Indemnity Supplemental Information (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Consolidating Statement of Financial Position

Consolidating Statement of Financial Position



	Erie Insurance Group
(in millions)	At December 31, 2013
Assets	Indemnity shareholder interest		Exchange noncontrolling interest		Reclassifications and eliminations			Erie Insurance Group
Investments
Available-for-sale securities, at fair value:
Fixed maturities	$	526	$	8,162	$	—		$	8,688
Equity securities	50		819		—			869
Trading securities, at fair value	0		3,202		—			3,202
Limited partnerships	146		940		—			1,086
Other invested assets	1		20		—			21
Total investments	723		13,143		—			13,866
Cash and cash equivalents	49		403		—			452
Premiums receivable from policyholders	—		1,167		—			1,167
Reinsurance recoverable	—		172		—			172
Deferred income tax asset	2		0		—			2
Deferred acquisition costs	—		566		—			566
Other assets	114		337		—			451
Receivables from the Exchange and other affiliates	300		—		(300		)	—
Note receivable from EFL	25		—		(25		)	—
Total assets	$	1,213	$	15,788	$	(325	)	$	16,676
Liabilities
Losses and loss expense reserves	$	—	$	3,747	$	—		$	3,747
Life policy and deposit contract reserves	—		1,758		—			1,758
Unearned premiums	—		2,598		—			2,598
Deferred income tax liability	0		450		—			450
Other liabilities	479		419		(325		)	573
Total liabilities	479		8,972		(325		)	9,126
Shareholders’ equity and noncontrolling interest
Total Indemnity shareholders’ equity	734		—		—			734
Noncontrolling interest in consolidated entity – Exchange	—		6,816		—			6,816
Total equity	734		6,816		—			7,550
Total liabilities, shareholders’ equity, and noncontrolling interest	$	1,213	$	15,788	$	(325	)	$	16,676

Consolidating Statement of Financial Position



	Erie Insurance Group
(in millions)	At December 31, 2012
Assets	Indemnity shareholder interest		Exchange noncontrolling interest		Reclassifications and eliminations			Erie Insurance Group
Investments
Available-for-sale securities, at fair value:
Fixed maturities	$	452	$	7,707	$	—		$	8,159
Equity securities	55		945		—			1,000
Trading securities, at fair value	0		2,417		—			2,417
Limited partnerships	180		1,037		—			1,217
Other invested assets	1		20		—			21
Total investments	688		12,126		—			12,814
Cash and cash equivalents	12		388		—			400
Premiums receivable from policyholders	—		1,062		—			1,062
Reinsurance recoverable	—		168		—			168
Deferred income tax asset	37		0		—			37
Deferred acquisition costs	—		504		—			504
Other assets	117		339		—			456
Receivables from the Exchange and other affiliates	281		—		(281		)	—
Note receivable from EFL	25		—		(25		)	—
Total assets	$	1,160	$	14,587	$	(306	)	$	15,441
Liabilities
Losses and loss expense reserves	$	—	$	3,598	$	—		$	3,598
Life policy and deposit contract reserves	—		1,708		—			1,708
Unearned premiums	—		2,365		—			2,365
Deferred income tax liability	0		365		—			365
Other liabilities	518		402		(306		)	614
Total liabilities	518		8,438		(306		)	8,650
Shareholders’ equity and noncontrolling interest
Total Indemnity shareholders’ equity	642		—		—			642
Noncontrolling interest in consolidated entity – Exchange	—		6,149		—			6,149
Total equity	642		6,149		—			6,791
Total liabilities, shareholders’ equity, and noncontrolling interest	$	1,160	$	14,587	$	(306	)	$	15,441

Indemnity

Condensed financial statements

Schedule of Income attributable to Indemnity shareholder interest

Income attributable to Indemnity shareholder interest



				Indemnity Shareholder Interest
(in millions)				Years ended December 31,
	Percent			2013		2012		2011
Management operations:
Management fee revenue, net	100.0	%		$	1,266	$	1,157	$	1,067
Service agreement revenue	100.0	%		31		31		33
Total revenue from management operations				1,297		1,188		1,100
Cost of management operations	100.0	%		1,088		983		892
Income from management operations before taxes				209		205		208
Life insurance operations:⁽¹⁾
Total revenue	21.6	%	⁽²⁾	—		—		10
Total benefits and expenses	21.6	%	⁽²⁾	—		—		7
Income from life insurance operations before taxes				—		—		3
Investment operations:⁽¹⁾
Net investment income				15		16		16
Net realized gains on investments				1		5		3
Net impairment losses recognized in earnings				0		0		0
Equity in earnings of limited partnerships				22		15		26
Income from investment operations before taxes				38		36		45
Income from operations before income taxes				247		241		256
Provision for income taxes				84		81		87
Net income attributable to Indemnity				$	163	$	160	$	169

(1)

Earnings on life insurance related invested assets are integral to the evaluation of the life insurance operations because of the long duration of life products. On that basis, for presentation purposes, the life insurance operations in the table above include life insurance related investment results. However, the life insurance investment results are included in the investment operations segment discussion in Note 5, “Segment Information”.

(2)

Prior to and through March 31, 2011, Indemnity retained a 21.6% ownership interest in EFL, which accrued to the Indemnity shareholder interest, and the Exchange retained a 78.4% ownership interest in EFL, which accrued to the interest of the subscribers (policyholders) of the Exchange, or noncontrolling interest. Due to the sale of Indemnity’s 21.6% ownership interest in EFL to the Exchange on March 31, 2011, 100.0% of EFL’s life insurance results accrue to the interest of the subscribers (policyholders) of the Exchange, or noncontrolling interest, after March 31, 2011.

Schedule of Indemnity's components of direct cash flows as included in the Consolidated Statements of Cash Flows

Indemnity’s components of direct cash flows as included in the Consolidated Statements of Cash Flows



	Indemnity Shareholder Interest
(in millions)	Years ended December 31,
	2013			2012			2011
Management fee received	$	1,240		$	1,135		$	1,053
Service agreement fee received	31			31			33
Net investment income received	22			28			22
Limited partnership distributions	27			21			22
Increase (decrease) in reimbursements collected from affiliates	6			(4		)	(9		)
Commissions and bonuses paid to agents	(681		)	(617		)	(583		)
Salaries and wages paid	(147		)	(130		)	(124		)
Pension contribution and employee benefits paid	(41		)	(38		)	(36		)
General operating expenses paid	(153		)	(139		)	(127		)
Income taxes paid	(86		)	(82		)	(82		)
Net cash provided by operating activities	218			205			169
Net cash (used in) provided by investing activities	(65		)	95			(211		)
Net cash used in financing activities	(116		)	(299		)	(257		)
Net increase (decrease) in cash and cash equivalents	37			1			(299		)
Cash and cash equivalents, beginning of year	12			11			310
Cash and cash equivalents, end of year	$	49		$	12		$	11