Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 24, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 0-24000 | |
Entry Registrant Name | ERIE INDEMNITY COMPANY | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 25-0466020 | |
Entity Address, Address Line One | 100 Erie Insurance Place, | |
Entity Address, City or Town | Erie, | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 16530 | |
City Area Code | 814 | |
Local Phone Number | 870-2000 | |
Title of 12(b) Security | Class A common stock, | |
Trading Symbol | ERIE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0000922621 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 46,189,068 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 2,542 |
STATEMENTS OF OPERATIONS (UNAUD
STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating revenue | ||||
Operating revenue | $ 657,019 | $ 647,710 | $ 1,273,756 | $ 1,241,816 |
Operating expenses | ||||
Operating expenses | 565,830 | 551,100 | 1,096,876 | 1,059,084 |
Operating income | 91,189 | 96,610 | 176,880 | 182,732 |
Investment income | ||||
Net investment income | 7,373 | 8,030 | 15,742 | 16,547 |
Net realized investment gains (losses) | 6,526 | 1,302 | (4,280) | 3,805 |
Net impairment losses recognized in earnings | (17) | (84) | (3,070) | (162) |
Equity in (losses) earnings of limited partnerships | (2,329) | 404 | (6,034) | (743) |
Total investment income | 11,553 | 9,652 | 2,358 | 19,447 |
Interest expense, net | 2 | 272 | 5 | 721 |
Other (expense) income | (258) | 48 | (624) | 95 |
Income before income taxes | 102,482 | 106,038 | 178,609 | 201,553 |
Income tax expense | 20,505 | 18,284 | 37,306 | 38,488 |
Net income | $ 81,977 | $ 87,754 | $ 141,303 | $ 163,065 |
Class A common stock | ||||
Class B – Basic and diluted EPS: | ||||
Class A common stock - basic (in dollars per share) | $ 1.76 | $ 1.88 | $ 3.03 | $ 3.50 |
Class A common stock - diluted (in dollars per share) | $ 1.57 | $ 1.68 | $ 2.70 | $ 3.12 |
Weighted average shares outstanding – Basic | ||||
Common stock - basic (in shares) | 46,187,808 | 46,188,994 | 46,188,299 | 46,188,668 |
Weighted average shares outstanding – Diluted | ||||
Common stock - diluted (in shares) | 52,302,981 | 52,314,700 | 52,313,667 | 52,313,371 |
Dividends declared per share | ||||
Common stock (in dollars per share) | $ 0.965 | $ 0.90 | $ 1.93 | $ 1.80 |
Class B common stock | ||||
Class B – Basic and diluted EPS: | ||||
Class B common stock – basic and diluted (in dollars per share) | $ 264 | $ 283 | $ 455 | $ 525 |
Weighted average shares outstanding – Basic | ||||
Common stock - basic (in shares) | 2,542 | 2,542 | 2,542 | 2,542 |
Weighted average shares outstanding – Diluted | ||||
Common stock - diluted (in shares) | 2,542 | 2,542 | 2,542 | 2,542 |
Dividends declared per share | ||||
Common stock (in dollars per share) | $ 144.75 | $ 135 | $ 289.50 | $ 270 |
Management fee revenue - policy issuance and renewal services, net | ||||
Operating revenue | ||||
Operating revenue | $ 483,795 | $ 480,513 | $ 927,545 | $ 911,496 |
Operating expenses | ||||
Operating expenses | 413,865 | 405,005 | 793,357 | 770,509 |
Management fee revenue - administrative services, net | ||||
Operating revenue | ||||
Operating revenue | 14,813 | 14,195 | 29,584 | 28,146 |
Administrative services reimbursement revenue | ||||
Operating revenue | ||||
Operating revenue | 151,965 | 146,095 | 303,519 | 288,575 |
Operating expenses | ||||
Operating expenses | 151,965 | 146,095 | 303,519 | 288,575 |
Service agreement revenue | ||||
Operating revenue | ||||
Operating revenue | $ 6,446 | $ 6,907 | $ 13,108 | $ 13,599 |
STATEMENTS OF COMPREHENSIVE INC
STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 81,977 | $ 87,754 | $ 141,303 | $ 163,065 |
Other comprehensive income, net of tax | ||||
Change in unrealized holding gains on available-for-sale securities | 37,451 | 2,579 | 5,215 | 8,057 |
Amortization of prior service costs and net actuarial loss on pension and other postretirement plans | 2,660 | 1,231 | 5,320 | 2,463 |
Total other comprehensive income, net of tax | 40,111 | 3,810 | 10,535 | 10,520 |
Comprehensive income | $ 122,088 | $ 91,564 | $ 151,838 | $ 173,585 |
STATEMENTS OF FINANCIAL POSITIO
STATEMENTS OF FINANCIAL POSITION $ in Thousands | Jun. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares |
Current assets: | ||
Cash and cash equivalents | $ 257,738 | $ 336,739 |
Available-for-sale securities | 27,409 | 32,810 |
Equity securities | 1,416 | 2,381 |
Receivables from Erie Insurance Exchange and affiliates, net | 506,690 | 468,636 |
Prepaid expenses and other current assets | 60,668 | 44,943 |
Federal income taxes recoverable | 0 | 462 |
Accrued investment income | 5,317 | 5,433 |
Total current assets | 859,238 | 891,404 |
Available-for-sale securities, net | 777,416 | 697,891 |
Equity securities | 73,973 | 64,752 |
Limited partnership investments | 15,463 | 26,775 |
Fixed assets, net | 246,572 | 221,379 |
Agent loans, net | 58,602 | 60,978 |
Deferred income taxes, net | 18,895 | 17,186 |
Other assets | 32,702 | 35,875 |
Total assets | 2,082,861 | 2,016,240 |
Current liabilities: | ||
Commissions payable | 282,436 | 262,963 |
Agent bonuses | 60,264 | 96,053 |
Accounts payable and accrued liabilities | 137,745 | 134,957 |
Dividends payable | 44,940 | 44,940 |
Contract liability | 36,625 | 35,938 |
Deferred executive compensation | 9,674 | 10,882 |
Federal income taxes payable | 15,441 | 0 |
Current portion of long-term borrowings | 1,998 | 1,979 |
Total current liabilities | 589,123 | 587,712 |
Defined benefit pension plans | 161,458 | 145,659 |
Long-term borrowings | 94,849 | 95,842 |
Contract liability | 18,826 | 18,435 |
Deferred executive compensation | 9,571 | 13,734 |
Other long-term liabilities | 14,895 | 21,605 |
Total liabilities | 888,722 | 882,987 |
Shareholders’ equity | ||
Additional paid-in-capital | 16,487 | 16,483 |
Accumulated other comprehensive loss | (106,333) | (116,868) |
Retained earnings | 2,427,905 | 2,377,558 |
Total contributed capital and retained earnings | 2,340,229 | 2,279,343 |
Treasury stock, at cost; 22,110,132 shares held | (1,162,546) | (1,158,910) |
Deferred compensation | 16,456 | 12,820 |
Total shareholders’ equity | 1,194,139 | 1,133,253 |
Total liabilities and shareholders’ equity | $ 2,082,861 | $ 2,016,240 |
Treasury stock (in shares) | shares | 22,110,132 | 22,110,132 |
Class A common stock | ||
Shareholders’ equity | ||
Common stock | $ 1,992 | $ 1,992 |
Common stock, stated value per share (in dollars per share) | $ / shares | $ 0.0292 | $ 0.0292 |
Common stock, authorized (in shares) | shares | 74,996,930 | 74,996,930 |
Common stock, issued (in shares) | shares | 68,299,200 | 68,299,200 |
Common stock, outstanding (in shares) | shares | 46,189,068 | 46,189,068 |
Class B common stock | ||
Shareholders’ equity | ||
Common stock | $ 178 | $ 178 |
Shares, Issued | shares | 2,542 | |
Shares, Outstanding | shares | 2,542 | |
Common stock, stated value per share (in dollars per share) | $ / shares | $ 70 | $ 70 |
Common stock, authorized (in shares) | shares | 3,070 | 3,070 |
Ratio for converting shares of Class B common stock into shares of Class A common stock (as a percent) | 2,400 | 2,400 |
STATEMENTS OF FINANCIAL POSIT_2
STATEMENTS OF FINANCIAL POSITION (Parenthetical) | Jun. 30, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares |
Treasury stock (in shares) | 22,110,132 | 22,110,132 |
Class A common stock | ||
Common stock, stated value per share (in dollars per share) | $ / shares | $ 0.0292 | $ 0.0292 |
Common stock, authorized (in shares) | 74,996,930 | 74,996,930 |
Common stock, issued (in shares) | 68,299,200 | 68,299,200 |
Common stock, outstanding (in shares) | 46,189,068 | 46,189,068 |
Class B common stock | ||
Common stock, stated value per share (in dollars per share) | $ / shares | $ 70 | $ 70 |
Common stock, authorized (in shares) | 3,070 | 3,070 |
Ratio for converting shares of Class B common stock into shares of Class A common stock (as a percent) | 2,400 | 2,400 |
STATEMENTS OF SHAREHOLDERS' EQU
STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Cumulative effect adjustment | [3] | Class A common stock | Class B common stock | Common stockClass A common stock | Common stockClass B common stock | Additional paid-in-capital | Accumulated other comprehensive (loss) income | Retained earnings | Retained earningsCumulative effect adjustment | [3] | Retained earningsClass A common stock | Retained earningsClass B common stock | Treasury stock | Deferred compensation | |
Beginning balance at Dec. 31, 2018 | $ 973,672 | $ 1,992 | $ 178 | $ 16,459 | $ (130,284) | $ 2,231,417 | $ (1,157,625) | $ 11,535 | |||||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Net income | 75,311 | 75,311 | |||||||||||||||
Other comprehensive (loss) income | 6,710 | 6,710 | |||||||||||||||
Dividends declared: | $ (41,570) | $ (343) | $ (41,570) | $ (343) | |||||||||||||
Net purchase of treasury stock | [1] | 24 | 24 | 0 | |||||||||||||
Deferred compensation | 0 | (1,154) | 1,154 | ||||||||||||||
Ending balance at Mar. 31, 2019 | 1,013,804 | 1,992 | 178 | 16,483 | (123,574) | 2,264,815 | (1,158,779) | 12,689 | |||||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Common stock (in dollars per share) | $ 0.90 | $ 135 | |||||||||||||||
Beginning balance at Dec. 31, 2018 | 973,672 | 1,992 | 178 | 16,459 | (130,284) | 2,231,417 | (1,157,625) | 11,535 | |||||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Net income | 163,065 | ||||||||||||||||
Other comprehensive (loss) income | 10,520 | 10,520 | |||||||||||||||
Ending balance at Jun. 30, 2019 | 1,063,454 | 1,992 | 178 | 16,483 | (119,764) | 2,310,655 | (1,158,300) | 12,210 | |||||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Common stock (in dollars per share) | $ 1.80 | $ 270 | |||||||||||||||
Beginning balance at Mar. 31, 2019 | 1,013,804 | 1,992 | 178 | 16,483 | (123,574) | 2,264,815 | (1,158,779) | 12,689 | |||||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Net income | 87,754 | 87,754 | |||||||||||||||
Other comprehensive (loss) income | 3,810 | 3,810 | |||||||||||||||
Dividends declared: | $ (41,570) | $ (344) | (41,570) | (344) | |||||||||||||
Net purchase of treasury stock | [1] | 0 | 0 | 0 | |||||||||||||
Deferred compensation | 0 | (443) | 443 | ||||||||||||||
Rabbi trust distribution | [2] | 0 | 922 | (922) | |||||||||||||
Ending balance at Jun. 30, 2019 | 1,063,454 | 1,992 | 178 | 16,483 | (119,764) | 2,310,655 | (1,158,300) | 12,210 | |||||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Common stock (in dollars per share) | $ 0.90 | $ 135 | |||||||||||||||
Beginning balance at Dec. 31, 2019 | 1,133,253 | $ (1,075) | 1,992 | 178 | 16,483 | (116,868) | 2,377,558 | $ (1,075) | (1,158,910) | 12,820 | |||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Net income | 59,326 | 59,326 | |||||||||||||||
Other comprehensive (loss) income | (29,576) | (29,576) | |||||||||||||||
Dividends declared: | $ (44,572) | $ (368) | (44,572) | (368) | |||||||||||||
Net purchase of treasury stock | [1] | 4 | 4 | 0 | |||||||||||||
Deferred compensation | 0 | (772) | 772 | ||||||||||||||
Ending balance at Mar. 31, 2020 | 1,116,992 | 1,992 | 178 | 16,487 | (146,444) | 2,390,869 | (1,159,682) | 13,592 | |||||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Common stock (in dollars per share) | $ 0.965 | $ 144.75 | |||||||||||||||
Beginning balance at Dec. 31, 2019 | 1,133,253 | $ (1,075) | 1,992 | 178 | 16,483 | (116,868) | 2,377,558 | $ (1,075) | (1,158,910) | 12,820 | |||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Net income | 141,303 | ||||||||||||||||
Other comprehensive (loss) income | 10,535 | 10,535 | |||||||||||||||
Ending balance at Jun. 30, 2020 | 1,194,139 | 1,992 | 178 | 16,487 | (106,333) | 2,427,905 | (1,162,546) | 16,456 | |||||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Common stock (in dollars per share) | $ 1.93 | $ 289.50 | |||||||||||||||
Beginning balance at Mar. 31, 2020 | 1,116,992 | 1,992 | 178 | 16,487 | (146,444) | 2,390,869 | (1,159,682) | 13,592 | |||||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Net income | 81,977 | 81,977 | |||||||||||||||
Other comprehensive (loss) income | 40,111 | 40,111 | |||||||||||||||
Dividends declared: | $ (44,573) | $ (368) | $ (44,573) | $ (368) | |||||||||||||
Net purchase of treasury stock | [1] | 0 | 0 | 0 | |||||||||||||
Deferred compensation | 0 | (3,568) | 3,568 | ||||||||||||||
Rabbi trust distribution | [2] | 0 | 704 | (704) | |||||||||||||
Ending balance at Jun. 30, 2020 | $ 1,194,139 | $ 1,992 | $ 178 | $ 16,487 | $ (106,333) | $ 2,427,905 | $ (1,162,546) | $ 16,456 | |||||||||
Increase (decrease) in shareholders' equity | |||||||||||||||||
Common stock (in dollars per share) | $ 0.965 | $ 144.75 | |||||||||||||||
[1] | Net purchases of treasury stock in 2020 and 2019 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 a retired director in 2020 and 2019. | ||||||||||||||||
[3] | The cumulative effect adjustment is related to the implementation of new credit loss allowance accounting guidance effective January 1, 2020. See Note 2. "Significant Accounting Policies". |
STATEMENTS OF SHAREHOLDERS' E_2
STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Class A common stock | ||||||
Dividends declared (in dollars per share) | $ 0.965 | $ 0.965 | $ 0.90 | $ 0.90 | $ 1.93 | $ 1.80 |
Class B common stock | ||||||
Dividends declared (in dollars per share) | $ 144.75 | $ 144.75 | $ 135 | $ 135 | $ 289.50 | $ 270 |
STATEMENTS OF CASH FLOWS (UNAUD
STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities | ||
Management fee received | $ 937,962 | $ 902,958 |
Administrative services reimbursements received | 279,689 | 296,390 |
Service agreement fee received | 13,108 | 13,599 |
Net investment income received | 18,217 | 16,799 |
Limited partnership distributions | 532 | 1,292 |
Commissions paid to agents | (448,622) | (434,599) |
Agents bonuses paid | (100,185) | (108,540) |
Salaries and wages paid | (100,360) | (101,765) |
Employee benefits paid | (15,962) | (22,085) |
General operating expenses paid | (133,422) | (117,915) |
Administrative services expenses paid | (298,046) | (291,136) |
Income taxes paid | (25,625) | (39,863) |
Interest paid | (4) | (719) |
Net cash provided by operating activities | 127,282 | 114,416 |
Purchase of investments: | ||
Available-for-sale securities | (198,192) | (615,384) |
Equity securities | (44,407) | 0 |
Limited partnerships | (19) | (9) |
Other investments | (603) | (124) |
Proceeds from investments: | ||
