|
ERIE INDEMNITY COMPANY
|
|
|
(Exact name of registrant as specified in its charter)
|
|
|
PENNSYLVANIA
|
|
25-0466020
|
|
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
|
|
incorporation or organization)
|
|
Identification No.)
|
|
|
100 Erie Insurance Place, Erie, Pennsylvania
|
|
16530
|
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
|
|
|
|
(814) 870-2000
|
|
|
(Registrant’s telephone number, including area code)
|
|
|
Not applicable
|
|
|
(Former name, former address and former fiscal year, if changed since last report)
|
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
|
Three months ended
|
||||||
|
|
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Revenues
|
|
|
|
|
||||
Premiums earned
|
|
$
|
1,402
|
|
|
$
|
1,288
|
|
Net investment income
|
|
113
|
|
|
109
|
|
||
Net realized investment gains
|
|
56
|
|
|
56
|
|
||
Net impairment losses recognized in earnings
|
|
(2
|
)
|
|
0
|
|
||
Equity in earnings of limited partnerships
|
|
28
|
|
|
50
|
|
||
Other income
|
|
8
|
|
|
8
|
|
||
Total revenues
|
|
1,605
|
|
|
1,511
|
|
||
Benefits and expenses
|
|
|
|
|
||||
Insurance losses and loss expenses
|
|
1,060
|
|
|
1,034
|
|
||
Policy acquisition and underwriting expenses
|
|
348
|
|
|
321
|
|
||
Total benefits and expenses
|
|
1,408
|
|
|
1,355
|
|
||
Income from operations before income taxes and noncontrolling interest
|
|
197
|
|
|
156
|
|
||
Provision for income taxes
|
|
61
|
|
|
47
|
|
||
Net income
|
|
$
|
136
|
|
|
$
|
109
|
|
|
|
|
|
|
||||
Less: Net income attributable to noncontrolling interest in consolidated entity – Exchange
|
|
97
|
|
|
63
|
|
||
|
|
|
|
|
||||
Net income attributable to Indemnity
|
|
$
|
39
|
|
|
$
|
46
|
|
|
|
|
|
|
||||
|
|
|
|
|
||||
Earnings Per Share
|
|
|
|
|
||||
Net income attributable to Indemnity per share
|
|
|
|
|
||||
Class A common stock – basic
|
|
$
|
0.83
|
|
|
$
|
0.99
|
|
Class A common stock – diluted
|
|
$
|
0.74
|
|
|
$
|
0.88
|
|
Class B common stock – basic and diluted
|
|
$
|
125
|
|
|
$
|
149
|
|
|
|
|
|
|
||||
Weighted average shares outstanding attributable to Indemnity – Basic
|
|
|
|
|
||||
Class A common stock
|
|
46,189,068
|
|
|
46,402,270
|
|
||
Class B common stock
|
|
2,542
|
|
|
2,542
|
|
||
|
|
|
|
|
||||
Weighted average shares outstanding attributable to Indemnity – Diluted
|
|
|
|
|
||||
Class A common stock
|
|
52,634,752
|
|
|
52,598,211
|
|
||
Class B common stock
|
|
2,542
|
|
|
2,542
|
|
||
|
|
|
|
|
||||
Dividends declared per share
|
|
|
|
|
||||
Class A common stock
|
|
$
|
0.6810
|
|
|
$
|
0.6350
|
|
Class B common stock
|
|
$
|
102.1500
|
|
|
$
|
95.2500
|
|
|
|
Three months ended
|
||||||
|
|
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Net income
|
|
$
|
136
|
|
|
$
|
109
|
|
|
|
|
|
|
||||
Other comprehensive income
|
|
|
|
|
||||
Change in unrealized holding gains on available-for-sale securities, net of tax expense of $29 and $43, respectively
|
|
53
|
|
|
80
|
|
||
Reclassification adjustment for gross gains included in net income, net of tax benefit of $2 and $5, respectively
|
|
(3
|
)
|
|
(8
|
)
|
||
Other comprehensive income
|
|
50
|
|
|
72
|
|
||
|
|
|
|
|
||||
Comprehensive income
|
|
$
|
186
|
|
|
$
|
181
|
|
Less: Comprehensive income attributable to noncontrolling interest in consolidated entity – Exchange
|
|
147
|
|
|
132
|
|
||
Total comprehensive income – Indemnity
|
|
$
|
39
|
|
|
$
|
49
|
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Assets
|
|
(Unaudited)
|
|
|
||||
Investments – Indemnity
|
|
|
|
|
||||
Available-for-sale securities, at fair value:
|
|
|
|
|
||||
Fixed maturities (amortized cost of $545 and $555, respectively)
|
|
$
|
556
|
|
|
$
|
564
|
|
Equity securities (cost of $24 and $24, respectively)
|
|
25
|
|
|
25
|
|
||
Limited partnerships (cost of $86 and $89, respectively)
|
|
100
|
|
|
113
|
|
||
Other invested assets
|
|
1
|
|
|
1
|
|
||
Investments – Exchange
|
|
|
|
|
||||
Available-for-sale securities, at fair value:
|
|
|
|
|
||||
Fixed maturities (amortized cost of $8,954 and $8,540, respectively)
|
|
9,499
|
|
|
9,007
|
|
||
Equity securities (cost of $763 and $788, respectively)
|
|
837
|
|
|
850
|
|
||
Trading securities, at fair value (cost of $2,218 and $2,289, respectively)
|
|
3,096
|
|
|
3,223
|
|
||
Limited partnerships (cost of $679 and $694, respectively)
|
|
815
|
|
|
866
|
|
||
Other invested assets
|
|
21
|
|
|
20
|
|
||
Total investments
|
|
14,950
|
|
|
14,669
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents (Exchange portion of $362 and $422, respectively)
|
|
420
|
|
|
514
|
|
||
Premiums receivable from policyholders – Exchange
|
|
1,304
|
|
|
1,281
|
|
||
Reinsurance recoverable – Exchange
|
|
162
|
|
|
161
|
|
||
Deferred income taxes – Indemnity
|
|
40
|
|
|
37
|
|
||
Deferred acquisition costs – Exchange
|
|
589
|
|
|
595
|
|
||
Other assets (Exchange portion of $403 and $374, respectively)
|
|
528
|
|
|
501
|
|
||
Total assets
|
|
$
|
17,993
|
|
|
$
|
17,758
|
|
|
|
|
|
|
||||
Liabilities and shareholders’ equity
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Indemnity liabilities
|
|
|
|
|
||||
Other liabilities
|
|
$
|
552
|
|
|
$
|
611
|
|
Exchange liabilities
|
|
|
|
|
||||
Losses and loss expense reserves
|
|
3,966
|
|
|
3,853
|
|
||
Life policy and deposit contract reserves
|
|
1,827
|
|
|
1,812
|
|
||
Unearned premiums
|
|
2,845
|
|
|
2,834
|
|
||
Deferred income taxes
|
|
494
|
|
|
490
|
|
||
Other liabilities
|
|
172
|
|
|
175
|
|
||
Total liabilities
|
|
9,856
|
|
|
9,775
|
|
||
|
|
|
|
|
||||
Indemnity shareholders’ equity
|
|
|
|
|
||||
Class A common stock, stated value $0.0292 per share; 74,996,930 shares authorized; 68,299,200 shares issued; 46,189,068 shares outstanding
|
|
2
|
|
|
2
|
|
||
Class B common stock, convertible at a rate of 2,400 Class A shares for
one
Class B share, stated value $70 per share; 3,070 shares authorized; 2,542 shares issued and outstanding
|
|
0
|
|
|
0
|
|
||
Additional paid-in-capital
|
|
16
|
|
|
16
|
|
||
Accumulated other comprehensive loss
|
|
(118
|
)
|
|
(118
|
)
|
||
Retained earnings
|
|
1,956
|
|
|
1,949
|
|
||
Total contributed capital and retained earnings
|
|
1,856
|
|
|
1,849
|
|
||
Treasury stock, at cost, 22,110,132 shares
|
|
(1,146
|
)
|
|
(1,146
|
)
|
||
Total Indemnity shareholders’ equity
|
|
710
|
|
|
703
|
|
||
|
|
|
|
|
||||
Noncontrolling interest in consolidated entity – Exchange
|
|
7,427
|
|
|
7,280
|
|
||
Total equity
|
|
8,137
|
|
|
7,983
|
|
||
Total liabilities, shareholders’ equity, and noncontrolling interest
|
|
$
|
17,993
|
|
|
$
|
17,758
|
|
|
|
Three months ended
|
||||||
|
|
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Premiums collected
|
|
$
|
1,389
|
|
|
$
|
1,289
|
|
Net investment income received
|
|
126
|
|
|
121
|
|
||
