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Erie Indemnity Reports First Quarter 2025 Results

1. ERIE's net income rose to $138.4 million in Q1 2025. 2. Earnings per diluted share increased to $2.65 from $2.38 YoY. 3. Operating income before taxes grew by 9.1%, indicating strong performance. 4. Management fee revenue surged, notably in policy issuance and renewal. 5. Investment and other income also showed significant year-on-year improvements.

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Why Bullish?

The increase in earnings and operating income suggests robust financial health, similar to previous outperformances that influenced a positive market perception. Historical examples show that consistent earnings growth positively affects stock prices, demonstrated during robust quarters in 2021 and 2022, leading to increased investor confidence.

How important is it?

The reported financials reflect significant operational success for ERIE, influencing investor sentiment and stock attractiveness. This could lead to increased trading activity and investor interest, ultimately driving share price upward in the near term, particularly as earnings expectations align with longer-term growth.

Why Short Term?

Investors typically react quickly to positive earnings announcements, like ERIE's, resulting in potential short-term price increases. However, sustained impact depends on market conditions and subsequent quarters' performance.

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Net Income was $138.4 million, Earnings per Diluted Share was $2.65 , /PRNewswire/ -- Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the quarter ending March 31, 2025.  Net income was $138.4 million, or $2.65 per diluted share, in the first quarter of 2025, compared to $124.6 million, or $2.38 per diluted share, in the first quarter of 2024. 1Q 2025 (in thousands) 1Q'25 1Q'24 Operating income $      151,376 $      138,812 Investment income 19,536 15,079 Other income 3,834 3,411 Income before income taxes      174,746 157,302 Income tax expense 36,329 32,750 Net income $      138,417 $      124,552 Operating income before taxes increased $12.6 million, or 9.1 percent, in the first quarter of 2025 compared to the first quarter of 2024. Management fee revenue - policy issuance and renewal services increased $89.4 million, or 13.4 percent, in the first quarter of 2025 compared to the first quarter of 2024. Management fee revenue - administrative services increased $0.7 million, or 4.2 percent, in the first quarter of 2025 compared to the first quarter of 2024. Cost of operations - policy issuance and renewal services Commissions increased $61.1 million in the first quarter of 2025, compared to the first quarter of 2024, primarily driven by the growth in direct and affiliated assumed written premium and, to a lesser extent, an increase in agent incentive compensation. Non-commission expense increased $16.3 million in the first quarter of 2025 compared to the first quarter of 2024. Underwriting and policy processing expense increased $3.1 million primarily due to increased personnel costs. Information technology costs increased $11.3 million primarily due to an increase in hardware and software costs and personnel costs and a decrease in capitalized professional fees related to technology initiatives. Customer service costs increased $1.6 million primarily due to increased personnel costs and credit card processing fees. Personnel costs in the first quarter of 2025 were impacted by increased compensation including higher estimated costs for incentive plan awards compared to 2024. Income from investments before taxes totaled $19.5 million in the first quarter of 2025 compared to $15.1 million in the first quarter of 2024.  Net investment income was $19.9 million in the first quarter of 2025 compared to $15.9 million in the first quarter of 2024.  Net realized and unrealized gains on investments were $0.5 million in the first quarter of 2025 compared to $1.9 million in the first quarter of 2024.  Net impairment losses recognized in earnings were $0.9 million in the first quarter of 2025 compared to $2.7 million in the first quarter of 2024. Webcast Information Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on April 25, 2025.  Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com. Erie Insurance Group According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 12th largest homeowners insurer, 13th largest automobile insurer and 13th largest commercial lines insurer in the United States based on direct premiums written.  Founded in 1925, Erie Insurance is a Fortune 500 company and the 17th largest property/casualty insurer in the United States based on total lines net premium written.  Rated A+ (Superior) by A.M. Best, ERIE has more than 7 million policies in force and operates in 12 states and the District of Columbia.  News releases and more information are available on ERIE's website at www.erieinsurance.com. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:Statements contained herein that are not historical fact are forward-looking statements and, as such, are subject to risks and uncertainties that could cause actual events and results to differ, perhaps materially, from those discussed herein.  Forward-looking statements relate to future trends, events or results and include, without limitation, statements and assumptions on which such statements are based that are related to our plans, strategies, objectives, expectations, intentions, and adequacy of resources.  Examples of forward-looking statements are discussions relating to premium and investment income, expenses, operating results, and compliance with contractual and regulatory requirements.  Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict.  Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.  Among the risks and uncertainties, in addition to those set forth in our filings with the Securities and Exchange Commission, that could cause actual results and future events to differ from those set forth or contemplated in the forward-looking statements include the following: dependence upon our relationship with the Erie Insurance Exchange ("Exchange") and the management fee under the agreement with the subscribers at the Exchange; dependence upon our relationship with the Exchange and the growth of the Exchange, including: general business and economic conditions; factors impacting the timing of premium rates charged for policies; factors affecting insurance industry competition, including technological innovations; dependence upon the independent agency system; and ability to maintain our brand, including our reputation for customer service; dependence upon our relationship with the Exchange and the financial condition of the Exchange, including: the Exchange's ability to maintain acceptable financial strength ratings; factors affecting the quality and liquidity of the Exchange's investment portfolio; changes in government regulation of the insurance industry; litigation and regulatory actions; emergence of significant unexpected events, including pandemics, 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 and retain talented management and employees; ability to ensure system availability and effectively manage technology initiatives; difficulties with technology, data or network security breaches, including cyber attacks; ability to maintain uninterrupted business operations; compliance with complex and evolving laws and regulations and outcome of pending and potential litigation; factors affecting the quality and liquidity of our investment portfolio; and ability to meet liquidity needs and access capital. A forward-looking statement speaks only as of the date on which it is made and reflects our analysis only as of that date.  We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changes in assumptions or otherwise. Erie Indemnity Company Consolidated Statements of Operations (dollars in thousands, except per share data) Three months ended March 31, 2025 2024 (Unaudited) Operating revenue Management fee revenue - policy issuance and renewal services $           755,049 $           665,686 Management fee revenue - administrative services 17,645 16,934 Administrative services reimbursement revenue 210,273 191,567 Service agreement revenue 6,432 6,514   Total operating revenue 989,399 880,701 Operating expenses Cost of operations - policy issuance and renewal services 627,750 550,322 Cost of operations - administrative services 210,273 191,567   Total operating expenses 838,023 741,889 Operating income 151,376 138,812 Investment income Net investment income 19,948 15,903 Net realized and unrealized investment gains 502 1,853 Net impairment losses recognized in earnings (914) (2,677) Total investment income 19,536 15,079 Other income 3,834 3,411 Income before income taxes 174,746 157,302 Income tax expense 36,329 32,750 Net income $           138,417 $           124,552 Net income per share Class A common stock – basic $                  2.97 $                  2.67 Class A common stock – diluted $                  2.65 $                  2.38 Class B common stock – basic and diluted $                   446 $                   401 Weighted average shares outstanding – Basic Class A common stock 46,188,903 46,189,014 Class B common stock 2,542 2,542 Weighted average shares outstanding – Diluted Class A common stock 52,304,384 52,301,803 Class B common stock 2,542 2,542 Dividends declared per share Class A common stock $                1.365 $               1.275 Class B common stock $              204.75 $             191.25 Erie Indemnity Company Consolidated Statements of Financial Position (in thousands) March 31,2025 December 31,2024 (Unaudited) Assets Current assets: Cash and cash equivalents (includes restricted cash of $25,164 and $23,559, respectively) $         260,379 $         298,397 Available-for-sale securities 52,976 44,604 Receivables from Erie Insurance Exchange and affiliates, net 719,898 707,060 Prepaid expenses and other current assets, net 78,387 83,902 Accrued investment income 10,849 11,069 Total current assets 1,122,489 1,145,032 Available-for-sale securities, net 1,047,540 991,726 Equity securities 81,814 85,891 Available-for-sale and equity securities lent 12,289 7,285 Fixed assets, net 513,088 513,494 Agent loans, net 85,723 80,597 Defined benefit pension plan 57,480 21,311 Other assets, net 47,805 43,278 Total assets $     2,968,228 $     2,888,614 Liabilities and shareholders' equity Current liabilities: Commissions payable $         429,380 $         408,309 Agent incentive compensation 42,190 75,458 Accounts payable and accrued liabilities 210,708 190,028 Dividends payable 63,569 63,569 Contract liability 44,102 42,761 Deferred executive compensation 9,636 14,874 Securities lending payable 12,706 7,513 Total current liabilities 812,291 802,512 Defined benefit pension plan 26,197 28,070 Contract liability 21,703 21,170 Deferred executive compensation 22,944 19,721 Deferred income taxes, net 3,704 6,418 Other long-term liabilities 14,038 23,465 Total liabilities 900,877 901,356 Shareholders' equity 2,067,351 1,987,258 Total liabilities and shareholders' equity $     2,968,228 $     2,888,614 SOURCE Erie Indemnity Company WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

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