Available-for-sale securities sales | 68,977 | 430,596 |
Available-for-sale securities maturities/calls | 58,722 | 261,902 |
Equity securities | 35,684 | 0 |
Limited partnerships | 577 | 2,450 |
Purchase of fixed assets | (37,426) | (34,260) |
Loans to agents | (2,313) | (6,947) |
Collections on agent loans | 3,577 | 3,991 |
Net cash (used in) provided by investing activities | (115,423) | 42,215 |
Cash flows from financing activities | ||
Dividends paid to shareholders | (89,881) | (83,824) |
Net payments on long-term borrowings | (979) | (962) |
Net cash used in financing activities | (90,860) | (84,786) |
Net (decrease) increase in cash and cash equivalents | (79,001) | 71,845 |
Cash and cash equivalents, beginning of period | 336,739 | 266,417 |
Cash and cash equivalents, end of period | 257,738 | 338,262 |
Supplemental disclosure of noncash transactions | ||
Transfer of investments from limited partnerships to equity securities | 4,188 | 0 |
Operating lease assets obtained in exchange for new operating lease liabilities | 3,440 | 33,136 |
Liability incurred to purchase fixed assets | $ 814 | $ 14,980 |
Nature of Operations
Nature of Operations | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 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 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 its 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 us as their common attorney-in-fact to transact certain business on their behalf. Pursuant to the subscriber's agreement for acting as attorney-in-fact in these two capacities, we earn 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 to 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 additional commissions and bonuses to agents, which are 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. Included in these expenses are allocations of costs for departments that support these policy issuance and renewal functions. By virtue of 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 an attorney-in-fact. Indemnity serves as the attorney-in-fact on behalf of the Exchange with respect to its administrative services. 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 amounts incurred for these services are reimbursed to Indemnity at cost in accordance with the subscriber's agreement and the service agreements. 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. If any events occurred that impaired the Exchange’s ability to grow or sustain its financial condition, including but not limited to reduced 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 would have as a consequence a decline in the total premiums paid and a correspondingly adverse effect on the amount of the management fees we receive. We also have an exposure to a concentration of credit risk related to the unsecured receivables due from the Exchange for its management fee and cost reimbursements. See Note 13, "Concentrations of Credit Risk". Coronavirus ("COVID-19") pandemic On March 11, 2020, the outbreak of the coronavirus ("COVID-19") was declared a global pandemic. The significant volatility in the financial markets, economic disruption and uncertainty resulting from the COVID-19 pandemic that began in the first quarter of 2020 continues to evolve and the pandemic’s ultimate impact and duration remain highly uncertain at this time. The Exchange’s previously announced rate reductions that become effective in the second half of 2020, coupled with the uncertain economic conditions, will likely continue to constrain the Exchange’s premium growth which would impact our management fee revenue. The Exchange’s underwriting profitability has improved largely due to declines in claims frequency. The extent and duration of changes in consumer behavior and driving patterns and the resulting impact to the Exchange’s growth and financial condition remain uncertain. The economic conditions resulting from the COVID-19 pandemic may negatively impact the collectability of the Exchange’s premiums receivable, however no such impact has been noted through the date of this report. While our investment portfolio |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of presentation The accompanying unaudited 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. 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 six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. For further information, refer to the financial statements and footnotes included in our Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission on February 27, 2020. 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 adopted accounting standards In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2016-13 "Financial Instruments-Credit Losses" , which requires financial assets measured at amortized cost to be presented at the net amount expected to be collected through the use of a new forward-looking current expected credit loss model and credit losses relating to available-for-sale debt securities to be recognized through an allowance for credit losses. We adopted this guidance, which applies to our receivable from Erie Insurance Exchange and affiliates, agent loans and investments, on January 1, 2020. For assets measured at amortized cost for which a current expected credit loss allowance was required, we adopted the guidance using the modified-retrospective approach. At January 1, 2020, we recorded current expected credit loss allowances related to agent loans of $0.8 million and receivables from Erie Insurance Exchange and affiliates of $0.6 million. This resulted in the recording of a cumulative effect adjustment, net of taxes, to retained earnings of $1.1 million. Our available-for-sale investments are not measured at amortized cost, and therefore do not require the use of a current expected credit loss model. Any credit losses, however, are required to be recorded as an allowance for credit losses rather than a reduction of the carrying value of the asset. For available-for-sale securities, we adopted the guidance using the prospective approach and recorded an initial allowance for credit losses of $0.6 million at March 31, 2020. The adoption of this standard did not have a material impact on our Statements of Financial Position, net income or net cash flows. Investments Available-for-sale securities – Fixed maturity debt securities and redeemable preferred stock are classified as available-for-sale and reported at fair value with unrealized investment gains and losses, net of income taxes, recognized in other comprehensive income. Available-for-sale securities with a remaining maturity of 12 months or less and any security that we intend to sell as of the reporting date are classified as current assets. Available-for-sale securities in an unrealized loss position are evaluated to determine whether the impairment is a result of credit loss or other factors. If we have the intent to sell or it's more likely than not that we would be required to sell the security before recovery of the amortized cost basis, the entire impairment is recognized in earnings. Securities that have experienced a decline in fair value that we do not intend to sell, and that we will not be required to sell before recovery, are evaluated to determine if the decline in fair value is credit related. Impairment resulting from a credit loss is recognized in earnings with a corresponding allowance on the balance sheet. Future recoveries of credit loss result in an adjustment to the allowance and earnings in the period the credit conditions improve. Factors considered in the evaluation of credit loss include the extent to which fair value is less than cost and fundamental factors specific to the issuer such as financial condition, changes in credit ratings, near and long-term business prospects and other factors, as well as the likelihood of recovery of the amortized cost of the security. If the qualitative review indicates credit impairment, the allowance for credit loss is measured as the amount that the security’s amortized cost exceeds the present value of cash flows expected to be collected and is limited to the amount that fair value is below amortized cost. Realized gains and losses and investment income – Realized gains and losses on sales of available-for-sale and equity securities are recognized in income based upon the specific identification method and reported as net realized investment gains (losses). Interest income is recognized as earned and includes amortization of premium and accretion of discount. Income is recognized based on the constant effective yield method, which includes periodically updated prepayment assumptions obtained from third party data sources on our prepaying securities. The effective yield for prepaying securities is recalculated on a retrospective basis. Dividend income is recognized at the ex-dividend date. Both interest and dividend income are reported as net investment income. We do not record an allowance for credit losses on accrued investment income as any amount deemed uncollectible is reversed from interest income in the period the expected payment defaults. Agent loans Agent loans, the majority of which are senior secured, are carried at unpaid principal balance with interest recorded in investment income as earned. The current portion of agent loans is recorded in prepaid expenses and other current assets. The adoption of ASU 2016-13 on January 1, 2020 requires the recording of a current expected credit loss allowance on these loans. The allowance is estimated using available loss history and/or external loss rates based on comparable loan losses and considers current conditions and forecasted information. When establishing the expected credit loss allowance upon implementation of ASU 2016-13, a cumulative effect adjustment was recorded to beginning retained earnings. Future changes to the allowance will be recognized in earnings as adjustments to net impairment losses. Prior to the adoption of ASU 2016-13, we did not record an allowance for credit losses as the majority of these loans are senior secured and have had insignificant default amounts. Other assets Other assets include operating lease assets and other long-term prepaid assets. The determination of whether an arrangement is a lease, and the related lease classification, is made at inception of a contract. Our leases are classified as operating leases. Operating lease assets and liabilities are recorded at inception based on the present value of the future minimum lease payments over the lease term at commencement date. When an implicit rate for the lease is not available, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of future payments. Lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Most of our lease contracts contain lease and non-lease components. Non-lease components are expensed as incurred. Operating lease assets are included in other assets, and the current and noncurrent portions of the operating lease liabilities are included in accounts payable and accrued expenses and other long-term liabilities, respectively. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The majority of our revenue is derived from the subscriber’s agreement between us and the subscribers (policyholders) at the Exchange. Pursuant to the subscriber’s agreement, we earn 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 Exchange, as well as the service provider for its insurance subsidiaries, with respect to all administrative services. The transaction price, including management fee revenue and administrative service reimbursement revenue, 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 allocation 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. In 2020, we are reviewing our transaction price allocation quarterly to consider the most current economic conditions related to the COVID-19 pandemic. These reviews have resulted in no material change to the allocation. 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). Our customer, 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. The Exchange, by virtue of its legal structure as a reciprocal insurer, does not have any employees or officers. Therefore, it enters into contractual relationships by and through an attorney-in-fact. Indemnity serves as the attorney-in-fact on behalf of the Exchange with respect to its administrative services in accordance with 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. Collectively, these services represent a second performance obligation under the subscriber’s agreement and the service agreements. The revenue allocated to this performance obligation is recognized over time as these services are provided. The portion of revenue not yet earned is recorded as a contract liability in the Statements of Financial Position. The administrative services expenses we incur and the related reimbursements we receive are recorded gross in the Statements of Operations. Indemnity records a receivable from the Exchange for management fee revenue when the premium is written or assumed 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 with annual terms only, cash collections generally occur within one year. A constraining estimate exists around the management fee received as consideration related to the potential for management fee 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 unearned premiums are refunded to them. We maintain an estimated allowance to reduce the management fee to its estimated net realizable value to account for the potential of mid-term policy cancellations based on historical cancellation rates. In 2020, our historical cancellation rates were adjusted to include the potential for increased cancellations given the current economic conditions related to the COVID-19 pandemic. This resulted in a $3.5 million increase in the allowance for the three months ended March 31, 2020 and an additional $0.9 million increase in the allowance for the three months ended June 30, 2020 for a cumulative increase of $4.4 million for the six months ended June 30, 2020. The increases to the allowance were $2.0 million and $2.9 million for the three and six months ended June 30, 2019 primarily driven by premium growth. This estimated allowance has been allocated between the two performance obligations consistent with the revenue allocation proportions. The following table disaggregates revenue by our two performance obligations: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Management fee revenue - policy issuance and renewal services, net $ 483,795 $ 480,513 $ 927,545 $ 911,496 Management fee revenue - administrative services, net 14,813 14,195 29,584 28,146 Administrative services reimbursement revenue 151,965 146,095 303,519 288,575 Total administrative services $ 166,778 $ 160,290 $ 333,103 $ 316,721 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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 are 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 June 30, 2020 2019 (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 $ 81,306 46,187,808 $ 1.76 $ 87,036 46,188,994 $ 1.88 Dilutive effect of stock-based awards 0 14,373 — 0 24,906 — Assumed conversion of Class B shares 671 6,100,800 — 718 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 81,977 52,302,981 $ 1.57 $ 87,754 52,314,700 $ 1.68 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 671 2,542 $ 264 $ 718 2,542 $ 283 Six months ended June 30, 2020 2019 (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 $ 140,146 46,188,299 $ 3.03 $ 161,730 46,188,668 $ 3.50 Dilutive effect of stock-based awards 0 24,568 — 0 23,903 — Assumed conversion of Class B shares 1,157 6,100,800 — 1,335 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 141,303 52,313,667 $ 2.70 $ 163,065 52,313,371 $ 3.12 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 1,157 2,542 $ 455 $ 1,335 2,542 $ 525 |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 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 June 30, 2020, nearly all of our available-for-sale and equity securities were priced using a third party pricing service. The following tables present our fair value measurements on a recurring basis by asset class and level of input as of: June 30, 2020 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 469,655 $ 2,104 $ 462,635 $ 4,916 Residential mortgage-backed securities 119,599 0 119,599 0 Commercial mortgage-backed securities 106,542 0 88,476 18,066 Collateralized debt obligations 96,288 0 96,029 259 Other debt securities 12,741 0 12,741 0 Total available-for-sale securities 804,825 2,104 779,480 23,241 Equity securities - nonredeemable preferred and common stock: Financial services sector 60,149 20,943 39,206 0 Utilities sector 7,712 4,259 3,453 0 Communications sector 3,894 3,894 0 0 Consumer sector 2,599 892 912 795 Energy sector 1,035 0 1,035 0 Total equity securities 75,389 29,988 44,606 795 Total $ 880,214 $ 32,092 $ 824,086 $ 24,036 December 31, 2019 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 454,880 $ 2,683 $ 443,873 $ 8,324 Residential mortgage-backed securities 125,343 0 125,343 0 Commercial mortgage-backed securities 67,541 0 64,220 3,321 Collateralized debt obligations 77,856 0 77,856 0 Other debt securities 5,081 0 5,081 0 Total available-for-sale securities 730,701 2,683 716,373 11,645 Equity securities - nonredeemable preferred and common stock: Financial services sector 53,513 14,927 38,586 0 Utilities sector 6,818 3,190 3,628 0 Communications sector 3,433 3,433 0 0 Energy sector 1,881 0 1,881 0 Industrial sector 980 0 980 0 Consumer sector 508 0 508 0 Total equity securities 67,133 21,550 45,583 0 Total $ 797,834 $ 24,233 $ 761,956 $ 11,645 We review the fair value hierarchy classifications each reporting period. Transfers between hierarchy levels may occur due to changes in available market observable inputs. Level 3 Assets – 2020 Quarterly Change: Beginning balance at March 31, 2020 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at June 30, 2020 Available-for-sale securities: Corporate debt securities $ 12,056 $ (2) $ 867 $ 783 $ (115) $ 1,142 $ (9,815) $ 4,916 Commercial mortgage-backed securities 7,383 (34) 268 6,891 (201) 4,334 (575) 18,066 Collateralized debt obligations 0 0 12 247 0 0 0 259 Total available-for-sale securities 19,439 (36) 1,147 7,921 (316) 5,476 (10,390) 23,241 Nonredeemable preferred stock 0 (25) 0 820 0 0 0 795 Total Level 3 securities $ 19,439 $ (61) $ 1,147 $ 8,741 $ (316) $ 5,476 $ (10,390) $ 24,036 Level 3 Assets – 2020 Year-to-Date Change: Beginning balance at December 31, 2019 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at June 30, 2020 Available-for-sale securities: Corporate debt securities $ 8,324 $ 5 $ (511) $ 2,501 $ (542) $ 8,037 $ (12,898) $ 4,916 Commercial mortgage-backed securities 3,321 (42) 120 7,203 (287) 8,891 (1,140) 18,066 Collateralized debt obligations 0 0 12 247 0 0 0 259 Total available-for-sale securities 11,645 (37) (379) 9,951 (829) 16,928 (14,038) 23,241 Nonredeemable preferred stock 0 (25) 0 820 0 0 0 795 Total Level 3 securities $ 11,645 $ (62) $ (379) $ 10,771 $ (829) $ 16,928 $ (14,038) $ 24,036 Level 3 Assets – 2019 Quarterly Change: (in thousands) Beginning balance at March 31, 2019 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at June 30, 2019 Available-for-sale securities: Corporate debt securities $ 11,523 $ (20) $ 23 $ 0 $ (5,841) $ 2,581 $ (1,893) $ 6,373 Residential mortgage-backed securities 915 4 15 0 (26) 0 (908) 0 Commercial mortgage-backed securities 1,182 15 (8) 0 (1,065) 2,551 (124) 2,551 Total Level 3 available-for-sale securities $ 13,620 $ (1) $ 30 $ 0 $ (6,932) $ 5,132 $ (2,925) $ 8,924 Level 3 Assets – 2019 Year-to-Date Change: (in thousands) Beginning balance at December 31, 2018 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at June 30, 2019 Available-for-sale securities: Corporate debt securities $ 12,577 $ (9) $ 291 $ 734 $ (6,272) $ 7,394 $ (8,342) $ 6,373 Residential mortgage-backed securities 0 4 15 921 (32) 0 (908) 0 Commercial mortgage-backed securities 0 13 (8) 478 (1,065) 3,257 (124) 2,551 Total Level 3 available-for-sale securities $ 12,577 $ 8 $ 298 $ 2,133 $ (7,369) $ 10,651 $ (9,374) $ 8,924 (1) These amounts are reported as net investment income and net realized 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. Quantitative and Qualitative Disclosures about Unobservable Inputs Investments totaling $6.0 million and $1.3 million at June 30, 2020 and December 31, 2019, respectively, were priced using a non-binding broker quote as the only pricing input and were classified within Level 3. The quantitative detail of the unobservable inputs supporting these quotes is neither provided nor reasonably available to us. Our Level 3 assets are not material in total and, with the exception of the tables above, additional Level 3 disclosures are not provided. 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: June 30, 2020 December 31, 2019 (in thousands) Carrying value Fair value Carrying value Fair value Agent loans (1) $ 65,450 $ 63,030 $ 67,696 $ 71,602 Long-term borrowings (2) 97,101 117,604 98,080 101,888 (1) The discount rate used to calculate fair value at June 30, 2020 is reflective of an increase in the BB+ financial yield curve due to the market volatility resulting from the COVID-19 pandemic. (2) The discount rate used to calculate fair value at June 30, 2020 is reflective of a decline in U.S. Treasury bond yields due to the market volatility resulting from the COVID-19 pandemic. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2020 | |
Investments [Abstract] | |
Investments | Investments Available-for-sale securities See Note 5, "Fair Value" for additional fair value disclosures. The following tables summarize the cost and fair value, net of credit loss allowance, of our available-for-sale securities as of: June 30, 2020 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities $ 461,398 $ 14,508 $ 6,251 $ 469,655 Residential mortgage-backed securities 115,631 3,970 2 119,599 Commercial mortgage-backed securities 104,403 3,390 1,251 106,542 Collateralized debt obligations 98,603 281 2,596 96,288 Other debt securities 12,435 355 49 12,741 Total available-for-sale securities, net $ 792,470 $ 22,504 $ 10,149 $ 804,825 December 31, 2019 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities $ 450,295 $ 6,289 $ 1,704 $ 454,880 Residential mortgage-backed securities 124,337 1,056 50 125,343 Commercial mortgage-backed securities 67,210 479 148 67,541 Collateralized debt obligations 78,059 44 247 77,856 Other debt securities 5,049 71 39 5,081 Total available-for-sale securities, net $ 724,950 $ 7,939 $ 2,188 $ 730,701 The amortized cost and estimated fair value of available-for-sale securities at June 30, 2020 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. June 30, 2020 Amortized Estimated (in thousands) cost fair value Due in one year or less $ 24,154 $ 24,233 Due after one year through five years 362,607 372,299 Due after five years through ten years 129,547 128,334 Due after ten years 276,162 279,959 Total available-for-sale securities (1) $ 792,470 $ 804,825 (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 Statements of Financial Position at June 30, 2020. The below securities have been evaluated and determined to be temporary declines in fair value for which we expect to recover our entire principal plus interest. The following table presents available-for-sale securities based on length of time in a gross unrealized loss position as of: June 30, 2020 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 81,468 $ 4,358 $ 8,058 $ 1,893 $ 89,526 $ 6,251 494 Residential mortgage-backed securities 1,407 2 0 0 1,407 2 3 Commercial mortgage-backed securities 30,808 1,251 0 0 30,808 1,251 47 Collateralized debt obligations 75,876 2,070 13,721 526 89,597 2,596 92 Other debt securities 2,780 49 0 0 2,780 49 7 Total available-for-sale securities $ 192,339 $ 7,730 $ 21,779 $ 2,419 $ 214,118 $ 10,149 643 Quality breakdown of available-for-sale securities: Investment grade $ 135,419 $ 3,849 $ 13,721 $ 526 $ 149,140 $ 4,375 170 Non-investment grade 56,920 3,881 8,058 1,893 64,978 5,774 473 Total available-for-sale securities $ 192,339 $ 7,730 $ 21,779 $ 2,419 $ 214,118 $ 10,149 643 December 31, 2019 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 25,804 $ 342 $ 15,699 $ 1,362 $ 41,503 $ 1,704 158 Residential mortgage-backed securities 16,712 50 0 0 16,712 50 7 Commercial mortgage-backed securities 21,981 147 372 1 22,353 148 30 Collateralized debt obligations 20,889 33 41,010 214 61,899 247 49 Other debt securities 2,350 39 0 0 2,350 39 2 Total available-for-sale securities $ 87,736 $ 611 $ 57,081 $ 1,577 $ 144,817 $ 2,188 246 Quality breakdown of available-for-sale securities: Investment grade $ 76,315 $ 287 $ 46,390 $ 218 $ 122,705 $ 505 100 Non-investment grade 11,421 324 10,691 1,359 22,112 1,683 146 Total available-for-sale securities $ 87,736 $ 611 $ 57,081 $ 1,577 $ 144,817 $ 2,188 246 Credit loss allowance on investments As of June 30, 2020, the current expected credit loss allowance on agent loans is $1.0 million and the credit loss allowance on available-for-sale securities is $0.4 million. Net investment income Investment income, net of expenses, was generated from the following portfolios: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Available-for sale securities $ 5,670 $ 5,488 $ 11,458 $ 11,649 Equity securities 901 141 1,757 282 Cash equivalents and other 1,115 2,660 3,089 5,125 Total investment income 7,686 8,289 16,304 17,056 Less: investment expenses 313 259 562 509 Investment income, net of expenses $ 7,373 $ 8,030 $ 15,742 $ 16,547 Realized investment gains (losses) Realized gains (losses) on investments were as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Available-for-sale securities: Gross realized gains $ 1,721 $ 2,062 $ 2,795 $ 4,320 Gross realized losses (1,366) (823) (1,825) (1,163) Net realized gains on available-for-sale securities 355 1,239 970 3,157 Equity securities (1) 6,170 63 (5,252) 648 Miscellaneous 1 0 2 0 Net realized investment gains (losses) $ 6,526 $ 1,302 $ (4,280) $ 3,805 (1) While our investment portfolio was negatively impacted in the first quarter of 2020 primarily due to the financial market volatility resulting from the COVID-19 pandemic, market conditions partially recovered in the second quarter of 2020, resulting in significant gains in the three months ended June 30, 2020. The portion of net unrealized gains and losses recognized during the reporting period related to equity securities held at the reporting date is calculated as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Equity securities: Net gains (losses) recognized during the period (1) $ 6,170 $ 63 $ (5,252) $ 648 Less: net gains (losses) recognized on securities sold 1,357 0 (2,157) 0 Net unrealized gains (losses) recognized on securities held at reporting date $ 4,813 $ 63 $ (3,095) $ 648 (1) While our investment portfolio was negatively impacted in the first quarter of 2020 primarily due to the financial market volatility resulting from the COVID-19 pandemic, market conditions partially recovered in the second quarter of 2020, resulting in significant gains in the three months ended June 30, 2020. Net impairments losses recognized in earnings Upon adoption of ASU 2016-13 on January 1, 2020, impairments on available-for-sale securities that are deemed to be credit related are recognized in earnings with a corresponding available-for-sale security allowance. All unrealized losses related to factors other than credit are recorded in other comprehensive income. Prior to January 1, 2020, we had the intent to sell all credit-impaired available-for-sale securities; therefore, the entire amount of the impairment charges was included in earnings and no impairments were recognized in other comprehensive income. See also Note 2, "Significant Accounting Policies". Impairments on available-for-sale securities and agent loans were as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Available-for-sale securities: Intent to sell $ 0 $ 84 $ 2,242 $ 162 Credit impaired 17 — 658 — Total available-for-sale securities 17 84 2,900 162 Agent loans - expected credit losses 0 — 170 — Net impairment losses recognized in earnings $ 17 $ 84 $ 3,070 $ 162 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases The following table summarizes our lease assets and liabilities as of: (in thousands) June 30, 2020 December 31, 2019 Operating lease assets $ 19,267 $ 22,401 Operating lease liabilities - current $ 11,216 $ 11,289 Operating lease liabilities - long-term 7,664 10,665 Total operating lease liabilities $ 18,880 $ 21,954 We currently have leases for real estate, technology equipment, copiers, and vehicles. Our largest operating lease asset at June 30, 2020 of $9.2 million is for office space leased from the Exchange, including the home office. Under this lease, rent is based on rental rates of like property and all operating expenses are the responsibility of the tenant (Indemnity). The lease agreement expires December 31, 2021. Operating lease costs for the three months ended June 30, 2020 and 2019 were $3.3 million and $3.6 million, respectively, and $6.7 million and $7.2 million for the six months ended June 30, 2020 and 2019, respectively. Of this amount, the Exchange and its subsidiaries reimbursed us $1.4 million and $1.6 million for the three months ended June 30, 2020 and 2019, respectively, and $2.8 million and $3.1 million for the six months ended June 30, 2020 and 2019, respectively, which represents the allocated share of lease costs supporting administrative services activities. |
