Erie Indemnity Achieves Strong Financial Performance in Q4 and 2024
Erie Indemnity Company reported robust financial results for the fourth quarter and the entirety of 2024, according to a recent announcement.
Q4 2024 Highlights
In the fourth quarter of 2024, the company recorded a net income of $152 million, equating to $2.91 per diluted share. This marks a notable increase from the $110.9 million, or $2.12 per share, reported during the same period in 2023. Pre-tax operating income also saw a significant rise, increasing by 31.7% year-over-year to reach $40.2 million. The positive financial performance was fueled by growth across different revenue streams.
Management fee revenue, generated from policy issuance and renewal services, increased by $96.7 million, and an additional $500,000 was added from administrative services. Investment income further bolstered the financial performance, with income before taxes reaching $20.8 million in the fourth quarter, compared to $9.8 million in the previous year. Earnings from limited partnerships also improved, totaling $1.8 million, a significant turnaround from a loss of $600,000 in 2023.
Net realized and unrealized gains on investments stood at $200,000 for the quarter compared to $3.4 million the prior year. Additionally, net impairment losses were reduced to $400,000, a substantial decrease from the $7.8 million recorded in the fourth quarter of 2023.
Full-Year 2024 Results
The company’s strong performance continued throughout the year. Erie Indemnity’s net income for 2024 was $600.3 million, or $11.48 per share, a substantial increase from the $446.1 million, or $8.53 per share, recorded in 2023. Pre-tax operating income for the year increased by $156.2 million, representing a 30% rise compared to the previous year.
Management fee revenue from policy issuance and renewal services experienced a considerable increase of $452 million, or 18.5%. Revenue from administrative services increased by $4.7 million, or 7.4%. Commission expenses rose by $252.9 million, attributed to the expansion in direct and affiliated assumed written premium. Non-commission expenses increased by $47.9 million, marked by a $18.5 million increase in underwriting and policy processing expenses, due to elevated underwriting report and personnel costs.
Income from investments before taxes rose to $69.3 million for 2024, up from $29 million the prior year. Net investment income also improved, reaching $70.2 million an increase from $44.6 million in the previous year. Net realized and unrealized gains on investments were $3.2 million, compared to losses of $5.8 million in 2023.
Looking Ahead
Looking to the future, Erie Indemnity plans to keep the management fee charged to Erie Insurance Exchange at 25%, effective January 1, as determined after reviewing both the Exchange and Erie Indemnity’s financial situations. The company’s board also approved a 7.1% increase in the regular quarterly dividend.
