Erie Indemnity Company (ERIE) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 28, 2023 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Erie Indemnity Company Second Quarter 2023 Earnings Conference Call. This call was prerecorded, and there will be no question-and-answer session following the recording.

Now I'd like to introduce your host for the call, Vice President of Investor Relations, Scott Beilharz.

Scott Beilharz

Thank you, and welcome, everyone. We appreciate you joining us for a recorded discussion about our second quarter results. This recording will include remarks from Tim NeCastro, President and Chief Executive Officer; and Julie Pelkowski, Executive Vice President and Chief Financial Officer. Our earnings release and financial supplement were issued yesterday afternoon after the market closed 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 these differences, please see the safe harbor statements in our Form 10-Q filing with the SEC dated July 27, 2023, 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 move on to Tim's remarks. Tim?

Tim NeCastro

Thanks, Scott, and thanks to all of you for your interest in Erie's performance for the second quarter of 2023. The executive team and I have spent a lot of time over the past few months connecting with our various stakeholders, with agents at our annual branch meetings across our footprint and at our combined agency taskforce meeting here in Erie, with employees at our open door, leader forum and claims recognition meetings and with investors at our annual meeting with shareholders held in April.

A frequent topic of discussion at these recent gatherings has been the challenges the industry continues to face. Inflation, supply chain issues and an increase in severe weather are among the most pressing, and we're certainly feeling the effects of them so far in 2023. That's reflected in our combined ratio, which now stands at 120.8% compared to 113.7% for the first half of 2022. Both personal and commercial lines continue to experience an increase in severity for property, auto and uninsured and underinsured motorist claims, although costs are growing at a more moderate pace than in the prior year. Year-to-date, personal auto claims severity is up 6% compared to last year and 21% since 2021.