Borrowing Arrangements
Borrowing Arrangements | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Borrowing Arrangements | Borrowing Arrangements Bank line of credit As of June 30, 2020, we have access to a $100 million bank revolving line of credit with a $25 million letter of credit sublimit that expires on October 30, 2023. As of June 30, 2020, a total of $99.1 million remains available under the facility due to $0.9 million outstanding letters of credit, which reduce the availability for letters of credit to $24.1 million. We had no borrowings outstanding on our line of credit as of June 30, 2020. Investments with a fair value of $124.4 million were pledged as collateral on the line at June 30, 2020. The investments pledged as collateral have no trading restrictions and are reported as available-for-sale securities and cash and cash equivalents as of June 30, 2020. The banks require compliance with certain covenants, which include leverage ratios and debt restrictions, for our line of credit. We are in compliance with all covenants at June 30, 2020. Term loan credit facility In 2016, we entered into a credit agreement for a $100 million senior secured draw term loan credit facility ("Credit Facility") for the acquisition of real property and construction of an office building that will serve as part of our principal headquarters. On January 1, 2019, the Credit Facility converted to a fully-amortized term loan with monthly payments of principal and interest at a fixed rate of 4.35% over a period of 28 years. Investments with a fair value of $126.1 million were pledged as collateral for the facility and are reported as available-for-sale securities and cash and cash equivalents as of June 30, 2020. The bank requires compliance with certain covenants, which include leverage ratios, debt restrictions and minimum net worth, for our Credit Facility. We are in compliance with all covenants at June 30, 2020. The remaining unpaid balance from the Credit Facility is reported at carrying value on our Statements of Financial Position, net of unamortized loan origination and commitment fees. See Note 5, "Fair Value" for the estimated fair value of these borrowings. Annual principal payments The following table sets forth future principal payments: (in thousands) Year Principal payments 2020 $ 1,000 2021 2,019 2022 2,109 2023 2,226 2024 2,302 Thereafter 87,445 |
Postretirement Benefits
Postretirement Benefits | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Postretirement Benefits | 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 for certain members of executive and senior management. Although we are the sponsor of these postretirement plans and record the funded status of these plans, the Exchange and its subsidiaries reimburse us for approximately 58% of the annual benefit expense of these plans, which represents pension benefits for employees performing administrative services and their allocated share of costs for employees in departments that support the administrative functions. The cost of our pension plans are as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Service cost for benefits earned $ 10,874 $ 8,464 $ 21,747 $ 16,927 Interest cost on benefits obligation 9,394 9,826 18,789 19,653 Expected return on plan assets (12,353) (11,871) (24,706) (23,742) Prior service cost amortization 335 348 671 697 Net actuarial loss amortization 3,031 1,278 6,062 2,556 Pension plan cost (1) $ 11,281 $ 8,045 $ 22,563 $ 16,091 (1) The components of pension plan costs other than the service cost component are included in the line item "Other (expense) income" in the Statements of Operations after reimbursements from the Exchange and its subsidiaries. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesIncome 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. Our effective tax rate was 20.0% and 20.9% for the three and six months ended June 30, 2020, respectively. The $6.8 million valuation allowance that was recognized on our net deferred tax assets at March 31, 2020, primarily related to unrealized losses on our investments, was released as of June 30, 2020 driven by the partial recovery experienced in market conditions in the second quarter of 2020. Of the total, $5.8 million was recorded in other comprehensive income and $1.0 million was recorded as an income tax benefit. The amount recognized as an income tax benefit decreased the effective tax rate by 0.9% for the three months ended June 30, 2020. Our effective tax rate was 17.2% and 19.1% for the three and six months ended June 30, 2019, respectively. Impacting our effective tax rate in the three and six months ended June 30, 2019 was the settlement of an uncertain tax position, which reduced our effective tax rate by 3.8% and 2.0%, respectively. |
Capital Stock
Capital Stock | 6 Months Ended |
Jun. 30, 2020 | |
Class of Stock Disclosures [Abstract] | |
Capital Stock | 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 shares of Class B common stock converted into Class A common stock during the six months ended June 30, 2020 and the year ended December 31, 2019. There is no provision for conversion of Class A shares to Class B shares, and Class B shares surrendered for conversion cannot be reissued. 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 shares repurchased under this program during the six months ended June 30, 2020 and the year ended December 31, 2019. We had approximately $17.8 million of repurchase authority remaining under this program at June 30, 2020. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 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 Statements of Operations where net income is presented, are as follows: Three months ended Three months ended June 30, 2020 June 30, 2019 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI (loss), beginning of period (1) $ (27,761) $ 0 $ (27,761) $ (2,235) $ (470) $ (1,765) OCI before reclassifications (1) 40,364 2,646 37,718 4,420 928 3,492 Realized investment gains (355) (75) (280) (1,239) (260) (979) Impairment losses 17 4 13 84 18 66 OCI 40,026 2,575 37,451 3,265 686 2,579 AOCI (loss), end of period (1) $ 12,265 $ 2,575 $ 9,690 $ 1,030 $ 216 $ 814 Pension and other postretirement plans: AOCI (loss), beginning of period $ (150,233) $ (31,550) $ (118,683) $ (154,190) $ (32,381) $ (121,809) Amortization of prior service costs 336 70 266 348 73 275 Amortization of net actuarial loss 3,031 637 2,394 1,210 254 956 OCI 3,367 707 2,660 1,558 327 1,231 AOCI (loss), end of period $ (146,866) $ (30,843) $ (116,023) $ (152,632) $ (32,054) $ (120,578) Total AOCI (loss), beginning of period $ (177,994) $ (31,550) $ (146,444) $ (156,425) $ (32,851) $ (123,574) Investment securities 40,026 2,575 37,451 3,265 686 2,579 Pension and other postretirement plans 3,367 707 2,660 1,558 327 1,231 OCI 43,393 3,282 40,111 4,823 1,013 3,810 AOCI (loss), end of period $ (134,601) $ (28,268) $ (106,333) $ (151,602) $ (31,838) $ (119,764) Six months ended Six months ended June 30, 2020 June 30, 2019 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI (loss), beginning of period $ 5,664 $ 1,189 $ 4,475 $ (9,169) $ (1,926) $ (7,243) OCI before reclassifications 4,671 981 3,690 13,194 2,771 10,423 Realized investment gains (970) (204) (766) (3,157) (663) (2,494) Impairment losses 2,900 609 2,291 162 34 128 OCI 6,601 1,386 5,215 10,199 2,142 8,057 AOCI (loss), end of period $ 12,265 $ 2,575 $ 9,690 $ 1,030 $ 216 $ 814 Pension and other postretirement plans: AOCI (loss), beginning of period $ (153,600) $ (32,257) $ (121,343) $ (155,749) $ (32,708) $ (123,041) Amortization of prior service costs 672 141 531 697 146 551 Amortization of net actuarial loss 6,062 1,273 4,789 2,420 508 1,912 OCI 6,734 1,414 5,320 3,117 654 2,463 AOCI (loss), end of period $ (146,866) $ (30,843) $ (116,023) $ (152,632) $ (32,054) $ (120,578) Total AOCI (loss), beginning of period $ (147,936) $ (31,068) $ (116,868) $ (164,918) $ (34,634) $ (130,284) Investment securities 6,601 1,386 5,215 10,199 2,142 8,057 Pension and other postretirement plans 6,734 1,414 5,320 3,117 654 2,463 OCI 13,335 2,800 10,535 13,316 2,796 10,520 AOCI (loss), end of period $ (134,601) $ (28,268) $ (106,333) $ (151,602) $ (31,838) $ (119,764) |
Concentrations of Credit Risk
Concentrations of Credit Risk | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Credit Risk | Concentrations of Credit RiskFinancial instruments could potentially expose us to concentrations of credit risk, including unsecured receivables from the Exchange. A large 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 $506.7 million and $468.6 million at June 30, 2020 and December 31, 2019, respectively. Given the financial strength of the Exchange and historical experience of no credit losses, we previously did not record a credit loss allowance to these receivables. Upon adoption of ASU 2016-13, we recorded an allowance for current expected credit losses of $0.6 million related to the receivables from the Exchange and affiliates. See also Note 2, "Significant Accounting Policies". There was no change to this allowance for the three and six months ended June 30, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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. To the extent that such litigation against us may have an exposure to a loss in excess of the amount we have accrued, we believe that such excess would not be material to our financial condition, results of operations, or cash flows. Legal fees are expensed as incurred. We believe that our accruals for legal proceedings are appropriate and, individually and in the aggregate, are not expected to be material to our financial condition, results of operations, or cash flows. 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 the financial condition, results of operations, or cash flows. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events No items were identified in this period subsequent to the financial statement date that required adjustment or additional disclosure. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited 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. 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 six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. For further information, refer to the financial statements and footnotes included in our Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission on February 27, 2020. |
Use of estimates | 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 adopted accounting standards | Recently adopted accounting standards In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2016-13 "Financial Instruments-Credit Losses" , which requires financial assets measured at amortized cost to be presented at the net amount expected to be collected through the use of a new forward-looking current expected credit loss model and credit losses relating to available-for-sale debt securities to be recognized through an allowance for credit losses. We adopted this guidance, which applies to our receivable from Erie Insurance Exchange and affiliates, agent loans and investments, on January 1, 2020. For assets measured at amortized cost for which a current expected credit loss allowance was required, we adopted the guidance using the modified-retrospective approach. At January 1, 2020, we recorded current expected credit loss allowances related to agent loans of $0.8 million and receivables from Erie Insurance Exchange and affiliates of $0.6 million. This resulted in the recording of a cumulative effect adjustment, net of taxes, to retained earnings of $1.1 million. Our available-for-sale investments are not measured at amortized cost, and therefore do not require the use of a current expected credit loss model. Any credit losses, however, are required to be recorded as an allowance for credit losses rather than a reduction of the carrying value of the asset. For available-for-sale securities, we adopted the guidance using the prospective approach and recorded an initial allowance for credit losses of $0.6 million at March 31, 2020. The adoption of this standard did not have a material impact on our Statements of Financial Position, net income or net cash flows. |
Investments | Investments Available-for-sale securities – Fixed maturity debt securities and redeemable preferred stock are classified as available-for-sale and reported at fair value with unrealized investment gains and losses, net of income taxes, recognized in other comprehensive income. Available-for-sale securities with a remaining maturity of 12 months or less and any security that we intend to sell as of the reporting date are classified as current assets. Available-for-sale securities in an unrealized loss position are evaluated to determine whether the impairment is a result of credit loss or other factors. If we have the intent to sell or it's more likely than not that we would be required to sell the security before recovery of the amortized cost basis, the entire impairment is recognized in earnings. Securities that have experienced a decline in fair value that we do not intend to sell, and that we will not be required to sell before recovery, are evaluated to determine if the decline in fair value is credit related. Impairment resulting from a credit loss is recognized in earnings with a corresponding allowance on the balance sheet. Future recoveries of credit loss result in an adjustment to the allowance and earnings in the period the credit conditions improve. Factors considered in the evaluation of credit loss include the extent to which fair value is less than cost and fundamental factors specific to the issuer such as financial condition, changes in credit ratings, near and long-term business prospects and other factors, as well as the likelihood of recovery of the amortized cost of the security. If the qualitative review indicates credit impairment, the allowance for credit loss is measured as the amount that the security’s amortized cost exceeds the present value of cash flows expected to be collected and is limited to the amount that fair value is below amortized cost. Realized gains and losses and investment income – Realized gains and losses on sales of available-for-sale and equity securities are recognized in income based upon the specific identification method and reported as net realized investment gains (losses). Interest income is recognized as earned and includes amortization of premium and accretion of discount. Income is recognized based on the constant effective yield method, which includes periodically updated prepayment assumptions obtained from third party data sources on our prepaying securities. The effective yield for prepaying securities is recalculated on a retrospective basis. Dividend income is recognized at the ex-dividend date. Both interest and dividend income are reported as net investment income. We do not record an allowance for credit losses on accrued investment income as any amount deemed uncollectible is reversed from interest income in the period the expected payment defaults. |
