Earnings call transcript Q1 2023

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Operator

Good morning, and welcome to the Erie Indemnity Company First Quarter 2023 Earnings Conference Call. This call was pre-recorded, and there will be no question-and-answer session following the recording.

Now I'd like to introduce your host of the call today, Vice President, Investor Relations, Scott Beilharz.

Your line is open.

Scott Beilharz

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

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

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

safe SEC in with harbor XX-Q filing on press April the dated Form statements such information For factors the may our the important XXXX, release. cause related and XX, in see differences, please

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

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

Timothy NeCastro

and thanks to for XXth your with performance of the Erie's of we founding. Scott, first company's a few XX, held you And later, our of our annual quarter April in Last the interest XXXX. anniversary for marked days shareholders. week all on Thanks, meeting

historic we the the so at just years, in hold from Theater we and home X in Erie, first Pennsylvania. office, person, did time this a For were in able meeting to our Downtown block Warner

pandemic-driven of a with engagement COVID-XX set of of our few to look forward move interaction the on-site hybrid This a we workforce. emergency model month, we marked arrangements, to moving a employees final also the our embrace returning majority fully of this welcomed new into just to health the expire as groups work We Earlier the and for public end weeks. work. as in working mode

the same while the of pace time, live technology on and how accelerating and at aspects many we of breaks change. the pushed Pandemic work,

from direct the COVID Many unusually impact challenges chain Additional Insurance a inflation, Erie have as supply of for like and slowed. have pandemic labor shortages ratio these had Exchange. challenges on the persisted emerge combined high even issues, and has

a measured slate meet first, ratio far reviews. a about We're to adherence reduce to quarter rate continuing progress our share to profitability management placing modernizing our technology underwriting in agency let's customer with But combined platforms intentional priority I'll notable through of legacy guidelines steps digital that this to high approach and year. that We're our turn expense on and strict and a and also so made been more expectations. investing first capabilities needs that's financials. increases,

for to the of severity the by rest in first points industry, the weather points the combined impacted of quarter events poor the which compared experienced That ratio to negatively weather XXXX quarter first of was the by [indiscernible], and from environment. X quarter first first combined [indiscernible] ratio be ratio inflationary the XXX.X% quarter [indiscernible] another added adverse in development the compounded the our in in Cat to to combined increase an events. Like relate continues XXX.X% from losses the XXXX. added

of our storms. months working have first flooding agents tirelessly serve I'd particular, catastrophe the as battered to well affected our and these teams my and unrelenting policyholders of Ohio, extend during Kentucky gratitude and loss and to staff claims wins severe by in few like loss as Tomatoes XXXX. to personal

to on Greg to over quarter Greg? I'll expand the our turn first results. call Now

Gregory Gutting

Tim Shareholder held Thanks, earnings this first Tim. our mentioned we and morning, XXXX Good Annual our XXth week. Earlier, thank you quarter earlier everyone, for Meeting joining call. that

been XX. Over my I afforded my have given many thankful my I As opportunities have during I relationships retirement wonderful Financial Chief was XX-year as tenure. serving you April last cultivated and the Officer, meeting effective for know, career, am that all my

held shareholder virtually, wonderful to X our and long-term meetings have spend to prior person our a it time With shareholders. live everyone was with get chance being event attend in the

As next Pelkowski company's as Julie chapter will life, your the my be I begin over in CFO. taking newest

had has career I seeing Controller, our Erie, Vice at first in have her department Erie Julie joining all distinguished under forward XXXX. will Senior President success Julie was and to great internal In XXXX, leadership. the a and audit named look

XXXX. quarter over the Direct the substantial you was first manage. with by operations Now to year. prior for growth the business the I'd premium driven like in for new which premium, XX.X%, first Exchange, the Beginning quarter share we with results written insurance XX% growth increased

to combined December the decreased ratio the Exchange's surplus from $XXX down $X.X policyholder XXX.X%, million for With the XX. billion, of quarter

