Erie Indemnity Company has announced key updates for 2025, including a decision to maintain the management fee rate and an increase in shareholder dividends.
The company will continue charging Erie Insurance Exchange a 25% management fee rate starting Jan. 1, 2025, the same rate applied throughout 2024.
The board of directors also approved a 7.1% increase in the regular quarterly dividend, raising the payout for Class A shares from $1.275 to $1.365, and for Class B shares from $191.25 to $204.75.
The 25% management fee rate, which is the maximum allowable under the agreement with Erie Insurance Exchange's policyholders, was determined after reviewing the financial positions of both the Exchange and Erie Indemnity.
The increased dividend, effective for the next quarter, reflects the company’s continued performance. The next quarterly dividend will be paid on Jan. 22, 2025, to shareholders of record as of Jan. 7, 2025, with the ex-dividend date also on Jan. 7, 2025.
Earlier this year, Erie Indemnity released its financial results for the year ending Dec. 31, 2023, showing an increase in net income to $446.1 million, or $8.53 per diluted share, up from $298.6 million, or $5.71 per diluted share, in 2022.
Operating income before taxes saw a 38.3% increase in 2023, reflecting an additional $144.0 million in income over the prior year.
This growth was driven by a 17.0% rise in management fee revenue from policy issuance and renewals, which amounted to a $354.2 million increase, and a 9.2% rise in revenue from administrative services, adding $5.3 million.
Based in Erie, Pennsylvania, Erie Insurance ranks as the 12th largest homeowners insurer and 13th largest in both automobile and commercial lines insurance in the U.S. based on direct premiums written.
How do you view the company’s decisions on management fees and dividends? Feel free to share your thoughts in the comments.
