Erie Indemnity (ERIE) 8-K Erie Indemnity Reports First Quarter 2008 Results and Expansion of Share Repurchase Program

Exhibit 99.2

ERIE INDEMNITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share data)

	Three			Three
	months			months
	ended			ended
	March 31,			March 31,
	2008			2007
	(Unaudited)
Operating revenue
Management fee revenue, net	$	216,971		$	216,020
Premiums earned		51,926			51,974
Service agreement revenue		7,391			7,418
Total operating revenue		276,288			275,412
Operating expenses
Cost of management operations		181,119			179,886
Losses and loss adjustment expenses incurred		33,760			32,234
Policy acquisition and other underwriting expenses		11,999			11,995
Total operating expenses		226,878			224,115
Investment (loss) income – unaffiliated
Investment income, net of expenses		11,672			13,978
Net realized (losses) gains on investments		(24,579	)		1,890
Equity in earnings of limited partnerships		7,978			12,518
Total investment (loss) income – unaffiliated		(4,929	)		28,386
Income before income taxes and equity in (losses) earnings of Erie Family Life Insurance		44,481			79,683
Provision for income taxes		14,251			24,592
Equity in (losses) earnings of Erie Family Life Insurance, net of tax		(253	)		1,270
Net income	$	29,977		$	56,361
Net income per share:
Class A common stock – basic	$	0.57		$	0.97
Class A common stock – diluted		0.51			0.88
Class B common stock – basic and diluted		84.57			149.01
Weighted average shares outstanding:
Class A common stock – basic		52,827,878			57,691,289
Class A common stock – diluted		58,965,265			63,906,458
Class B common stock – basic and diluted		2,551			2,573
Dividends declared per share:
Class A common stock	$	0.44		$	0.40
Class B common stock		66.00			60.00

1

ERIE INDEMNITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS — SEGMENT BASIS

(amounts in thousands, except per share data)

	Three			Three
	months			months
	ended			ended
	March 31,			March 31,
	2008			2007
	(Unaudited)
Management operations
Management fee revenue	$	229,599		$	228,645
Service agreement revenue		7,391			7,418
Total revenue from management operations		236,990			236,063
Cost of management operations		191,660			190,385
Income from management operations		45,330			45,678
Insurance underwriting operations
Premiums earned		51,926			51,974
Losses and loss adjustment expenses incurred		33,760			32,234
Policy acquisition and other underwriting expenses		14,086			14,121
Total losses and expenses		47,846			46,355
Underwriting income		4,080			5,619
Investment operations
Investment income, net of expenses		11,672			13,978
Net realized (losses) gains on investments		(24,579	)		1,890
Equity in earnings of limited partnerships		7,978			12,518
Equity in (losses) earnings of Erie Family Life Insurance		(272	)		1,366
Net (loss) revenue from investment operations		(5,201	)		29,752
Income before income taxes		44,209			81,049
Provision for income taxes		14,232			24,688
Net income	$	29,977		$	56,361
Net income per share – Class A basic	$	0.57		$	0.97
Net income per share – Class A diluted		0.51			0.88
Net income per share – Class B basic and diluted		84.57			149.01
Weighted average shares outstanding - Class A diluted		58,965			63,906

Amounts presented on a segment basis are gross of intercompany/intersegment items.

2

ERIE INDEMNITY COMPANY

RECONCILIATION OF OPERATING INCOME TO NET INCOME

Definition of non-GAAP and operating measures

We believe that investors’ understanding of our performance is enhanced by the disclosure of the following non-GAAP financial measure. Our method of calculating this measure may differ from those used by other companies and therefore comparability may be limited.

Operating incomeis net income excluding realized capital gains and losses and related federal income taxes. We elected the fair value measurement option for our common stock portfolio effective January 1, 2008. As such, changes in value related to common stocks are reported in earnings. These unrealized gains or losses are included in the net realized losses/gains on investments on the Consolidated Statements of Operations that is used to calculate operating income. Equity in earnings or losses of Erie Family Life Insurance Company and equity in earnings or losses of limited partnerships are not excluded from the calculation of operating income. Both of these categories include the respective investment’s realized capital gains and losses, as well as unrealized gains and losses, as these investments are accounted for under the equity method.

Net income is the GAAP measure that is most directly comparable to operating income.

