8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 1, 2023

ERIE INDEMNITY COMPANY

(Exact name of registrant as specified in its charter)

Pennsylvania	0-24000	25-0466020
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

100 Erie Insurance Place,	Erie,	Pennsylvania	16530
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: 814 870-2000

Not applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Class A common stock,	stated value $0.0292 per share	ERIE	NASDAQ Stock Market, LLC
(Title of each class)		(Trading Symbol)	(Name of each exchange on which registered)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On March 1, 2023, Erie Indemnity Company (the "Company") issued a press release announcing financial results for the quarter and year ended December 31, 2022. Copies of the press release and financial information are attached hereto and are incorporated herein by reference as Exhibit 99.1 and Exhibit 99.2, respectively.

On March 2, 2023 at 10:00 a.m. the Company will provide a pre-recorded Webcast that is complementary to the press release announcing financial results for the quarter and year ended December 31, 2022.

Item 8.01 Other Events.

At its meeting on February 16, 2023, the Company's Board of Directors approved the following quarterly dividend on shares of Erie Indemnity Company Class A common stock:

Dividend Number: 371

Class A Rate Per Share: $1.19

Declaration Date: February 16, 2023

Ex-Dividend Date: April 4, 2023

Record Date: April 5, 2023

Payable Date: April 20, 2023

Item 9.01 Financial Statements and Exhibits.

Exhibit 99.1 Press Release

Exhibit 99.2 Financial Information

Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

Exhibit Index

Exhibit No.	Description
99.1	Press Release
99.2	Financial Information
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Erie Indemnity Company
March 1, 2023	By:	/s/ Gregory J. Gutting
		Name: Gregory J. Gutting
		Title: Executive Vice President & CFO

EX-99.1

Exhibit 99.1

Erie Indemnity Reports Full Year and Fourth Quarter 2022 Results

Net Income per Diluted Share was $1.25 for the Quarter and $5.71 for the Year

Erie, Pa. - March 1, 2023 - Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the full year and quarter ending December 31, 2022. Net income was $298.6 million, or $5.71 per diluted share, in 2022, compared to $297.9 million, or $5.69 per diluted share, in 2021. Net income was $65.5 million, or $1.25 per diluted share, in the fourth quarter of 2022, compared to $55.0 million, or $1.05 per diluted share, in the fourth quarter of 2021.

The uncertainty resulting from post-pandemic conditions and the current economic environment continues to evolve and the duration or extent of financial impacts remain uncertain.

4Q and Full Year 2022
(dollars in thousands)	4Q'22		4Q'21		2022		2021
Operating income	$	81,430	$	61,834	$	376,214	$	318,097
Investment income	288		12,328		632		67,332
Interest expense and other, net	(243)		4,335		394		9,025
Income before income taxes	81,961		69,827		376,452		376,404
Income tax expense	16,471		14,785		77,883		78,544
Net income	$	65,490	$	55,042	$	298,569	$	297,860

2022 Full Year Highlights

Operating income before taxes increased $58.1 million, or 18.3 percent, in 2022 compared to 2021.

◦Management fee revenue - policy issuance and renewal services increased $174.7 million, or 9.1 percent, in 2022 compared to 2021.

◦Management fee revenue - administrative services remained consistent at $58.3 million in both 2022 and 2021.

◦Cost of operations - policy issuance and renewal services

–Commissions increased $71.1 million in 2022 compared to 2021 driven by direct and affiliated assumed written premium growth, partially offset by a reduction in agent incentive compensation.

–Non-commission expense increased $47.1 million in 2022 compared to 2021. Underwriting and policy processing costs increased $6.4 million primarily due to increased underwriting report, printing, and personnel costs. Information technology costs increased $13.1 million primarily due to increased hardware and software costs and professional fees, partially offset by decreased personnel costs. Sales and advertising costs increased $7.5 million primarily due to increased advertising and agent-related expenses. Administrative and other expenses increased $22.5 million primarily due to an increase in personnel costs related to compensation and increased professional fees.

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◦The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $668.3 million in 2022 and $638.5 million in 2021, but had no net impact on operating income.

Income from investments before taxes totaled $0.6 million in 2022 compared to $67.3 million in 2021. Net investment income was $28.6 million in 2022 compared to $62.2 million in 2021. Included in net investment income is $10.4 million of limited partnership losses in 2022 compared to earnings of $31.7 million in 2021. Net realized and unrealized losses on investments were $27.3 million in 2022 compared to gains of $4.9 million in 2021.

