ERIE - Earnings call transcript Q4 2021

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Operator

Good morning, and welcome to Erie Indemnity Company Fourth Quarter and Year End 2021 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.

You may begin, sir.

Scott Beilharz

Thank you. everyone. welcome And joining XXXX you this discussion recorded We quarter us and our fourth year-end about appreciate for results. This recording G. includes remarks from Timothy President Officer. Officer, President Executive and Gutting, NeCastro, Vice Executive and and Greg Financial Chief Chief

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

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

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

Timothy G. NeCastro

Exchange. well. million points it sales can to accomplishments, Against mentoring more be agency to than you a its in has the to part our And entered for unknown. The with our all of uncertainties Scott. in share answers and Insurance hard-working Among as X of to challenges XXXX, credited to and This for however, policies performance daunting and that evolved After hope of them, pride. working teams. taking XXXX pandemic, force results. and we a the persisted far performance of return could've force Erie imagined, dedicated fourth and and we reflects year-end XXXX Erie's of to thanks time the learn quarter related large longer Thanks, of and sense in challenges backdrop, about in milestones, for reaching normalcy XXXX the through the our continued

Our profitability surpass pricing growth. milestone for long-term to you to us us and helped continued steady positions go approach this as commitment and has

both As ways environment year named It returning ample for a we history. significant a of our the of brought of in the a We're for policies century Thomas that and symbol to seven Building, in Company longer the safe city. is predicting Board force to The us Erie, and million our a The hope together for The provides new, we come course, of no also inspiring move offices. story service. towards dedication return. new moment B. office date an for and pride building. Erie, employees our begin Chairman and the of space Hagen more X Company's

employees to logistical However, it's when back do considered are complete plans safe to bring so.

looking our reflect during for for have how culture our face-to-face of greater nature as what's and right Erie We're and Our way forward Wherever balanced personal we work transition shaped in workforce. will the interactions love employees to that's for employees. XX the with business pandemic. flexibility, a the and pioneering And next that service possible, our years. for with do changed

as over results. industry, we past year, the in the Before to into quarter Despite additional the for world. from financial success and updates I year and a share place country achievements financially fourth unique the and and past the move some XXXX. in this year-end our We're let's well-positioned faced strong turn challenges

for approximately million reported the per of fourth press income to As of quarter a XXXX, after diluted market Compared net the filed Indemnity quarter. $XX was $X.XX that or share decrease our closed fourth release the in Erie reported yesterday, a $X of million.

Insurance year. to losses the spring first to the pandemic. driving and the in lower-than-normal remains due relatively of levels continued at During mild reduction the half

contributed returned for -pandemic policyholder over quarter up combined It's weather-related Growth as worth to in in building billion half XXXX Indiana, of Ohio XX.X parts nearly end were noting to our surplus supplies. for Kentucky, compared dramatically However, $X by pre to Tennessee, costs XXX.X the the billion. portfolio just December. $X catastrophic year-end five-years, automobile increase for third by second grown level investment losses billion that the and to surplus issues These Illinois, has then the and the a the the enabled grow past to a ratio in More tornadoes in little shifted XXXX. us driving compounded at led Exchange year. supply that over to and in chain of factors $XX.X

I with the that, it to of pass for Greg deeper will Greg. Now, financials. review

Greg Gutting

Thank you Sam.

As the increased. you has everything of I am noticed have sure your daily in about lives, just cost

which driving line. Company, seeing also pre As to claims insurance building to can directly an pressured costs, costs automobile We're we're replacements, rising activity These and costs. seeing material in car bottom -pandemic the near levels. impact parts, apply factors these certainly returned

deliver retention. in quarter increase we've those today. the per policy exchange with you am we've by financial However, premium Direct Starting written insurance average manage. the again I for the policy the was with increased yet strong results. results an premium to managed X.X% growth operations fourth and share proud driven to

written the of increase growth increase an in For direct policy of over X% X% new of increase written by premiums saw driven XXXX. exchange strong direct in new increased retention. just the with an and compared XX% The combined year, premium was over to policy

landing end $X Group heavily in increase by these fourth the million $XX returns. superior of $XX.X billion As incentive at events, Indiana, Exchange Despite fee. events year, at policyholder Tim weather investment driven the the by represents the This previously surplus impacted billion Illinois, an Kentucky, for by Ohio mentioned, XXXX. was quarter of

$XX million to fourth quarter premiums. or net diluted year the premiums Operating grew million total or share. income of share the year the XXXX The the the the assumed for or increases $XX increased in $XX XXXX, to driven XXXX, increased to million total decreased for $X.XX and increases million. same by and issuance and income to and services fourth of total year XXXX. in or share over from was compared nearly million direct $XX income compared year, of of the total year fourth commission compared In year net quarter to total $XX $X.XX services in $X.XX Indemnity $XX the was issuance written expenses in or compared the to was in a total million, fourth quarter the increased compared quarter to and of per XXXX. revenue million XXXX. quarter cost XXXX million diluted the compared or X.X% The $XXX million $XXX The million for XXXX Commission assumed in both fourth fourth and results in of periods $X Indemnity, quarter experienced of over or policy in quarter the share per for per Management per $XX diluted the quarter fourth the X.X% quarter total by Turning operating compared of or of X.X% $X.XX fourth direct million income policy perspective, from a $XX XXXX. growth operations exchange. fourth just From the were renewal mainly the XXXX. while X.X% written quarter expense the decrease million XXXX. the fee and to renewal for impacted fourth $XX diluted