We use operating income to evaluate the results of operations. It reveals trends in our management services, insurance underwriting and investment operations that may be obscured by the net effects of realized capital gains and losses. Realized capital gains and losses may vary significantly between periods and are generally driven by business decisions and economic developments such as capital market condition, the timing of which is unrelated to management services and the insurance underwriting processes. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our performance. We are aware that the price to earnings multiple commonly used by investors as a forward-looking valuation technique uses operating income as the denominator. Operating income should not be considered as a substitute for net income and does not reflect our overall profitability.

The following table reconciles operating income and net income for the periods ended March 31, 2008 and 2007:

	Three			Three
	months ended			months ended
	March 31,			March 31,
	2008			2007
	(Unaudited)			(Unaudited)
(in thousands, except per share data)
Operating income	$	45,953		$	55,133
Net realized (losses) gains on investments		(24,579	)		1,890
Income tax benefit (expense) on realized (losses) gains		8,603			(662	)
Realized (losses) gains, net of income taxes		(15,976	)		1,228
Net income	$	29,977		$	56,361
	Three months			Three months
	ended			ended
	March 31,			March 31,
		2008			2007
	(Unaudited)			(Unaudited)
Per Class A share – diluted:
Operating income	$	0.78		$	0.86
Net realized (losses) gains on investments		(0.42	)		0.03
Income tax benefit (expense) on realized (losses) gains		0.15			(0.01	)
Realized (losses) gains, net of income taxes		(0.27	)		0.02
Net income	$	0.51		$	0.88

3

ERIE INDEMNITY COMPANY

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(amounts in thousands, except per share data)

	March 31,		December 31,
	2008		2007
	(Unaudited)
Assets
Investments
Available-for-sale securities, at fair value:
Fixed maturities	$	659,470	$	703,406
Equity securities		107,967		218,270
Trading securities, at fair value		110,664		0
Other invested assets		295,019		297,059
Total investments		1,173,120		1,218,735
Cash and cash equivalents		31,201		31,070
Equity in Erie Family Life Insurance		58,977		59,046
Premiums receivable from policyholders		241,098		243,612
Receivables from affiliates		1,194,352		1,177,830
Other assets		152,208		148,330
Total assets	$	2,850,956	$	2,878,623
Liabilities and shareholders’ equity
Liabilities
Unpaid losses and loss adjustment expenses	$	1,017,054	$	1,026,531
Unearned premiums		417,298		421,263
Other liabilities		420,644		379,550
Total liabilities		1,854,996		1,827,344
Total shareholders’ equity		995,960		1,051,279
Total liabilities and shareholders’ equity	$	2,850,956	$	2,878,623
Book value per share	$	17.10	$	17.68
Shares outstanding		58,257		59,461

4

ERIE INDEMNITY COMPANY
RECONCILIATION OF PROPERTY AND CASUALTY GROUP TO INDEMNITY RESULTS

	Three			Three
	months ended			months ended
	March 31,			March 31,
	2008			2007
(dollars in thousands)
Property and Casualty Group insurance underwriting operations (SAP basis)
Direct underwriting results
Direct written premium	$	918,396		$	918,178
Premiums earned		937,819			942,157
Loss and loss adjustment expenses incurred		603,390			572,327
Policy acquisition and other underwriting expenses		254,862			257,102
Total losses and expenses		858,252			829,429
Direct underwriting income		79,567			112,728
Nonaffiliated reinsurance underwriting results
Assumed voluntary-less ceded retrocessions		210			(2,898	)
Assumed involuntary		(791	)		(1,364	)
Less: Ceded		9,043			7,815
Nonaffiliated reinsurance underwriting loss		(9,624	)		(12,077	)
Net underwriting income (SAP basis)	$	69,943		$	100,651
Erie Indemnity insurance underwriting operations (SAP to GAAP basis)
Percent of pool assumed by the Indemnity Company		5.50	%		5.50	%
Indemnity preliminary underwriting income (SAP basis)	$	3,847		$	5,536
SAP to GAAP adjustments		233			83
Indemnity underwriting income before tax (GAAP basis)	$	4,080		$	5,619
Property & Casualty Group (SAP basis)
Net basis:
Loss and LAE ratio		65.6	%		62.3	%
Underwriting ratio		27.3			27.1
Policyholder dividends ratio		0.1			0.2
Statutory combined ratio		93.0			89.6
Adjusted combined ratio, excluding profit component		88.9			85.5
Direct business:
Loss ratio points from prior accident year reserve development – redundancy		(5.3	)		(10.3	)
Loss ratio points from prior accident years from salvage and subrogation recoveries collected		(3.3	)		(3.1	)
Total loss ratio points from prior accident years		(8.6	)		(13.4	)
Loss ratio points from catastrophes		1.6			0.5
Erie Indemnity Company
GAAP combined ratio		92.1			89.2
GAAP loss ratio points from catastrophes		1.6			0.5