Limited partnership distributions
|
|
32
|
|
|
25
|
|
||
Service agreement fee received
|
|
8
|
|
|
8
|
|
||
Commissions and bonuses paid to agents
|
|
(249
|
)
|
|
(225
|
)
|
||
Losses paid
|
|
(793
|
)
|
|
(785
|
)
|
||
Loss expenses paid
|
|
(125
|
)
|
|
(130
|
)
|
||
Other underwriting and acquisition costs paid
|
|
(226
|
)
|
|
(235
|
)
|
||
Income taxes paid
|
|
(72
|
)
|
|
(14
|
)
|
||
Net cash provided by operating activities
|
|
90
|
|
|
54
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
||||
Purchase of investments:
|
|
|
|
|
||||
Fixed maturities
|
|
(882
|
)
|
|
(501
|
)
|
||
Preferred stock
|
|
(54
|
)
|
|
(76
|
)
|
||
Common stock
|
|
(298
|
)
|
|
(260
|
)
|
||
Limited partnerships
|
|
(25
|
)
|
|
(27
|
)
|
||
Sales/maturities of investments:
|
|
|
|
|
||||
Fixed maturity sales
|
|
271
|
|
|
159
|
|
||
Fixed maturity calls/maturities
|
|
209
|
|
|
244
|
|
||
Preferred stock
|
|
49
|
|
|
64
|
|
||
Common stock
|
|
512
|
|
|
267
|
|
||
Sale of and returns on limited partnerships
|
|
76
|
|
|
41
|
|
||
Net purchase of property and equipment
|
|
(12
|
)
|
|
(6
|
)
|
||
Net distributions on agent loans
|
|
(1
|
)
|
|
0
|
|
||
Net cash used in investing activities
|
|
(155
|
)
|
|
(95
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
||||
Annuity deposits and interest
|
|
20
|
|
|
22
|
|
||
Annuity surrenders and withdrawals
|
|
(20
|
)
|
|
(18
|
)
|
||
Universal life deposits and interest
|
|
6
|
|
|
7
|
|
||
Universal life surrenders
|
|
(3
|
)
|
|
(3
|
)
|
||
Purchase of treasury stock
|
|
0
|
|
|
(10
|
)
|
||
Dividends paid to shareholders
|
|
(32
|
)
|
|
(30
|
)
|
||
Net cash used in financing activities
|
|
(29
|
)
|
|
(32
|
)
|
||
|
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
|
(94
|
)
|
|
(73
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
514
|
|
|
452
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
420
|
|
|
$
|
379
|
|
|
|
Indemnity Shareholder Interest
|
||||||||||||||||||||
(dollars in millions, except per share data)
|
|
Three months ended March 31,
|
||||||||||||||||||||
|
|
2015
|
|
2014
|
||||||||||||||||||
|
|
Allocated net income (numerator)
|
|
Weighted shares (denominator)
|
|
Per-share amount
|
|
Allocated net income (numerator)
|
|
Weighted shares (denominator)
|
|
Per-share amount
|
||||||||||
Class A – Basic EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income available to Class A stockholders
|
|
$
|
39
|
|
|
46,189,068
|
|
|
$
|
0.83
|
|
|
$
|
46
|
|
|
46,402,270
|
|
|
$
|
0.99
|
|
Dilutive effect of stock-based awards
|
|
0
|
|
|
344,884
|
|
|
—
|
|
|
0
|
|
|
95,141
|
|
|
—
|
|
||||
Assumed conversion of Class B shares
|
|
0
|
|
|
6,100,800
|
|
|
—
|
|
|
0
|
|
|
6,100,800
|
|
|
—
|
|
||||
Class A – Diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income available to Class A stockholders on Class A equivalent shares
|
|
$
|
39
|
|
|
52,634,752
|
|
|
$
|
0.74
|
|
|
$
|
46
|
|
|
52,598,211
|
|
|
$
|
0.88
|
|
Class B – Basic and diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income available to Class B stockholders
|
|
$
|
0
|
|
|
2,542
|
|
|
$
|
125
|
|
|
$
|
0
|
|
|
2,542
|
|
|
$
|
149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Erie Insurance Group
|
||||||||||||||||||||||
(in millions)
|
|
Three months ended March 31, 2015
|
||||||||||||||||||||||
|
|
Management
operations
|
|
Property
and casualty
insurance
operations
|
|
Life
insurance
operations
|
|
Investment
operations
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Premiums earned/life policy revenue
|
|
|
|
$
|
1,380
|
|
|
$
|
22
|
|
|
|
|
$
|
0
|
|
|
$
|
1,402
|
|
||||
Net investment income
|
|
|
|
|
|
|
|
$
|
116
|
|
|
(3
|
)
|
|
113
|
|
||||||||
Net realized investment gains
|
|
|
|
|
|
|
|
56
|
|
|
|
|
56
|
|
||||||||||
Net impairment losses recognized in earnings
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
(2
|
)
|
||||||||||
Equity in earnings of limited partnerships
|
|
|
|
|
|
|
|
28
|
|
|
|
|
28
|
|
||||||||||
Management fee revenue
|
|
$
|
343
|
|
|
|
|
|
|
|
|
(343
|
)
|
|
—
|
|
||||||||
Service agreement and other revenue
|
|
8
|
|
|
|
|
0
|
|
|
|
|
|
|
8
|
|
|||||||||
Total revenues
|
|
351
|
|
|
1,380
|
|
|
22
|
|
|
198
|
|
|
(346
|
)
|
|
1,605
|
|
||||||
Cost of management operations
|
|
298
|
|
|
|
|
|
|
|
|
(298
|
)
|
|
—
|
|
|||||||||
Insurance losses and loss expenses
|
|
|
|
1,033
|
|
|
28
|
|
|
|
|
(1
|
)
|
|
1,060
|
|
||||||||
Policy acquisition and underwriting expenses
|
|
|
|
386
|
|
|
9
|
|
|
|
|
(47
|
)
|
|
348
|
|
||||||||
Total benefits and expenses
|
|
298
|
|
|
1,419
|
|
|
37
|
|
|
—
|
|
|
(346
|
)
|
|
1,408
|
|
||||||
Income (loss) before income taxes
|
|
53
|
|
|
(39
|
)
|
|
(15
|
)
|
|
198
|
|
|
—
|
|
|
197
|
|
||||||
Provision for income taxes
|
|
19
|
|
|
(14
|
)
|
|
(5
|
)
|
|
61
|
|
|
—
|
|
|
61
|
|
||||||
Net income (loss)
|
|
$
|
34
|
|
|
$
|
(25
|
)
|
|
$
|
(10
|
)
|
|
$
|
137
|
|
|
$
|
—
|
|
|
$
|
136
|
|
|
|
Erie Insurance Group
|
||||||||||||||||||||||
(in millions)
|
|
Three months ended March 31, 2014
|
||||||||||||||||||||||
|
|
Management
operations
|
|
Property
and casualty
insurance
operations
|
|
Life
insurance
operations
|
|
Investment
operations
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Premiums earned/life policy revenue
|
|
|
|
$
|
1,268
|
|
|
$
|
20
|
|
|
|
|
$
|
0
|
|
|
$
|
1,288
|
|
||||
Net investment income
|
|
|
|
|
|
|
|
$
|
112
|
|
|
(3
|
)
|
|
109
|
|
||||||||
Net realized investment gains
|
|
|
|
|
|
|
|
56
|
|
|
|
|
56
|
|
||||||||||
Net impairment losses recognized in earnings
|
|
|
|
|
|
|
|
0
|
|
|
|
|
0
|
|
||||||||||
Equity in earnings of limited partnerships
|
|
|
|
|
|
|
|
50
|
|
|
|
|
50
|
|
||||||||||
Management fee revenue
|
|
$
|
319
|
|
|
|
|
|
|
|
|
(319
|
)
|
|
—
|
|
||||||||
Service agreement and other revenue
|
|
7
|
|
|
|
|
1
|
|
|
|
|
|
|
8
|
|
|||||||||
Total revenues
|
|
326
|
|
|
1,268
|
|
|
21
|
|
|
218
|
|
|
(322
|
)
|
|
1,511
|
|
||||||
Cost of management operations
|
|
268
|
|
|
|
|
|
|
|
|
(268
|
)
|
|
—
|
|
|||||||||
Insurance losses and loss expenses
|
|
|
|
1,007
|
|
|
28
|
|
|
|
|
(1
|
)
|
|
1,034
|
|
||||||||
Policy acquisition and underwriting expenses
|
|
|
|
365
|
|
|
9
|
|
|
|
|
(53
|
)
|
|
321
|
|
||||||||
Total benefits and expenses
|
|
268
|
|
|
1,372
|
|
|
37
|
|
|
—
|
|
|
(322
|
)
|
|
1,355
|
|
||||||
Income (loss) before income taxes
|
|
58
|
|
|
(104
|
)
|
|
(16
|
)
|
|
218
|
|
|
—
|
|
|
156
|
|
||||||
Provision for income taxes
|
|
20
|
|
|
(36
|
)
|
|
(6
|
)
|
|
69
|
|
|
—
|
|
|
47
|
|
||||||
Net income (loss)
|
|
$
|
38
|
|
|
$
|
(68
|
)
|
|
$
|
(10
|
)
|
|
$
|
149
|
|
|
$
|
—
|
|
|
$
|
109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
|
•
|
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
•
|
Level 3 – Unobservable inputs for the asset or liability.
