ERIE - Earnings call transcript Q2 2019

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Operator

Good morning, and welcome to the Erie Indemnity Company Second Quarter 2019 Earnings Conference Call. This call was prerecorded, and there will be no question-and-answer session following the recording.

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 recorded discussion about our 2019 second 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

press with on Safe July XX, the please without For factors is release. related Erie any cause It may may XXXX, see property and important in rebroadcast prior Harbor such be our Indemnity the in Indemnity the the other differences, Erie written filing Company. SEC, of by information This reproduced of statements Company. dated that XX-Q or call not party Form the prerecorded consent

we to will on Tim's move remarks. that, With

Timothy NeCastro

you thank Indemnity the everyone performed three over your and interest time and in results. Erie’s well Scott Thanks, past months. Erie today second quarter for

filed yesterday, quarter in of XXXX. As you in diluted more the second Indemnity quarter million in our press million that’s reported net the saw income or for Erie release $XX share per $X.XX over $X

Greg that more talk will about behind what’s increase.

XXth on continues puts in policy Renewal grew Conning's highlights a over retention. premium continue share billion. of growth industry Erie In insurance to to he Exchange, on for the exceed row. we to to recent second industry we Erie outperform X.X%, for the the this year driving nearly growth latest the does, X.X% want I this as premium experience premiums Before manage. The exchanges year operation is forecast Insurance strong prior work result $X quarter, pace to the

is has the past driven factors. share. to growth calls, last between in grow years the our outpace the over long gap shared and goal industry our market slowed term several industry growth The we’ve on by two As premium Erie’s

market softening are automobile steady take [sharpens] are in decreases shopping First private as Prices activity. which carriers or rates the passenger on hold conditions.

second we’re risks. At true bolster is investment private show necessary of end our The passenger auto provide This our Secondly the is to down generating rate driven commitment is intentional our to the slowing surplus of It's a Erie, $X.X XXXX. ability was to move returns. not at almost competitive billion billion $X for the that a and to we the quarter, end to at an growth by and steady position was growth a very move believe up best the competitive stay policyholder to pricing. profit. steady growth compared

to context ratio. share Lastly, combined some around our I want

our For storm ratio territory. increase to XXX.X much compared of affected XXX.X the of a that spring first active season parts That of XXXX, half ago. an totaled extremely the reflects Midwest operating exchanges Erie’s year including combined

Day when Memorial brought and hail Indiana, Pennsylvania most One to storms Illinois, over of winds events significant the strong place took and Ohio.

to They're representatives area of deliver quickly The agents way in we our In and a and Ohio about our note those, her her neighborhoods Dayton employees adjuster. you our needs the start share I a for received of in hit take and before to insurers the care want destructive experience times agent from typically hard by Dayton a customer like with was customers. big process with recovery. our of immediate tornadoes. other in customers

this I I can't enough with comfort level agents. too and as devastation worked insurance of a provider. want I've employees why confidence dedicated for thank claims providing of our Erie my as and our high examples Both individuals, to I she wrote them tornado. of through me thank the are chosen

Your commitment difference we our to a serve. the communities and customers make great care and

about with the initiatives. following the pleased recent the more strategic we're recognition in our far results Overall of that Erie so progress Gregg's this review year for financials. talk I'll and Greg? on

Gregory Gutting

Tim. Thanks

mentioned, claims continue Tim quarter weather like it can financial May and [Indiscernible] or to a in availability traditional As offer above award-winning seen measures go successes our all solid beyond but was service. customer to and experience. in expanding be quarter experienced those payments, responding second events we our to service electronic be in this catastrophic customer

am offer our quarter have the During been we say outstanding we and proud through has for pilot all the ability will The second claims to that satisfaction continue I property to Zell. forward their with feedback customers. electronically of this Visa settlement a capabilities. auto and and provided capability initial to Today e-payment claims new provide continued customers to look our the we Direct adjusters

Erie's Now income diluted per $X.XX quarter per to net you share I'd million million second $XX to financial like share results. share the $XX or Erie's $X.XX was XXXX. quarter of with diluted Starting second the or compared in with

months diluted $XXX net $X.XX or per million was compared or a diluted share share six income half million of XXXX. the to first the For of in $XXX XXXX, $X.XX first per

per from XXXX. second of of income operating XXXX that second an saw the million compared then same were and of months of of assumed first the the and second direct pointed in outpace premium Operating quarter renewal income $XX in six also months the growth six increases XXXX. or $XX increased policies change premiums in the XXXX year. million force quarter of revenue X.X% this the fee the or services increased And quarter last in $X year in average we million the X.X% increase the periods as by written in to compared to compared policy policy to to Driving six million and $XX exchanges periods issuance Management first in first in both reflecting and the and in months premium industry. exchange, the Tim growth continues both and out,

the policy to in the periods the renewal X.X% first in XXXX XXXX. and by was $XX of exchange operations and second profitable less first by the Commissions increased quarter growth million services increased cost quarter same written agent driven the for issuance Indemnities half That million assumed and the premiums X.X% the related of in XXXX. offset direct by $XX increase to compared somewhat in and second XXXX in the six costs months in to of incentive lower growth. compared