SAP basis represents statutory accounting principles as codified by the National Association of Insurance Commissioners (NAIC).

5Selected financial data of Erie Insurance Exchange:

The selected financial data below is derived from the Erie Insurance Exchange’s financial statements prepared in accordance with Statutory Accounting Principles. In our opinion, all adjustments consisting only of normal recurring accruals, considered necessary for a fair presentation have been included. The financial data set forth below is only a summary.

	Three		Three
	months ended		months ended
	March 31,		March 31,
	2008		2007
(dollars in thousands)
Statutory accounting basis	(Unaudited)
Premiums earned	$	887,492	$	889,551
Losses, loss adjustment expenses and
underwriting expenses		821,418		794,427
Net underwriting income		66,074		95,124
Total investment income		30,229		136,646
Income before income taxes		96,303		231,770
Federal income tax expense		60,800		71,992
Net income	$	35,503	$	159,778

	As of		As of
	March 31,		December 31,
	2008		2007
(dollars in thousands)
Statutory accounting basis	(Unaudited)
Cash and invested assets	$	8,811,249	$	8,927,997
Other assets		1,142,810		1,033,852
Total assets	$	9,954,059	$	9,961,849
Loss, loss adjustments expense and
unearned premium reserves	$	4,826,374	$	4,848,549
Other liabilities		406,574		345,776
Total liabilities		5,232,948		5,194,325
Policyholders’ surplus		4,721,111		4,767,524
Total liabilities and policyholders’ surplus	$	9,954,059	$	9,961,849

6

Management fee revenue by major lines of business – Segment basis:

	Three months			Three months
	ended			ended
	March 31,			March 31,			%
	2008			2007			Change
(dollars in thousands)
Private passenger auto	$	109,250		$	108,676			0.5	%
Homeowners		37,784			37,093			1.9
Commercial multi-peril		28,744			28,764			-0.1
Workers compensation		21,214			22,976			-7.7
Commercial auto		20,718			20,792			-0.4
All other lines of business		11,889			11,244			5.7
		229,599			229,545			0.0
Change in allowance for management fee returned on cancelled policies		0			(900	)
Management fee revenue, net of allowance	$	229,599		$	228,645			0.4	%
Management fee rate		25.00	%		25.00	%

7

Growth rates of policies in force for Property and Casualty Group insurance operations by major lines of business:

	Private		12-mth.					12-mth.					12-mth.			Total		12-mth.
	Passenger		growth					growth			All Other		growth			Personal		growth
Date	Auto		rate			Homeowners		rate			Personal Lines		rate			Lines		rate
03/31/2006		1,636,048		(1.6	)%		1,356,885		1.0	%		289,964		3.6	%		3,282,897		(0.1	)%
06/30/2006		1,637,472		(1.3	)		1,366,633		1.2			294,409		4.2			3,298,514		0.2
09/30/2006		1,636,947		(0.9	)		1,373,763		1.4			298,361		4.6			3,309,071		0.5
12/31/2006		1,633,882		(0.4	)		1,377,965		1.8			301,497		5.2			3,313,344		1.0
03/31/2007		1,635,714		0.0			1,384,856		2.1			305,591		5.4			3,326,161		1.3
06/30/2007		1,644,561		0.4			1,398,034		2.3			311,761		5.9			3,354,356		1.7
09/30/2007		1,649,801		0.8			1,408,114		2.5			316,786		6.2			3,374,701		2.0
12/31/2007		1,651,234		1.1			1,413,712		2.6			321,431		6.6			3,386,377		2.2
03/31/2008		1,655,869		1.2			1,420,250		2.6			325,926		6.7			3,402,045		2.3

