ERIE INDEMNITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

	Three months		Three months ended		Nine months ended		Nine months ended
	ended Sept. 30		Sept. 30		Sept. 30		Sept. 30
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
		2004		2003		2004		2003
OPERATING REVENUE:
Management fee revenue-net	$	232,837	$	219,001	$	684,539	$	634,785
Premiums earned		52,862		48,358		154,576		140,759
Service agreement revenue		5,384		6,667		16,207		20,014
Total operating revenue		291,083		274,026		855,322		795,558
OPERATING EXPENSES:
Cost of management operations		177,659		160,416		521,599		467,030
Losses and loss expenses incurred		34,602		38,723		112,642		115,587
Policy acquisition and other underwriting expenses		12,153		11,168		35,906		32,302
Total operating expenses		224,414		210,307		670,147		614,919
Investment income — Unaffiliated
Investment income, net of expenses		14,795		14,477		45,048		43,015
Net realized gains on investments		859		1,846		6,743		5,815
Equity in earnings (losses) of limited
partnerships		3,845		1,311		5,765		(1,435	)
Total investment income - unaffiliated		19,499		17,634		57,556		47,395
Income before income taxes and equity in earnings of Erie Family
Life Insurance Co.		86,168		81,353		242,731		228,034
Provision for income taxes		29,141		27,124		81,865		76,107
Equity in earnings of Erie Family Life Insurance Company, net of tax		1,539		2,008		4,227		4,668
Net income	$	58,566	$	56,237	$	165,093	$	156,595
Net income per share — basic	$	0.83	$	0.79	$	2.34	$	2.21
Net income per share — diluted	$	0.83	$	0.79	$	2.34	$	2.20
Weighted average shares outstanding		70,186		70,997		70,584		70,997
DIVIDENDS DECLARED
Class A non-voting common	$	0.215	$	0.19	$	0.645	$	0.57
Class B common		32.25		28.50		96.75		85.50

ERIE INDEMNITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS — SEGMENT BASIS

(Amounts in thousands, except per share data)

	Three months		Three months ended			Nine months ended			Nine months ended
	ended Sept. 30		Sept. 30			Sept. 30			Sept. 30
	(unaudited)		(unaudited)			(unaudited)			(unaudited)
		2004		2003			2004			2003
MANAGEMENT OPERATIONS
Management fee revenue	$	246,388	$	231,747		$	724,379		$	671,730
Service agreement revenue		5,384		6,667			16,207			20,014
Total revenue from management operations		251,772		238,414			740,586			691,744
Cost of management operations		187,999		169,752			551,957			494,212
Income from management operations		63,773		68,662			188,629			197,532
INSURANCE UNDERWRITING OPERATIONS
Premiums earned		52,862		48,358			154,576			140,759
Losses and loss adjustment expenses incurred		34,602		38,723			112,642			115,587
Policy acquisition and other underwriting expenses		15,365		14,578			45,389			42,065
Total losses and expenses		49,967		53,301			158,031			157,652
Underwriting gain (loss)		2,895		(4,943	)		(3,455	)		(16,893	)
INVESTMENT OPERATIONS
Net investment income		14,795		14,477			45,048			43,015
Net realized gains on investments		859		1,846			6,743			5,815
Equity in earnings (losses) of limited
partnerships		3,845		1,311			5,765			(1,435	)
Equity in earnings of Erie Family Life Insurance Company		1,654		2,160			4,545			5,019
Net revenue from investment operations		21,153		19,794			62,101			52,414
Income before income taxes		87,821		83,513			247,275			233,053
Provision for income taxes		29,255		27,276			82,182			76,458
Net income	$	58,566	$	56,237		$	165,093		$	156,595
Net income per share — basic	$	0.83	$	0.79		$	2.34		$	2.21
Net income per share — diluted	$	0.83	$	0.79		$	2.34		$	2.20
WEIGHTED AVERAGE SHARES OUTSTANDING		70,186		70,997			70,584			70,997

Amounts presented on a segment basis are presented gross of intercompany/intersegment items

ERIE INDEMNITY COMPANY

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Amounts in thousands, except per share data)