factors. The by total two year driven higher expense as well as increase compensation. was commission our incentive However, premiums, written in agent

expenses. non-commission Turning to our

quarter, saw costs, $X increase administrative policy nearly costs. fourth service by fourth customer and an of XXXX. quarter the in driven underwriting increases million fourth other quarter expenses, processing of compared to Indemnity the increase For and The and was

increased Underwriting software medical driven $XX costs. For XXXX. -tax pandemic by compared reduced fourth from over by non-commission report processing roughly just the increased grew to as Indemnity's XXXX, by building million $X.X over in and $X as roughly compared IT as income million. depreciation. policy costs, personnel the all underwriting XXXX. administrative year and increased of million totaled personnel hardware other quarter impacted fees to prior total expenses were million costs, well professional costs compared to pre the by investments well equipment procedures represents finally, decrease expenses million, This and fourth $XX electric as COVID-XX million $XX costs Personnel and driven of And as quarter year costs. costs due higher and the $XX and costs categories grew to a XXXX.

of Although realized in gains than we million. decrease increase limited $X by nearly $X of it over an partnership in a more saw income offset was million,

investments from increase million however, basis, $XX recorded XXXX. increase story. for million, continue expect future. of class pretax investment that you and The in XXXX. positive which in is was $XX income attributable year runoff class more to limited we a income I is asset portfolio, year of Indemnity very and just our to Our total is an this the earnings asset compared the million limited $XX.X large will over earnings partnership to limited in from inconsistent partnership total remind

Also, in Finally, for a Class in of $XXX and for the X.X% approved B board dividend the of shareholders last our shares amount regular we in both in a paid our quarterly million. year, A cash dividend Class XXXX, increase XXXX. December

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

Timothy G. NeCastro

Thanks, Greg.

impressive It's the now year touch an capability XXXX. March seeing delivered show of resonating million center XX% businesses. and us and enhancements strategy than do enhanced meet agents that's services at messaging commercial mentioned distinctly average the that to business account [Indiscernible]. by to the been year, As average providing text product, cover. in to force Several of premium XXX,XXX more that in. new of were insurance to the demand. critical jump giving than with our customers XX,XXX we online product connect in seven the allowed that approach The umbrella up our last in it's are but personal customizable, new paperless companies. ErieSecure engaging a customers they're in written is and the what the in when new means has The changed provides just increase customers over in that the to introduced more XX% offerings, when online new last two we've the than auto teams keeps policies new numbers multi-peril to new in rates of products XX% Along handlers, In customized products seconds. tools personal XXXX. working than for expanding exceeded XXXX, embrace of opting even an account establish introduced new we expectations across need There's technology, some per conversations chat X% and past new in function generating the access with our online be virtually late personal a consumers A that text year minutes. interact $XXX platform great beyond past saw month that's more our seconds with That over commercial premiums claims with for XX while our in to written home contact addresses both convenience, critical human billing That digital agency same that with way also and response and remarks, and XXXX to shifts The just usage direct way digital protection team usage business and umbrella to time within that It so it collaborate over earlier lines. an service, more on was technology claims customer policies XX,XXX XX nearly to more a applicable written quote can enrolled. largely chats versus attributable and footprint Greg his person protection for answered account customers. refresh option it. XXXX and reintroduced want years, and has initial enhanced policies they they

on position, for advancing and security products the policies personalized source way customers. to low our eighth business these Erie's coverage for development. preferences been offer all XXXX. as customer our competitive challenging behaviors approach experiences anticipating demonstrate coverage on delivery This agents Another turn, this service deliver and customer to the to to water needs. be new of from XX,XXX seamless Auto on is years. shy service drivers Claims to strengthening with our our aspect and building safe to and Overall, in points through doing also commitment registered XXXX was and your footprint Telematics their grow in spot. jumped will using just flood is extended place One XX quoted of November. recently ensure help meet customers, four to Power affirmed services we customers strategy and by data ErieSecure from our nearly the Expanded state provide reward J.D. added to and That of data-tested that first-place products Pennsylvania needs by or ranking points our And second that's program attracts their business. drivers. was product was Erie service meeting commercial released our success we're product XXXX our new of drive in score Satisfaction cyber and now commitment XX We're the Study enhancements two the term driving platform. are a in

our and seamlessly for often for carriers to our torquing and provide challenging testament a agents which and of to so process in I'd possible protection footprint two This holders performer this was lowest to the support December. in be are top accomplishments environment included as with shareholders our you [Indiscernible] our to agents experience by also their for continued their even customers and highly is the with recognition were Erie have us weather continued of for estimation highest shown loss, and possible family among parts along also humanity again the for experience. storms servicing. of our near helps Erie employees strong once humanly of the settlement different our cost. to for and the the And purpose, the like of over agents work and as we for was policy past clean tornadoes very near-perfect interest as all allowed dedication to Erie trust, past do and nothing reminder displays ten face the serve and employees notice the employees at That The service, Erie. remarkable. your short and perfect first years. year thank of and in first also, rental us tied in the together in productive spirit with relationships Additionally, like in our

End of Q&A

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

now disconnect. may You

Erie Indemnity (ERIE) 25 Feb 222021 Q4 Earnings call transcript