ERIE - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to the Erie Indemnity Company Second Quarter 2021 Earnings Conference Call. [Operator Instructions] 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 2021 second quarter results. This recording will include remarks from Tim NeCastro, President and Chief Executive Officer; and Greg Gutting, Executive Vice President and Chief Financial Officer.

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

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

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

Tim NeCastro

and morning, in to performance you more Thank of learn good everyone. for Erie's time second taking about quarter XXXX. the Scott, Thanks,

we're see in a new The seven-story is those I greater work reset our we're first way Over living. will to return for building, spectacular, the of with to first delay. July, we set normal it which be several to employees Phase our have And wait in more us is to started to initiative. returning employees. normal workplace the a begin activity. a two employees phase XX-month return planning Many offices more September of the with with working. can't number weeks, building past September to to dedicate filled to In early significantly many of in and also of that, a of starting of after way began to our office returning among

of ways to to that our working, adapting phased we'll note new workplace and we be and pilot through return this go. learning it's move As important we as

lessons the over past biggest transcends the that the of physical years is X.X touch One learned location. human

So our of the just to taking early as pandemic, decisions. approach a the we're to and since thoughtful deliberate doing we've committed days been

what's model next and at of our everything the As delivery, do. special we culture our unique for workforce remains pioneer we service forefront

excited sales symbol Turning stability sure of to milestone quarter. agency and in an not teams. our this reached six hard-working policies a could second and million announce milestone underwriting I'm our exciting without continued with We our and dedicated growth, certainly have force force. to

you profitability a and for report reach seven to approach point we as pricing to holding strong million the of service. of remarkable to are halfway as pleased year, will steady as quarter first We in and study had commitment I'm century XXXX. the long-term and those to financial Our well force continued positions results policies that a look us growth we of

year-to-date. strong to levels million in second share you release Erie a In reduction our almost XX%. we This diluted second due As in net compared This quarter. reported yesterday, close the of remain was premium by spring the $X.XX market of $X.XX in per continued net grew and after of XXXX. increase driving in largely an lower-than-normal pandemic, the to per to a mild or by XXXX, of of combined the relatively XX.X% filed premium $XX to quarter diluted income of increase written a for X.X%. saw second million driven and ratio is new Losses income $XX quarter the share press contributing retention or Indemnity at

expand over results. Greg? to call on turn will I our quarter Now Greg the to second

Greg Gutting

call. earnings of part morning, taking to today second time you the Thank Good a Tim. quarter be for Erie everyone. Thanks, Indemnity

to As in of Erie our continues more results. financial is this see the way reflected to a continuing country move to living, normal

we still an with seeing along growth, pre-pandemic are also but claims seeing activity is below We increase business That levels. in new are that, being claims said, frequency.

see, the Starting Erie growth that almost $XX.X you insurance $XXX of financial premium, by as driven results, from new prior direct success going written business we XX.X%, Exchange, positioned well for the I share March X.X%, million with will the quarter second surplus You manage, quarter XX. operations ratio the growth year. to with With the forward. in the for Exchange's substantial the premium remains for billion, climbed which up XX% combined a policyholder over grew was

quarter, compared to second share the $XX $X.XX per of In million per or of million income Indemnity. quarter in or to second $X.XX shifting the $XX Indemnity generated XXXX. net share Now diluted diluted

of XXXX decrease of $XX this for For X.X% of quarter of of saw X.X% for six XXXX. the revenue XXXX. policy and Operating renewal million the issuance compared the the months income or to last to income $XXX per $X.XX first XXXX. XXXX quarter increased share net six $XXX per to to management second or year million $X in in months second of XXXX, half second in was the million $XX compared $X.XX million compared share first services half fee operating diluted of first quarter of compared X.X% or Indemnity the income quarter or a diluted million first also in second the or year. the of decreased Indemnity's

was the XXXX quarter increase compared million first XXXX. to the to of last period saw an the compared the administrative months half flat services of of fee or to revenue of same $XXX,XXX Indemnity in for year. half XXXX, Management X.X% allocated decreased While $XX first second the and first six in

lesser and, by increases compared million cost and in Commissions period costs both for as issuance quarter renewal more million, related agent in the compensation a to XXXX. Turning operations extent, assumed of in were compensation expenses increase of of The the XXXX the driven increased incentive the by policy periods the compared $X growth. underwriting to increases and Information personnel in months in and the Non-commission of increases in million in premiums driven by by first to XXXX. agent the policy to Underwriting hardware $X increased million, increased direct services. same second written to Indemnity's and to increased Exchange $XX second million increased of report also technology quarter second and $XX $X and six for costs software costs costs. quarter processing XXXX expenses increased well as due personnel in primarily profitable the costs.

