Erie Insurance publishes full year financials

Operating income saw a huge spurt, supported by management fee revenue

Erie Insurance publishes full year financials

Insurance News

By Kenneth Araullo

Erie Indemnity Company (Erie Insurance) has released its financial outcomes for the year ending December 31, 2023, revealing an increase in net income to $446.1 million, or $8.53 per diluted share, up from $298.6 million, or $5.71 per diluted share, in 2022.

The fourth quarter of 2023 also saw a rise in net income, reaching $110.9 million, or $2.12 per diluted share, compared to $65.5 million, or $1.25 per diluted share, in the final quarter of 2022.

The company experienced a 38.3% increase in operating income before taxes in 2023, amounting to an additional $144.0 million over the previous year. This growth was supported by a 17.0% rise in management fee revenue from policy issuance and renewal services, totaling an increase of $354.2 million, and a 9.2% uptick in revenue from administrative services, amounting to an additional $5.3 million.

Investment income, Q4 performance

Erie Indemnity’s operational costs associated with policy issuance and renewal services also saw an increase, with commissions rising to $169.0 million due to expanded direct and affiliated assumed written premium, despite a reduction in agent incentive compensation.

Non-commission expenses also rose by $46.9 million, driven by increases in underwriting, policy processing, information technology, and administrative costs. The company noted an increase in personnel costs, offset by a decrease in pension costs due to a higher discount rate compared to 2022.

Investment income before taxes for Erie Indemnity surged to $29.0 million in 2023 from $0.6 million in 2022, with net investment income increasing to $44.6 million from $28.6 million in the previous year. The company also reported a reduction in net realized and unrealized losses on investments to $5.8 million in 2023, from $27.3 million in 2022.

In the fourth quarter of 2023, Erie Indemnity saw operating income before taxes increase by 56.1%, or $45.7 million, compared to the same period in 2022. Management fee revenue from policy issuance and renewal services grew by 19.5%, or $98.0 million, and administrative services revenue increased by 12.2%, or $1.8 million.

The insurer also noted that the fourth quarter witnessed notable growth in commissions and a slight rise in non-commission expenses.

In other recent developments, Erie Insurance recently announced the promotion of Andy Abramczyk to senior vice president.

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