Indemnity Supplemental Information (Tables)

3 Months Ended

Mar. 31, 2012

Indemnity Supplemental Information

Schedule of Consolidating Statement of Financial Position

	Erie Insurance Group
	March 31, 2012
(in millions)	Indemnity	Exchange	Reclassifications		Erie
	shareholder	noncontrolling	and		Insurance
Assets	interest	interest	eliminations		Group
Investments
Available-for-sale securities, at fair value:
Fixed maturities	$   494	$  7,483	$     –		$  7,977
Equity securities	26	621	–		647
Trading securities, at fair value	29	2,596	–		2,625
Limited partnerships	204	1,087	–		1,291
Other invested assets	1	19	–		20
Total investments	754	11,806	–		12,560
Cash and cash equivalents	28	171	–		199
Premiums receivable from policyholders	–	1,000	–		1,000
Reinsurance recoverable	–	167	–		167
Deferred income taxes	18	–	–		18
Deferred acquisition costs	–	482	–		482
Other assets	115	291	–		406
Receivables from the Exchange and other affiliates	256	–	(256	)	–
Note receivable from EFL	25	–	(25	)	–
Total assets	$1,196	$13,917	$(281	)	$14,832
Liabilities
Losses and loss expense reserves	$       –	$3,451	$     –		$3,451
Life policy and deposit contract reserves	–	1,689	–		1,689
Unearned premiums	–	2,196	–		2,196
Deferred income taxes	–	279	–		279
Other liabilities	420	402	(281	)	541
Total liabilities	420	8,017	(281	)	8,156
Shareholders’ equity and noncontrolling interest
Total Indemnity shareholders’ equity	776	–	–		776
Noncontrolling interest in consolidated entity – Exchange	–	5,900	–		5,900
Total equity	776	5,900	–		6,676
Total liabilities, shareholders’ equity and noncontrolling interest	$1,196	$13,917	$(281	)	$14,832

Consolidating Statement of Financial Position

	Erie Insurance Group
	December 31, 2011
(in millions)	Indemnity	Exchange	Reclassifications		Erie
	shareholder	noncontrolling	and		Insurance
Assets	interest	interest	eliminations		Group
Investments
Available-for-sale securities, at fair value:
Fixed maturities	$   548	$  7,292	$     –		$  7,840
Equity securities	25	564	–		589
Trading securities, at fair value	27	2,308	–		2,335
Limited partnerships	208	1,082	–		1,290
Other invested assets	1	19	–		20
Total investments	809	11,265	–		12,074
Cash and cash equivalents	11	174	–		185
Premiums receivable from policyholders	–	976	–		976
Reinsurance recoverable	–	166	–		166
Deferred income taxes	19	–	–		19
Deferred acquisition costs	–	487	–		487
Other assets	119	322	–		441
Receivables from the Exchange and other affiliates	254	–	(254	)	–
Note receivable from EFL	25	–	(25	)	–
Total assets	$1,237	$13,390	$(279	)	$14,348
Liabilities
Losses and loss expense reserves	$       –	$  3,499	$     –		$  3,499
Life policy and deposit contract reserves	–	1,671	–		1,671
Unearned premiums	–	2,178	–		2,178
Deferred income taxes	–	147	–		147
Other liabilities	456	383	(279	)	560
Total liabilities	456	7,878	(279	)	8,055
Shareholders’ equity and noncontrolling interest
Total Indemnity shareholders’ equity	781	–	–		781
Noncontrolling interest in consolidated entity – Exchange	–	5,512	–		5,512
Total equity	781	5,512	–		6,293
Total liabilities, shareholders’ equity and noncontrolling interest	$1,237	$13,390	$(279	)	$14,348

Schedule of Income attributable to Indemnity shareholder interest

	Indemnity Shareholder Interest
				Three months ended
(in millions)				March 31,
	Percent		2012		2011
Management operations:
Management fee revenue, net	100.0%		$269		$251
Service agreement revenue	100.0%		7		8
Total revenue from management operations			276		259
Cost of management operations	100.0%		230		211
Income from management operations before taxes			46		48
Life insurance operations: (1) (2)
Total revenue	21.6%	(2)	–		10
Total benefits and expenses	21.6%	(2)	–		7
Income from life insurance operations before taxes			–		3
Investment operations:
Net investment income			4		4
Net realized gains on investments			3		1
Net impairment losses recognized in earnings			0		0
Equity in earnings of limited partnerships			1		11
Income from investment operations before taxes			8		16
Income from operations before income taxes			54		67
Provision for income taxes			18		23
Net income			$  36		$  44

(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% 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 Shareholder Interest
		Three months ended
(in millions)		March 31,
	2012			2011
Management fee received	$ 266			$ 252
Service agreement fee received	7			8
Net investment income received	7			4
Limited partnership distributions	3			5
Increase (decrease) in reimbursements collected from affiliates	0			(8	)
Commissions and bonuses paid to agents	(180		)	(178	)
Salaries and wages paid	(34		)	(38	)
Pension contribution and employee benefits paid	(27		)	(4	)
General operating expenses paid	(33		)	(35	)
Income taxes paid	0			0
Net cash provided by operating activities	9			6
Net cash provided by (used in) investing activities	53			(168	)
Net cash used in financing activities	(45		)	(62	)
Net increase (decrease) in cash and cash equivalents	17			(224	)
Cash and cash equivalents at beginning of period	11			310
Cash and cash equivalents at end of period	$  28			$  86