4Q 2022 Highlights

Operating income before taxes increased $19.6 million, or 31.7 percent, in the fourth quarter of 2022 compared to the fourth quarter of 2021.

◦Management fee revenue - policy issuance and renewal services increased $53.3 million, or 11.8 percent, in the fourth quarter of 2022 compared to the fourth quarter of 2021.

◦Management fee revenue - administrative services increased $0.6 million, or 4.0 percent in the fourth quarter of 2022 compared to the fourth quarter of 2021.

◦Cost of operations - policy issuance and renewal services

–Commissions increased $15.6 million in the fourth quarter of 2022 compared to the fourth quarter of 2021 primarily driven by direct and affiliated assumed written premium growth, partially offset by a reduction in agent incentive compensation.

–Non-commission expense increased $19.3 million in the fourth quarter of 2022 compared to the fourth quarter of 2021. Underwriting and policy processing costs increased $3.5 million primarily due to increased personnel costs, postage and underwriting report costs. Information technology costs increased $5.1 million primarily due to increased hardware and software costs and professional fees. Sales and advertising costs increased $4.4 million primarily due to increased advertising and agent-related expenses. Administrative and other expenses increased $7.5 million primarily due to increased personnel costs.

◦The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $175.6 million in the fourth quarter of 2022 and $165.4 million in the fourth quarter of 2021, but had no net impact on operating income.

Income from investments before taxes totaled $0.3 million in the fourth quarter of 2022 compared to $12.3 million in the fourth quarter of 2021. Net investment income was $4.0 million in the fourth quarter of 2022 compared to $12.6 million in the fourth quarter of 2021. Included in net investment income is $8.3 million of limited partnership losses in the fourth quarter of 2022 compared to earnings of $5.0 million in the fourth quarter of 2021. Net realized and unrealized losses on investments were $3.5 million in the fourth quarter of 2022 compared to $0.2 million in the fourth quarter of 2021.

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Webcast Information

Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on March 2, 2023.  Investors may access the pre-recorded audio broadcast by logging on to www.erieinsurance.com.

Erie Insurance Group

According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 11th largest homeowners insurer, 13th largest automobile insurer and 13th largest commercial lines insurer in the United States based on direct premiums written. Founded in 1925, Erie Insurance is a Fortune 500 company and the 19th largest property/casualty insurer in the United States based on total lines net premium written. Rated A+ (Superior) by A.M. Best, ERIE has more than 6 million policies in force and operates in 12 states and the District of Columbia.

News releases and more information are available on ERIE's website at www.erieinsurance.com.

***

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

Statements contained herein that are not historical fact are forward-looking statements and, as such, are subject to risks and uncertainties that could cause actual events and results to differ, perhaps materially, from those discussed herein.  Forward-looking statements relate to future trends, events or results and include, without limitation, statements and assumptions on which such statements are based that are related to our plans, strategies, objectives, expectations, intentions, and adequacy of resources.  Examples of forward-looking statements are discussions relating to premium and investment income, expenses, operating results, and compliance with contractual and regulatory requirements.  Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict.  Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.  Among the risks and uncertainties, in addition to those set forth in our filings with the Securities and Exchange Commission, that could cause actual results and future events to differ from those set forth or contemplated in the forward-looking statements include the following:

•dependence upon our relationship with the Erie Insurance Exchange ("Exchange") and the management fee under the agreement with the subscribers at the Exchange;

•dependence upon our relationship with the Exchange and the growth of the Exchange, including:

◦general business and economic conditions;

◦factors affecting insurance industry competition;

◦dependence upon the independent agency system; and

◦ability to maintain our reputation for customer service;

•dependence upon our relationship with the Exchange and the financial condition of the Exchange, including:

◦the Exchange's ability to maintain acceptable financial strength ratings;

◦factors affecting the quality and liquidity of the Exchange's investment portfolio;

◦changes in government regulation of the insurance industry;

◦litigation and regulatory actions;

◦emergence of significant unexpected events, including pandemics and inflation;

◦emerging claims and coverage issues in the industry; and

◦severe weather conditions or other catastrophic losses, including terrorism;

•costs of providing policy issuance and renewal services to the Exchange under the subscriber's agreement;

•ability to attract and retain talented management and employees;

•ability to ensure system availability and effectively manage technology initiatives;

•difficulties with technology or data security breaches, including cyber attacks;

•ability to maintain uninterrupted business operations;

•outcome of pending and potential litigation;

•factors affecting the quality and liquidity of our investment portfolio; and

•our ability to meet liquidity needs and access capital.

