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Erie Indemnity Company Class A ERIE
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/27/2013

Operator: Good morning and welcome to Erie Indemnity Company Fourth Quarter 2012 Earnings Conference Call. I'd like to introduce your host for today's call, Scott Beilharz.

Scott Beilharz - Director, IR: Thank you, Janine, and welcome, everyone. We appreciate all of you joining us. On today's call, management will discuss our fourth quarter 2012 results and other matters related to the Company's fourth quarter operations.

Joining me today are Terry Cavanaugh, President and CEO; Marcia Dall, Executive Vice President and Chief Financial Officer; Rick Burt, Executive Vice President, Products; Chip Dufala, Executive Vice President, Services; Bob Ingram, Executive Vice President Information Technology; John Kearns, Executive Vice President, Sales and Marketing; and Jim Tanous, Executive Vice President, Secretary and General Counsel. Our earnings release and financial supplements were issued yesterday afternoon and are currently available on our website erieinsurance.com. We will hear brief remarks from Terry and Marcia and then open the call for questions.

Before we begin, let me remind everyone that today's discussion may contain forward-looking statements. These forward-looking statements reflect the Company's current views about future events and are based on assumptions subject to known and unknown risks and uncertainties. These risks and uncertainties may cause results to differ materially from those anticipated as described in those statements. For information on important factors that may cause such differences, please see the Safe Harbor statements in our latest 10-K filing with the SEC dated February 26, 2013, and in the related press release.

Also, in this call we may cover non-GAAP measures. A reconciliation to the GAAP-based results can be found in the 10-K. This call is being recorded and recording is the property of Erie Indemnity Company. It is not intended for reproduction or rebroadcast by any other party without the prior written consent of Erie Indemnity Company. A replay will be available on our website today after 12.30 p.m. Eastern Time.

Your participation on this call will constitute consent to recording, publication, webcast, broadcast, and use of your name, voice and comments by Erie Indemnity. If you do not agree with these terms, please disconnect at this time.

With that I'll now turn the call over to Terry.

Terrence W. Cavanaugh - President and CEO: Thank you, Scott, and good morning to everyone. Erie Indemnity ended 2012 with strong gains in both net income and earnings per share, driven primarily by strong top line growth and positive year-over-year investment results. Combined these led to an Indemnity net income per share diluted for the quarter of $0.56 compared to $0.49 last year. Direct written premium of the exchange, which drives Indemnity's management fee revenue, remained strong, up 9.9% for the fourth quarter. Higher average premium per policy in all of our major lines of business contributed to the increase in revenue.

In 2012, thanks to the efforts of our agents and employees, we increased policies by 3.9% and our policy retention rate increased to a strong 90.9% at year-end. Our 2012 results reflect success and our key initiatives, service responsiveness as well as the engagement of our agency force. These initiatives, which will continue in 2013, focused on three strategic priorities; ease of doing business, innovation, and service excellence.

Read our Earnings Call Transcript disclaimer.
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