|
|
|
Erie Insurance Group
|
||||||||||||||
|
|
March 31, 2015
|
||||||||||||||
|
|
Fair value measurements using:
|
||||||||||||||
(in millions)
|
|
Total
|
|
Quoted prices in
active markets for identical assets
Level 1
|
|
Observable inputs
Level 2
|
|
Unobservable inputs
Level 3
|
||||||||
Indemnity
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
States & political subdivisions
|
|
$
|
225
|
|
|
$
|
0
|
|
|
$
|
225
|
|
|
$
|
0
|
|
Corporate debt securities
|
|
232
|
|
|
0
|
|
|
232
|
|
|
0
|
|
||||
Residential mortgage-backed securities
|
|
8
|
|
|
0
|
|
|
8
|
|
|
0
|
|
||||
Commercial mortgage-backed securities
|
|
50
|
|
|
0
|
|
|
50
|
|
|
0
|
|
||||
Collateralized debt obligations
|
|
36
|
|
|
0
|
|
|
36
|
|
|
0
|
|
||||
Other debt securities
|
|
5
|
|
|
0
|
|
|
5
|
|
|
0
|
|
||||
Total fixed maturities
|
|
556
|
|
|
0
|
|
|
556
|
|
|
0
|
|
||||
Nonredeemable preferred stock
|
|
12
|
|
|
2
|
|
|
10
|
|
|
0
|
|
||||
Common stock
|
|
13
|
|
|
13
|
|
|
0
|
|
|
0
|
|
||||
Total available-for-sale securities
|
|
581
|
|
|
15
|
|
|
566
|
|
|
0
|
|
||||
Other investments
(1)
|
|
7
|
|
|
0
|
|
|
0
|
|
|
7
|
|
||||
Total – Indemnity
|
|
$
|
588
|
|
|
$
|
15
|
|
|
$
|
566
|
|
|
$
|
7
|
|
Exchange
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury
|
|
$
|
6
|
|
|
$
|
0
|
|
|
$
|
6
|
|
|
$
|
0
|
|
Government sponsored enterprises
|
|
4
|
|
|
0
|
|
|
4
|
|
|
0
|
|
||||
States & political subdivisions
|
|
1,506
|
|
|
0
|
|
|
1,506
|
|
|
0
|
|
||||
Foreign government securities
|
|
82
|
|
|
0
|
|
|
82
|
|
|
0
|
|
||||
Corporate debt securities
|
|
7,724
|
|
|
0
|
|
|
7,644
|
|
|
80
|
|
||||
Residential mortgage-backed securities
|
|
58
|
|
|
0
|
|
|
58
|
|
|
0
|
|
||||
Commercial mortgage-backed securities
|
|
30
|
|
|
0
|
|
|
30
|
|
|
0
|
|
||||
Collateralized debt obligations
|
|
11
|
|
|
0
|
|
|
11
|
|
|
0
|
|
||||
Other debt securities
|
|
78
|
|
|
0
|
|
|
69
|
|
|
9
|
|
||||
Total fixed maturities
|
|
9,499
|
|
|
0
|
|
|
9,410
|
|
|
89
|
|
||||
Nonredeemable preferred stock
|
|
738
|
|
|
375
|
|
|
362
|
|
|
1
|
|
||||
Common stock
|
|
99
|
|
|
99
|
|
|
0
|
|
|
0
|
|
||||
Total available-for-sale securities
|
|
10,336
|
|
|
474
|
|
|
9,772
|
|
|
90
|
|
||||
Trading securities:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
3,096
|
|
|
3,081
|
|
|
0
|
|
|
15
|
|
||||
Total trading securities
|
|
3,096
|
|
|
3,081
|
|
|
0
|
|
|
15
|
|
||||
Other investments
(1)
|
|
51
|
|
|
0
|
|
|
0
|
|
|
51
|
|
||||
Total – Exchange
|
|
$
|
13,483
|
|
|
$
|
3,555
|
|
|
$
|
9,772
|
|
|
$
|
156
|
|
Total – Erie Insurance Group
|
|
$
|
14,071
|
|
|
$
|
3,570
|
|
|
$
|
10,338
|
|
|
$
|
163
|
|
|
|
|
|
|
|
|
|
|
||||||||
% of total assets at fair value
|
|
100.0
|
%
|
|
25.4
|
%
|
|
73.5
|
%
|
|
1.1
|
%
|
|
|
Erie Insurance Group
|
||||||||||||||
|
|
December 31, 2014
|
||||||||||||||
|
|
Fair value measurements using:
|
||||||||||||||
(in millions)
|
|
Total
|
|
Quoted prices in
active markets for
identical assets
Level 1
|
|
Observable
inputs
Level 2
|
|
Unobservable
inputs
Level 3
|
||||||||
Indemnity
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
States & political subdivisions
|
|
$
|
231
|
|
|
$
|
0
|
|
|
$
|
231
|
|
|
$
|
0
|
|
Corporate debt securities
|
|
234
|
|
|
0
|
|
|
234
|
|
|
0
|
|
||||
Residential mortgage-backed securities
|
|
8
|
|
|
0
|
|
|
8
|
|
|
0
|
|
||||
Commercial mortgage-backed securities
|
|
51
|
|
|
0
|
|
|
51
|
|
|
0
|
|
||||
Collateralized debt obligations
|
|
33
|
|
|
0
|
|
|
33
|
|
|
0
|
|
||||
Other debt securities
|
|
7
|
|
|
0
|
|
|
7
|
|
|
0
|
|
||||
Total fixed maturities
|
|
564
|
|
|
0
|
|
|
564
|
|
|
0
|
|
||||
Nonredeemable preferred stock
|
|
12
|
|
|
2
|
|
|
10
|
|
|
0
|
|
||||
Common stock
|
|
13
|
|
|
13
|
|
|
0
|
|
|
0
|
|
||||
Total available-for-sale securities
|
|
589
|
|
|
15
|
|
|
574
|
|
|
0
|
|
||||
Other investments
(1)
|
|
8
|
|
|
0
|
|
|
0
|
|
|
8
|
|
||||
Total – Indemnity
|
|
$
|
597
|
|
|
$
|
15
|
|
|
$
|
574
|
|
|
$
|
8
|
|
Exchange
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury
|
|
$
|
6
|
|
|
$
|
0
|
|
|
$
|
6
|
|
|
$
|
0
|
|
Government sponsored enterprises
|
|
4
|
|
|
0
|
|
|
4
|
|
|
0
|
|
||||
States & political subdivisions
|
|
1,477
|
|
|
0
|
|
|
1,477
|
|
|
0
|
|
||||
Foreign government securities
|
|
10
|
|
|
0
|
|
|
10
|
|
|
0
|
|
||||
Corporate debt securities
|
|
7,289
|
|
|
0
|
|
|
7,202
|
|
|
87
|
|
||||
Residential mortgage-backed securities
|
|
111
|
|
|
0
|
|
|
111
|
|
|
0
|
|
||||
Commercial mortgage-backed securities
|
|
30
|
|
|
0
|
|
|
30
|
|
|
0
|
|
||||
Collateralized debt obligations
|
|
11
|
|
|
0
|
|
|
11
|
|
|
0
|
|
||||
Other debt securities
|
|
69
|
|
|
0
|
|
|
57
|
|
|
12
|
|
||||
Total fixed maturities
|
|
9,007
|
|
|
0
|
|
|
8,908
|
|
|
99
|
|
||||
Nonredeemable preferred stock
|
|
710
|
|
|
328
|
|
|
381
|
|
|
1
|
|
||||
Common stock
|
|
140
|
|
|
140
|
|
|
0
|
|
|
0
|
|
||||
Total available-for-sale securities
|
|
9,857
|
|
|
468
|
|
|
9,289
|
|
|
100
|
|
||||
Trading securities:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
3,223
|
|
|
3,208
|
|
|
0
|
|
|
15
|
|
||||
Total trading securities
|
|
3,223
|
|
|
3,208
|
|
|
0
|
|
|
15
|
|
||||
Other investments
(1)
|
|
71
|
|
|
0
|
|
|
0
|
|
|
71
|
|
||||
Total – Exchange
|
|
$
|
13,151
|
|
|
$
|
3,676
|
|
|
$
|
9,289
|
|
|
$
|
186
|
|
Total – Erie Insurance Group
|
|
$
|
13,748
|
|
|
$
|
3,691
|
|
|
$
|
9,863
|
|
|
$
|
194
|
|
|
|
|
|
|
|
|
|
|
||||||||
% of total assets at fair value
|
|
100.0
|
%
|
|
26.9
|
%
|
|
71.7
|
%
|
|
1.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Erie Insurance Group
|
||||||||||||||||||||||||||
(in millions)
|
|
Beginning balance at December 31, 2014
|
|
Included in
earnings
(1)
|
|
Included
in other comprehensive
income
|
|
Purchases
|
|
Sales
|
|
Transfers
in and (out) of
Level 3
|
|
Ending balance at March 31, 2015
|
||||||||||||||
Indemnity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate debt securities
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Total fixed maturities
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Total available-for-sale securities
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||||
Other investments
|
|
8
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1
|
)
|
|
0
|
|
|
7
|
|
|||||||
Total Level 3 assets – Indemnity
|
|
$
|
8
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(1
|
)
|
|
$
|
0
|
|
|
$
|
7
|
|
Exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate debt securities
|
|
$
|
87
|
|
|
$
|
0
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
$
|
(9
|
)
|
|
$
|
80
|
|
Other debt securities
|
|
12
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(3
|
)
|
|
9
|
|
|||||||
Total fixed maturities
|
|
99
|
|
|
0
|
|
|
1
|
|
|
3
|
|
|
(2
|
)
|
|
(12
|
)
|
|
89
|
|
|||||||
Nonredeemable preferred stock
|
|
1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|||||||
Total available-for-sale securities
|
|
100
|
|
|
0
|
|
|
1
|
|
|
3
|
|
|
(2
|
)
|
|
(12
|
)
|
|
90
|
|
|||||||
Trading securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Common stock
|
|
15
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
15
|
|
|||||||
Total trading securities
|
|
15
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
15
|
|
|||||||
Other investments
|
|
71
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
(21
|
)
|
|
0
|
|
|
51
|
|
|||||||
Total Level 3 assets – Exchange
|
|
$
|
186
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
(23
|
)
|
|
$
|
(12
|
)
|
|
$
|
156
|
|
Total Level 3 assets – Erie Insurance Group
|
|
$
|
194
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
(24
|
)
|
|
$
|
(12
|
)
|
|
$
|
163
|
|
(1)
|
These amounts are reported in the Consolidated Statement of Operations. There is
$1 million
included in equity in earnings of limited partnerships for the
three months
ended
March 31, 2015
on Level 3 securities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Erie Insurance Group
|
||||||||||||||||||||||||||
(in millions)
|
|
Beginning balance at December 31, 2013
|
|
Included in
earnings
(1)
|
|
Included
in other
comprehensive
income
|
|
Purchases
|
|
Sales
|
|
Transfers
in and (out) of
Level 3
|
|
Ending balance at March 31, 2014
|
||||||||||||||
Indemnity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate debt securities
|
|
$
|
1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1
|
|
Collateralized debt obligations
|
|
1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1
|
)
|
|
0
|
|
|
0
|
|
|||||||
Total fixed maturities
|
|
2
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1
|
)
|
|
0
|
|
|
1
|
|
|||||||
Total available-for-sale securities
|
|
2
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1
|
)
|
|
0
|
|
|
1
|
|
|||||||
Other investments
|
|
18
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
(1
|
)
|
|
0
|
|
|
18
|
|
|||||||
Total Level 3 assets – Indemnity
|
|
$
|
20
|
|
|
$
|
1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(2
|
)
|
|
$
|
0
|
|
|
$
|
19
|
|
Exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate debt securities
|
|
$
|
26
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
26
|
|
Collateralized debt obligations
|
|
5
|
|
|
1
|
|
|
(1
|
)
|
|
0
|
|
|
(3
|
)
|
|
(2
|
)
|
|
0
|
|
|||||||
Total fixed maturities
|
|
31
|
|
|
1
|
|
|
(1
|
)
|
|
0
|
|
|
(3
|
)
|
|
(2
|
)
|
|
26
|
|
|||||||
Nonredeemable preferred stock
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|||||||
Total available-for-sale securities
|
|
31
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
|
(3
|
)
|
|
(2
|
)
|
|
27
|
|
|||||||
Trading securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Common stock
|
|
15
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
15
|
|
|||||||
Total trading securities
|
|
15
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
15
|
|
|||||||
Other investments
|
|
98
|
|
|
5
|
|
|
0
|
|
|
0
|
|
|
(5
|
)
|
|
0
|
|
|
98
|
|
|||||||
Total Level 3 assets – Exchange
|
|
$
|
144
|
|
|
$
|
6
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(8
|
)
|
|
$
|
(2
|
)
|
|
$
|
140
|
|
Total Level 3 assets – Erie Insurance Group
|
|
$
|
164
|
|
|
$
|
7
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(10
|
)
|
|
$
|
(2
|
)
|
|
$
|
159
|
|
(1)
|
These amounts are reported in the Consolidated Statement of Operations. There is
$1 million
included in net realized investment gains (losses) and
$6 million
included in equity in earnings of limited partnerships for the
three months
ended
March 31, 2014
on Level 3 securities.