	September 30		December 31
	2004		2003
	(unaudited)
ASSETS
Investments
Fixed maturities	$	981,989	$	879,361
Equity securities
Preferred stock		141,024		148,952
Common stock		39,356		40,451
Other invested assets		127,190		116,400
Total investments		1,289,559		1,185,164
Cash and cash equivalents		79,167		87,192
Equity in Erie Family Life Insurance Company		58,104		56,072
Premiums receivable from policyholders		295,119		266,957
Receivables from affiliates		1,079,669		984,146
Other assets		180,379		175,076
Total assets		2,981,997		2,754,607
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Unpaid losses and loss adjustment expenses		905,930		845,536
Unearned premiums		493,313		449,606
Other liabilities		344,202		295,295
Total liabilities		1,743,445		1,590,437
Total shareholders’ equity		1,238,552		1,164,170
Total liabilities and shareholders’ equity	$	2,981,997	$	2,754,607
Book value per share	$	17.68	$	16.40
Shares outstanding		70,040		70,997

Selected financial data of Erie Insurance Exchange:

The selected financial data below is derived from the Erie Insurance Exchange’s financial statements prepared in accordance with Statutory Accounting Principles. In the opinion of management, all adjustments consisting only of normal recurring accruals, considered necessary for a fair presentation have been included. The financial data set forth below is only a summary.

	Three months		Three months ended			Nine months ended		Nine months ended
	ended Sept. 30		Sept. 30			Sept. 30		Sept. 30
(In thousands)		2004		2003			2004		2003
Statutory Accounting Basis	(unaudited)		(unaudited)			(unaudited)		(unaudited)
Premiums earned	$	937,357	$	866,860		$	2,741,960	$	2,501,654
Losses and loss adjustment expenses		573,469		793,975			1,830,851		2,116,828
Insurance underwriting and other expenses		271,123		247,732			790,223		756,597
Net underwriting gain (loss)		92,765		(174,817	)		120,886		(371,771	)
Net investment income		70,685		61,138			202,179		172,313
Net realized gains		45,371		76,693			76,550		154,907
Federal income tax expense (benefit)		63,525		(12,858	)		119,725		(59,539	)
Net income (loss)	$	145,296		($24,128	)	$	279,890	$	14,988
	As of		As of
(In thousands)	Sept. 30,		Dec. 31,
Statutory Accounting Basis		2004		2003
	(unaudited)
Cash and invested assets	$	7,223,864	$	7,024,796
Other assets		1,180,043		1,020,830
Total assets		8,403,907		8,045,626
Claims and unearned premium reserves		4,916,395		4,616,687
Other liabilities		835,380		999,854
Total liabilities		5,751,775		5,616,541
Policyholders’ surplus		2,652,132		2,429,085
Total liabilities and policyholders surplus	$	8,403,907	$	8,045,626

ERIE INDEMNITY COMPANY
RECONCILIATION OF PROPERTY AND CASUALTY GROUP TO INDEMNITY RESULTS

	Three months			Three months ended			Nine months ended			Nine months ended
	ended Sept. 30			Sept. 30			Sept. 30			Sept. 30
	2004			2003			2004			2003
Underwriting results of the Property and Casualty Group-(SAP Basis)
Direct underwriting results
Direct written premiums	$	1,045,785		$	971,029		$	3,084,470		$	2,810,123
Premiums earned		998,231			892,789			2,900,590			2,566,465
Loss and loss adjustment expense incurred		604,944			786,847			1,911,122			2,145,901
Underwriting expense incurred		281,378			250,311			818,876			764,067
Dividends to policyholders		3,962			4,931			12,198			14,652
Other expenses		4,031			3,675			10,614			8,999
Direct underwriting income (loss)		103,916			(152,975	)		147,780			(367,154	)
Nonaffiliated reinsurance underwriting results-net
Assumed voluntary-less ceded retrocessions		6,029			6,865			9,874			8,235
Assumed voluntary		(5,992	)		(6,372	)		(14,860	)		(7,024	)
Ceded reinsurance		8,023			27,490			24,387			23,573
Nonaffiliated reinsurance underwriting loss		(7,986	)		(26,997	)		(29,373	)		(22,362	)
Net underwriting gain (loss) (SAP Basis)		95,930			(179,972	)		118,407			(389,516	)
ERIE INDEMNITY INSURANCE UNDERWRITING OPERATIONS
Percent of pool assumed by the Indemnity Company		5.50	%		5.50	%		5.50	%		5.50	%
Indemnity preliminary underwriting income (loss)		5,276			(9,898	)		6,512			(21,423	)
Excess-of-loss premiums ceded to the Exchange		(842	)		(1,150	)		(2,524	)		(2,300	)
Reinsurance (charges) recoveries under excess-of-loss		(1,159	)		7,074			(6,088	)		7,196
SAP to GAAP adjustments		(380	)		(969	)		(1,355	)		(366	)
Indemnity underwriting income (loss)		2,895			(4,943	)		(3,455	)		(16,893	)
Net Property & Casualty Group (SAP Basis)
Loss and LAE Ratio		61.3			90.9			67.1			84.4
Underwriting ratio		26.9			25.6			26.4			27.0
Policyholder dividends ratio		0.4			0.5			0.4			0.6
Statutory combined ratio		88.6			117.0			93.9			112.0
Adjusted combined ratio, excluding profit component		83.0			110.7			88.3			105.7
Loss ratio points from catastrophes		3.6			12.0			2.2			6.3
Loss ratio points from prior accident year reserve development-(redundancy) deficiency		(3.2	)		(0.2	)		(4.3	)		1.0
Erie Indemnity Company
GAAP combined ratio		94.5			110.2			102.2			112.0
GAAP loss ratio points from catastrophes		3.7			12.5			2.3			6.5