Agent loans | Agent loansAgent loans, the majority of which are senior secured, are carried at unpaid principal balance with interest recorded in investment income as earned. The current portion of agent loans is recorded in prepaid expenses and other current assets. The adoption of ASU 2016-13 on January 1, 2020 requires the recording of a current expected credit loss allowance on these loans. The allowance is estimated using available loss history and/or external loss rates based on comparable loan losses and considers current conditions and forecasted information. When establishing the expected credit loss allowance upon implementation of ASU 2016-13, a cumulative effect adjustment was recorded to beginning retained earnings. Future changes to the allowance will be recognized in earnings as adjustments to net impairment losses. Prior to the adoption of ASU 2016-13, we did not record an allowance for credit losses as the majority of these loans are senior secured and have had insignificant default amounts. |
Other assets | Other assets Other assets include operating lease assets and other long-term prepaid assets. The determination of whether an arrangement is a lease, and the related lease classification, is made at inception of a contract. Our leases are classified as operating leases. Operating lease assets and liabilities are recorded at inception based on the present value of the future minimum lease payments over the lease term at commencement date. When an implicit rate for the lease is not available, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of future payments. Lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Most of our lease contracts contain lease and non-lease components. Non-lease components are expensed as incurred. Operating lease assets are included in other assets, and the current and noncurrent portions of the operating lease liabilities are included in accounts payable and accrued expenses and other long-term liabilities, respectively. |
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 are 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. |
Fair value of financial instruments | 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 June 30, 2020, nearly all of our available-for-sale and equity securities were priced using a third party pricing service. |
Commitments and contingencies | 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. To the extent that such litigation against us may have an exposure to a loss in excess of the amount we have accrued, we believe that such excess would not be material to our financial condition, results of operations, or cash flows. Legal fees are expensed as incurred. We believe that our accruals for legal proceedings are appropriate and, individually and in the aggregate, are not expected to be material to our financial condition, results of operations, or cash flows. 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 the financial condition, results of operations, or cash flows. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Performance Obligation | The following table disaggregates revenue by our two performance obligations: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Management fee revenue - policy issuance and renewal services, net $ 483,795 $ 480,513 $ 927,545 $ 911,496 Management fee revenue - administrative services, net 14,813 14,195 29,584 28,146 Administrative services reimbursement revenue 151,965 146,095 303,519 288,575 Total administrative services $ 166,778 $ 160,290 $ 333,103 $ 316,721 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of the Numerators and Denominators Used in the Basic and Diluted Per-Share Computations | 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 June 30, 2020 2019 (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 $ 81,306 46,187,808 $ 1.76 $ 87,036 46,188,994 $ 1.88 Dilutive effect of stock-based awards 0 14,373 — 0 24,906 — Assumed conversion of Class B shares 671 6,100,800 — 718 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 81,977 52,302,981 $ 1.57 $ 87,754 52,314,700 $ 1.68 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 671 2,542 $ 264 $ 718 2,542 $ 283 Six months ended June 30, 2020 2019 (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 $ 140,146 46,188,299 $ 3.03 $ 161,730 46,188,668 $ 3.50 Dilutive effect of stock-based awards 0 24,568 — 0 23,903 — Assumed conversion of Class B shares 1,157 6,100,800 — 1,335 6,100,800 — Class A – Diluted EPS: Income available to Class A stockholders on Class A equivalent shares $ 141,303 52,313,667 $ 2.70 $ 163,065 52,313,371 $ 3.12 Class B – Basic and diluted EPS: Income available to Class B stockholders $ 1,157 2,542 $ 455 $ 1,335 2,542 $ 525 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements on a Recurring Basis by Asset Class and Level of Input | The following tables present our fair value measurements on a recurring basis by asset class and level of input as of: June 30, 2020 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 469,655 $ 2,104 $ 462,635 $ 4,916 Residential mortgage-backed securities 119,599 0 119,599 0 Commercial mortgage-backed securities 106,542 0 88,476 18,066 Collateralized debt obligations 96,288 0 96,029 259 Other debt securities 12,741 0 12,741 0 Total available-for-sale securities 804,825 2,104 779,480 23,241 Equity securities - nonredeemable preferred and common stock: Financial services sector 60,149 20,943 39,206 0 Utilities sector 7,712 4,259 3,453 0 Communications sector 3,894 3,894 0 0 Consumer sector 2,599 892 912 795 Energy sector 1,035 0 1,035 0 Total equity securities 75,389 29,988 44,606 795 Total $ 880,214 $ 32,092 $ 824,086 $ 24,036 December 31, 2019 (in thousands) Total Level 1 Level 2 Level 3 Available-for-sale securities: Corporate debt securities $ 454,880 $ 2,683 $ 443,873 $ 8,324 Residential mortgage-backed securities 125,343 0 125,343 0 Commercial mortgage-backed securities 67,541 0 64,220 3,321 Collateralized debt obligations 77,856 0 77,856 0 Other debt securities 5,081 0 5,081 0 Total available-for-sale securities 730,701 2,683 716,373 11,645 Equity securities - nonredeemable preferred and common stock: Financial services sector 53,513 14,927 38,586 0 Utilities sector 6,818 3,190 3,628 0 Communications sector 3,433 3,433 0 0 Energy sector 1,881 0 1,881 0 Industrial sector 980 0 980 0 Consumer sector 508 0 508 0 Total equity securities 67,133 21,550 45,583 0 Total $ 797,834 $ 24,233 $ 761,956 $ 11,645 |
Schedule of Roll Forward of Level 3 Fair Value Measurements on a Recurring Basis | Level 3 Assets – 2020 Quarterly Change: Beginning balance at March 31, 2020 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at June 30, 2020 Available-for-sale securities: Corporate debt securities $ 12,056 $ (2) $ 867 $ 783 $ (115) $ 1,142 $ (9,815) $ 4,916 Commercial mortgage-backed securities 7,383 (34) 268 6,891 (201) 4,334 (575) 18,066 Collateralized debt obligations 0 0 12 247 0 0 0 259 Total available-for-sale securities 19,439 (36) 1,147 7,921 (316) 5,476 (10,390) 23,241 Nonredeemable preferred stock 0 (25) 0 820 0 0 0 795 Total Level 3 securities $ 19,439 $ (61) $ 1,147 $ 8,741 $ (316) $ 5,476 $ (10,390) $ 24,036 Level 3 Assets – 2020 Year-to-Date Change: Beginning balance at December 31, 2019 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at June 30, 2020 Available-for-sale securities: Corporate debt securities $ 8,324 $ 5 $ (511) $ 2,501 $ (542) $ 8,037 $ (12,898) $ 4,916 Commercial mortgage-backed securities 3,321 (42) 120 7,203 (287) 8,891 (1,140) 18,066 Collateralized debt obligations 0 0 12 247 0 0 0 259 Total available-for-sale securities 11,645 (37) (379) 9,951 (829) 16,928 (14,038) 23,241 Nonredeemable preferred stock 0 (25) 0 820 0 0 0 795 Total Level 3 securities $ 11,645 $ (62) $ (379) $ 10,771 $ (829) $ 16,928 $ (14,038) $ 24,036 Level 3 Assets – 2019 Quarterly Change: (in thousands) Beginning balance at March 31, 2019 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at June 30, 2019 Available-for-sale securities: Corporate debt securities $ 11,523 $ (20) $ 23 $ 0 $ (5,841) $ 2,581 $ (1,893) $ 6,373 Residential mortgage-backed securities 915 4 15 0 (26) 0 (908) 0 Commercial mortgage-backed securities 1,182 15 (8) 0 (1,065) 2,551 (124) 2,551 Total Level 3 available-for-sale securities $ 13,620 $ (1) $ 30 $ 0 $ (6,932) $ 5,132 $ (2,925) $ 8,924 Level 3 Assets – 2019 Year-to-Date Change: (in thousands) Beginning balance at December 31, 2018 Included in earnings (1) Included Purchases Sales Transfers into Level 3 (2) Transfers out of Level 3 (2) Ending balance at June 30, 2019 Available-for-sale securities: Corporate debt securities $ 12,577 $ (9) $ 291 $ 734 $ (6,272) $ 7,394 $ (8,342) $ 6,373 Residential mortgage-backed securities 0 4 15 921 (32) 0 (908) 0 Commercial mortgage-backed securities 0 13 (8) 478 (1,065) 3,257 (124) 2,551 Total Level 3 available-for-sale securities $ 12,577 $ 8 $ 298 $ 2,133 $ (7,369) $ 10,651 $ (9,374) $ 8,924 (1) These amounts are reported as net investment income and net realized 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. |
Schedule of 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: June 30, 2020 December 31, 2019 (in thousands) Carrying value Fair value Carrying value Fair value Agent loans (1) $ 65,450 $ 63,030 $ 67,696 $ 71,602 Long-term borrowings (2) 97,101 117,604 98,080 101,888 (1) The discount rate used to calculate fair value at June 30, 2020 is reflective of an increase in the BB+ financial yield curve due to the market volatility resulting from the COVID-19 pandemic. (2) The discount rate used to calculate fair value at June 30, 2020 is reflective of a decline in U.S. Treasury bond yields due to the market volatility resulting from the COVID-19 pandemic. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments [Abstract] | |
Schedule of Reconciliation of Cost to Fair Value, Net of Credit Loss Allowance, of Available-For-Sale Securities | The following tables summarize the cost and fair value, net of credit loss allowance, of our available-for-sale securities as of: June 30, 2020 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities $ 461,398 $ 14,508 $ 6,251 $ 469,655 Residential mortgage-backed securities 115,631 3,970 2 119,599 Commercial mortgage-backed securities 104,403 3,390 1,251 106,542 Collateralized debt obligations 98,603 281 2,596 96,288 Other debt securities 12,435 355 49 12,741 Total available-for-sale securities, net $ 792,470 $ 22,504 $ 10,149 $ 804,825 December 31, 2019 (in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities $ 450,295 $ 6,289 $ 1,704 $ 454,880 Residential mortgage-backed securities 124,337 1,056 50 125,343 Commercial mortgage-backed securities 67,210 479 148 67,541 Collateralized debt obligations 78,059 44 247 77,856 Other debt securities 5,049 71 39 5,081 Total available-for-sale securities, net $ 724,950 $ 7,939 $ 2,188 $ 730,701 |
Schedule of Amortized Cost and Estimated Fair Value of Available-For-Sale Securities by Remaining Contractual Term to Maturity | The amortized cost and estimated fair value of available-for-sale securities at June 30, 2020 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. June 30, 2020 Amortized Estimated (in thousands) cost fair value Due in one year or less $ 24,154 $ 24,233 Due after one year through five years 362,607 372,299 Due after five years through ten years 129,547 128,334 Due after ten years 276,162 279,959 Total available-for-sale securities (1) $ 792,470 $ 804,825 (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 Statements of Financial Position at June 30, 2020. |
Schedule of Available-For-Sale Securities in a Gross Unrealized Loss Position by Length of Time | The below securities have been evaluated and determined to be temporary declines in fair value for which we expect to recover our entire principal plus interest. The following table presents available-for-sale securities based on length of time in a gross unrealized loss position as of: June 30, 2020 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 81,468 $ 4,358 $ 8,058 $ 1,893 $ 89,526 $ 6,251 494 Residential mortgage-backed securities 1,407 2 0 0 1,407 2 3 Commercial mortgage-backed securities 30,808 1,251 0 0 30,808 1,251 47 Collateralized debt obligations 75,876 2,070 13,721 526 89,597 2,596 92 Other debt securities 2,780 49 0 0 2,780 49 7 Total available-for-sale securities $ 192,339 $ 7,730 $ 21,779 $ 2,419 $ 214,118 $ 10,149 643 Quality breakdown of available-for-sale securities: Investment grade $ 135,419 $ 3,849 $ 13,721 $ 526 $ 149,140 $ 4,375 170 Non-investment grade 56,920 3,881 8,058 1,893 64,978 5,774 473 Total available-for-sale securities $ 192,339 $ 7,730 $ 21,779 $ 2,419 $ 214,118 $ 10,149 643 December 31, 2019 Less than 12 months 12 months or longer Total (dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized No. of Corporate debt securities $ 25,804 $ 342 $ 15,699 $ 1,362 $ 41,503 $ 1,704 158 Residential mortgage-backed securities 16,712 50 0 0 16,712 50 7 Commercial mortgage-backed securities 21,981 147 372 1 22,353 148 30 Collateralized debt obligations 20,889 33 41,010 214 61,899 247 49 Other debt securities 2,350 39 0 0 2,350 39 2 Total available-for-sale securities $ 87,736 $ 611 $ 57,081 $ 1,577 $ 144,817 $ 2,188 246 Quality breakdown of available-for-sale securities: Investment grade $ 76,315 $ 287 $ 46,390 $ 218 $ 122,705 $ 505 100 Non-investment grade 11,421 324 10,691 1,359 22,112 1,683 146 Total available-for-sale securities $ 87,736 $ 611 $ 57,081 $ 1,577 $ 144,817 $ 2,188 246 |