|
|
|
Erie Insurance Group
|
|||||||||||
|
|
March 31, 2015
|
|||||||||||
(dollars in millions)
|
|
Fair
value
|
|
|
Valuation techniques
|
|
Unobservable input
|
|
Range
|
|
Weighted
average
|
||
Exchange
|
|
|
|
|
|
|
|
|
|
|
|
||
Corporate debt securities
(1)
|
|
$
|
7
|
|
|
|
Market approach
|
|
Comparable transaction EBITDA multiples
|
|
8.0x
|
|
8.0x
|
|
|
|
|
|
|
|
|
Comparable security yield
|
|
6%
|
|
6%
|
|
Nonredeemable preferred stock
(2)
|
|
1
|
|
|
|
Market approach
|
|
Held at cost
|
|
|
|
|
|
Common stock
(1)
|
|
15
|
|
|
|
Market approach
|
|
Comparable transaction EBITDA multiples
|
|
8.0x
|
|
8.0x
|
|
|
|
|
|
|
|
|
|
Discount for lack of marketability
|
|
10%
|
|
10%
|
|
|
December 31, 2014
|
|||||||||||
(dollars in millions)
|
|
Fair
value
|
|
|
Valuation techniques
|
|
Unobservable input
|
|
Range
|
|
Weighted
average
|
||
Exchange
|
|
|
|
|
|
|
|
|
|
|
|
||
Corporate debt securities
(1)
|
|
$
|
7
|
|
|
|
Market approach
|
|
Comparable transaction EBITDA multiples
|
|
8.0x
|
|
8.0x
|
|
|
|
|
|
|
|
Comparable security yield
|
|
6%
|
|
6%
|
||
Nonredeemable preferred stock
(2)
|
|
1
|
|
|
|
Market approach
|
|
Held at cost
|
|
|
|
|
|
Common stock
(1)
|
|
15
|
|
|
|
Market approach
|
|
Comparable transaction EBITDA multiples
|
|
8.0x
|
|
8.0x
|
|
|
|
|
|
|
|
|
Discount for lack of marketability
|
|
10%
|
|
10%
|
(1)
|
Common stock investments and Corporate debt securities – The unobservable inputs used in the fair value measurement of direct private equity common stock investments and certain corporate debt securities are comparable private transaction earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples, the average EBITDA multiple for comparable publicly traded companies and the amount of discount applied to the price due to the illiquidity of the securities being valued. Significant changes in any of those inputs in isolation could result in a significantly higher or lower fair value measurement.
|
(2)
|
Nonredeemable preferred stock - Represents a private security where cost was determined to be the best estimate of fair value.
|
|
|
Erie Insurance Group
|
||||||||||||||
(in millions)
|
|
March 31, 2015
|
||||||||||||||
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Indemnity
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
Priced via pricing services
|
|
$
|
555
|
|
|
$
|
0
|
|
|
$
|
555
|
|
|
$
|
0
|
|
Priced via market comparables/broker quotes
(1)
|
|
1
|
|
|
0
|
|
|
1
|
|
|
0
|
|
||||
Total fixed maturities
|
|
556
|
|
|
0
|
|
|
556
|
|
|
0
|
|
||||
Nonredeemable preferred stock:
|
|
|
|
|
|
|
|
|
||||||||
Priced via pricing services
|
|
10
|
|
|
2
|
|
|
8
|
|
|
0
|
|
||||
Priced via market comparables/broker quotes
(1)
|
|
2
|
|
|
0
|
|
|
2
|
|
|
0
|
|
||||
Total nonredeemable preferred stock
|
|
12
|
|
|
2
|
|
|
10
|
|
|
0
|
|
||||
Common stock:
|
|
|
|
|
|
|
|
|
||||||||
Priced via pricing services
|
|
13
|
|
|
13
|
|
|
0
|
|
|
0
|
|
||||
Total common stock
|
|
13
|
|
|
13
|
|
|
0
|
|
|
0
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
|
||||||||
Priced via unobservable inputs
(2)
|
|
7
|
|
|
0
|
|
|
0
|
|
|
7
|
|
||||
Total other investments
|
|
7
|
|
|
0
|
|
|
0
|
|
|
7
|
|
||||
Total – Indemnity
|
|
$
|
588
|
|
|
$
|
15
|
|
|
$
|
566
|
|
|
$
|
7
|
|
Exchange
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
Priced via pricing services
|
|
$
|
9,330
|
|
|
$
|
0
|
|
|
$
|
9,330
|
|
|
$
|
0
|
|
Priced via market comparables/broker quotes
(1)
|
|
162
|
|
|
0
|
|
|
80
|
|
|
82
|
|
||||
Priced via internal modeling
|
|
7
|
|
|
0
|
|
|
0
|
|
|
7
|
|
||||
Total fixed maturities
|
|
9,499
|
|
|
0
|
|
|
9,410
|
|
|
89
|
|
||||
Nonredeemable preferred stock:
|
|
|
|
|
|
|
|
|
||||||||
Priced via pricing services
|
|
716
|
|
|
375
|
|
|
341
|
|
|
0
|
|
||||
Priced via market comparables/broker quotes
(1)
|
|
21
|
|
|
0
|
|
|
21
|
|
|
0
|
|
||||
Priced via internal modeling
|
|
1
|
|
|
0
|
|
|
0
|
|
|
1
|
|
||||
Total nonredeemable preferred stock
|
|
738
|
|
|
375
|
|
|
362
|
|
|
1
|
|
||||
Common stock:
|
|
|
|
|
|
|
|
|
||||||||
Priced via pricing services
|
|
3,180
|
|
|
3,180
|
|
|
0
|
|
|
0
|
|
||||
Priced via internal modeling
|
|
15
|
|
|
0
|
|
|
0
|
|
|
15
|
|
||||
Total common stock
|
|
3,195
|
|
|
3,180
|
|
|
0
|
|
|
15
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
|
||||||||
Priced via unobservable inputs
(2)
|
|
51
|
|
|
0
|
|
|
0
|
|
|
51
|
|
||||
Total other investments
|
|
51
|
|
|
0
|
|
|
0
|
|
|
51
|
|
||||
Total – Exchange
|
|
$
|
13,483
|
|
|
$
|
3,555
|
|
|
$
|
9,772
|
|
|
$
|
156
|
|
Total – Erie Insurance Group
|
|
$
|
14,071
|
|
|
$
|
3,570
|
|
|
$
|
10,338
|
|
|
$
|
163
|
|
(1)
|
When a non-binding broker quote was the only price available, the security was classified as Level 3.
|
(2)
|
Other investments measured at fair value represent real estate funds included on the balance sheet as limited partnership investments that are reported under the fair value option. The fair value of these investments is based on the net asset value (NAV) information provided by the general partner.
