Erie Indemnity Company Q2 FY2025 earnings call

• Information security event: On June 7, IT team identified unauthorized network activity, initiated proactive network outage and system shutdown. After investigation, no sensitive personal info, financial records or legally protected data was breached. Recovery process took time, with teams implementing workarounds and mobilizing workforce. Appreciation expressed for employees and agents.
• 100th anniversary: In April, leadership team visited NASDAQ headquarters to ring opening bell to celebrate 100th year in business and 30th anniversary of Erie Indemnity's listing on NASDAQ.
• Erie Insurance Foundation: In May, announced creation of Erie Insurance Foundation, with Erie Indemnity Company planning to donate $100 million to seed the foundation's endowment.
• Consumer Reports recognition: Erie was named the highest-rated auto insurance provider by Consumer Reports earlier this year.
• Fortune 500: In June, Erie moved up 52 spots on the 2025 Fortune 500 list, improving from 376 to 323 based on 2024 fiscal year total revenue.

Erie Insurance Exchange

• Direct and assumed written premiums grew by nearly 9.2% in the second quarter of 2025 and 11.4% in the first half of 2025 compared to the same respective periods in the prior year.
• Average premium per policy increased by 11.9%.
• Policies in-force grew by 1.7%, and policy retention ratio was 89.7%.
• Combined ratio in the second quarter of 2025 was 116.9% compared to 115.9% in the second quarter of 2024, with catastrophic weather events contributing 20.7 points and 16.2 points respectively. Year-to-date combined ratio was 112.6% in 2025 compared to 111.1% in the first 6 months of 2024, with catastrophic weather events contributing 18.5 points versus 12.7 points in the same period of 2024.

Indemnity

• Net income was $175 million or $3.34 per diluted share in the second quarter of 2025 compared to $164 million or $3.13 per diluted share in the second quarter of 2024. Year-to-date, Indemnity net income was $313 million or $5.99 per diluted share compared to $289 million or $5.52 per diluted share at this time last year.
• Operating income increased in the second quarter nearly 5% to almost $200 million compared to the second quarter of 2024, bringing year-to-date 2025 operating income to $350 million, an increase of almost 7% compared to the first half of 2024.
• Management fee revenue from policy issuance and renewal services increased 8.3% to $824 million in the second quarter of 2025 compared to the second quarter of 2024 and nearly 11% to $1.6 billion in the first half of the year compared to this time last year.
• Income from investments totaled almost $20 million compared to earnings of nearly $14 million in the second quarter of 2024. Net investment income was just over $20 million in the second quarter compared to almost $16 million in the same period last year. Total investment income in the first half of 2025 was $39 million compared to $29 million in the first half of 2024.

• Cybersecurity risk: Cybercriminal groups and information security incidents are becoming increasingly sophisticated and even the most well-protected organizations can be impacted. Safeguarding systems and information remains a top priority, and the company is implementing learnings from the recent incident to strengthen cybersecurity protections.