Erie Indemnity Company (ERIE) investor relations material

Executive summary

• Net income for Q1 2026 was $150.5 million, up from $138.4 million in Q1 2025, with EPS rising to $2.88 from $2.65 year-over-year.

• Operating income rose 10.2% year-over-year to $166.8 million, driven by higher management fee revenue and controlled expense growth.

• Board leadership transitioned as Jonathan Hirt Hagen was elected chairman, succeeding Tom Hagen, who remains as Chairman Emeritus and Chair of the Executive Committee.

• William Edwards joined the board, and the company mourned the passing of longtime board member George Lucore.

• Early signs of recovery in profitability after a challenging 2025, with improved underwriting and balanced performance in Q1 2026.

Financial highlights

• Direct written premium grew 3.6% in Q1 2026, down from 13.9% growth in Q1 2025.

• Average premium per policy increased 8.1%, but policies in force declined 1.7% year-over-year; retention dropped to 88%.

• Combined ratio improved to 99.4% from 108.1% in Q1 2025, driven by lower catastrophe and non-catastrophe losses.

• Management fee revenue from policy issuance and renewal services rose 4.2% to $786.4 million.

• Net investment income increased 18.1% to $23.6 million, though total investment income was partially offset by $0.8 million in net realized and unrealized investment losses.

• Commission expense rose 6.4% to $465 million, while non-commission expenses fell 5.6% to $180 million.

• $68 million in dividends paid to shareholders in Q1 2026.

Outlook and guidance

• Focus remains on disciplined execution, long-term strategy, and restoring profitability while pursuing healthy growth.

• Continued rollout of Erie Auto Security and Business Auto 2.0 products across additional states in 2026.

• New online quote platform to expand to more states, aiming to improve lead conversion and agent connectivity.

• The Exchange plans to continue premium growth and expand its agency force, with future premium levels influenced by rate actions, regulatory changes, and economic conditions.

• Management expects sufficient liquidity and capital resources to meet future needs, supported by strong cash positions and a $100 million revolving credit facility.