? Answer: No. Viewing the information outside of the scope of your job duties is a violation of our Code. Just because we have access to information, doesn’t make it acceptable to view it for non-work related purposes. If you are assigned to work on that claim, you are required to alert your leader and ask that the work be reassigned. 15
Records Management We are careful to create records that clearly and accurately reflect our intentions, actions and decisions. We maintain records responsibly, in line with regulations and ERIE’s Records Retention Schedule. See ERIE’s Records Retention Policy for more information. Did you know? There may be times when ERIE needs to hold onto records because of potential litigation or investigation. When there is a legal hold order in place, records must be retained even if their retention period has expired. If you have received a legal hold order email notice from the Law Division, or if you have heard about the possibility of litigation or an investigation, you must hold onto all records that may be related regardless of your opinion about the information contained in those records. See ERIE’s Legal Hold Policy for more information. Do not destroy or discard anything that may be related to the legal hold until the hold is released. Be Above All • Exercise good judgment when creating any professional communication and recognize that any email or message may be read in the future by someone without the benefit of context. • Keep records for the appropriate period of time under ERIE’s Records Retention Schedule. • Follow instructions to hold records and cease any normal record destruction when required to do so by a legal hold, or if you learn that the records may be relevant to a case or claim. If in doubt, contact the Law Division. Call the ERIE Ethicsline at 1 (866) 469-5708 or visit erieinsurance.ethicspoint.com for Anonymous Reporting 24/7. 16
Intellectual Property We value the knowledge and intellectual contribution of our Employees. Our intellectual property is critical to our success as a company and we must safeguard it at all times. We also protect the intellectual property of third parties. Did you know? Intellectual property is made up of assets each of us create and contribute in our daily work. For the most part, these assets are intangible, meaning, not physical objects, but ideas, concepts or rights. Here are some examples of intellectual property that we might encounter working for ERIE: Trademarks and service marks—are ways ERIE, and other companies, identify their products to make them stand out in the market. Some examples include: our ERIE service mark, the cupola logo and product or service brand names. Copyrights—are the rights we have to reproduce, distribute and display the written, graphic and audiovisual works that we create, such as policy forms and marketing materials. Trade secrets and proprietary information—are information that ERIE classifies as confidential and restricted. Some examples include underwriting guidelines, claims handling procedures, investment plans, strategic plans, Customer lists, custom software and computer coding designs. See ERIE’s Information Classifications segment in our Privacy & Information Security Handbook for more information. Patents—are federally-granted rights that prevent others from using company products and processes. Be Above All • Understand how to identify intellectual property and how to protect it. • Be mindful of copyrights that belong to others. Don’t copy, download, distribute, use or display materials that may be subject to copyright without permission of the copyright owner. See ERIE’s Copyright Policy for more information. • Contact the Law Division with any questions or guidance on recognizing when something is ERIE’s intellectual property, how to use ERIE’s intellectual property, or if you think ERIE’s intellectual property (or someone else’s) has been misused. Financial Statements At ERIE, we maintain accurate and complete accounts and have internal controls in place to ensure that we provide timely, accurate and transparent financial statements when filed or otherwise disclosed to the public. If we find discrepancies, we investigate and work quickly to resolve them. Be Above All • Be accurate and follow all company policies and internal control procedures when recording transactions. • Never intentionally falsify or misrepresent the facts of a transaction. • Exercise good judgment and follow corporate guidelines when preparing or approving expense reports. • Report any concerns about internal controls or the accuracy or integrity of ERIE’s financial statements or disclosures to one of the key contacts listed at the end of our Code. 17