			12-mth.			CML*		12-mth.					12-mth.					12-mth.			Total		12-mth.
	CML*		growth			Multi-		growth			Workers		growth			All Other		growth			CML*		growth
Date	Auto		rate			Peril		rate			Comp.		rate			CML* Lines		rate			Lines		rate
03/31/2006		118,587		1.0	%		214,461		2.3	%		55,254		(4.7	)%		90,301		2.8	%		478,603		1.2	%
06/30/2006		119,471		0.9			217,134		2.4			54,871		(4.4	)		91,568		2.9			483,044		1.3
09/30/2006		119,555		0.8			217,763		2.3			54,379		(4.4	)		92,687		2.9			484,384		1.2
12/31/2006		119,801		0.9			218,542		2.4			53,923		(4.1	)		92,687		2.7			484,953		1.3
03/31/2007		119,907		1.1			219,300		2.3			53,498		(3.2	)		92,857		2.8			485,562		1.5
06/30/2007		121,587		1.8			223,670		3.0			53,955		(1.7	)		94,612		3.3			493,824		2.2
09/30/2007		122,154		2.2			226,302		3.9			54,341		(0.1	)		96,167		3.8			498,964		3.0
12/31/2007		122,558		2.3			228,214		4.4			54,720		1.5			96,464		4.1			501,956		3.5
03/31/2008		122,882		2.5			229,577		4.7			54,927		2.7			96,511		3.9			503,897		3.8

			12-mth.
	Total All		growth
Date	Lines		rate
03/31/2006		3,761,500		0.1	%
06/30/2006		3,781,558		0.4
09/30/2006		3,793,455		0.6
12/31/2006		3,798,297		1.0
03/31/2007		3,811,723		1.3
06/30/2007		3,848,180		1.8
09/30/2007		3,873,665		2.1
12/31/2007		3,888,333		2.4
03/31/2008		3,905,942		2.5

CML* = Commercial

8

Policy retention trends for Property and Casualty Group insurance operations by major lines of business:

	Private									CML*
	Passenger			CML*						Multi-			Workers			All Other
Date	Auto			Auto			Homeowners			Peril			Comp.			Lines			Total All Lines
03/31/2006		90.1	%		88.0	%		88.6	%		85.9	%		86.0	%		86.2	%		88.8	%
06/30/2006		90.3			87.7			88.9			85.9			85.9			86.5			89.0
09/30/2006		90.5			87.8			89.2			86.0			85.8			86.7			89.2
12/31/2006		90.8			87.7			89.4			86.0			85.7			87.1			89.5
03/31/2007		91.0			88.0			89.7			86.1			86.2			87.2			89.7
06/30/2007		91.1			88.1			89.9			86.0			86.3			87.6			89.9
09/30/2007		91.3			88.2			90.1			86.1			86.8			87.5			90.0
12/31/2007		91.5			88.2			90.3			86.0			86.8			87.8			90.2
03/31/2008		91.6			88.4			90.5			86.5			87.6			87.9			90.4

CML* = Commercial

9

Average premium per policy trends for Property and Casualty Group insurance operations by major lines of business:

	Private		12-mth.					12-mth.			All other		12-mth.					12-mth.
	Passenger		percent					percent			Personal		percent			Total Personal		percent
Date	Auto		change			Homeowners		change			Lines		change			Lines		change
03/31/2006	$	1,161		(2.7	)%	$	539		(2.4	)%	$	349		0.6	%	$	832		(3.0	)%
06/30/2006		1,140		(3.9	)		535		(2.6	)		348		0.6			818		(3.9	)
09/30/2006		1,122		(4.8	)		530		(2.9	)		348		0.3			806		(4.7	)
12/31/2006		1,110		(5.5	)		526		(3.1	)		349		0.3			797		(5.2	)
03/31/2007		1,100		(5.3	)		524		(2.8	)		349		0.0			791		(4.9	)
06/30/2007		1,094		(4.0	)		520		(2.8	)		351		0.9			786		(3.9	)
09/30/2007		1,093		(2.6	)		519		(2.1	)		352		1.1			783		(2.9	)
12/31/2007		1,092		(1.6	)		518		(1.5	)		353		1.1			782		(1.9	)
03/31/2008		1,091		(0.8	)		518		(1.1	)		354		1.4			781		(1.3	)