fees. same other increased and and second the in XXXX, administrative quarter to XXXX in increased building by expenses Lastly, compared million equipment depreciation the professional period driven $X of and

first asset of the an technology in more were million the will and in of six in by months increase of million costs expenses XXXX, respectively. $X nearly of and quarter saw and of and partnerships runoff, quarter this million, $XX The first by class $XX million, For Indemnity for results months first $X non-commission policy six six driven to driven million expenses I primarily nearly of months underwriting processing the and earnings equity increases limited in investments class administrative the in earnings asset the million costs expect from well from $XX XXXX. the is driven of remind Income and million, same second continue primarily professional in taxes in as limited and $X you future. XXXX. totaled as compared of to costs that $XX partnership period by inconsistent the $XX increased other personnel second million fees limited before we and of XXXX, and

has balance a measured capital strong of $XX in always, management, As sheet. And us enabled we our and to million we approach financial time maintain you pay take again your performance six shareholders months dividends. our first Thank to a our for for the very today. over XXXX,

call over Tim? to turn back Tim. I'll Now the

Tim NeCastro

growth. the by past challenges beat we comes employees over to our it Despite haven't many productivity missed Greg. faced Thanks, and when XX months, a agents the and

make difference continue and to beyond. for teams execute agents a will on year positive our and that initiatives this customers Our

auto service. In and with agents pricing, home refreshed insurance strengthening prefer. bolster relationship ongoing training on in Erie, capabilities agents and competitive product far. XX% For the Companywide, nurture top with are team creating team this for position, priority distinct leveraging year, to our our strategy we is business the recruiting and strategy, been they agents. our than been it's share up Umbrella developments, recruiting, and agents new engage presence have will moving our over premium That digital the way be rolled personal results beyond further means and coverage with umbrella states. and to has human expanding written right they on cover, the more a our developing a tremendous is personal formed Most and Because importantly, to will developing our provides new The that's distinctive shared making what new aligned and forward. performance that support we the XX force so and and product and is focused to Erie's so broadening refreshed digital are that, and grow critical touch. agency Erie while in doing we've commitment values success just umbrella product our sure that customers a are established continuing for direct the out our policies agents have of using to refining agent our recent protection wherever focused providing methods newly year-to-date. onboarding

hometown several the have end in agents we commitment. product a we our our equity to to of the and the new that to communities after-school we of $XXX,XXX Erie. minority customers all our is activities of business, grant where and ongoing for in and children. supporting key by the We that a efforts goal XXXX. supporting part to school Our support in that investment speak $XXX,XXX In recognize from states introduced outreach April, May, do outreach investment for Pennsylvania recent include ranging In in focus Erie, readiness opportunities initiatives on community health improving announced coalition focused on nonprofits $XX,XXX of

Charity Additionally, awarded nonprofits year to will participated the in our team and held later were this who events Pennsylvania this the scheduled to delighted we Though last Allentown, year's XX through as May canceled in We're summer. voted XXXX share that Challenge. on be to captains pandemic, those golf $XXX,XXX tournaments Erie XXXX in funds. due nonprofits

share I Before earned to few call. a last our Erie we accolades since want close, by

XXX year. from in list up spots moved on American the XXXX the to First, XX Fortune XXXX corporations Erie XXX impressive of from total the revenue XXX largest based an fiscal

for the region position J.D. XXXX customer prestigious recent Erie ranked auto financial Our ranking was the among us recognized satisfaction speaks first for past Erie's the to North Central years service. in two group in study. XX and in studies. to also commitment strong insurance this Power

overall ranked the of Power automobile satisfaction for customer Insurance In Study. was third J.D. in segment midsized the addition, XXXX Erie Shopping insurer

Erie's that earned support commitment recertification the industry and one of notice most share to collaboration. work, and of first the service hard the team's Finally, loss awards pleased This I'm and is very respected reflects from in BenchmarkPortal. team customer

my always, to I'd in support commitment for to your above trust. and like employees for to for today express As Erie. gratitude you and and all to interest our our their Thank continued their shareholders in for service and being listening in agents all

Erie Indemnity (ERIE) 31 Jul 212021 Q2 Earnings call transcript