ERIE - Earnings call transcript Q3 2019

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Operator

Good morning, and welcome to the Erie Indemnity Company Third 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 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 close 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 on safe October XX, the please For factors related cause may XXXX, see and important in harbor such release. our the in the differences, filing SEC, information statements press dated that XX-Q Form

This It is any written Company. Indemnity of may rebroadcast Erie party Company. not consent without prerecorded Indemnity by the or prior the Erie other reproduced call property of be

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

Timothy NeCastro

Thanks, Scott, Erie's all success. have who and results in you continued of interest a the and thanks to

of Erie third quarter of year. favorable the first XXXX, saw our Indemnity half the strong continued performance During we the through

million press once premium Exchange. by and the outperform highlights the the we insurance he compared around income over results, $XX year-to-date yesterday, $XX to third to to $XXX diluted the net before release, the in net increase compared of again income our nine Indemnity's exchange in X% third I'll $XXX into of was grew first XXXX, XXXX, over million manage, an reported we Direct does, for share operation get That's details an As well and some which the XX%. Greg XXXX, million brings it our written Indemnity's per $X.XX months of or the filed industry. Erie share. increase quarter Insurance year-to-date quarter of to will in million positions of but

premium direct is in growth industry for forecast X.X%. latest Conning's

As see private earnings marketplace, report, we're approach a we, we to prices and last in auto. long-term mentioned for passenger challenging maintained continuing that reputation competitive markets, more steady, softening stability. pricing Erie, to a In in reinforces our the reliability with at

some third the during the Finally, weather we quarter. in improvement saw

responded affecting Our teams most weather Carolina, down customers X major North agents X Wisconsin and second The storms the to in events in X were claims months, over the localized, more recent Virginia from quarter. and That's to more the spring. and as But in Maryland. what about well compared territory. Ohio wind as of localized saw our damaging damage we in parts caused summer of again, Pennsylvania, operating the and half hail past

combined ratio the for like an incredibly when the is of their service, our be there important ago. our events. during demonstrate these to organization, and to They to teams the we they difficult superior course, XX.X% promise Erie Our Year-to-date, in and thanks and XX.X% combined year our and, work these It's My combined was it have the in claims Erie of we quarter deliver than better. their our and to make things a on year a higher value that communities our to XXX.X%. our XXX.X%, customers times ago compared was third that all. our for agents weather to give role promise

for the returns. $X the over to despite investment up thanks surplus continued billion, And weather, to strong stormy policyholder its to grow Erie year, million $XXX

frequently year meetings and our leave storms, of dedicated damaging our territories the teams. claims to week, we make hard-working incredibly where many our visits efforts Especially humbled service we'll commitment year sales so our and celebrate how in and of office our support agents the approached we above all our these I we our and of customers, employees, and we teams finish all up only I'm field claims field Next the terms agents in in appreciation recognize agents of by Erie's show office each to share a but an who and not our by we employees as in service, for and how being communities. how other for Both how employees are. in each at of campus, commitment home treat

even that I'll financial But human we digital with talk review the Erie's Greg quarter. philosophy strategic more maintain about world. results our the how focus third distinctive first, on aligns initiatives, will ensuring a touch for in

Gregory Gutting

Thanks, Tim.

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

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

in revenue operating and operating nine of resulted growth outpaced $X the XXXX to of compared third the quarter in total in third both of first income or quarter That third million quarter Total XXXX. the operating growth in expenses the XXXX. the of months in XX%

or X% nine of first quarters year. the income of first the $XX this For over year, months last increased operating X million

and XXXX. nine for third both million the $XX same third to and of direct the in per to of period due quarter average policy increase total third over in fee the policy premium first premiums assumed of issuance to and and management in X% months The in $XX contributed XXXX This force million the quarter in increased $XX increased compared the the in XXXX. compared growth for periods. to quarter services this cost written million of both an in revenue Indemnity's is renewal increase in policies operations premiums. Total

$XX of total grew XXXX, months nine first of cost the For operations million.