SAP Basis represents statutory accounting principles as codified by the National Association of Insurance Commissioners (NAIC)

	Three months		Three months ended					Nine months ended		Nine months ended
	ended Sept. 30		Sept. 30					Sept. 30		Sept. 30
	(in thousands)		(in thousands)			%		(in thousands)		(in thousands)			%
		2004		2003	Change				2004		2003	Change
Private passenger auto	$	126,724	$	121,065		4.7	%	$	362,672	$	343,820		5.5	%
Commercial auto		18,587		18,008		3.2			59,956		57,115		5.0
Homeowner		49,962		42,962		16.3			132,615		110,491		20.0
Commercial multi-peril		25,192		23,127		8.9			80,302		74,573		7.7
Workers’ compensation		20,491		18,716		9.5			64,319		61,344		4.8
All other lines of business		10,032		9,169		9.4			30,215		27,087		11.5
		250,988		233,047		7.7	%		730,079		674,430		8.3	%
Allowance for management fee returned on cancelled policies		4,600		1,300					5,700		2,700
Total management fee revenue	$	246,388	$	231,747		6.3	%	$	724,379	$	671,730		7.8	%

Growth rates of policies in force for Property and Casualty Group insurance operations:

	Private		12-mth.					12-mth.			All other		12-mth.			Total		12-mth.
	passenger		growth					growth			personal lines		growth			Personal		growth
Date	auto		rate			Homeowners		rate			of business		rate			lines		rate
06/30/03		1,650,225		9.1	%		1,293,575		12.8	%		264,423		14.0	%		3,208,223		11.0	%
09/30/03		1,666,285		7.2			1,316,775		10.6			269,640		12.2			3,252,700		9.0
12/31/03		1,672,621		5.1			1,327,842		7.9			272,547		9.2			3,273,010		6.6
03/31/04		1,678,496		3.4			1,335,763		5.8			275,970		7.2			3,290,229		4.7
06/30/04		1,686,524		2.2			1,347,409		4.2			278,547		5.3			3,312,480		3.3
09/30/04		1,682,561		1.0			1,350,899		2.6			278,707		3.4			3,312,167		1.9

Growth rates of policies in force for Property and Casualty Group insurance operations:

			12-mth.			CML*		12-mth.					12-mth.			All other		12-mth.			Total		12-mth.
	CML*		growth			multi-		growth			Workers’		growth			CML* lines		growth			CML*		growth
Date	auto		rate			peril		rate			comp.		rate			of business		rate			lines		rate
06/30/03		112,911		10.2	%		201,614		12.2	%		61,932		11.4	%		83,826		10.5	%		460,283		11.3	%
09/30/03		114,339		8.5			205,127		10.5			62,396		8.8			85,789		9.8			467,651		9.7
12/31/03		115,171		6.6			206,533		8.3			62,282		5.7			86,409		8.3			470,395		7.5
03/31/04		115,760		5.3			206,937		6.2			61,378		2.1			86,344		6.1			470,419		5.4
06/30/04		117,060		3.7			209,795		4.1			60,735		(1.9	)		87,172		4.0			474,762		3.1
09/30/04		117,090		2.4			210,012		2.4			59,863		(4.1	)		87,921		2.5			474,886		1.5

Growth rates of policies in force for Property and Casualty Group insurance operations:

			12-mth.
	Total all		growth
Date	lines		rate
06/30/03		3,668,506		11.0	%
09/30/03		3,720,351		9.0
12/31/03		3,743,405		6.7
03/31/04		3,760,648		4.7
06/30/04		3,787,242		3.2
09/30/04		3,787,053		1.8

*CML = Commercial

Policy retention trends for Property and Casualty Group insurance operations:

	Private									CML*					All other
	passenger			CML*						multi-			Workers’		lines of
Date	auto			auto			Homeowners			peril			comp.		business			Total
06/30/03		92.2	%		91.1	%		90.5	%		88.4	%		89.4		88.4	%		90.1	%
09/30/03		91.9			90.4			90.1			88.0			88.9		88.4			90.6
12/31/03		91.6			89.8			89.5			87.5			88.1		88.2			90.2
03/31/04		91.2			89.7			89.0			87.6			88.1		87.5			89.8
06/30/04		90.7			89.0			88.4			86.7			86.7		86.8			89.2
09/30/04		90.3			88.5			87.9			86.0			86.2		86.0			88.7

*CML = Commercial

ERIE INDEMNITY COMPANY

PROPERTY & CASUALTY GROUP ADJUSTED COMBINED RATIO BY
MAJOR LINES OF BUSINESS (SAP BASIS)

	Quarter to date			Quarter to date			Year to date			Year to date
	Sept. 30			Sept. 30			Sept. 30			Sept. 30
	2004			2003			2004			2003
Private passenger auto		85.3	%		95.5	%		97.1	%		100.6	%
Home protector		74.4	%		136.1	%		77.5	%		115.3	%
Other personal lines		88.4	%		111.2	%		79.1	%		96.8	%
Total personal		82.7	%		105.5	%		87.8	%		103.9	%
Commercial multi-peril		59.8	%		106.3	%		78.0	%		114.9	%
Commercial auto		96.0	%		100.5	%		89.8	%		99.2	%
Workers’ compensation		101.2	%		158.1	%		103.7	%		128.6	%
Other commercial lines		90.7	%		97.8	%		75.9	%		79.1	%
Total commercial		84.1	%		119.4	%		88.9	%		112.4	%
Grand total-direct business only		82.9	%		109.6	%		88.1	%		106.4	%
Total-net of reinsurance		83.0	%		110.7	%		88.3	%		105.7	%

ERIE INDEMNITY COMPANY

RECONCILIATION OF OPERATING INCOME TO NET INCOME

(Amounts in thousands, except per share data)

Definition on Non-GAAP and Operating Measures

Operating income, a non-GAAP measure, is income excluding realized capital gains and losses, after tax. Realized capital gains and losses which are included in the Company’s equity in earnings of Erie Family Life Insurance Company and equity in earnings of limited partnerships are not excluded from net income to compute operating income. Net income is the GAAP measure that is most directly comparable to operating income. The Company’s method of calculating this measure may differ from those used by other companies and therefore comparability may be limited.

The Company uses operating income to evaluate their results of operations. It reveals trends in the Company’s management services, insurance underwriting and investment operations that may be obscured by the net effects of realized capital gains and losses. These items may vary significantly between periods and are generally driven by business decisions and economic developments such as capital market conditions, the timing of which is unrelated to management services and insurance underwriting processes of the Company. The Company believes operating income is useful for investors to evaluate these components separately and in the aggregate when reviewing the Company’s performance. The Company is aware that the price to earnings multiple commonly used by investors as a forward-looking valuation technique uses operating income as the denominator. Operating income should not be considered as a substitute for net income and does not reflect the overall profitability of the Company’s business.

The following table reconciles operating income and net income for the three and nine months ended September 30, 2004 and 2003.

	Three months			Three months ended			Nine months ended			Nine months ended
	ended Sept. 30			Sept. 30			Sept. 30			Sept. 30
(in thousands)	(unaudited)			(unaudited)			(unaudited)			(unaudited)
	2004			2003			2004			2003
Operating income	$	58,007		$	55,038		$	160,710		$	152,815
Net realized gains on investments		859			1,846			6,743			5,815
Income tax expense on realized gains		(300	)		(647	)		(2,360	)		(2,035	)
Realized gains net of income tax expense		559			1,199			4,383			3,780
Net income	$	58,566		$	56,237		$	165,093		$	156,595
	Per share			Per share			Per share			Per share
	information			information			information			information
	Three months			Three months			Nine months			Nine months
	ended Sept. 30			ended Sept. 30			ended Sept. 30			ended Sept. 30
(in thousands)	(unaudited)			(unaudited)			(unaudited)			(unaudited)
		2004			2003			2004			2003
Operating income		0.83			.078			2.28			2.15
Net realized gains on investments		0.01			0.02			0.10			0.08
Income tax expense on realized gains		(0.01	)		(0.01	)		(0.04	)		(0.02	)
Realized gains net of income tax expense		(0.00	)		0.01			0.06			0.06
Net income		0.83			0.79			2.34			2.21