Our Reputation Communication with the Public Our shareholders and Customers rely on us to be truthful and to uphold our values and Founding Purpose. This includes being honest, clear and accurate when we communicate to the public and the media about ERIE. Only certain individuals within ERIE have permission to speak on ERIE’s behalf. See ERIE’s Media Policy for more information. Be Above All • If you receive an inquiry from the public, including the media, contact Strategic Communications. • If you receive an inquiry from a regulator or government agency, contact Compliance or Government Relations. • Do not share internal ERIE information online or on social media, as this may result in an unintended public disclosure. Social Media We must exercise good judgment when using social media, regardless of whether our use is for business or personal reasons. See ERIE’s Employee Social Media Policy for more information. Be Above All • Social media is generally a public forum, and posts and comments might be viewed or read by anyone. Regardless of the context, you are personally responsible and accountable for your communications in social media. • Never disclose confidential information about ERIE or any of our Customers or business partners while using social media. • Remember, you are an extension of ERIE and your actions should reflect our core values and be legal, ethical and in alignment with company policies. • You should be respectful of potential readers and colleagues, and not post or share anything that others may perceive as obscene, threatening, harassing or discriminatory. Question: I was approached by a local news station while walking to my car and they asked me if I would comment on behalf of ERIE. Should I agree to make a comment? Answer: No. If you are not authorized to speak on behalf of ERIE within the scope of your job duties, you should never make a statement on behalf of ERIE. Call the ERIE Ethicsline at 1 (866) 469-5708 or visit erieinsurance.ethicspoint.com for Anonymous Reporting 24/7. 18
Political Activity To protect our interests and the interests of the insurance industry, ERIE participates in government relations and political engagement activities with elected officials and regulators. In doing this, ERIE observes all lobbying laws and regulations that apply to corporate political activity. Our nonpartisan political action committees serve as important vehicles to advocate for the insurance industry. Only selected ERIE Employees in the Law Division are designated to speak on behalf of ERIE regarding our position on pending legislation. All others should not speak on behalf of ERIE in this regard. Be Above All • If you participate in personal political activities, do not use ERIE’s assets to support those activities, and do not solicit contributions from fellow Employees. • Avoid making statements on political issues that could appear to be speaking for ERIE, such as mentioning ERIE’s name or your job title. • If you participate in corporate political activity on ERIE’s behalf, know and follow the laws and regulations that govern this process. • If you have questions, contact the SVP of Law or VP of Government Relations. 19
Our Conduct What happens if someone violates our Code? We all have a responsibility to uphold our Code and to raise concerns of suspected or actual violations. All violations will be investigated, and appropriate action will be taken, which may include corrective action, up to and including termination of employment or the business relationship. Speak Up What: Speaking up means looking out for ERIE, for each other and for our Customers. It means being responsible for recognizing illegal, unethical, unsafe or unprofessional behavior, as well as other violations of our Code or company policies. If you are an ERIE leader: it also means promoting a culture which encourages Employees to ask questions, report concerns, and ensure Employees are protected from retaliation. When we speak up we foster an environment which helps maintain a high ethical standard of conduct. When: Trust yourself. If it doesn’t feel right, it probably isn’t. Reporting concerns can help us identify issues early when it’s still possible to prevent damage to our business and reputation. How: ERIE has several different ways you can speak up if you have a question, concern or need to report misconduct. To speak up, contact: • Your leader or any ERIE leader • The Compliance Department • Your ERC or HRBP • Any of the Key Contacts at the end of our Code • ERIE Ethicsline ERIE Ethicsline is a service provided by an independent third party which you may use to make reports. This service includes a telephone hotline and a website where you can report concerns. You may choose to remain anonymous when reporting. All ethical and legal concerns reported to ERIE will be investigated and appropriate action taken. There are also several external reporting options available, depending on the nature of the concern and where the matter is located geographically. For more information, refer to: • Whistleblower Protection • Equal Employment Opportunity Commission (EEOC) • Securities and Exchange Commission (SEC) • Department of Labor (DOL) • FinCEN • State specific laws and regulations Call the ERIE Ethicsline at 1 (866) 469-5708 or visit erieinsurance.ethicspoint.com for Anonymous Reporting 24/7. 20
What will happen after I make a report? ERIE will take your report seriously and you will not be retaliated against for making an honest report. ERIE will not discipline, discriminate or retaliate against anyone who reports a concern in good faith, or who cooperates in any investigation or inquiry regarding such conduct, even if the allegation is proven to be unsubstantiated. ERIE will also do everything possible to protect the confidentiality of individuals who make a report or participate in an investigation. ERIE will only share information about individual reports with those who need to know to carry out the investigation. If misconduct is discovered, appropriate corrective action will be taken. What happens if the company becomes the subject of an investigation? If ERIE becomes the subject of an investigation, it is important that we maintain a positive and respectful working relationship with regulators, auditors and other entities. We may be asked to help coordinate these investigations. If so, we must respond honestly, completely and timely. Compliance and Law will help guide us through those investigations. Call Ethicsline Information Recorded Routed to Restricted ERIE Leaders Investigated Appropriate Action Taken 21
