Erie Indemnity Company (NASDAQ:ERIE) Q3 2018 Earnings Conference Call Transcript
Oct 26, 2018 • 10:00 am ET
Good morning and welcome to the Erie Indemnity Company Third Quarter 2018 Earnings Conference Call. This call was pre-recorded and there will be no question-and-answer session following the recording.
Now I'd like to introduce your host for the call, VP of IR, Scott Beilharz.
Thank you and welcome everyone. We appreciate you joining us for this recorded discussion about our 2018 third quarter results. This recording will include remarks from Tim NeCastro, President and CEO; and Greg Gutting, EVP and CFO. Our earnings release and financial supplement were issued yesterday afternoon after the market closed, and are available within the Investor Relations section of our web site, erieinsurance.com.
(Forward-Looking Cautionary Statements)
This pre-recorded call is a property of Erie Indemnity Company. It may not be reproduced or rebroadcast by any other party without the prior written consent of Erie Indemnity Company.
With that, we'll move on to Tim's remarks.
Thanks, Scott and thanks to everyone for taking time to learn more about Erie's performance through the third quarter. I'm pleased to share that we are continuing the pace we set during the first half of the year, resulting in another strong quarter for Indemnity. As you saw in our third quarter 10-Q filed yesterday, we reported net income of $80 million or $1.54 per share for the quarter. We are very pleased with these earnings results.
For context, I'd like to share a few bright spots from the Exchange, the insurance operations we manage. Then Greg will follow with more of the details around the Indemnity's third quarter results. We reached a significant milestone during the third quarter, achieving $7 billion in total direct written premium over the rolling 12 month period. That $7 billion, reflects $5 billion in premiums from personal lines and nearly $2 billion from commercial. We have had strong P&C premium growth over the past decade, growth that has outpaced the industry in each of the last 10 years.
We've nearly doubled personal lines premium over the past nine years, with growth largely from our existing agents. Average premium per agency has climbed more than 60% since 2009 from 1.9 million to 3.1 million.
In commercial, we wrote an additional $1 billion in premium in the last five years alone. It's a result driven by our continued effort to bolster our agents' knowledge, skills and capabilities to meet the needs of small to mid-sized businesses. We've also grown policyholder surplus, which reached $9 billion in the third quarter. That result reflects Erie's healthy operational and financial position and our ability to be there for the customers who place their trust in us.
While increased storm activity continued during the third quarter, including impact from Hurricane Florence, the effect on our territories was modest compared to expectations. Similarly, while Hurricane Michael heavily affected parts of Florida and other coastal states, our claims impact was again less than anticipated. Our reported combined ratio through the third quarter was 102.1 year to date, compared to 95.6 year to date at