Erie Indemnity Company has disclosed its financial outcomes for the first quarter ending March 31.
The company reported a net income of $124.6 million, or $2.38 per diluted share, marking an increase from $86.2 million, or $1.65 per diluted share, recorded in the same quarter of the previous year.
The firm experienced a 25.6% rise in operating income before taxes, which amounted to an increase of $28.3 million for the first quarter of 2024, compared to the corresponding period in 2023.
Regarding revenue specifics, management fee revenue from policy issuance and renewal services witnessed an upsurge of $107.6 million, or 19.3%, in the first quarter of 2024 relative to the first quarter of 2023. Additionally, management fee revenue from administrative services climbed by $1.7 million, or 11.5%, in the same period.
The cost of operations linked to policy issuance and renewal services also saw significant changes. Commissions grew by $67 million, primarily due to an increase in direct and affiliated assumed written premium along with heightened agent incentive compensation. Furthermore, non-commission expenses escalated by $14.3 million.
This increase included a $4.4 million rise in underwriting and policy processing costs, primarily driven by higher underwriting report and personnel expenses.
Conversely, information technology costs decreased by $3.7 million, mainly due to a rise in capitalized professional fees and personnel costs related to technological initiatives. Sales and advertising expenditures surged by $4.3 million, primarily due to increased agent-related costs, while administrative and other costs rose by $7.2 million, largely due to increased personnel and travel expenses.
The investment income before taxes showed a robust recovery, posting $15.1 million in the first quarter of 2024, in contrast to a loss of $4.7 million in the first quarter of 2023. Net investment income reached $15.9 million, a significant improvement from $2.2 million in the prior year. This included $0.5 million of limited partnership earnings, compared to losses of $10.8 million in the first quarter of 2023.
Additionally, the firm realized net gains of $1.9 million on investments during the quarter, a recovery from losses of $5.3 million in the same quarter of the previous year. Net impairment losses recognized in earnings were reported at $2.7 million, up from $1.6 million in the first quarter of 2023.
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