|
|
|
Erie Insurance Group
|
||||||||||||||
|
|
March 31, 2015
|
||||||||||||||
(in millions)
|
|
Amortized
cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Estimated fair value
|
||||||||
Indemnity
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
States & political subdivisions
|
|
$
|
213
|
|
|
$
|
12
|
|
|
$
|
0
|
|
|
$
|
225
|
|
Corporate debt securities
|
|
232
|
|
|
2
|
|
|
2
|
|
|
232
|
|
||||
Residential mortgage-backed securities
|
|
8
|
|
|
0
|
|
|
0
|
|
|
8
|
|
||||
Commercial mortgage-backed securities
|
|
51
|
|
|
0
|
|
|
1
|
|
|
50
|
|
||||
Collateralized debt obligations
|
|
36
|
|
|
0
|
|
|
0
|
|
|
36
|
|
||||
Other debt securities
|
|
5
|
|
|
0
|
|
|
0
|
|
|
5
|
|
||||
Total fixed maturities
|
|
545
|
|
|
14
|
|
|
3
|
|
|
556
|
|
||||
Nonredeemable preferred stock
|
|
11
|
|
|
1
|
|
|
0
|
|
|
12
|
|
||||
Common stock
|
|
13
|
|
|
0
|
|
|
0
|
|
|
13
|
|
||||
Total available-for-sale securities – Indemnity
|
|
$
|
569
|
|
|
$
|
15
|
|
|
$
|
3
|
|
|
$
|
581
|
|
Exchange
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury
|
|
$
|
6
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
6
|
|
Government sponsored enterprises
|
|
3
|
|
|
1
|
|
|
0
|
|
|
4
|
|
||||
States & political subdivisions
|
|
1,421
|
|
|
86
|
|
|
1
|
|
|
1,506
|
|
||||
Foreign government securities
|
|
80
|
|
|
2
|
|
|
0
|
|
|
82
|
|
||||
Corporate debt securities
|
|
7,278
|
|
|
470
|
|
|
24
|
|
|
7,724
|
|
||||
Residential mortgage-backed securities
|
|
57
|
|
|
1
|
|
|
0
|
|
|
58
|
|
||||
Commercial mortgage-backed securities
|
|
28
|
|
|
2
|
|
|
0
|
|
|
30
|
|
||||
Collateralized debt obligations
|
|
6
|
|
|
5
|
|
|
0
|
|
|
11
|
|
||||
Other debt securities
|
|
75
|
|
|
3
|
|
|
0
|
|
|
78
|
|
||||
Total fixed maturities
|
|
8,954
|
|
|
570
|
|
|
25
|
|
|
9,499
|
|
||||
Nonredeemable preferred stock
|
|
667
|
|
|
72
|
|
|
1
|
|
|
738
|
|
||||
Common stock
|
|
96
|
|
|
3
|
|
|
0
|
|
|
99
|
|
||||
Total available-for-sale securities – Exchange
|
|
$
|
9,717
|
|
|
$
|
645
|
|
|
$
|
26
|
|
|
$
|
10,336
|
|
Total available-for-sale securities – Erie Insurance Group
|
|
$
|
10,286
|
|
|
$
|
660
|
|
|
$
|
29
|
|
|
$
|
10,917
|
|
|
|
Erie Insurance Group
|
||||||||||||||
|
|
December 31, 2014
|
||||||||||||||
(in millions)
|
|
Amortized
cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Estimated fair value
|
||||||||
Indemnity
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
States & political subdivisions
|
|
$
|
219
|
|
|
$
|
12
|
|
|
$
|
0
|
|
|
$
|
231
|
|
Corporate debt securities
|
|
236
|
|
|
1
|
|
|
3
|
|
|
234
|
|
||||
Residential mortgage-backed securities
|
|
8
|
|
|
0
|
|
|
0
|
|
|
8
|
|
||||
Commercial mortgage-backed securities
|
|
52
|
|
|
0
|
|
|
1
|
|
|
51
|
|
||||
Collateralized debt obligations
|
|
33
|
|
|
0
|
|
|
0
|
|
|
33
|
|
||||
Other debt securities
|
|
7
|
|
|
0
|
|
|
0
|
|
|
7
|
|
||||
Total fixed maturities
|
|
555
|
|
|
13
|
|
|
4
|
|
|
564
|
|
||||
Nonredeemable preferred stock
|
|
11
|
|
|
1
|
|
|
0
|
|
|
12
|
|
||||
Common stock
|
|
13
|
|
|
0
|
|
|
0
|
|
|
13
|
|
||||
Total available-for-sale securities – Indemnity
|
|
$
|
579
|
|
|
$
|
14
|
|
|
$
|
4
|
|
|
$
|
589
|
|
Exchange
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury
|
|
$
|
6
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
6
|
|
Government sponsored enterprises
|
|
3
|
|
|
1
|
|
|
0
|
|
|
4
|
|
||||
States & political subdivisions
|
|
1,394
|
|
|
84
|
|
|
1
|
|
|
1,477
|
|
||||
Foreign government securities
|
|
10
|
|
|
0
|
|
|
0
|
|
|
10
|
|
||||
Corporate debt securities
|
|
6,918
|
|
|
405
|
|
|
34
|
|
|
7,289
|
|
||||
Residential mortgage-backed securities
|
|
109
|
|
|
3
|
|
|
1
|
|
|
111
|
|
||||
Commercial mortgage-backed securities
|
|
28
|
|
|
2
|
|
|
0
|
|
|
30
|
|
||||
Collateralized debt obligations
|
|
6
|
|
|
5
|
|
|
0
|
|
|
11
|
|
||||
Other debt securities
|
|
66
|
|
|
3
|
|
|
0
|
|
|
69
|
|
||||
Total fixed maturities
|
|
8,540
|
|
|
503
|
|
|
36
|
|
|
9,007
|
|
||||
Nonredeemable preferred stock
|
|
650
|
|
|
64
|
|
|
4
|
|
|
710
|
|
||||
Common stock
|
|
138
|
|
|
3
|
|
|
1
|
|
|
140
|
|
||||
Total available-for-sale securities – Exchange
|
|
$
|
9,328
|
|
|
$
|
570
|
|
|
$
|
41
|
|
|
$
|
9,857
|
|
Total available-for-sale securities – Erie Insurance Group
|
|
$
|
9,907
|
|
|
$
|
584
|
|
|
$
|
45
|
|
|
$
|
10,446
|
|
|
|
Erie Insurance Group
|
||||||
|
|
March 31, 2015
|
||||||
(in millions)
|
|
Amortized
|
|
Estimated
|
||||
|
|
cost
|
|
fair value
|
||||
Indemnity
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
71
|
|
|
$
|
71
|
|
Due after one year through five years
|
|
226
|
|
|
227
|
|
||
Due after five years through ten years
|
|
145
|
|
|
150
|
|
||
Due after ten years
|
|
103
|
|
|
108
|
|
||
Total fixed maturities – Indemnity
|
|
$
|
545
|
|
|
$
|
556
|
|
Exchange
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
446
|
|
|
$
|
453
|
|
Due after one year through five years
|
|
3,320
|
|
|
3,512
|
|
||
Due after five years through ten years
|
|
3,656
|
|
|
3,852
|
|
||
Due after ten years
|
|
1,532
|
|
|
1,682
|
|
||
Total fixed maturities – Exchange
|
|
$
|
8,954
|
|
|
$
|
9,499
|
|
Total fixed maturities – Erie Insurance Group
|
|
$
|
9,499
|
|
|
$
|
10,055
|
|
|
|
Erie Insurance Group
|
|||||||||||||||||||||||||
|
|
March 31, 2015
|
|||||||||||||||||||||||||
(dollars in millions)
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
|||||||||||||||||||||
Indemnity
|
|
Fair
value
|
|
Unrealized losses
|
|
Fair
value
|
|
Unrealized losses
|
|
Fair
value
|
|
Unrealized losses
|
|
No. of holdings
|
|||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
States & political subdivisions
|
|
$
|
3
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3
|
|
|
$
|
0
|
|
|
2
|
|
Corporate debt securities
|
|
70
|
|
|
2
|
|
|
3
|
|
|
0
|
|
|
73
|
|
|
2
|
|
|
185
|
|
||||||
Residential mortgage-backed securities
|
|
3
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
3
|
|
|
0
|
|
|
3
|
|
||||||
Commercial mortgage-backed securities
|
|
30
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
30
|
|
|
1
|
|
|
20
|
|
||||||
Collateralized debt obligations
|
|
13
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
13
|
|
|
0
|
|
|
6
|
|
||||||
Other debt securities
|
|
1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|
0
|
|
|
1
|
|
||||||
Total fixed maturities
|
|
120
|
|
|
3
|
|
|
3
|
|
|
0
|
|
|
123
|
|
|
3
|
|
|
217
|
|
||||||
Common stock
|
|
13
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
13
|
|
|
0
|
|
|
1
|
|
||||||
Total available-for-sale securities – Indemnity
|
|
$
|
133
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
0
|
|
|
$
|
136
|
|
|
$
|
3
|
|
|
218
|
|
Quality breakdown of fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investment grade
|
|
$
|
69
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
0
|
|
|
$
|
72
|
|
|
$
|
1
|
|
|
37
|
|
Non-investment grade
|
|
51
|
|
|
2
|
|
|
0
|
|
|
0
|
|
|
51
|
|
|
2
|
|
|
180
|
|
||||||
Total fixed maturities – Indemnity
|
|
$
|
120
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
0
|
|
|
$
|
123
|
|
|
$
|
3
|
|
|
217
|
|
Exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
U.S. treasury
