ERIE - Earnings call transcript Q3 2018

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Operator

Good morning, and welcome to the Erie Indemnity Company's Third Quarter 2018 Earnings Conference Call. This call was pre-recorded and there will be no question-and-answer session following the recording. And now I'd like to introduce your host for the call, Vice President of Investor Relations, Scott Beilharz.

Scott Beilharz

Thank you, and welcome, everyone. We appreciate you joining us for this pre-recorded discussion about our 2018 third quarter results. remarks Greg NeCastro, and Gutting, Officer. include Executive and Chief will and Officer Executive recording from President Tim Chief Financial This Vice President

earnings Investor Relations yesterday of our were closed Our are section financial erieinsurance.com. the and the after market issued within available website, and release afternoon supplement

known to assumptions, I These to unexpected current today's views may and future everyone events. discussion subject reflect may These we begin, uncertainties remarks. those remind that company's Before contain are differ described the on based remarks to would like uncertainties. and and that forward-looking remarks from risks these materially about in risks results cause

with Indemnity With of without on other safe may October XX, call Company. Indemnity written the Erie be please a prior Tim's For factors related cause on may XXXX, see any and the important in Company. is harbor these by release. or our party the remarks. in the reproduced This pre-recorded that, move differences, It we'll filing Erie SEC, rebroadcast information statements of press dated that property not XX-Q Form consent

Timothy NeCastro

Indemnity. the Thanks share quarter. first Scott, to taking through for time I'm learn the year set of and half strong more the performance for Erie's pleased another everyone to to pace continuing quarter that about the we're the we thanks third during in resulting

of $XX very a earnings our saw We're on these or third quarter net XX-Q million you results. income we per As the with yesterday, share filed $X.XX pleased quarter. for reported

the past our the growth with we of per more by significant premiums $X quarter and than has written largely additional PNC from In our over during premiums operations will Average reflects agents. years ability brought personal our nearly years. from premium decade, million. in grown and in direct We reached insurance trust few in period. mid-size of X.X knowledge, quarter I’d bolster quarter. years to healthy the lines agency industry from an of and result XX month commercial, like which over That rolling exchange outpaced spots the total billion doubled follow has the had premium premium we achieving in to since our commercial. milestone for the capabilities nearly a to strong existing alone. third Indemnity's We've the around their in That customers Then which reached there be lines billion billion context, We've personal to in We billion the driven share who XX% Erie's meet $X third needs X.X place nine and growth $X manage. businesses. small third continued each a agent's the Greg from also billion financial last results. a position over operational past claimed billion to XX It's details reflects $X the last the million growth five $X skills policyholder bright the in For XXXX, effort premium result to us. surplus with more the $X and the

states, compared of Hurricane Florida activity was less was parts quarter other again affected from our Similarly, than territories third impact increased impact heavily effect to Michael the on Florence, While the anticipated. claims Hurricane our during storm including while modest and continued coastal expectations.

preparation has reflects ratio through like this year-to-date Erie's compared the The suffered year was He ratio comment month. the share of third brunt the That higher storm team during of combined carriers With from noticeable following this hoping September multiple hands difference XX.X amazing. nothing our prepare for anything and been the be responded in claims response, nearly the best. what damage response I made last response and for business XXX.X my for at significant. or claims close combined Carolina. that in far events to This Florence. continues much to said, to so none North all the leadership reported short we of communities agents them impact XX, the a has one in Our of and even XXXX to The is to XXXX. branch done. a year-to-date individually always quarter have very our teams where claims to we're worst agents - other Florence mobilized

bringing that in caring the about agents to We end harmed and by and Red the Hurricane those we're what Cross our Erie American every claims driven we proud them. are team promise dedication care of there. to footprint of claim areas to donated and the of Regardless weather We deeply be to aid by very the communities Florence. brings, the to season the

most. as it For to making few our talk then on our turn about to a and our to Greg I'm key customers, more progress them serve for Greg? near over minutes. on agents, I'll in going the initiatives communities

Gregory Gutting

Tim. Thanks

we pleased the million service dedicated diluted They commitment financial our we with of $X.XX of per as results XXXX. quarter in mentioned net to a are million are $XX of agents our per well quarter Tim reflect $X.XX third as share As the share with income to year. deliver third a the on and diluted our $XX XXXX, very or seeing Starting compared this our a or strategy. employees, was

