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): February 22, 2024

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 February 26, 2024, Erie Indemnity Company (the "Company") issued a press release announcing financial results for the quarter and year ended December 31, 2023. 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 February 27, 2024 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, 2023.

Item 8.01 Other Events.

At its meeting on February 22, 2024, the Company's Board of Directors approved the following quarterly dividend on shares of Erie Indemnity Company Class A common stock:

Dividend Number: 375

Class A Rate Per Share: $1.275

Declaration Date: February 22, 2024

Ex-Dividend Date: April 8, 2024

Record Date: April 9, 2024

Payable Date: April 23, 2024

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
February 26, 2024	By:	/s/ Julie M. Pelkowski
		Name: Julie M. Pelkowski
		Title: Executive Vice President & CFO

EX-99.1

Exhibit 99.1

Erie Indemnity Reports Full Year and Fourth Quarter 2023 Results

Net Income per Diluted Share was $2.12 for the Quarter and $8.53 for the Year

Erie, Pa. - February 26, 2024 - Erie Indemnity Company (NASDAQ: ERIE) today announced financial results for the full year and quarter ending December 31, 2023. Net income was $446.1 million, or $8.53 per diluted share, in 2023, compared to $298.6 million, or $5.71 per diluted share, in 2022. Net income was $110.9 million, or $2.12 per diluted share, in the fourth quarter of 2023, compared to $65.5 million, or $1.25 per diluted share, in the fourth quarter of 2022.

4Q and Full Year 2023
(in thousands)	4Q'23		4Q'22		2023		2022
Operating income	$	127,084	$	81,430	$	520,256	$	376,214
Investment income	9,771		288		28,968		632
Interest expense and other (income), net	(3,069)		(243)		(12,712)		394
Income before income taxes	139,924		81,961		561,936		376,452
Income tax expense	28,996		16,471		115,875		77,883
Net income	$	110,928	$	65,490	$	446,061	$	298,569

2023 Full Year Highlights

Operating income before taxes increased $144.0 million, or 38.3 percent, in 2023 compared to 2022.

◦Management fee revenue - policy issuance and renewal services increased $354.2 million, or 17.0 percent, in 2023 compared to 2022.

◦Management fee revenue - administrative services increased $5.3 million, or 9.2% in 2023 compared to 2022.

◦Cost of operations - policy issuance and renewal services

–Commissions increased $169.0 million in 2023 compared to 2022 primarily driven by the growth in direct and affiliated assumed written premium, partially offset by a decrease in agent incentive compensation.

–Non-commission expense increased $46.9 million in 2023 compared to 2022. Underwriting and policy processing costs increased $9.4 million primarily due to policies in force growth. Information technology costs increased $18.6 million primarily due to increased professional fees, personnel costs, and hardware and software costs. Administrative and other expenses increased $20.0 million primarily due to an increase in personnel costs. Personnel costs in 2023 were impacted by increased compensation including higher estimated costs for incentive plan awards, partially offset by lower pension costs due to an increase in the discount rate compared to 2022. Increases in incentive plan costs

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were driven by improved direct written premium and policies in force growth and Indemnity's higher stock price at year-end 2023 compared to 2022.

◦The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $737.1 million in 2023 and $668.3 million in 2022, but had no net impact on operating income.

Income from investments before taxes totaled $29.0 million in 2023 compared to $0.6 million in 2022. Net investment income was $44.6 million in 2023 compared to $28.6 million in 2022. Net investment income included limited partnership losses of $11.3 million in 2023 compared to $10.4 million in 2022. Net realized and unrealized losses on investments were $5.8 million in 2023 compared to $27.3 million in 2022. Net impairment losses recognized in earnings were $9.8 million in 2023 compared to $0.7 million in 2022.

4Q 2023 Highlights

Operating income before taxes increased $45.7 million, or 56.1 percent, in the fourth quarter of 2023 compared to the fourth quarter of 2022.

◦Management fee revenue - policy issuance and renewal services increased $98.0 million, or 19.5 percent, in the fourth quarter of 2023 compared to the fourth quarter of 2022.

◦Management fee revenue - administrative services increased $1.8 million, or 12.2 percent in the fourth quarter of 2023 compared to the fourth quarter of 2022.

◦Cost of operations - policy issuance and renewal services

–Commissions increased $53.1 million in the fourth quarter of 2023 compared to the fourth quarter of 2022 primarily driven by the growth in direct and affiliated assumed written premium.

–Non-commission expense increased $1.2 million in the fourth quarter of 2023 compared to the fourth quarter of 2022. Information technology costs increased $2.9 million primarily due to increased professional fees and personnel costs. Sales and advertising costs decreased $2.4 million primarily due to decreased advertising expenses. Customer service costs increased $0.8 million primarily due to increased bank charges and personnel costs.

◦The administrative services reimbursement revenue and corresponding cost of operations increased both total operating revenue and total operating expenses by $192.7 million in the fourth quarter of 2022 and $175.6 million in the fourth quarter of 2022, but had no net impact on operating income.