Schedule of Investment Income, Net of Expenses, from Portfolios | Investment income, net of expenses, was generated from the following portfolios: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Available-for sale securities $ 5,670 $ 5,488 $ 11,458 $ 11,649 Equity securities 901 141 1,757 282 Cash equivalents and other 1,115 2,660 3,089 5,125 Total investment income 7,686 8,289 16,304 17,056 Less: investment expenses 313 259 562 509 Investment income, net of expenses $ 7,373 $ 8,030 $ 15,742 $ 16,547 |
Schedule of Realized Gains and Losses on Investments and Net Unrealized Gains and Losses Recognized during the Reporting Period Related to Equity Securities Held at the Reporting Date | Realized gains (losses) on investments were as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Available-for-sale securities: Gross realized gains $ 1,721 $ 2,062 $ 2,795 $ 4,320 Gross realized losses (1,366) (823) (1,825) (1,163) Net realized gains on available-for-sale securities 355 1,239 970 3,157 Equity securities (1) 6,170 63 (5,252) 648 Miscellaneous 1 0 2 0 Net realized investment gains (losses) $ 6,526 $ 1,302 $ (4,280) $ 3,805 (1) While our investment portfolio was negatively impacted in the first quarter of 2020 primarily due to the financial market volatility resulting from the COVID-19 pandemic, market conditions partially recovered in the second quarter of 2020, resulting in significant gains in the three months ended June 30, 2020. The portion of net unrealized gains and losses recognized during the reporting period related to equity securities held at the reporting date is calculated as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Equity securities: Net gains (losses) recognized during the period (1) $ 6,170 $ 63 $ (5,252) $ 648 Less: net gains (losses) recognized on securities sold 1,357 0 (2,157) 0 Net unrealized gains (losses) recognized on securities held at reporting date $ 4,813 $ 63 $ (3,095) $ 648 (1) While our investment portfolio was negatively impacted in the first quarter of 2020 primarily due to the financial market volatility resulting from the COVID-19 pandemic, market conditions partially recovered in the second quarter of 2020, resulting in significant gains in the three months ended June 30, 2020. |
Schedule of Impairments on Available-For-Sale Securities and Agent Loans | Impairments on available-for-sale securities and agent loans were as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Available-for-sale securities: Intent to sell $ 0 $ 84 $ 2,242 $ 162 Credit impaired 17 — 658 — Total available-for-sale securities 17 84 2,900 162 Agent loans - expected credit losses 0 — 170 — Net impairment losses recognized in earnings $ 17 $ 84 $ 3,070 $ 162 |
Schedule of Impairments on Available-For-Sale Securities and Agent Loans | Impairments on available-for-sale securities and agent loans were as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Available-for-sale securities: Intent to sell $ 0 $ 84 $ 2,242 $ 162 Credit impaired 17 — 658 — Total available-for-sale securities 17 84 2,900 162 Agent loans - expected credit losses 0 — 170 — Net impairment losses recognized in earnings $ 17 $ 84 $ 3,070 $ 162 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Lease Assets and Liabilities Recorded in Statements of Financial Position | The following table summarizes our lease assets and liabilities as of: (in thousands) June 30, 2020 December 31, 2019 Operating lease assets $ 19,267 $ 22,401 Operating lease liabilities - current $ 11,216 $ 11,289 Operating lease liabilities - long-term 7,664 10,665 Total operating lease liabilities $ 18,880 $ 21,954 |
Borrowing Arrangements (Tables)
Borrowing Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Future Principal Payments | The following table sets forth future principal payments: (in thousands) Year Principal payments 2020 $ 1,000 2021 2,019 2022 2,109 2023 2,226 2024 2,302 Thereafter 87,445 |
Postretirement Benefits (Tables
Postretirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Cost of Pension Plans | The cost of our pension plans are as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2020 2019 2020 2019 Service cost for benefits earned $ 10,874 $ 8,464 $ 21,747 $ 16,927 Interest cost on benefits obligation 9,394 9,826 18,789 19,653 Expected return on plan assets (12,353) (11,871) (24,706) (23,742) Prior service cost amortization 335 348 671 697 Net actuarial loss amortization 3,031 1,278 6,062 2,556 Pension plan cost (1) $ 11,281 $ 8,045 $ 22,563 $ 16,091 (1) The components of pension plan costs other than the service cost component are included in the line item "Other (expense) income" in the Statements of Operations after reimbursements from the Exchange and its subsidiaries. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component, Including Amounts Reclassified to Other Comprehensive Income (Loss) and the Related Line Item in the Statements of Operations Where Net Income is Presented | 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 Statements of Operations where net income is presented, are as follows: Three months ended Three months ended June 30, 2020 June 30, 2019 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI (loss), beginning of period (1) $ (27,761) $ 0 $ (27,761) $ (2,235) $ (470) $ (1,765) OCI before reclassifications (1) 40,364 2,646 37,718 4,420 928 3,492 Realized investment gains (355) (75) (280) (1,239) (260) (979) Impairment losses 17 4 13 84 18 66 OCI 40,026 2,575 37,451 3,265 686 2,579 AOCI (loss), end of period (1) $ 12,265 $ 2,575 $ 9,690 $ 1,030 $ 216 $ 814 Pension and other postretirement plans: AOCI (loss), beginning of period $ (150,233) $ (31,550) $ (118,683) $ (154,190) $ (32,381) $ (121,809) Amortization of prior service costs 336 70 266 348 73 275 Amortization of net actuarial loss 3,031 637 2,394 1,210 254 956 OCI 3,367 707 2,660 1,558 327 1,231 AOCI (loss), end of period $ (146,866) $ (30,843) $ (116,023) $ (152,632) $ (32,054) $ (120,578) Total AOCI (loss), beginning of period $ (177,994) $ (31,550) $ (146,444) $ (156,425) $ (32,851) $ (123,574) Investment securities 40,026 2,575 37,451 3,265 686 2,579 Pension and other postretirement plans 3,367 707 2,660 1,558 327 1,231 OCI 43,393 3,282 40,111 4,823 1,013 3,810 AOCI (loss), end of period $ (134,601) $ (28,268) $ (106,333) $ (151,602) $ (31,838) $ (119,764) Six months ended Six months ended June 30, 2020 June 30, 2019 (in thousands) Before Tax Income Tax Net Before Tax Income Tax Net Investment securities: AOCI (loss), beginning of period $ 5,664 $ 1,189 $ 4,475 $ (9,169) $ (1,926) $ (7,243) OCI before reclassifications 4,671 981 3,690 13,194 2,771 10,423 Realized investment gains (970) (204) (766) (3,157) (663) (2,494) Impairment losses 2,900 609 2,291 162 34 128 OCI 6,601 1,386 5,215 10,199 2,142 8,057 AOCI (loss), end of period $ 12,265 $ 2,575 $ 9,690 $ 1,030 $ 216 $ 814 Pension and other postretirement plans: AOCI (loss), beginning of period $ (153,600) $ (32,257) $ (121,343) $ (155,749) $ (32,708) $ (123,041) Amortization of prior service costs 672 141 531 697 146 551 Amortization of net actuarial loss 6,062 1,273 4,789 2,420 508 1,912 OCI 6,734 1,414 5,320 3,117 654 2,463 AOCI (loss), end of period $ (146,866) $ (30,843) $ (116,023) $ (152,632) $ (32,054) $ (120,578) Total AOCI (loss), beginning of period $ (147,936) $ (31,068) $ (116,868) $ (164,918) $ (34,634) $ (130,284) Investment securities 6,601 1,386 5,215 10,199 2,142 8,057 Pension and other postretirement plans 6,734 1,414 5,320 3,117 654 2,463 OCI 13,335 2,800 10,535 13,316 2,796 10,520 AOCI (loss), end of period $ (134,601) $ (28,268) $ (106,333) $ (151,602) $ (31,838) $ (119,764) |
Nature of Operations (Details)
Nature of Operations (Details) | 6 Months Ended |
Jun. 30, 2020Obligations | |
Revenue, Performance Obligation [Abstract] | |
Performance obligations under subscriber's agreement | 2 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) $ in Thousands | 6 Months Ended | |||||||
Jun. 30, 2020 | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||
Agent loans, allowance for credit loss | $ 1,000 | |||||||
Cumulative effect adjustment | 1,194,139 | $ 1,116,992 | $ 1,133,253 | $ 1,063,454 | $ 1,013,804 | $ 973,672 | ||
Available-for-sale securities, allowance for credit loss | $ 400 | $ 600 | ||||||
Cumulative effect adjustment | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Agent loans, allowance for credit loss | $ 800 | |||||||
Cumulative effect adjustment | 1,100 | $ (1,075) | [1] | |||||
Erie Insurance Exchange | Cumulative effect adjustment | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Receivables from Erie Insurance Exchange, allowance for credit loss | $ 600 | |||||||
[1] | The cumulative effect adjustment is related to the implementation of new credit loss allowance accounting guidance effective January 1, 2020. See Note 2. "Significant Accounting Policies". |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Obligations | Jun. 30, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |||||
Indemnity's management fee rate as a percent of direct and affiliated assumed written premiums of the Exchange (percentage) | 25.00% | ||||
Performance obligations under subscriber's agreement | Obligations | 2 | ||||
Increase in allowance for cancellations | $ | $ 0.9 | $ 3.5 | $ 2 | $ 4.4 | $ 2.9 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenues By Performance Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of revenue by performance obligation | ||||
Revenue | $ 657,019 | $ 647,710 | $ 1,273,756 | $ 1,241,816 |
Management fee revenue - policy issuance and renewal services, net | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 483,795 | 480,513 | 927,545 | 911,496 |
Management fee revenue - policy issuance and renewal services, net | Transferred at point in time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 483,795 | 480,513 | 927,545 | 911,496 |
Management fee revenue - administrative services, net | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 14,813 | 14,195 | 29,584 | 28,146 |
Management fee revenue - administrative services, net | Transferred over time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 14,813 | 14,195 | 29,584 | 28,146 |
Administrative services reimbursement revenue | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 151,965 | 146,095 | 303,519 | 288,575 |
Administrative services reimbursement revenue | Transferred over time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | 151,965 | 146,095 | 303,519 | 288,575 |
Administrative services | Transferred over time | ||||
Disaggregation of revenue by performance obligation | ||||
Revenue | $ 166,778 | $ 160,290 | $ 333,103 | $ 316,721 |
Earnings Per Share (Details)
Earnings Per Share (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2019 | |
Class A common stock | |||||
Income available to stockholders (Basic EPS:) | |||||
Allocated net income (numerator) | $ | $ 81,306 | $ 87,036 | $ 140,146 | $ 161,730 | |
Weighted shares (denominator) (in shares) | 46,187,808 | 46,188,994 | 46,188,299 | 46,188,668 | |
Per-share amount (in dollars per share) | $ / shares | $ 1.76 | $ 1.88 | $ 3.03 | $ 3.50 | |
Dilutive effect of stock-based awards | |||||
Allocated net income (numerator) | $ | $ 0 | $ 0 | $ 0 | $ 0 | |
Weighted shares (denominator) (in shares) | 14,373 | 24,906 | 24,568 | 23,903 | |
Assumed conversion of Class B shares | |||||
Allocated net income (numerator) | $ | $ 671 | $ 718 | $ 1,157 | $ 1,335 | |
Weighted shares (denominator) (in shares) | 6,100,800 | 6,100,800 | 6,100,800 | 6,100,800 | |
Income available to stockholders on equivalent shares (Diluted EPS:) | |||||
Allocated net income (numerator) | $ | $ 81,977 | $ 87,754 | $ 141,303 | $ 163,065 | |
Weighted shares (denominator) (in shares) | 52,302,981 | 52,314,700 | 52,313,667 | 52,313,371 | |
Per-share amount (in dollars per share) | $ / shares | $ 1.57 | $ 1.68 | $ 2.70 | $ 3.12 | |
Class B common stock | |||||
Reconciliation of the numerators and denominators used in the basic and diluted per-share computations | |||||
Ratio for converting shares of Class B common stock into shares of Class A common stock (as a percent) | 2,400 | 2,400 | 2,400 | ||
Income available to stockholders (Basic EPS:) | |||||
Allocated net income (numerator) | $ | $ 671 | $ 718 | $ 1,157 | $ 1,335 | |
Weighted shares (denominator) (in shares) | 2,542 | 2,542 | 2,542 | 2,542 | |
Income available to stockholders on equivalent shares (Diluted EPS:) | |||||
Weighted shares (denominator) (in shares) | 2,542 | 2,542 | 2,542 | 2,542 | |
Class B – Basic and diluted EPS: | |||||
Weighted shares (denominator) (in shares) | 2,542 | 2,542 | 2,542 | 2,542 | |
Per share amount (in dollars per share) | $ / shares | $ 264 | $ 283 | $ 455 | $ 525 |
Fair Value - Fair Value Measure
Fair Value - Fair Value Measurements on a Recurring Basis by Asset Class and Level of Input (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | $ 804,825 | |
Corporate debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 469,655 | $ 454,880 |
Residential mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 119,599 | 125,343 |
Commercial mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 106,542 | 67,541 |
Collateralized debt obligations | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 96,288 | 77,856 |
Other debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 12,741 | 5,081 |
Available-for-sale securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 804,825 | 730,701 |
Fair Value, Measurements, Recurring Basis | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 880,214 | 797,834 |
Fair Value, Measurements, Recurring Basis | Corporate debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 469,655 | 454,880 |
Fair Value, Measurements, Recurring Basis | Residential mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 119,599 | 125,343 |
Fair Value, Measurements, Recurring Basis | Commercial mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 106,542 | 67,541 |
Fair Value, Measurements, Recurring Basis | Collateralized debt obligations | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 96,288 | 77,856 |
Fair Value, Measurements, Recurring Basis | Other debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 12,741 | 5,081 |