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

quarter in first the the XXXX. of management first fee Management revenue services in XXXX revenue quarter of renewal administrative million million in $XX.X policy the and Operating XX.X% compared income or increased quarter XXXX. compared $XXX,XXX first of $XX.X XXXX fee first increased quarter the quarter. XX.X% of issuance the for allocated increased first Indemnity's to services or to to

in assumed same $XX.X quarter renewal compensation decreased The cost awards. period and increased policy Indemnity's of by Exchange, the to for direct compensation XXXX. driven slightly in XXXX operations premiums and services. by compared to in written offset of million agent in the the by agent increases increases Commissions were first Turning the issuance

$XX policy and increased and software costs personnel increased increased expense primarily increased costs. XXXX professional increased million first hardware the personnel fees, Noncommission and to due report driven Information by Underwriting costs. and million, $XX.X technology expenses underwriting quarter of by XXXX. $X.X costs in million compared processing to

a administrative by decrease offset $X.X compensation XXXX in fees. increased compared in costs period Also, personnel driven quarter XXXX, professional and in by and increased of costs, the related other million the to expenses occupancy same first the building to partially

limited results equity and driven this that by asset were to runoff, quarter. limited partnership $X will losses inconsistent more classes Investment and the we taxes million the partnerships future. I losses the the asset class in first limited from of in $XX.X totaled million earnings expect before continue remind primarily of and in first The and you quarter.

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

And today. Thank I'll for over time Tim. back turn again Tim? you your to call the now

Timothy NeCastro

Thank you, Greg.

teams areas, most capabilities updates visible earlier, XXXX. in in claim to highest status our our perhaps our As legacy and platform. Erie are modernizing We're mentioned have but a working all last our intuitive investing launched the were redesigns platform. of to pros customers merged and among agents recent greater more year, significant series and feedback, priorities and additional progress digital several that agent updates in to I more platforms A on by been introduced provide making robust information influenced develop claims portfolio

recently and of X we're updates X a improve are for status towards our and the As claim are customers agents. investments to needle recent the of becoming moving the to further beginning of true agents just enhancements example the said, the service customers. making These experience concierge

X valuable digital which In our because customers important being online tool customers million expect billing platform, and features This allows and account the time now X questions gives a value meaningful to service account last more as that milestone on that more an call, tool households. acts used is Online this customers. time self-service of for about filling spend mentioned like and our they delivers. self-service than team is our and the I interactions by want agents customer less and topics with

The account introduced. for waste policy also this documents was and to creates growth a Earlier paperless month, reduce of opportunities increase and online efficiency option expenses.

up line in and of environmental to With eligible paperless, being to these average to access paperless our choose billing, the easy customers expenses capabilities impact. potential to see Now on pages through demand XX XX% of personal reduce to for the policies document have addition policies an it's policy can platform. and

our providing possible heart enhancements our customers. the at to these Also commitment best service of the to is

everyone affirmed to first industry matter on J.D. by among Agent they Power These fall the is Independent has ranking for us. place we the experience of serve heels goal positive or are a Satisfaction through engaging ensure with last accolades efforts be Our to how they're personal who carriers. no continue lines

important than points over We another were in satisfaction be for XXXX U.S. J.D. ranked average study jumped XX in Power the points and proud assessment claims February. Erie released highest XX the industry XXXX. in customer to property scored higher

our commend time I'd notable our are continued being facing is loss a customer doing commitment at right the These ones by first our teams do What's that operations that only our and claims, their agents. particular shortages. to of comes teams gauge we're and about affirm they care significant but not this of accolades all success, above customers our thing like in recognition it talent also in service. for to frontline when are

for commitment level the a award place be a EOE recognized also Hispanic Black of were by for work our an Journal for Magazine. to recognitions in all. X be a health workforce and insurance National Association Best We the continued well-being to XX great Platinum to named than are proud of with in industry These the was efforts our wellness. to to Heart for American affirmation XXXX employee Best years more recently lists of Network row, the And Erie

Chief Before would impressive to colleague myself, Erie. friend. by Gutting, by retirement XX-year like personally I the at be career be certainly and best upcoming after company missed all missed as close, we his and an a will Greg CFO, in will the many, wish as the including valued Officer, Financial He

however, join interest role hands. us, Erie. results Until on thank you CFO on capable second quarter X, call. Pelkowski in Julie May the all and share your again to for our will leaving is will Greg very then, financial assume me Erie's in

Erie Indemnity (ERIE) 28 Apr 232023 Q1 Earnings call transcript