six other quarter $X increase $XX and million compared compared increased by expenses customer million Non-commissioned same service technology of increase $X driven increases the the year of and In non-commissioned second in costs million to last administrative administrative by period $XX $X expenses other million costs. increased and million, of XXXX technology million. in XXXX the expenses costs information information to a months driven and million in in of costs $X first a $XX in

and were stock information by due cost year. were professional fees the price during an long-term higher to incentive due to increased increased other the planned technology and The costs costs higher the driven administrative increase in

net XXXX. driven increased periods. investment to of primarily million XXXX Total XXXX by in the in our increases and were first both periods $X same million income in compared realized over in The the second the of $X growth half in gains quarter

take compared quarter the balance diligently to six in $X expense to tax XXXX. million same We measured a relatively and decreased capital for a period the remained but by sheet. the flat management second in maintain income approach indemnities months Finally, first strong

us first months the For our enabled $XX our million XXXX, performance dividends. strong shareholders six of has to nearly pay in

turn back to Tim. over I'll the call that With

Timothy NeCastro

Thanks Greg.

well for positioning strong, Erie financial a continued is Our foundation future. bright growth and profitable

sources four on making to revenue platforms of preparing business invest a the new and enhance future. strengthening continue experience, across We in and future and workforce focus identifying the of continuing areas; the developing data, with areas. use all that Erie four We're progress to of our

revenue Our Virginia position recent strengthen to expansion in accidents drivers driver We drivers. introduced and among further premiums. now for competitive motor behavior good web-based for on into earning designed include Wisconsin auto a create expanding all rewards training discounts is their driving to efforts young telematics program opportunities. program recently which our are and teens introduction reduce the Teen program head and we vehicle as compliments of using achievements XXXX. our program, on states insurance to and This track

line nearing legacy program homeowners’ platform. line it customize processes converting fronts. This of is and closer further conversion personal line business on to our policies for protector online agents easy to also business have from of our improving bundles agents and conversion customer's comes a sell It one finish platform business, writing our step home one our this for gets coverage. the lines significant secure number line of servicing owners high-volume writing home with In a for They'll of Erie we're when to Erie. capabilities us full The a our home to for business. experience simplifies to web-based the of this

to the year-end. alike. with for coverages homeowners, in We're conversion most change track all extremely customers industry-leading and that our lastly, has well and customers I'm on complete by agents the share pleased very And conversion to protection. to able this states we're of gone offer

of and has within has with Finally, long technology. key exploring sharpening core I and that at a within innovation. experiments operations function been want opportunities to advancing share a aimed Erie to our focus on recent developments new both dedicated Innovation our new team

and and his our services leading necessary on what leaders are in team offerings responsible to senior opportunities and our advance for assisting innovation also taking Keith beyond current we with of call to One Keith our business. our charge innovation. products deliver Kennedy capabilities core while evaluating next-level where is this

in of most innovation before with been organizations team and first capacity strong built more XXXX, the than brings part he Erie products through Keith XXXX joined since district. like-minded of network our company XX build recently new broad geographic Pennsylvania lead has consulting role years of He's a leaders a helping Keith capabilities. and to his his new the expansion. experience work to in in a define

some Before recent close share like recognition we to for Erie. I'd

for is in Family a from Best strong According reflects balance and sheet appropriate risk and favorable First XXth AM Life. A+ profile Best Erie's to earn this performance excellent Erie financial rating Erie's the subsidiary AM to superior. has rating strength rating management. rating Best. addition row at AM business year life our a to also AM This of in enterprise the Erie's Best A operating A+ affirmed affirmed least

West that the I'm you recognition earned Along is to satisfaction agents, Power score very for recent again This awards the Virginia, Earning noteworthy with experience District with especially is Virginia, the this in markets and because this proud our fifth the share with auto time regional mid-Atlantic Erie JD in award region comprises our has study mid-Atlantic with Maryland honor auto customers insurance an since region premium moved customer agents area the region. the our the from led the XXXX. we've Columbia. Now highest Erie. and volume; our to highest reflects with of for for Pennsylvania,

Erie strength that policy. the and Erie's to insurance this makes value on lifecycle honors our of Together like and auto is XXXX second What Insurance of awards the Power and choosing difference offer service testament they top we these their customer customers. renewal are trophy the matters for I their our two through built these service in mid-Atlantic that complete following year a finish Shopping our JD time The value proposition the shopping of agents. reflect that and really U.S. proposition from It's is Study. the from with a Auto an insurance about a protection great

to who groups diversity the second and of for share top council the in Erie's by resource national council spot for XXXX. in the earned in want recently for leadership year I a XXst X% The employee recognition Lastly, States United the a on inclusion. placing employees some our nation row serve among earned

DNI for for market agents, great thing is our do business. makes list communities sense of on and the councils strong and results a employees, This inclusive DNI a for workforce right was is business and contributions This diverse recognize a operations. ERG's the across Fostering also of our customers to good and the by our and team. honor compiled Association to it focus and

appreciate Erie. in interest I time want for to today. thank your We you your

Erie Indemnity (ERIE) 26 Jul 192019 Q2 Earnings call transcript