Income from investments before taxes totaled $9.8 million in the fourth quarter of 2023 compared to $0.3 million in the fourth quarter of 2022. Net investment income was $14.2 million in the fourth quarter of 2023 compared to $4.0 million in the fourth quarter of 2022. Net investment income included limited partnership losses of $0.6 million in the fourth quarter of 2023 compared to $8.3 million in the fourth quarter of 2022. Net realized and unrealized gains on investments were $3.4 million in the fourth quarter of 2023 compared to losses of $3.5 million in the fourth quarter of 2022. Net impairment losses recognized in earnings were $7.8 million in the fourth quarter of 2023 compared to $0.2 million in the fourth quarter of 2022.

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Webcast Information

Indemnity has scheduled a pre-recorded audio broadcast on the Web for 10:00 AM ET on February 27, 2024.  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 12th largest homeowners insurer, 12th 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, including technological innovations;

◦dependence upon the independent agency system; and

◦ability to maintain our brand, including 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 economic or social 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 subscribers at 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;

•compliance with complex and evolving laws and regulations and outcome of pending and potential litigation;

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

•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,
	2023		2022		2023		2022
	(Unaudited)
Operating revenue
Management fee revenue - policy issuance and renewal services	$	601,595	$	503,633	$	2,442,073	$	2,087,846
Management fee revenue - administrative services	16,693		14,877		63,669		58,323
Administrative services reimbursement revenue	192,728		175,613		737,139		668,268
Service agreement revenue	6,651		6,512		26,059		25,687
Total operating revenue	817,667		700,635		3,268,940		2,840,124
Operating expenses
Cost of operations - policy issuance and renewal services	497,855		443,592		2,011,545		1,795,642
Cost of operations - administrative services	192,728		175,613		737,139		668,268
Total operating expenses	690,583		619,205		2,748,684		2,463,910
Operating income	127,084		81,430		520,256		376,214
Investment income
Net investment income	14,212		3,979		44,572		28,585
Net realized and unrealized investment gains (losses)	3,408		(3,453)		(5,838)		(27,286)
Net impairment losses recognized in earnings	(7,849)		(238)		(9,766)		(667)
Total investment income	9,771		288		28,968		632
Interest expense	—		—		—		2,009
Other income	3,069		243		12,712		1,615
Income before income taxes	139,924		81,961		561,936		376,452
Income tax expense	28,996		16,471		115,875		77,883
Net income	$	110,928	$	65,490	$	446,061	$	298,569
Earnings Per Share
Net income per share
Class A common stock – basic	$	2.38	$	1.41	$	9.58	$	6.41
Class A common stock – diluted	$	2.12	$	1.25	$	8.53	$	5.71
Class B common stock – basic and diluted	$	357	$	211	$	1,437	$	962
Weighted average shares outstanding – Basic
Class A common stock	46,189,041		46,189,028		46,188,981		46,188,916
Class B common stock	2,542		2,542		2,542		2,542
Weighted average shares outstanding – Diluted
Class A common stock	52,301,676		52,298,903		52,299,411		52,297,990
Class B common stock	2,542		2,542		2,542		2,542
Dividends declared per share
Class A common stock	$	1.275	$	1.190	$	4.845	$	4.520
Class B common stock	$	191.25	$	178.50	$	726.75	$	678.00

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Erie Indemnity Company

Statements of Financial Position

(in thousands)

	December 31, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents (includes restricted cash of $12,542 and $11,932, respectively)	$	144,055	$	142,090
Available-for-sale securities	82,017		24,267
Receivables from Erie Insurance Exchange and affiliates, net	625,338		524,937
Prepaid expenses and other current assets	69,321		79,201
Accrued investment income	9,458		8,301
Total current assets	930,189		778,796
Available-for-sale securities, net	879,224		870,394
Equity securities	84,253		72,560
Fixed assets, net	442,610		413,874
Agent loans, net	58,434		60,537
Defined benefit pension plan	34,320		0
Other assets, net	42,934		43,295
Total assets	$	2,471,964	$	2,239,456
Liabilities and shareholders' equity
Current liabilities:
Commissions payable	$	353,709	$	300,028
Agent incentive compensation	68,077		95,166
Accounts payable and accrued liabilities	175,622		165,915
Dividends payable	59,377		55,419
Contract liability	41,210		36,547
Deferred executive compensation	10,982		12,036
Total current liabilities	708,977		665,111
Defined benefit pension plans	26,260		51,224
Contract liability	19,910		17,895
Deferred executive compensation	20,936		13,724
Deferred income taxes, net	11,481		14,075
Other long-term liabilities	21,565		29,019
Total liabilities	809,129		791,048
Shareholders' equity	1,662,835		1,448,408
Total liabilities and shareholders' equity	$	2,471,964	$	2,239,456

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XML

Document and Entity Information	Feb. 22, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Feb. 22, 2024
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