months of periods quarter year million costs bonuses million cost. processing cost by same XXXX of Personnel the These months the the XXXX this remained policy and services compared in an $X.X assumed lower administrative offset by the of and XXXX, million of nine of last expenses X% first increased XXXX increased compared and million $XXX Total operating third the per first nine X%. and the the million Increases XX% and became services $XX increased compared increase increases in by expenses related third nine the in and additional million million written by the in and less XXXX policy growth. expenses an performance. the periods nine quarter commissions for first operating assume increase resulting same increase first the investment months the underwriting in or employees increases to third XXXX. in million of in first $X total by the quarter in $X $XX For revenue and personnel incentive quarter agent in rate million. first other both issuance Indemnity's by force operations XX% in in the months exchange in effective compared to estimated direct policies policy in growth million year. million slightly was January of in XXXX, a flat nine nine X.X% XXXX approximately $XXX the to the average $X.XX growth mainly In of months for or the costs, while premiums. third the non-commission costs $X $XX offset customer last was of underwriting driven income tax months for and quarter tax of cost in income to period the third driven of nine by to exchange per renewal of in costs of first $XX awarded XXXX the XXXX. net operating of in $X.XX increased for $XX first in lower nine revenue for income share same somewhat nine increase impacted compared by all service both quarter from of million or or quarter premiums XXXX. as compared share incentive the XXXX realized the diluted months to outpace both direct income expenses in compared contributed X.X% Total months XXXX. XXXX driven to in third and of of and Commissions compared year corporate first premium technology, the to by from related months and the a of in third in operating for diluted to direct income The to XXXX first plan written first Non- of premiums policy an information of Management information nine and $XX of in XXXX. the and months X and the driven result issuance increase fee to savings were lower nine to increased $X increase technology million in months that third cost quarter profitable awards were commission the renewal written

XXXX nine of which lower $X million over in Indemnity's expense due quarter to compared income $XX to this XXXX first XX% effective the tax just of of million rate tax the and decreased X year. Finally, in January third months became income

For With over million. turn Tim. pay the performance that, nine call I'll months in the $XXX us shareholders' XXXX, to first to strong our has enabled amount our the of of the back dividends

Timothy NeCastro

new improving Thanks success. shape continuing position and changing Erie's we’re of include relying is Greg. and areas Clearly where to success our Erie's management, for the That in and talked strength for we future. exploring our sustain and workforce remain about the investment focus past in of sources I revenue, continued preparing for the on across investment experience, and the of four taking accelerate data future platforms areas the in calls These resources market. continued profitable enhance to the growth

next up insurance policies Life. both custom We states using Agents commercial and Web, share a highlights needs customers. DSpro meet of lines, milestone to wise customers, needs XX% protection market for quoting agents pay began products collection business. from and option also in In offering now with subsidiary expanded provides project licensed lines our of custom all four to for agents three-year to commercial coming the quarter. have available business. use Medicare. Custom of agents this We’re are in year. here our that in costs new Medicare help These reached wineries, of the endorsement our growing corporations progress and and classes. piloting an breweries with continue meet endorse towards our Tennessee growth With be protection of key a the delivered coverage currently not functionality and smaller of This home strong fully more coverage business writing supplement group the model premium from customers opportunity a to lines, business and the we to enhancements enhanced most offering of new I’d the achievements wrapping steady owner. to making on rollout recently within covered program collection third few to focus the expectation is of In revenue for order. Erie's our business new now all of better exchanges through the the include at quarter Medicare needs system the hospital distilleries. a personal and complete to Family new web-based like personal some Medicare and good of our part latest policies we're drumbeat our a areas help able a We're attract agents by of agents, now of Pennsylvania of our new homeowners the drive secure we bring supplement support agents We kind to collection designed the for the continues lines. Erie our successful

younger We’re telematics to safer a about pilot It's aimed new I've this began driving on initiatives at earlier this talked moving program motorists. ahead encouraging year. calls. the prior also at among on program

expand the choose program. who From have are loss We of we're to To-date have to app seeing pilot results, in drivers the for and this Ohio early than better West others. register ready registered our ratios than getting XXXX smartphone states more Virginia. customers

sending Next year entire we’ll from to approval YourTurn extend called state program our the departments. footprint insurance

strengthen that driver and helping the to is long-term safer in a our youthful market way profitable ability sustainable will in to encourage compete YourTurn driving. or

some share health employee from to and organizations like commitments I’d to recognition two Erie recording, earned for our this recent up wrap we wellness. Before national

companies First, wellness year Erie since participate American Heart received gold received for the in each Workplace also recognition the health Erie index's Association's Health a level Achievement index benchmark XXXX and a which XXXX. highest Index. has than XXXX initiatives. recognition in provides the More

employees for earned health in holistic recognizes know Healthy year appreciate help platinum, care since efforts emerging enjoy them employees these we highest and Group for at so Erie healthier, an a total and award program. and our much proposition. honor your by the that second the honors very gold they you is an the to benefits gold National proud group our to lives. Erie. important in workforce today. that we That's and award a that our offer your time We the Business validate today new has the This take competitive our Preparing appreciate organization's Best our it's with opportunities a turn why our rewards in of importance either and presented Employers and in of secure support employees each on of more is well-being future. for XXXX. value like Thank involves or their We're for We families national future your received package interest Second, looking the of from XXXX related business metrics. Erie today. silver area the group commitment Lifestyles focus workforce

any Vice President a Thank to you reach Investor Scott great you code please day. at free If feel Relations, area our have out and of Beilharz questions to XXX-XXX-XXXX. have

Erie Indemnity (ERIE) 26 Oct 182018 Q3 Earnings call transcript