Erie Indemnity Company (Erie Insurance) has released its financial outcomes for the year ending December 31, 2023, revealing 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.
The fourth quarter of 2023 also saw a rise in net income, reaching $110.9 million, or $2.12 per diluted share, compared to $65.5 million, or $1.25 per diluted share, in the final quarter of 2022.
The company experienced a 38.3% increase in operating income before taxes in 2023, amounting to an additional $144.0 million over the previous year. This growth was supported by a 17.0% rise in management fee revenue from policy issuance and renewal services, totaling an increase of $354.2 million, and a 9.2% uptick in revenue from administrative services, amounting to an additional $5.3 million.
Erie Indemnity’s operational costs associated with policy issuance and renewal services also saw an increase, with commissions rising to $169.0 million due to expanded direct and affiliated assumed written premium, despite a reduction in agent incentive compensation.
Non-commission expenses also rose by $46.9 million, driven by increases in underwriting, policy processing, information technology, and administrative costs. The company noted an increase in personnel costs, offset by a decrease in pension costs due to a higher discount rate compared to 2022.
Investment income before taxes for Erie Indemnity surged to $29.0 million in 2023 from $0.6 million in 2022, with net investment income increasing to $44.6 million from $28.6 million in the previous year. The company also reported a reduction in net realized and unrealized losses on investments to $5.8 million in 2023, from $27.3 million in 2022.
In the fourth quarter of 2023, Erie Indemnity saw operating income before taxes increase by 56.1%, or $45.7 million, compared to the same period in 2022. Management fee revenue from policy issuance and renewal services grew by 19.5%, or $98.0 million, and administrative services revenue increased by 12.2%, or $1.8 million.
The insurer also noted that the fourth quarter witnessed notable growth in commissions and a slight rise in non-commission expenses.
In other recent developments, Erie Insurance recently announced the promotion of Andy Abramczyk to senior vice president.
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