Fair Value, Measurements, Recurring Basis | Available-for-sale securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 804,825 | 730,701 |
Fair Value, Measurements, Recurring Basis | Equity securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 75,389 | 67,133 |
Fair Value, Measurements, Recurring Basis | Nonredeemable preferred stock | Financial services sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 60,149 | 53,513 |
Fair Value, Measurements, Recurring Basis | Nonredeemable preferred stock | Utilities sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 7,712 | 6,818 |
Fair Value, Measurements, Recurring Basis | Nonredeemable preferred stock | Consumer sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 2,599 | 508 |
Fair Value, Measurements, Recurring Basis | Nonredeemable preferred stock | Energy sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 1,035 | 1,881 |
Fair Value, Measurements, Recurring Basis | Nonredeemable preferred stock | Industrial Sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 980 | |
Fair Value, Measurements, Recurring Basis | Nonredeemable preferred and common stock | Communications sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 3,894 | 3,433 |
Fair Value, Measurements, Recurring Basis | Level 1 | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 32,092 | 24,233 |
Fair Value, Measurements, Recurring Basis | Level 1 | Corporate debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 2,104 | 2,683 |
Fair Value, Measurements, Recurring Basis | Level 1 | Residential mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Commercial mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Collateralized debt obligations | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Other debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Available-for-sale securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 2,104 | 2,683 |
Fair Value, Measurements, Recurring Basis | Level 1 | Equity securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 29,988 | 21,550 |
Fair Value, Measurements, Recurring Basis | Level 1 | Nonredeemable preferred stock | Financial services sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 20,943 | 14,927 |
Fair Value, Measurements, Recurring Basis | Level 1 | Nonredeemable preferred stock | Utilities sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 4,259 | 3,190 |
Fair Value, Measurements, Recurring Basis | Level 1 | Nonredeemable preferred stock | Consumer sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 892 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Nonredeemable preferred stock | Energy sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 1 | Nonredeemable preferred stock | Industrial Sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 0 | |
Fair Value, Measurements, Recurring Basis | Level 1 | Nonredeemable preferred and common stock | Communications sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 3,894 | 3,433 |
Fair Value, Measurements, Recurring Basis | Level 2 | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 824,086 | 761,956 |
Fair Value, Measurements, Recurring Basis | Level 2 | Corporate debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 462,635 | 443,873 |
Fair Value, Measurements, Recurring Basis | Level 2 | Residential mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 119,599 | 125,343 |
Fair Value, Measurements, Recurring Basis | Level 2 | Commercial mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 88,476 | 64,220 |
Fair Value, Measurements, Recurring Basis | Level 2 | Collateralized debt obligations | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 96,029 | 77,856 |
Fair Value, Measurements, Recurring Basis | Level 2 | Other debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 12,741 | 5,081 |
Fair Value, Measurements, Recurring Basis | Level 2 | Available-for-sale securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 779,480 | 716,373 |
Fair Value, Measurements, Recurring Basis | Level 2 | Equity securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 44,606 | 45,583 |
Fair Value, Measurements, Recurring Basis | Level 2 | Nonredeemable preferred stock | Financial services sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 39,206 | 38,586 |
Fair Value, Measurements, Recurring Basis | Level 2 | Nonredeemable preferred stock | Utilities sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 3,453 | 3,628 |
Fair Value, Measurements, Recurring Basis | Level 2 | Nonredeemable preferred stock | Consumer sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 912 | 508 |
Fair Value, Measurements, Recurring Basis | Level 2 | Nonredeemable preferred stock | Energy sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 1,035 | 1,881 |
Fair Value, Measurements, Recurring Basis | Level 2 | Nonredeemable preferred stock | Industrial Sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 980 | |
Fair Value, Measurements, Recurring Basis | Level 2 | Nonredeemable preferred and common stock | Communications sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Total | 24,036 | 11,645 |
Fair Value, Measurements, Recurring Basis | Level 3 | Corporate debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 4,916 | 8,324 |
Fair Value, Measurements, Recurring Basis | Level 3 | Residential mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Commercial mortgage-backed securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 18,066 | 3,321 |
Fair Value, Measurements, Recurring Basis | Level 3 | Collateralized debt obligations | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 259 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Other debt securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Available-for-sale securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Available-for-sale securities | 23,241 | 11,645 |
Fair Value, Measurements, Recurring Basis | Level 3 | Equity securities | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 795 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Nonredeemable preferred stock | Financial services sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Nonredeemable preferred stock | Utilities sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Nonredeemable preferred stock | Consumer sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 795 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Nonredeemable preferred stock | Energy sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 0 | 0 |
Fair Value, Measurements, Recurring Basis | Level 3 | Nonredeemable preferred stock | Industrial Sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | 0 | |
Fair Value, Measurements, Recurring Basis | Level 3 | Nonredeemable preferred and common stock | Communications sector | ||
Fair value measurements on a recurring basis by asset class and level of input | ||
Equity securities | $ 0 | $ 0 |
Fair Value - Level 3 Assets (De
Fair Value - Level 3 Assets (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | $ 19,439 | $ 11,645 | ||
Included in earnings | (61) | (62) | ||
Included in other comprehensive income | 1,147 | (379) | ||
Purchases | 8,741 | 10,771 | ||
Sales | (316) | (829) | ||
Transfers into Level 3 | 5,476 | 16,928 | ||
Transfers out of Level 3 | (10,390) | (14,038) | ||
Ending balance | 24,036 | 24,036 | ||
Available-for-sale securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 19,439 | $ 13,620 | 11,645 | $ 12,577 |
Included in earnings | (36) | (1) | (37) | 8 |
Included in other comprehensive income | 1,147 | 30 | (379) | 298 |
Purchases | 7,921 | 0 | 9,951 | 2,133 |
Sales | (316) | (6,932) | (829) | (7,369) |
Transfers into Level 3 | 5,476 | 5,132 | 16,928 | 10,651 |
Transfers out of Level 3 | (10,390) | (2,925) | (14,038) | (9,374) |
Ending balance | 23,241 | 8,924 | 23,241 | 8,924 |
Corporate debt securities | Available-for-sale securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 12,056 | 11,523 | 8,324 | 12,577 |
Included in earnings | (2) | (20) | 5 | (9) |
Included in other comprehensive income | 867 | 23 | (511) | 291 |
Purchases | 783 | 0 | 2,501 | 734 |
Sales | (115) | (5,841) | (542) | (6,272) |
Transfers into Level 3 | 1,142 | 2,581 | 8,037 | 7,394 |
Transfers out of Level 3 | (9,815) | (1,893) | (12,898) | (8,342) |
Ending balance | 4,916 | 6,373 | 4,916 | 6,373 |
Residential mortgage-backed securities | Available-for-sale securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 915 | 0 | ||
Included in earnings | 4 | 4 | ||
Included in other comprehensive income | 15 | 15 | ||
Purchases | 0 | 921 | ||
Sales | (26) | (32) | ||
Transfers into Level 3 | 0 | 0 | ||
Transfers out of Level 3 | (908) | (908) | ||
Ending balance | 0 | 0 | ||
Commercial mortgage-backed securities | Available-for-sale securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 7,383 | 1,182 | 3,321 | 0 |
Included in earnings | (34) | 15 | (42) | 13 |
Included in other comprehensive income | 268 | (8) | 120 | (8) |
Purchases | 6,891 | 0 | 7,203 | 478 |
Sales | (201) | (1,065) | (287) | (1,065) |
Transfers into Level 3 | 4,334 | 2,551 | 8,891 | 3,257 |
Transfers out of Level 3 | (575) | (124) | (1,140) | (124) |
Ending balance | 18,066 | $ 2,551 | 18,066 | $ 2,551 |
Collateralized debt obligations | Available-for-sale securities | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 0 | 0 | ||
Included in earnings | 0 | 0 | ||
Included in other comprehensive income | 12 | 12 | ||
Purchases | 247 | 247 | ||
Sales | 0 | 0 | ||
Transfers into Level 3 | 0 | 0 | ||
Transfers out of Level 3 | 0 | 0 | ||
Ending balance | 259 | 259 | ||
Nonredeemable preferred stock | Nonredeemable preferred stock | ||||
Roll forward of level 3 fair value measurements on a recurring basis | ||||
Beginning balance | 0 | 0 | ||
Included in earnings | (25) | (25) | ||
Included in other comprehensive income | 0 | 0 | ||
Purchases | 820 | 820 | ||
Sales | 0 | 0 | ||
Transfers into Level 3 | 0 | 0 | ||
Transfers out of Level 3 | 0 | 0 | ||
Ending balance | $ 795 | $ 795 |
Fair Value - Quantitative and Q
Fair Value - Quantitative and Qualitative Disclosures about Unobservable Inputs (Details) - Level 3 - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Fair value measurements on a recurring basis, valuation techniques | ||||||
Fair value, measurement with unobservable inputs | $ 24,036 | $ 19,439 | $ 11,645 | |||
Available-for-sale securities | ||||||
Fair value measurements on a recurring basis, valuation techniques | ||||||
Fair value, measurement with unobservable inputs | 23,241 | $ 19,439 | 11,645 | $ 8,924 | $ 13,620 | $ 12,577 |
Fair Value, Measurements, Recurring Basis | Non-Binding Broker Quote | Available-for-sale securities | ||||||
Fair value measurements on a recurring basis, valuation techniques | ||||||
Fair value, measurement with unobservable inputs | $ 6,000 | $ 1,300 |
Fair Value - Financial Instrume
Fair Value - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Carrying value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Agent loans | $ 65,450 | $ 67,696 |
Long-term borrowings | 97,101 | 98,080 |
Level 3 | Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Agent loans | 63,030 | 71,602 |
Long-term borrowings | $ 117,604 | $ 101,888 |
Investments - Cost and Fair Val
Investments - Cost and Fair Value, Net of Credit Loss Allowance, of Available-For-Sale Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Available-for-sale securities | ||
Amortized cost | $ 792,470 | |
Estimated fair value | 804,825 | |
Corporate debt securities | ||
Available-for-sale securities | ||
Amortized cost | 461,398 | $ 450,295 |
Gross unrealized gains | 14,508 | 6,289 |
Gross unrealized losses | 6,251 | 1,704 |
Estimated fair value | 469,655 | 454,880 |
Residential mortgage-backed securities | ||
Available-for-sale securities | ||
Amortized cost | 115,631 | 124,337 |
Gross unrealized gains | 3,970 | 1,056 |
Gross unrealized losses | 2 | 50 |
Estimated fair value | 119,599 | 125,343 |
Commercial mortgage-backed securities | ||
Available-for-sale securities | ||
Amortized cost | 104,403 | 67,210 |
Gross unrealized gains | 3,390 | 479 |
Gross unrealized losses | 1,251 | 148 |
Estimated fair value | 106,542 | 67,541 |
Collateralized debt obligations | ||
Available-for-sale securities | ||
Amortized cost | 98,603 | 78,059 |
Gross unrealized gains | 281 | 44 |
Gross unrealized losses | 2,596 | 247 |
Estimated fair value | 96,288 | 77,856 |
Other debt securities | ||
Available-for-sale securities | ||
Amortized cost | 12,435 | 5,049 |
Gross unrealized gains | 355 | 71 |
Gross unrealized losses | 49 | 39 |
Estimated fair value | 12,741 | 5,081 |
Available-for-sale securities | ||
Available-for-sale securities | ||
Amortized cost | 792,470 | 724,950 |
Gross unrealized gains | 22,504 | 7,939 |
Gross unrealized losses | 10,149 | 2,188 |
Estimated fair value | $ 804,825 | $ 730,701 |
Investments - Amortized Cost an
Investments - Amortized Cost and Estimated Fair Value of Available-For-Sale Securities by Contractual Maturity (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Amortized cost | |
Due in one year or less | $ 24,154 |
Due after one year through five years | 362,607 |
Due after five years through ten years | 129,547 |
Due after ten years | 276,162 |
Amortized cost | 792,470 |
Estimated fair value | |
Due in one year or less | 24,233 |
Due after one year through five years | 372,299 |
Due after five years through ten years | 128,334 |
Due after ten years | 279,959 |
Estimated fair value | $ 804,825 |
Investments - Available-For-Sal
Investments - Available-For-Sale Securities in a Gross Unrealized Loss Position (Details) $ in Thousands | Jun. 30, 2020USD ($)Holdings | Dec. 31, 2019USD ($)Holdings |
Investment grade | ||
Fair value | ||
Less than 12 months | $ 135,419 | $ 76,315 |
12 months or longer | 13,721 | 46,390 |
Total | 149,140 | 122,705 |
Unrealized losses | ||
Less than 12 months | 3,849 | 287 |
12 months or longer | 526 | 218 |
Total | $ 4,375 | $ 505 |
No. of holdings | Holdings | 170 | 100 |
Non-investment grade | ||
Fair value | ||
Less than 12 months | $ 56,920 | $ 11,421 |
12 months or longer | 8,058 | 10,691 |
Total | 64,978 | 22,112 |
Unrealized losses | ||
Less than 12 months | 3,881 | 324 |
12 months or longer | 1,893 | 1,359 |
Total | $ 5,774 | $ 1,683 |
No. of holdings | Holdings | 473 | 146 |
Available-for-sale securities | ||
Fair value | ||
Less than 12 months | $ 192,339 | $ 87,736 |
12 months or longer | 21,779 | 57,081 |
Total | 214,118 | 144,817 |
