Erie Indemnity Company (NASDAQ:ERIE) Q2 2019 Earnings Conference Call - Final Transcript
Jul 26, 2019 • 10:00 am ET
Good morning and welcome to the Erie Indemnity Company Second Quarter 2019 Earnings Conference Call. This call was prerecorded and there will be no answer-and-question session following the recording. Now I'd like to introduce your host for the call, Vice President of Investor Relations, Scott Beilharz.
Scott W. Beilharz
Thank you, and welcome, everyone. We appreciate you joining us for this recorded discussion about our 2019 second quarter results. This recording will include remarks from Tim NeCastro, President and Chief Executive Officer; and Greg Gutting, Executive Vice President and Chief Financial Officer.
Our earnings release and financial supplement were issued yesterday afternoon after the market close and are available within the Investor Relations section of our website erieinsurance.com.
Before we begin, I would like to remind everyone that today's discussion may contain forward-looking remarks that reflect the company's current views about future events. These remarks are based on assumptions, subject to known and unexpected risks and uncertainties.
These risks and uncertainties may cause results to differ materially from those described in these remarks. For information on important factors that may cause such differences, please see the safe harbor statements in our Form 10-Q filing with the SEC dated July 25th, 2019 and in the related press release.
This prerecorded call is the 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 will move on to Tim's remarks.
Timothy G. NeCastro
Thanks, Scott, and thank you, everyone for your time today and interest in Erie's second quarter results. Erie Indemnity performed well over the past three months.
As you saw in our press release filed yesterday, Erie Indemnity reported net income of $88 million or $1.68 per diluted share for the quarter. That's over $8 million more in the second quarter in 2018. Greg will talk more about what's behind that increase.
Before he does, I want to share recent highlights for Erie Insurance Exchange. The insurance operation we manage. In the second quarter premiums grew 5.6% over the prior year to nearly $2 billion. Renewal premium is driving this growth as we continued to experience strong policy retention.
The Exchange's growth continues to exceed Conning's latest industry forecast of 4.1%. This result puts Erie on pace to outperform the industry on a premium growth for the 12th year in a row. As we've shared on past calls, our long-term growth goal is to outpace the industry and grow our market share.
The gap between Erie's premium growth and the industry has slowed over the last two years driven by several factors. First, the market conditions. Prices are softening in private passenger automobile as carriers hold steady on rates or take decreases, which dampens shopping activity.
Secondly, at Erie, we are slowing down the private passenger auto growth that is not generating a profit. This is an intentional move to shore up our competitive position and bolster our ability to provide a competitive rate for the very best risks.