Closing Thoughts Thank you for taking the time to read ERIE’s Code of Conduct. Every day, we work hard to build trust with our colleagues, Agents, Policyholders, vendor partners and the communities we serve. That trust has been built over generations but, unfortunately, it can be damaged by a single poor decision. While mistakes happen and we learn from them, acting ethically, with integrity and honesty, must always guide the decisions we make to maintain that trust and protect ERIE’s reputation. I encourage you to use this Code as a practical resource whenever you're unsure of the right course of action or facing an ethical dilemma. And if you see or become aware of behavior or activity that doesn't seem right, please speak up and notify the appropriate company personnel. Speaking up helps protect each other, our customers and the values that define ERIE. The Code may not address every situation you’ll encounter, but it can help you make informed decisions and connect you with the right resources. If you have any questions or concerns, contact the Compliance Department, Human Resources or any of the key contacts listed on the next page. We’re here to help. ERIE is the company it is today because of Employees who choose to do the right thing every day. Our customers, Agents and communities count on us to uphold that commitment, and I know we will continue to do so together. Thank you for everything you do to help create, maintain and foster a culture of ethics, integrity and compliance. — Mandy Elder Vice President, Compliance & Ethics Conclusion “Simple common sense mixed with plain decency.” – H.O. Hirt Call the ERIE Ethicsline at 1 (866) 469-5708 or visit erieinsurance.ethicspoint.com for Anonymous Reporting 24/7. 22
23 Key Contacts Mandy Elder Vice President, Compliance & Ethics and AML/OFAC Officer Mandy.Elder@Erieinsurance.com (814) 870-2292 Stephen Murdock Vice President, Corporate Internal Audit Officer Stephen.Murdock@erieinsurance.com (814) 870-2635 James Nealon III Senior Vice President, Law James.NealonIII@erieinsurance.com (814) 870-3183 Karen Skarupski Senior Vice President, Human Resources Karen.Skarupski@erieinsurance.com (814) 870-3319 ERIE Ethicsline erieinsurance.ethicspoint.com 1 (866) 469-5708 This Code is a statement of ERIE’s compliance and ethics requirements. However, it is not a complete statement of ERIE policies. Certain ERIE policies are linked in this document for individuals internal to ERIE to review. These links are for ease of reference. This Code does not create an employment or third-party contract. While we are all responsible to comply with our Code, in rare occasions, our Executive Officers or Directors may receive a waiver of certain obligations. Only our Board of Directors or its delegated committee can grant such a waiver and if approved, the waiver will be disclosed to our Shareholders as required by laws and regulations.
OFP99 10/26 This Code is a statement of ERIE’s compliance and ethics requirements. However, it is not a complete statement of ERIE policies. Certain ERIE policies are linked in this document for individuals internal to ERIE to review. These links are for ease of reference. This Code does not create an employment or third-party contract. While we are all responsible to comply with our Code, in rare occasions, our Executive Officers or Directors may receive a waiver of certain obligations. Only our Board of Directors or its delegated committee can grant such a waiver and if approved, the waiver will be disclosed to our Shareholders as required by laws and regulations.
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Timothy G. NeCastro, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Erie Indemnity Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| Date: | October 29, 2026 | |||||||
| /s/ Timothy G. NeCastro | ||||||||
| Timothy G. NeCastro | ||||||||
| President & CEO | ||||||||
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Julie M. Pelkowski, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Erie Indemnity Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| Date: | October 29, 2026 | |||||||
| /s/ Julie M. Pelkowski | ||||||||
| Julie M. Pelkowski | ||||||||
| Executive Vice President & CFO | ||||||||
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
We, Timothy G. NeCastro, Chief Executive Officer of the Erie Indemnity Company (the "Company"), and Julie M. Pelkowski, Chief Financial Officer of the Company, certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, that:
(1)The Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2026 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Timothy G. NeCastro | |||||
| Timothy G. NeCastro | |||||
| President & CEO | |||||
| /s/ Julie M. Pelkowski | |||||
| Julie M. Pelkowski | |||||
| Executive Vice President & CFO | |||||
| October 29, 2026 | |||||
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.