Unrealized losses | ||
Less than 12 months | 7,730 | 611 |
12 months or longer | 2,419 | 1,577 |
Total | $ 10,149 | $ 2,188 |
No. of holdings | Holdings | 643 | 246 |
Corporate debt securities | ||
Fair value | ||
Less than 12 months | $ 81,468 | $ 25,804 |
12 months or longer | 8,058 | 15,699 |
Total | 89,526 | 41,503 |
Unrealized losses | ||
Less than 12 months | 4,358 | 342 |
12 months or longer | 1,893 | 1,362 |
Total | $ 6,251 | $ 1,704 |
No. of holdings | Holdings | 494 | 158 |
Residential mortgage-backed securities | ||
Fair value | ||
Less than 12 months | $ 1,407 | $ 16,712 |
12 months or longer | 0 | 0 |
Total | 1,407 | 16,712 |
Unrealized losses | ||
Less than 12 months | 2 | 50 |
12 months or longer | 0 | 0 |
Total | $ 2 | $ 50 |
No. of holdings | Holdings | 3 | 7 |
Commercial mortgage-backed securities | ||
Fair value | ||
Less than 12 months | $ 30,808 | $ 21,981 |
12 months or longer | 0 | 372 |
Total | 30,808 | 22,353 |
Unrealized losses | ||
Less than 12 months | 1,251 | 147 |
12 months or longer | 0 | 1 |
Total | $ 1,251 | $ 148 |
No. of holdings | Holdings | 47 | 30 |
Collateralized debt obligations | ||
Fair value | ||
Less than 12 months | $ 75,876 | $ 20,889 |
12 months or longer | 13,721 | 41,010 |
Total | 89,597 | 61,899 |
Unrealized losses | ||
Less than 12 months | 2,070 | 33 |
12 months or longer | 526 | 214 |
Total | $ 2,596 | $ 247 |
No. of holdings | Holdings | 92 | 49 |
Other debt securities | ||
Fair value | ||
Less than 12 months | $ 2,780 | $ 2,350 |
12 months or longer | 0 | 0 |
Total | 2,780 | 2,350 |
Unrealized losses | ||
Less than 12 months | 49 | 39 |
12 months or longer | 0 | 0 |
Total | $ 49 | $ 39 |
No. of holdings | Holdings | 7 | 2 |
Investments - Credit Loss Allow
Investments - Credit Loss Allowance on Investments (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Mar. 31, 2020 |
Investments [Abstract] | ||
Agent loans, allowance for credit loss | $ 1 | |
Available-for-sale securities, allowance for credit loss | $ 0.4 | $ 0.6 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Investment income from portfolios | ||||
Total investment income | $ 7,686 | $ 8,289 | $ 16,304 | $ 17,056 |
Less: investment expenses | 313 | 259 | 562 | 509 |
Investment income, net of expenses | 7,373 | 8,030 | 15,742 | 16,547 |
Available-for-sale securities | ||||
Investment income from portfolios | ||||
Total investment income | 5,670 | 5,488 | 11,458 | 11,649 |
Equity securities | ||||
Investment income from portfolios | ||||
Total investment income | 901 | 141 | 1,757 | 282 |
Cash equivalents and other | ||||
Investment income from portfolios | ||||
Total investment income | $ 1,115 | $ 2,660 | $ 3,089 | $ 5,125 |
Investments - Realized Investme
Investments - Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Available-for-sale securities: | ||||
Net realized investment gains (losses) | $ 6,526 | $ 1,302 | $ (4,280) | $ 3,805 |
Available-for-sale securities | ||||
Available-for-sale securities: | ||||
Gross realized gains | 1,721 | 2,062 | 2,795 | 4,320 |
Gross realized losses | (1,366) | (823) | (1,825) | (1,163) |
Net realized gains on available-for-sale securities | 355 | 1,239 | 970 | 3,157 |
Equity securities | ||||
Available-for-sale securities: | ||||
Equity securities | 6,170 | 63 | (5,252) | 648 |
Miscellaneous | ||||
Available-for-sale securities: | ||||
Miscellaneous | $ 1 | $ 0 | $ 2 | $ 0 |
Investments - Portion of Net Un
Investments - Portion of Net Unrealized Gains and Losses Recognized During the Reporting Period Related To Equity Securities (Details) - Equity securities - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Equity securities: | ||||
Net gains (losses) recognized during the period | $ 6,170 | $ 63 | $ (5,252) | $ 648 |
Less: net gains (losses) recognized on securities sold | 1,357 | 0 | (2,157) | 0 |
Net unrealized gains (losses) recognized on securities held at reporting date | $ 4,813 | $ 63 | $ (3,095) | $ 648 |
Investments - Impairments on Av
Investments - Impairments on Available-For-Sale Securities and Agent Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Available-for-sale securities: | ||||
Intent to sell | $ 0 | $ 84 | $ 2,242 | $ 162 |
Credit impaired | 17 | 0 | 658 | 0 |
Total available-for-sale securities | 17 | 84 | 2,900 | 162 |
Agent loans - expected credit losses | 0 | 0 | 170 | 0 |
Net impairment losses recognized in earnings | $ 17 | $ 84 | $ 3,070 | $ 162 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||||
Operating lease costs | $ 3,300 | $ 3,600 | $ 6,700 | $ 7,200 | |
Erie Insurance Exchange | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease costs, amount reimbursed from Exchange and its subsidiaries | 1,400 | $ 1,600 | 2,800 | $ 3,100 | |
Erie Insurance Exchange | Office Space | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease assets | 9,200 | 9,200 | |||
Operating lease assets | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease assets | 19,267 | 19,267 | $ 22,401 | ||
Operating lease liabilities - current | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease liabilities - current | 11,216 | 11,216 | 11,289 | ||
Operating lease liabilities - long-term | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease liabilities - long-term | 7,664 | 7,664 | 10,665 | ||
Operating lease liabilities | |||||
Lessee, Lease, Description [Line Items] | |||||
Total operating lease liabilities | $ 18,880 | $ 18,880 | $ 21,954 |
Borrowing Arrangements - Bank L
Borrowing Arrangements - Bank Line of Credit (Details) - Revolving line of credit | Jun. 30, 2020USD ($) |
Bank line of credit | |
Maximum borrowing capacity under the bank revolving line of credit | $ 100,000,000 |
Maximum letter of credit sublimit under the bank revolving line of credit | 25,000,000 |
Available borrowing capacity under the bank revolving line of credit, due to outstanding letters of credit | 99,100,000 |
Outstanding amount of letters of credit under the bank revolving line of credit | 900,000 |
Available amount of letters of credit under the bank revolving line of credit | 24,100,000 |
Borrowings outstanding under the bank revolving line of credit | 0 |
Fair value of investments pledged as collateral on the bank revolving line of credit | $ 124,400,000 |
Borrowing Arrangements - Term L
Borrowing Arrangements - Term Loan Credit Facility (Details) - Secured debt - USD ($) | Jan. 01, 2019 | Jun. 30, 2020 | Dec. 31, 2016 |
Term loan credit facility | |||
Amount of senior secured draw term loan credit facility | $ 100,000,000 | ||
Fixed interest rate of credit facility (as a percent) | 4.35% | ||
Repayment period of credit facility | 28 years | ||
Fair value of investments pledged as collateral on the credit facility | $ 126,100,000 |
Borrowing Arrangements - Annual
Borrowing Arrangements - Annual Principal Payments (Details) - Secured debt $ in Thousands | Jun. 30, 2020USD ($) |
Future principal payments: | |
2020 | $ 1,000 |
2021 | 2,019 |
2022 | 2,109 |
2023 | 2,226 |
2024 | 2,302 |
Thereafter | $ 87,445 |
Postretirement Benefits (Detail
Postretirement Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cost of pension plans: | ||||
Service cost for benefits earned | $ 10,874 | $ 8,464 | $ 21,747 | $ 16,927 |
Interest cost on benefits obligation | 9,394 | 9,826 | 18,789 | 19,653 |
Expected return on plan assets | (12,353) | (11,871) | (24,706) | (23,742) |
Prior service cost amortization | 335 | 348 | 671 | 697 |
Net actuarial loss amortization | 3,031 | 1,278 | 6,062 | 2,556 |
Pension plan cost | $ 11,281 | $ 8,045 | $ 22,563 | $ 16,091 |
Erie Insurance Exchange | ||||
Postretirement Benefits | ||||
Postretirement annual benefit expense reimbursed to Indemnity from the Exchange and its subsidiaries (as a percent) | 58.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate (as a percent) | 20.00% | 17.20% | 20.90% | 19.10% | |
Valuation allowance recognized on net deferred tax assets | $ 6.8 | ||||
Valuation allowance release, amount recorded in other comprehensive income | $ 5.8 | ||||
Valuation allowance release, amount recorded as an income tax benefit | $ 1 | ||||
Valuation allowance release, decrease to effective tax rate (percent) | 0.90% | ||||
Effective income tax rate, settlement of uncertain tax position (percent) | 3.80% | 2.00% |
Capital Stock - Class A and B C
Capital Stock - Class A and B Common Stock (Details) - Class B common stock | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020shares | Dec. 31, 2019shares | |
Common Stock | ||
Ratio for converting shares of Class B common stock into shares of Class A common stock (as a percent) | 2,400 | 2,400 |
Class B common stock shares converted into Class A common stock shares (in shares) | 0 | 0 |
Capital Stock - Stock Repurchas
Capital Stock - Stock Repurchases (Details) - Class A common stock - Stock repurchase program - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2011 | |
Stock repurchases | |||
Amount of authorized stock repurchases approved for continuation under the current program | $ 150,000,000 | ||
Shares repurchased under stock repurchase program (in shares) | 0 | 0 | |
Approximate amount of repurchase authority remaining under the current stock repurchase program | $ 17,800,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated other comprehensive income (loss), net of tax | ||||||
AOCI (loss), beginning of period | $ (116,868) | $ (116,868) | ||||
Change in unrealized holding gains on available-for-sale securities | $ 37,451 | $ 2,579 | 5,215 | $ 8,057 | ||
Pension and other postretirement plans, OCI (loss) | 2,660 | 1,231 | 5,320 | 2,463 | ||
OCI | 40,111 | (29,576) | 3,810 | $ 6,710 | 10,535 | 10,520 |
AOCI (loss), end of period | (106,333) | (106,333) | ||||
Investment securities: | ||||||
Accumulated other comprehensive income (loss), before tax | ||||||
AOCI (loss), beginning of period | (27,761) | 5,664 | (2,235) | (9,169) | 5,664 | (9,169) |
OCI (loss) before reclassifications | 40,364 | 4,420 | 4,671 | 13,194 | ||
Realized investment gains | (355) | (1,239) | (970) | (3,157) | ||
Impairment losses | 17 | 84 | 2,900 | 162 | ||
Investment securities, OCI (loss) | 40,026 | 3,265 | 6,601 | 10,199 | ||
AOCI (loss), end of period | 12,265 | (27,761) | 1,030 | (2,235) | 12,265 | 1,030 |
Accumulated other comprehensive income (loss), tax | ||||||
AOCI (loss), beginning of period | 0 | 1,189 | (470) | (1,926) | 1,189 | (1,926) |
OCI (loss) before reclassifications | 2,646 | 928 | 981 | 2,771 | ||
Realized investment gains | (75) | (260) | (204) | (663) | ||
Impairment losses | 4 | 18 | 609 | 34 | ||
Investment securities, OCI (loss) | 2,575 | 686 | 1,386 | 2,142 | ||
AOCI (loss), end of period | 2,575 | 0 | 216 | (470) | 2,575 | 216 |
Accumulated other comprehensive income (loss), net of tax | ||||||
AOCI (loss), beginning of period | (27,761) | 4,475 | (1,765) | (7,243) | 4,475 | (7,243) |
OCI (loss) before reclassifications | 37,718 | 3,492 | 3,690 | 10,423 | ||
Realized investment gains | (280) | (979) | (766) | (2,494) | ||
Impairment losses | 13 | 66 | 2,291 | 128 | ||
Change in unrealized holding gains on available-for-sale securities | 37,451 | 2,579 | 5,215 | 8,057 | ||
AOCI (loss), end of period | 9,690 | (27,761) | 814 | (1,765) | 9,690 | 814 |
Pension and other postretirement plans: | ||||||
Accumulated other comprehensive income (loss), before tax | ||||||
AOCI (loss), beginning of period | (150,233) | (153,600) | (154,190) | (155,749) | (153,600) | (155,749) |
Amortization of prior service costs | 336 | 348 | 672 | 697 | ||
Amortization of net actuarial loss | 3,031 | 1,210 | 6,062 | 2,420 | ||
Pension and other postretirement plans, OCI (loss) | 3,367 | 1,558 | 6,734 | 3,117 | ||
AOCI (loss), end of period | (146,866) | (150,233) | (152,632) | (154,190) | (146,866) | (152,632) |
Accumulated other comprehensive income (loss), tax | ||||||
AOCI (loss), beginning of period | (31,550) | (32,257) | (32,381) | (32,708) | (32,257) | (32,708) |
Amortization of prior service costs | 70 | 73 | 141 | 146 | ||
Amortization of net actuarial loss | 637 | 254 | 1,273 | 508 | ||
Pension and other postretirement plans, OCI (loss) | 707 | 327 | 1,414 | 654 | ||
AOCI (loss), end of period | (30,843) | (31,550) | (32,054) | (32,381) | (30,843) | (32,054) |
Accumulated other comprehensive income (loss), net of tax | ||||||
AOCI (loss), beginning of period | (118,683) | (121,343) | (121,809) | (123,041) | (121,343) | (123,041) |
Amortization of prior service costs | 266 | 275 | 531 | 551 | ||
Amortization of net actuarial loss | 2,394 | 956 | 4,789 | 1,912 | ||
Pension and other postretirement plans, OCI (loss) | 2,660 | 1,231 | 5,320 | 2,463 | ||
AOCI (loss), end of period | (116,023) | (118,683) | (120,578) | (121,809) | (116,023) | (120,578) |
Total | ||||||
Accumulated other comprehensive income (loss), before tax | ||||||
AOCI (loss), beginning of period | (177,994) | (147,936) | (156,425) | (164,918) | (147,936) | (164,918) |
Investment securities, OCI (loss) | 40,026 | 3,265 | 6,601 | 10,199 | ||
Pension and other postretirement plans, OCI (loss) | 3,367 | 1,558 | 6,734 | 3,117 | ||
OCI | 43,393 | 4,823 | 13,335 | 13,316 | ||
AOCI (loss), end of period | (134,601) | (177,994) | (151,602) | (156,425) | (134,601) | (151,602) |
Accumulated other comprehensive income (loss), tax | ||||||
AOCI (loss), beginning of period | (31,550) | (31,068) | (32,851) | (34,634) | (31,068) | (34,634) |
Investment securities, OCI (loss) | 2,575 | 686 | 1,386 | 2,142 | ||
Pension and other postretirement plans, OCI (loss) | 707 | 327 | 1,414 | 654 | ||
OCI | 3,282 | 1,013 | 2,800 | 2,796 | ||
AOCI (loss), end of period | (28,268) | (31,550) | (31,838) | (32,851) | (28,268) | (31,838) |
Accumulated other comprehensive income (loss), net of tax | ||||||
AOCI (loss), beginning of period | (146,444) | (116,868) | (123,574) | (130,284) | (116,868) | (130,284) |
Change in unrealized holding gains on available-for-sale securities | 37,451 | 2,579 | 5,215 | 8,057 | ||
Pension and other postretirement plans, OCI (loss) | 2,660 | 1,231 | 5,320 | 2,463 | ||
OCI | 40,111 | (29,576) | 3,810 | 6,710 | 10,535 | 10,520 |
AOCI (loss), end of period | $ (106,333) | $ (146,444) | $ (119,764) | $ (123,574) | $ (106,333) | $ (119,764) |
Concentrations of Credit Risk (
Concentrations of Credit Risk (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Receivables from Erie Insurance Exchange and its affiliates | $ 506,690,000 | $ 468,636,000 |
Erie Insurance Exchange | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Change in allowance for credit loss | $ 0 |