Erie Indemnity Company (ERIE) investor relations material

Executive summary

• Net income for Q1 2026 was $150.5 million ($2.88 per diluted share), up from $138.4 million ($2.65 per share) in Q1 2025, with operating income rising 10.2% to $166.8 million, driven by higher management fee revenue and controlled expenses.

• 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 steady progress 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 and 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, and administrative services management fee revenue increased 10.4% to $19.5 million.

• Net investment income reached $23.6 million, up from $19.9 million year-over-year, though total investment income was partially offset by $0.8 million in net realized and unrealized investment losses.

• Operating cash flow was $91.9 million, down from $118.1 million, primarily due to higher incentive compensation payments.

Outlook and guidance

• Focus remains on disciplined growth and profitability, leveraging new products and technology, with continued rollout of Erie Auto Security and Business Auto 2.0 expected to support growth.

• New online quote platform to expand to additional 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.