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
1
|
|
States & political subdivisions
|
|
108
|
|
|
1
|
|
|
5
|
|
|
0
|
|
|
113
|
|
|
1
|
|
|
29
|
|
||||||
Foreign government securities
|
|
6
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
6
|
|
|
0
|
|
|
6
|
|
||||||
Corporate debt securities
|
|
673
|
|
|
22
|
|
|
56
|
|
|
2
|
|
|
729
|
|
|
24
|
|
|
468
|
|
||||||
Residential mortgage-backed securities
|
|
6
|
|
|
0
|
|
|
17
|
|
|
0
|
|
|
23
|
|
|
0
|
|
|
6
|
|
||||||
Commercial mortgage-backed securities
|
|
0
|
|
|
0
|
|
|
1
|
|
|
0
|
|
|
1
|
|
|
0
|
|
|
1
|
|
||||||
Other debt securities
|
|
9
|
|
|
0
|
|
|
7
|
|
|
0
|
|
|
16
|
|
|
0
|
|
|
3
|
|
||||||
Total fixed maturities
|
|
802
|
|
|
23
|
|
|
86
|
|
|
2
|
|
|
888
|
|
|
25
|
|
|
514
|
|
||||||
Nonredeemable preferred stock
|
|
47
|
|
|
0
|
|
|
22
|
|
|
1
|
|
|
69
|
|
|
1
|
|
|
11
|
|
||||||
Total available-for-sale securities – Exchange
|
|
$
|
849
|
|
|
$
|
23
|
|
|
$
|
108
|
|
|
$
|
3
|
|
|
$
|
957
|
|
|
$
|
26
|
|
|
525
|
|
Quality breakdown of fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investment grade
|
|
$
|
445
|
|
|
$
|
6
|
|
|
$
|
82
|
|
|
$
|
1
|
|
|
$
|
527
|
|
|
$
|
7
|
|
|
136
|
|
Non-investment grade
|
|
357
|
|
|
17
|
|
|
4
|
|
|
1
|
|
|
361
|
|
|
18
|
|
|
378
|
|
||||||
Total fixed maturities – Exchange
|
|
$
|
802
|
|
|
$
|
23
|
|
|
$
|
86
|
|
|
$
|
2
|
|
|
$
|
888
|
|
|
$
|
25
|
|
|
514
|
|
|
|
Erie Insurance Group
|
|||||||||||||||||||||||||
|
|
December 31, 2014
|
|||||||||||||||||||||||||
(dollars in millions)
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
|||||||||||||||||||||
Indemnity
|
|
Fair
value
|
|
Unrealized
losses
|
|
Fair
value
|
|
Unrealized
losses
|
|
Fair
value
|
|
Unrealized
losses
|
|
No. of
holdings
|
|||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
States & political subdivisions
|
|
$
|
6
|
|
|
$
|
0
|
|
|
$
|
2
|
|
|
$
|
0
|
|
|
$
|
8
|
|
|
$
|
0
|
|
|
4
|
|
Corporate debt securities
|
|
121
|
|
|
3
|
|
|
0
|
|
|
0
|
|
|
121
|
|
|
3
|
|
|
250
|
|
||||||
Residential mortgage-backed securities
|
|
6
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
6
|
|
|
0
|
|
|
4
|
|
||||||
Commercial mortgage-backed securities
|
|
41
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
41
|
|
|
1
|
|
|
24
|
|
||||||
Collateralized debt obligations
|
|
21
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
21
|
|
|
0
|
|
|
9
|
|
||||||
Other debt securities
|
|
7
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
7
|
|
|
0
|
|
|
3
|
|
||||||
Total fixed maturities
|
|
202
|
|
|
4
|
|
|
2
|
|
|
0
|
|
|
204
|
|
|
4
|
|
|
294
|
|
||||||
Common stock
|
|
0
|
|
|
0
|
|
|
13
|
|
|
0
|
|
|
13
|
|
|
0
|
|
|
1
|
|
||||||
Total available-for-sale securities – Indemnity
|
|
$
|
202
|
|
|
$
|
4
|
|
|
$
|
15
|
|
|
$
|
0
|
|
|
$
|
217
|
|
|
$
|
4
|
|
|
295
|
|
Quality breakdown of fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investment grade
|
|
$
|
146
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
0
|
|
|
$
|
148
|
|
|
$
|
1
|
|
|
58
|
|
Non-investment grade
|
|
56
|
|
|
3
|
|
|
0
|
|
|
0
|
|
|
56
|
|
|
3
|
|
|
236
|
|
||||||
Total fixed maturities – Indemnity
|
|
$
|
202
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
0
|
|
|
$
|
204
|
|
|
$
|
4
|
|
|
294
|
|
Exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
U.S. treasury
|
|
$
|
1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1
|
|
|
$
|
0
|
|
|
2
|
|
States & political subdivisions
|
|
47
|
|
|
0
|
|
|
47
|
|
|
1
|
|
|
94
|
|
|
1
|
|
|
24
|
|
||||||
Corporate debt securities
|
|
980
|
|
|
29
|
|
|
181
|
|
|
5
|
|
|
1,161
|
|
|
34
|
|
|
656
|
|
||||||
Residential mortgage-backed securities
|
|
6
|
|
|
0
|
|
|
27
|
|
|
1
|
|
|
33
|
|
|
1
|
|
|
8
|
|
||||||
Commercial mortgage-backed securities
|
|
1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1
|
|
|
0
|
|
|
1
|
|
||||||
Other debt securities
|
|
13
|
|
|
0
|
|
|
7
|
|
|
0
|
|
|
20
|
|
|
0
|
|
|
4
|
|
||||||
Total fixed maturities
|
|
1,048
|
|
|
29
|
|
|
262
|
|
|
7
|
|
|
1,310
|
|
|
36
|
|
|
695
|
|
||||||
Nonredeemable preferred stock
|
|
86
|
|
|
3
|
|
|
25
|
|
|
1
|
|
|
111
|
|
|
4
|
|
|
16
|
|
||||||
Common stock
|
|
0
|
|
|
0
|
|
|
73
|
|
|
1
|
|
|
73
|
|
|
1
|
|
|
2
|
|
||||||
Total available-for-sale securities – Exchange
|
|
$
|
1,134
|
|
|
$
|
32
|
|
|
$
|
360
|
|
|
$
|
9
|
|
|
$
|
1,494
|
|
|
$
|
41
|
|
|
713
|
|
Quality breakdown of fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investment grade
|
|
$
|
606
|
|
|
$
|
10
|
|
|
$
|
253
|
|
|
$
|
5
|
|
|
$
|
859
|
|
|
$
|
15
|
|
|
172
|
|
Non-investment grade
|
|
442
|
|
|
19
|
|
|
9
|
|
|
2
|
|
|
451
|
|
|
21
|
|
|
523
|
|
||||||
Total fixed maturities – Exchange
|
|
$
|
1,048
|
|
|
$
|
29
|
|
|
$
|
262
|
|
|
$
|
7
|
|
|
$
|
1,310
|
|
|
$
|
36
|
|
|
695
|
|
|
|
Erie Insurance Group
|
||||||
(in millions)
|
|
Three months ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Indemnity
|
|
|
|
|
|
|
||
Fixed maturities
|
|
$
|
4
|
|
|
$
|
3
|
|
Equity securities
|
|
0
|
|
|
1
|
|
||
Cash equivalents and other
|
|
0
|
|
|
0
|
|
||
Total investment income
|
|
4
|
|
|
4
|
|
||
Less: investment expenses
|
|
0
|
|
|
0
|
|
||
Investment income, net of expenses – Indemnity
|
|
$
|
4
|
|
|
$
|
4
|
|
Exchange
|
|
|
|
|
|
|
||
Fixed maturities
|
|
$
|
94
|
|
|
$
|
86
|
|
Equity securities
|
|
26
|
|
|
29
|
|
||
Cash equivalents and other
|
|
1
|
|
|
0
|
|
||
Total investment income
|
|
121
|
|
|
115
|
|
||
Less: investment expenses
|
|
12
|
|
|
10
|
|
||
Investment income, net of expenses – Exchange
|
|
$
|
109
|
|
|
$
|
105
|
|
Investment income, net of expenses – Erie Insurance Group
|
|
$
|
113
|
|
|
$
|
109
|
|
|
|
Erie Insurance Group
|
||||||
(in millions)
|
|
Three months ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Indemnity
|
|
|
|
|
|
|
||
Available-for-sale securities:
|
|
|
|
|
|
|
||
Fixed maturities:
|
|
|
|
|
|
|
||
Gross realized gains
|
|
$
|
0
|
|
|
$
|
0
|
|
Gross realized losses
|
|
0
|
|
|
0
|
|
||
Net realized gains
|
|
0
|
|
|
0
|
|
||
Equity securities:
|
|
|
|
|
|
|
||
Gross realized gains
|
|
0
|
|
|
1
|
|
||
Gross realized losses
|
|
0
|
|
|
0
|
|
||
Net realized gains
|
|
0
|
|
|
1
|
|
||
Net realized investment gains – Indemnity
|
|
$
|
0
|
|
|
$
|
1
|
|
Exchange
|
|
|
|
|
|
|
||
Available-for-sale securities:
|
|
|
|
|
|
|
||
Fixed maturities:
|
|
|
|
|
|
|
||
Gross realized gains
|
|
$
|
6
|
|
|
$
|
6
|
|
Gross realized losses
|
|
(4
|
)
|
|
(1
|
)
|
||
Net realized gains
|
|
2
|
|
|
5
|
|
||
Equity securities:
|
|
|
|
|
|
|
||
Gross realized gains
|
|
5
|
|
|
8
|
|
||
Gross realized losses
|
|
0
|
|
|
(1
|
)
|
||
Net realized gains
|
|
5
|
|
|
7
|
|
||
Trading securities:
|
|
|
|
|
|
|
||
Common stock:
|
|
|
|
|
|
|
||
Gross realized gains
|
|
117
|
|
|
70
|
|
||
Gross realized losses
|
|
(12
|
)
|
|
(3
|
)
|
||
Decreases in fair value
(1)
|
|
(56
|
)
|
|
(24
|
)
|
||
Net realized gains
|
|
49
|
|
|
43
|
|
||
Net realized investment gains – Exchange
|
|
$
|
56
|
|
|
$
|
55
|
|
Net realized investment gains – Erie Insurance Group
|
|
$
|
56
|
|
|
$
|
56
|
|
(1)
|
The fair value on our common stock portfolio is based upon exchange traded prices provided by a nationally recognized pricing service.