A forward-looking statement speaks only as of the date on which it is made and reflects our analysis only as of that date.  We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changes in assumptions, or otherwise.

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EX-99.2

Exhibit 99.2

Erie Indemnity Company

Statements of Operations

(dollars in thousands, except per share data)

	Three months ended December 31,				Twelve months ended December 31,
	2022		2021		2022		2021
	(Unaudited)
Operating revenue
Management fee revenue - policy issuance and renewal services	$	503,633	$	450,286	$	2,087,846	$	1,913,166
Management fee revenue - administrative services	14,877		14,301		58,323		58,286
Administrative services reimbursement revenue	175,613		165,350		668,268		638,483
Service agreement revenue	6,512		5,994		25,687		24,042
Total operating revenue	700,635		635,931		2,840,124		2,633,977
Operating expenses
Cost of operations - policy issuance and renewal services	443,592		408,747		1,795,642		1,677,397
Cost of operations - administrative services	175,613		165,350		668,268		638,483
Total operating expenses	619,205		574,097		2,463,910		2,315,880
Operating income	81,430		61,834		376,214		318,097
Investment income
Net investment income	3,979		12,572		28,585		62,177
Net realized and unrealized investment (losses) gains	(3,453)		(237)		(27,286)		4,946
Net impairment (losses) recoveries recognized in earnings	(238)		(7)		(667)		209
Total investment income	288		12,328		632		67,332
Interest expense	—		1,050		2,009		4,132
Other income (expense)	243		(3,285)		1,615		(4,893)
Income before income taxes	81,961		69,827		376,452		376,404
Income tax expense	16,471		14,785		77,883		78,544
Net income	$	65,490	$	55,042	$	298,569	$	297,860
Earnings Per Share
Net income per share
Class A common stock – basic	$	1.41	$	1.18	$	6.41	$	6.40
Class A common stock – diluted	$	1.25	$	1.05	$	5.71	$	5.69
Class B common stock – basic and diluted	$	211	$	177	$	962	$	959
Weighted average shares outstanding – Basic
Class A common stock	46,189,028		46,189,068		46,188,916		46,188,806
Class B common stock	2,542		2,542		2,542		2,542
Weighted average shares outstanding – Diluted
Class A common stock	52,298,903		52,305,628		52,297,990		52,307,302
Class B common stock	2,542		2,542		2,542		2,542
Dividends declared per share
Class A common stock	$	1.190	$	1.110	$	4.520	$	4.215
Class B common stock	$	178.50	$	166.50	$	678.00	$	632.25

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Erie Indemnity Company

Statements of Financial Position

(in thousands)

	December 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	142,090	$	183,702
Available-for-sale securities	24,267		38,396
Receivables from Erie Insurance Exchange and affiliates, net	524,937		479,123
Prepaid expenses and other current assets	79,201		56,206
Accrued investment income	8,301		6,303
Total current assets	778,796		763,730
Available-for-sale securities, net	870,394		907,689
Equity securities	72,560		87,743
Fixed assets, net	413,874		374,802
Agent loans, net	60,537		58,683
Deferred income taxes, net	0		145
Other assets	43,295		49,265
Total assets	$	2,239,456	$	2,242,057
Liabilities and shareholders' equity
Current liabilities:
Commissions payable	$	300,028	$	270,746
Agent bonuses	95,166		120,437
Accounts payable and accrued liabilities	165,915		138,317
Dividends payable	55,419		51,693
Contract liability	36,547		34,935
Deferred executive compensation	12,036		12,637
Current portion of long-term borrowings	—		2,098
Total current liabilities	665,111		630,863
Defined benefit pension plans	51,224		130,383
Long-term borrowings	—		91,734
Contract liability	17,895		17,686
Deferred executive compensation	13,724		14,571
Deferred income taxes, net	14,075		0
Other long-term liabilities	29,019		14,342
Total liabilities	791,048		899,579
Shareholders' equity	1,448,408		1,342,478
Total liabilities and shareholders' equity	$	2,239,456	$	2,242,057

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XML

Document and Entity Information	Mar. 01, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Mar. 01, 2023
Entity Registrant Name	ERIE INDEMNITY COMPANY
Entity Incorporation, State or Country Code	PA
Entity File Number	0-24000
Entity Tax Identification Number	25-0466020
Entity Address, Address Line One	100 Erie Insurance Place,
Entity Address, City or Town	Erie,
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	16530
City Area Code	814
Local Phone Number	870-2000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A common stock,
Trading Symbol	ERIE
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000922621
Amendment Flag	false