			12-mth.					12-mth.					12-mth.			Total		12-mth.
			percent					percent			All Other		percent			CML*		percent
Date	CML* Auto		change			Workers Comp.		change			CML* Lines		change			Lines		change
03/31/2006	$	2,778		(0.8	)%	$	6,270		4.4	%	$	1,710		(0.6	)%	$	2,501		(0.5	)%
06/30/2006		2,730		(1.8	)		6,143		0.7			1,676		(1.9	)		2,444		(2.4	)
09/30/2006		2,705		(3.0	)		6,047		(0.9	)		1,669		(1.5	)		2,416		(3.0	)
12/31/2006		2,687		(3.4	)		5,985		(3.7	)		1,657		(2.8	)		2,393		(4.3	)
03/31/2007		2,664		(4.1	)		5,914		(5.7	)		1,641		(4.0	)		2,365		(5.4	)
06/30/2007		2,627		(3.8	)		5,901		(3.9	)		1,616		(3.6	)		2,333		(4.5	)
09/30/2007		2,600		(3.9	)		5,780		(4.4	)		1,592		(4.6	)		2,295		(5.0	)
12/31/2007		2,577		(4.1	)		5,602		(6.4	)		1,581		(4.6	)		2,262		(5.5	)
03/31/2008		2,568		(3.6	)		5,453		(7.8	)		1,576		(4.0	)		2,240		(5.3	)

			12-mth.
	Total All		percent
Date	Lines		change
03/31/2006	$	1,044		(2.1	)%
06/30/2006		1,026		(3.3	)
09/30/2006		1,011		(4.2	)
12/31/2006		1,001		(4.8	)
03/31/2007		991		(5.1	)
06/30/2007		984		(4.1	)
09/30/2007		978		(3.3	)
12/31/2007		973		(2.8	)
03/31/2008		969		(2.2	)

CML* = Commercial

10

PROPERTY & CASUALTY GROUP ADJUSTED COMBINED RATIO BY
MAJOR LINES OF BUSINESS (SAP BASIS) – DIRECT BUSINESS

	Three Months ended												Three Months ended
	March 31, 2008												March 31, 2007
				Prior Year**						Current						Prior Year**						Current
				Reserve						Accident						Reserve						Accident
	Calendar*			Development						Year						Development						Year
				Deficiency			Catastrophe			Excluding			Calendar*			Deficiency			Catastrophe			Excluding
	Year			(Redundancy)			Losses			Catastrophes			Year			(Redundancy)			Losses			Catastrophes
Private passenger quto		85.0	%		-11.2	%		0.1	%		96.1	%		83.8	%		-14.4	%		0.0	%		98.2	%
Homeowners		90.5	%		-1.3	%		1.2	%		90.6	%		78.1	%		-9.1	%		0.5	%		86.7	%
Other personal lines		59.6	%		-16.9	%		0.1	%		76.4	%		78.9	%		-5.9	%		0.0	%		84.8	%
Total personal lines		85.3	%		-8.7	%		1.3	%		92.7	%		81.8	%		-12.6	%		0.5	%		93.9	%
Commercial multi-peril		109.1	%		13.2	%		0.3	%		95.6	%		93.7	%		-1.0	%		0.0	%		94.7	%
Commercial auto		62.9	%		-23.9	%		0.0	%		86.8	%		77.9	%		-12.3	%		0.0	%		90.2	%
Workers compensation		90.5	%		4.8	%		0.0	%		85.7	%		102.8	%		0.5	%		0.0	%		102.3	%
Other commercial lines		117.2	%		45.2	%		0.0	%		72.0	%		45.4	%		-24.8	%		0.0	%		70.2	%
Total commercial lines		91.7	%		2.8	%		0.3	%		88.6	%		88.7	%		-5.2	%		0.0	%		93.9	%
Grand total – direct business only		87.3	%		-5.3	%		1.6	%		91.0	%		84.0	%		-10.3	%		0.5	%		93.8	%
*The calendar year combined ratio represents the adjusted statutory combined ratio, which removes the profit component of the management fee earned by the Company.
**The prior accident year reserve development does not include the effects of salvage and subrogation recoveries.

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