|
|
|
|
|
|
(in millions)
|
|
Erie Insurance Group
|
||||||
|
|
Three months ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Indemnity
|
|
|
|
|
||||
Equity in earnings of limited partnerships accounted for under the equity method
|
|
$
|
2
|
|
|
$
|
5
|
|
Change in fair value of limited partnerships accounted for under the fair value option
|
|
0
|
|
|
1
|
|
||
Equity in earnings of limited partnerships – Indemnity
|
|
$
|
2
|
|
|
$
|
6
|
|
Exchange
|
|
|
|
|
||||
Equity in earnings of limited partnerships accounted for under the equity method
|
|
$
|
25
|
|
|
$
|
39
|
|
Change in fair value of limited partnerships accounted for under the fair value option
|
|
1
|
|
|
5
|
|
||
Equity in earnings of limited partnerships – Exchange
|
|
$
|
26
|
|
|
$
|
44
|
|
Equity in earnings of limited partnerships – Erie Insurance Group
|
|
$
|
28
|
|
|
$
|
50
|
|
|
|
Erie Insurance Group
|
|||||||||||||
|
|
As of and for the three months ended March 31, 2015
|
|||||||||||||
(dollars in millions)
Investment percentage in limited partnerships
|
|
Number of
partnerships
|
|
Asset
recorded
|
|
Income (loss)
recognized
due to valuation
adjustments by
the partnerships
|
|
Income
(1oss)
recorded
|
|||||||
Indemnity
|
|
|
|
|
|
|
|
|
|||||||
Private equity:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
24
|
|
|
$
|
32
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
Greater than or equal to 10% but less than 50%
|
|
3
|
|
|
17
|
|
|
0
|
|
|
0
|
|
|||
Total private equity
|
|
27
|
|
|
49
|
|
|
(1
|
)
|
|
1
|
|
|||
Mezzanine debt:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
11
|
|
|
9
|
|
|
0
|
|
|
1
|
|
|||
Greater than or equal to 10% but less than 50%
|
|
3
|
|
|
5
|
|
|
0
|
|
|
0
|
|
|||
Greater than 50%
|
|
1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
Total mezzanine debt
|
|
15
|
|
|
14
|
|
|
0
|
|
|
1
|
|
|||
Real estate:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
11
|
|
|
25
|
|
|
(5
|
)
|
|
5
|
|
|||
Greater than or equal to 10% but less than 50%
|
|
3
|
|
|
3
|
|
|
(6
|
)
|
|
5
|
|
|||
Greater than 50%
|
|
2
|
|
|
9
|
|
|
2
|
|
|
0
|
|
|||
Total real estate
|
|
16
|
|
|
37
|
|
|
(9
|
)
|
|
10
|
|
|||
Total limited partnerships – Indemnity
|
|
58
|
|
|
$
|
100
|
|
|
$
|
(10
|
)
|
|
$
|
12
|
|
Exchange
|
|
|
|
|
|
|
|
|
|||||||
Private equity:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
42
|
|
|
$
|
333
|
|
|
$
|
(8
|
)
|
|
$
|
15
|
|
Greater than or equal to 10% but less than 50%
|
|
3
|
|
|
71
|
|
|
1
|
|
|
0
|
|
|||
Total private equity
|
|
45
|
|
|
404
|
|
|
(7
|
)
|
|
15
|
|
|||
Mezzanine debt:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
21
|
|
|
118
|
|
|
(3
|
)
|
|
6
|
|
|||
Greater than or equal to 10% but less than 50%
|
|
4
|
|
|
25
|
|
|
0
|
|
|
2
|
|
|||
Greater than 50%
|
|
3
|
|
|
29
|
|
|
1
|
|
|
0
|
|
|||
Total mezzanine debt
|
|
28
|
|
|
172
|
|
|
(2
|
)
|
|
8
|
|
|||
Real estate:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
24
|
|
|
162
|
|
|
(11
|
)
|
|
16
|
|
|||
Greater than or equal to 10% but less than 50%
|
|
5
|
|
|
42
|
|
|
(18
|
)
|
|
16
|
|
|||
Greater than 50%
|
|
2
|
|
|
35
|
|
|
9
|
|
|
0
|
|
|||
Total real estate
|
|
31
|
|
|
239
|
|
|
(20
|
)
|
|
32
|
|
|||
Total limited partnerships – Exchange
|
|
104
|
|
|
$
|
815
|
|
|
$
|
(29
|
)
|
|
$
|
55
|
|
Total limited partnerships – Erie Insurance Group
|
|
|
|
$
|
915
|
|
|
$
|
(39
|
)
|
|
$
|
67
|
|
|
|
Erie Insurance Group
|
|||||||||||||
|
|
As of and for the year ended December 31, 2014
|
|||||||||||||
(dollars in millions)
Investment percentage in limited partnerships
|
|
Number of
partnerships
|
|
Asset
recorded
|
|
Income (loss)
recognized
due to valuation
adjustments by
the partnerships
|
|
Income
(1oss)
recorded
|
|||||||
Indemnity
|
|
|
|
|
|
|
|
|
|||||||
Private equity:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
24
|
|
|
$
|
34
|
|
|
$
|
(7
|
)
|
|
$
|
7
|
|
Greater than or equal to 10% but less than 50%
|
|
3
|
|
|
18
|
|
|
3
|
|
|
1
|
|
|||
Total private equity
|
|
27
|
|
|
52
|
|
|
(4
|
)
|
|
8
|
|
|||
Mezzanine debt:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
11
|
|
|
10
|
|
|
0
|
|
|
2
|
|
|||
Greater than or equal to 10% but less than 50%
|
|
3
|
|
|
4
|
|
|
0
|
|
|
0
|
|
|||
Greater than 50%
|
|
1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
Total mezzanine debt
|
|
15
|
|
|
14
|
|
|
0
|
|
|
2
|
|
|||
Real estate:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
11
|
|
|
36
|
|
|
5
|
|
|
(2
|
)
|
|||
Greater than or equal to 10% but less than 50%
|
|
3
|
|
|
4
|
|
|
1
|
|
|
0
|
|
|||
Greater than 50%
|
|
2
|
|
|
7
|
|
|
0
|
|
|
1
|
|
|||
Total real estate
|
|
16
|
|
|
47
|
|
|
6
|
|
|
(1
|
)
|
|||
Total limited partnerships – Indemnity
|
|
58
|
|
|
$
|
113
|
|
|
$
|
2
|
|
|
$
|
9
|
|
Exchange
|
|
|
|
|
|
|
|
|
|||||||
Private equity:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
42
|
|
|
$
|
344
|
|
|
$
|
(12
|
)
|
|
$
|
43
|
|
Greater than or equal to 10% but less than 50%
|
|
3
|
|
|
74
|
|
|
13
|
|
|
3
|
|
|||
Total private equity
|
|
45
|
|
|
418
|
|
|
1
|
|
|
46
|
|
|||
Mezzanine debt:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
21
|
|
|
120
|
|
|
0
|
|
|
16
|
|
|||
Greater than or equal to 10% but less than 50%
|
|
4
|
|
|
23
|
|
|
(3
|
)
|
|
3
|
|
|||
Greater than 50%
|
|
3
|
|
|
27
|
|
|
0
|
|
|
3
|
|
|||
Total mezzanine debt
|
|
28
|
|
|
170
|
|
|
(3
|
)
|
|
22
|
|
|||
Real estate:
|
|
|
|
|
|
|
|
|
|||||||
Less than 10%
|
|
22
|
|
|
207
|
|
|
18
|
|
|
7
|
|
|||
Greater than or equal to 10% but less than 50%
|
|
5
|
|
|
44
|
|
|
6
|
|
|
2
|
|
|||
Greater than 50%
|
|
2
|
|
|
27
|
|
|
(17
|
)
|
|
20
|
|
|||
Total real estate
|
|
29
|
|
|
278
|
|
|
7
|
|
|
29
|
|
|||
Total limited partnerships – Exchange
|
|
102
|
|
|
$
|
866
|
|
|
$
|
5
|
|
|
$
|
97
|
|
Total limited partnerships – Erie Insurance Group
|
|
|
|
$
|
979
|
|
|
$
|
7
|
|
|
$
|
106
|
|
|
|
Erie Insurance Group
|
||||||
(in millions)
|
|
Three months ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Service cost for benefits earned
|
|
$
|
8
|
|
|
$
|
6
|
|
Interest cost on benefits obligation
|
|
8
|
|
|
7
|
|
||
Expected return on plan assets
|
|
(9
|
)
|
|
(8
|
)
|
||
Prior service cost amortization
|
|
0
|
|
|
0
|
|
||
Net actuarial loss amortization
|
|
3
|
|
|
2
|
|
||
Pension plan cost
(1)
|
|
$
|
10
|
|
|
$
|
7
|
|
(1)
|
Pension plan costs represent the total cost for the Erie Insurance Group before reimbursements to Indemnity from the Exchange and EFL.
|
|
|
Indemnity Shareholder Interest
|
||||||||||
(in millions)
|
|
Unrealized holding gains (losses) on available-for-sale securities
|
|
Postretirement plans
(2)
|
|
Total
|
||||||
Balance at December 31, 2013
|
|
$
|
6
|
|
|
$
|
(65
|
)
|
|
$
|
(59
|
)
|
Other comprehensive income before reclassifications, net of tax
|
|
4
|
|
|
0
|
|
|
4
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax
(1)
|
|
(1
|
)
|
|
0
|
|
|
(1
|
)
|
|||
Net current period other comprehensive income, net of tax
|
|
3
|
|
|
0
|
|
|
3
|
|
|||
Balance at March 31, 2014
|
|
$
|
9
|
|
|
$
|
(65
|
)
|
|
$
|
(56
|
)
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Balance at December 31, 2014
|
|
$
|
7
|
|
|
$
|
(125
|
)
|
|
$
|
(118
|
)
|
Other comprehensive income before reclassifications, net of tax
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax
(1)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
Net current period other comprehensive income, net of tax
|
|
0
|
|
|
0
|
|
|
0
|
|
|||
Balance at March 31, 2015
|
|
$
|
7
|
|
|
$
|
(125
|
)
|
|
$
|
(118
|
)
|
(1)
|
See the following table for details about these reclassifications.
|
(2)
|
There are no amounts reclassified out of accumulated other comprehensive loss related to postretirement plan items during interim periods.
|
|
|
Erie Insurance Group
|
||||||
|
|
Three months ended
|
||||||
|
|
March 31, 2015
|
|
March 31, 2014
|
||||
(in millions)
|
|
Amounts reclassified from accumulated other comprehensive income (loss)
(1)
|
||||||
|
|
|||||||
Unrealized holding gains (losses) on available-for-sale securities:
|
|
|
|
|
||||
Net realized investment gains
|
|
$
|
7
|
|
|
$
|
13
|
|
Net impairment losses recognized in earnings
|
|
(2
|
)
|
|
0
|
|
||
Income from operations before income taxes and noncontrolling interest
|
|
5
|
|
|
13
|
|
||
Provision for income taxes
|
|
2
|
|
|
5
|
|
||
Net income
|
|
3
|
|
|
8
|
|
||
Less: Net income attributable to noncontrolling interest in consolidated entity – Exchange
|
|
3
|
|
|
7
|
|
||
Net income attributable to Indemnity
|
|
$
|
0
|
|
|
$
|
1
|
|
(1)
|
Positive amounts indicate net income, while negative amounts indicate net loss.