the technology increased last service and to increased year. Information million. $X somewhat other the customer by quarter, $X underwriting related to agent million and first to in increased the offset administrative which and assumed increased to as stock This increased direct $X $XX the expenses partially costs long-term lower growth million the compared premiums professional year-to-date million, million a million and third in exchange. and compared fees, result to and third to lower increase quarter quarter third by third expenses, processing policy price months increased by quarter. These costs due in profitable million decreased in the costs X% incentive the the less $X costs written by decrease the $XX $X driven Commissions in nine compared expenses Non-commission increases XXXX. offset due of of quarter by was plan incentive were XXXX company's during the

as result In the of and the of Administrative in increased expenses professional fees. to first increased XXXX, higher a same nine period costs months non-commission compared $XX IT $XX million XXXX. million XXXX other company expenses to in million, stock due price costs same XXXX. a by to $X period increased an by in driven higher in plan the incentive increase long-term compared the

by the quarter an Personnel to XXXX. costs in all million of months of $X expense approximately XXXX. first categories awarded quarter first of the additional totaled impacted Investment compared $X nine the million bonuses all nine of $X increase $XX the third third of were for for employees million, million for months income and to XXXX

the income year, compared $XX of same months million, in an nine of XXXX. $XX was which totaled period increase investment the first the to For million

amount $XXX to us in operating have strong pay of enabled in results shareholders our continued million dividends XXXX. Our the

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

Timothy NeCastro

Thanks, Greg.

we're sources centered discussed on into for critical distinctive we our us earnings As our areas is moving strategic each building at focus on we revenue future, the strategic The workforce touch. business call, X identifying that Erie the business our deliver new X for creating on platforms and strong our data, a model believe enhance are ability continuing areas developing to future. Erie with experience, to are: use human and of and service strengthening the and of

how I'd earlier. and not like but strengthening experience. about the service bit our second, is impact us It's picture, about whenever more discuss always platforms talked of the Erie obvious, talk an to and enhancing area, we first the the that leading our important I of results. part a the to data

employees, is closely to work care are of and all our customer personal position. and service process still for experience the with that individual. delivering while customized are experience stakeholders, technology preferences claims competitive driving to lets smarter, at work and but the ways service, costs doing that agents us and is down Erie aimed of the customers, thoughtfully Our we enhance needs the tied The improving and

satisfaction understanding higher is developed in Our We customer the teams deep for agent. to satisfaction is initial experience. of the claims know, of reported the loss that instance, have when key drivers the

quarter option We want customers also claim know of a to digitally. report a that the

of that is digital of kind leveraging focused and strategy knowledge data Our platforms. with the power on

and to savings and customer that shift and convenience are customers, customer human Calls last tracking That and claims call to access and focus drives ability touch. care online agent the are payments better on are reduced year. XX% with billing for the agents and down complex from payment cost to providing billing the and more our information example, both experiencing benefit about volume more for greater agent. For calls of team customer most and expands we compared

our At access. ratings. same is call using care the provide forefront quarter reduction in our we're access digital the satisfaction in shared a too, and customer portal, of to customer first efforts human maintaining customer digital is a year of to and makes critical customer to is improved care the result of I time, this is portal Online faster. customers of capabilities. The a more capabilities. information time seen streamlined we've service future. touch team earlier as investment our working exceptional easier at the average because this agents Our smarter, that that new Since launch

and touch an that agent. an comes And differentiates Erie policy so service the as human with Erie the that

our recently Finally, quoted, "At close has of name." I'll X one positive Erie, notes. every As claim a Carolina North with adjusters

of best First, U.S. companies Erie recently by a among the homeowners insurance was in Insurance list XXXX

customization protect at the a Senior and is this overseeing recognized to as well direct leader in the Secretary We're helping legal by affecting #X excited announced Brian long reputation have the unique risks & behind Report. to the policy to second, week, in as General Corporate of good Erie's last list Counsel, writer, was issues World Brian Board we Bolash. Directors. appointment And for Erie time We new and company. potential this low on the role, him News of Erie Counsel, our and features rates new Amica. options. Erie's debuted

you for in We Thank time your Erie. appreciate your today. interest again truly

End of Q&A

Ladies conference for this Thank you today's call. gentlemen, and participating. concludes

disconnect. now may You

Erie Indemnity (ERIE) 26 Oct 192019 Q3 Earnings call transcript