|
|
|
Erie Insurance Group
|
||||||||||
(in millions, except per share data)
|
|
Indemnity
shareholder
interest
|
|
Exchange
noncontrolling
interest
|
|
Erie
Insurance
Group
|
||||||
Balance at December 31, 2013
|
|
$
|
734
|
|
|
$
|
6,816
|
|
|
$
|
7,550
|
|
Net income
|
|
168
|
|
|
405
|
|
|
573
|
|
|||
Change in accumulated other comprehensive income (loss), net of tax
|
|
(59
|
)
|
|
59
|
|
|
0
|
|
|||
Net purchase of treasury stock
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||
Dividends declared:
|
|
|
|
|
|
|
||||||
Class A $2.4125 per share
|
|
(120
|
)
|
|
—
|
|
|
(120
|
)
|
|||
Class B $361.875 per share
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Balance at December 31, 2014
|
|
$
|
703
|
|
|
$
|
7,280
|
|
|
$
|
7,983
|
|
Net income
|
|
39
|
|
|
97
|
|
|
136
|
|
|||
Change in accumulated other comprehensive income (loss), net of tax
|
|
0
|
|
|
50
|
|
|
50
|
|
|||
Dividends declared:
|
|
|
|
|
|
|
||||||
Class A $0.6810 per share
|
|
(32
|
)
|
|
—
|
|
|
(32
|
)
|
|||
Class B $102.15 per share
|
|
0
|
|
|
—
|
|
|
0
|
|
|||
Balance at March 31, 2015
|
|
$
|
710
|
|
|
$
|
7,427
|
|
|
$
|
8,137
|
|
|
|
Erie Insurance Group
|
||||||||||||||
|
|
At March 31, 2015
|
||||||||||||||
(in millions)
|
|
Indemnity
shareholder
interest
|
|
Exchange
noncontrolling
interest
|
|
Reclassifications
and
eliminations
|
|
Erie
Insurance
Group
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities, at fair value:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
|
$
|
556
|
|
|
$
|
9,499
|
|
|
$
|
—
|
|
|
$
|
10,055
|
|
Equity securities
|
|
25
|
|
|
837
|
|
|
—
|
|
|
862
|
|
||||
Trading securities, at fair value
|
|
—
|
|
|
3,096
|
|
|
—
|
|
|
3,096
|
|
||||
Limited partnerships
|
|
100
|
|
|
815
|
|
|
—
|
|
|
915
|
|
||||
Other invested assets
|
|
1
|
|
|
21
|
|
|
—
|
|
|
22
|
|
||||
Total investments
|
|
682
|
|
|
14,268
|
|
|
—
|
|
|
14,950
|
|
||||
Cash and cash equivalents
|
|
58
|
|
|
362
|
|
|
—
|
|
|
420
|
|
||||
Premiums receivable from policyholders
|
|
—
|
|
|
1,304
|
|
|
—
|
|
|
1,304
|
|
||||
Reinsurance recoverable
|
|
—
|
|
|
162
|
|
|
—
|
|
|
162
|
|
||||
Deferred income tax asset
|
|
40
|
|
|
0
|
|
|
—
|
|
|
40
|
|
||||
Deferred acquisition costs
|
|
—
|
|
|
589
|
|
|
—
|
|
|
589
|
|
||||
Other assets
|
|
125
|
|
|
403
|
|
|
—
|
|
|
528
|
|
||||
Receivables from the Exchange and other affiliates
|
|
337
|
|
|
—
|
|
|
(337
|
)
|
|
—
|
|
||||
Note receivable from EFL
|
|
25
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
||||
Total assets
|
|
$
|
1,267
|
|
|
$
|
17,088
|
|
|
$
|
(362
|
)
|
|
$
|
17,993
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss expense reserves
|
|
$
|
—
|
|
|
$
|
3,966
|
|
|
$
|
—
|
|
|
$
|
3,966
|
|
Life policy and deposit contract reserves
|
|
—
|
|
|
1,827
|
|
|
—
|
|
|
1,827
|
|
||||
Unearned premiums
|
|
—
|
|
|
2,845
|
|
|
—
|
|
|
2,845
|
|
||||
Deferred income tax liability
|
|
0
|
|
|
494
|
|
|
—
|
|
|
494
|
|
||||
Other liabilities
|
|
557
|
|
|
529
|
|
|
(362
|
)
|
|
724
|
|
||||
Total liabilities
|
|
557
|
|
|
9,661
|
|
|
(362
|
)
|
|
9,856
|
|
||||
Shareholders’ equity and noncontrolling interest
|
|
|
|
|
|
|
|
|
||||||||
Total Indemnity shareholders’ equity
|
|
710
|
|
|
—
|
|
|
—
|
|
|
710
|
|
||||
Noncontrolling interest in consolidated entity – Exchange
|
|
—
|
|
|
7,427
|
|
|
—
|
|
|
7,427
|
|
||||
Total equity
|
|
710
|
|
|
7,427
|
|
|
—
|
|
|
8,137
|
|
||||
Total liabilities, shareholders’ equity, and noncontrolling interest
|
|
$
|
1,267
|
|
|
$
|
17,088
|
|
|
$
|
(362
|
)
|
|
$
|
17,993
|
|
|
|
Erie Insurance Group
|
||||||||||||||
|
|
At December 31, 2014
|
||||||||||||||
(in millions)
|
|
Indemnity
shareholder
interest
|
|
Exchange
noncontrolling
interest
|
|
Reclassifications
and
eliminations
|
|
Erie
Insurance
Group
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities, at fair value:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
|
$
|
564
|
|
|
$
|
9,007
|
|
|
$
|
—
|
|
|
$
|
9,571
|
|
Equity securities
|
|
25
|
|
|
850
|
|
|
—
|
|
|
875
|
|
||||
Trading securities, at fair value
|
|
—
|
|
|
3,223
|
|
|
—
|
|
|
3,223
|
|
||||
Limited partnerships
|
|
113
|
|
|
866
|
|
|
—
|
|
|
979
|
|
||||
Other invested assets
|
|
1
|
|
|
20
|
|
|
—
|
|
|
21
|
|
||||
Total investments
|
|
703
|
|
|
13,966
|
|
|
—
|
|
|
14,669
|
|
||||
Cash and cash equivalents
|
|
92
|
|
|
422
|
|
|
—
|
|
|
514
|
|
||||
Premiums receivable from policyholders
|
|
—
|
|
|
1,281
|
|
|
—
|
|
|
1,281
|
|
||||
Reinsurance recoverable
|
|
—
|
|
|
161
|
|
|
—
|
|
|
161
|
|
||||
Deferred income tax asset
|
|
37
|
|
|
0
|
|
|
—
|
|
|
37
|
|
||||
Deferred acquisition costs
|
|
—
|
|
|
595
|
|
|
—
|
|
|
595
|
|
||||
Other assets
|
|
127
|
|
|
374
|
|
|
—
|
|
|
501
|
|
||||
Receivables from the Exchange and other affiliates
|
|
335
|
|
|
—
|
|
|
(335
|
)
|
|
—
|
|
||||
Note receivable from EFL
|
|
25
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
||||
Total assets
|
|
$
|
1,319
|
|
|
$
|
16,799
|
|
|
$
|
(360
|
)
|
|
$
|
17,758
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss expense reserves
|
|
$
|
—
|
|
|
$
|
3,853
|
|
|
$
|
—
|
|
|
$
|
3,853
|
|
Life policy and deposit contract reserves
|
|
—
|
|
|
1,812
|
|
|
—
|
|
|
1,812
|
|
||||
Unearned premiums
|
|
—
|
|
|
2,834
|
|
|
—
|
|
|
2,834
|
|
||||
Deferred income tax liability
|
|
0
|
|
|
490
|
|
|
—
|
|
|
490
|
|
||||
Other liabilities
|
|
616
|
|
|
530
|
|
|
(360
|
)
|
|
786
|
|
||||
Total liabilities
|
|
616
|
|
|
9,519
|
|
|
(360
|
)
|
|
9,775
|
|
||||
Shareholders’ equity and noncontrolling interest
|
|
|
|
|
|
|
|
|
||||||||
Total Indemnity shareholders’ equity
|
|
703
|
|
|
—
|
|
|
—
|
|
|
703
|
|
||||
Noncontrolling interest in consolidated entity – Exchange
|
|
—
|
|
|
7,280
|
|
|
—
|
|
|
7,280
|
|
||||
Total equity
|
|
703
|
|
|
7,280
|
|
|
—
|
|
|
7,983
|
|
||||
Total liabilities, shareholders’ equity, and noncontrolling interest
|
|
$
|
1,319
|
|
|
$
|
16,799
|
|
|
$
|
(360
|
)
|
|
$
|
17,758
|
|
|
|
Indemnity Shareholder Interest
|
||||||
(
in millions)
|
|
Three months ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Management operations:
|
|
|
|
|
|
|
||
Management fee revenue, net
|
|
$
|
343
|
|
|
$
|
319
|
|
Service agreement revenue
|
|
8
|
|
|
7
|
|
||
Total revenue from management operations
|
|
351
|
|
|
326
|
|
||
Cost of management operations
|
|
298
|
|
|
268
|
|
||
Income from management operations before taxes
|
|
53
|
|
|
58
|
|
||
Investment operations:
|
|
|
|
|
|
|
||
Net investment income
|
|
4
|
|
|
4
|
|
||
Net realized gains on investments
|
|
0
|
|
|
1
|
|
||
Net impairment losses recognized in earnings
|
|
0
|
|
|
0
|
|
||
Equity in earnings of limited partnerships
|
|
2
|
|
|
6
|
|
||
Income from investment operations before taxes
|
|
6
|
|
|
11
|
|
||
Income from operations before income taxes
|
|
59
|
|
|
69
|
|
||
Provision for income taxes
|
|
20
|
|
|
23
|
|
||
Net income attributable to Indemnity
|
|
$
|
39
|
|
|
$
|
46
|
|
|
|
Indemnity Shareholder Interest
|
||||||
(in millions)
|
|
Three months ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Management fee received
|
|
$
|
342
|
|
|
$
|
317
|
|
Service agreement fee received
|
|
8
|
|
|
8
|
|
||
Net investment income received
|
|
6
|
|
|
6
|
|
||
Limited partnership distributions
|
|
5
|
|
|
3
|
|
||
Increase in reimbursements collected from affiliates
|
|
0
|
|
|
1
|
|
||
Commissions and bonuses paid to agents
|
|
(249
|
)
|
|
(225
|
)
|
||
Salaries and wages paid
|
|
(42
|
)
|
|
(47
|
)
|
||
Pension contribution and employee benefits paid
|
|
(22
|
)
|
|
(23
|
)
|
||
General operating expenses paid
|
|
(63
|
)
|
|
(50
|
)
|
||
Income taxes paid
|
|
0
|
|
|
1
|
|
||
Net cash used in operating activities
|
|
(15
|
)
|
|
(9
|
)
|
||
Net cash provided by investing activities
|
|
13
|
|
|
44
|
|
||
Net cash used in financing activities
|
|
(32
|
)
|
|
(40
|
)
|
||
Net decrease in cash and cash equivalents
|
|
(34
|
)
|
|
(5
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
92
|
|
|
49
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
58
|
|
|
$
|
44
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Page Number
|
•
|
dependence upon Indemnity’s relationship with the Exchange and the management fee under the agreement with the subscribers at the Exchange;
|
•
|
costs of providing services to the Exchange under the subscriber’s agreement;
|
•
|
ability to attract and retain talented management and employees;
|
•
|
ability to maintain uninterrupted business operations;
|
•
|
factors affecting the quality and liquidity of Indemnity’s investment portfolio;
|
•
|
credit risk from the Exchange;
|
•
|
Indemnity’s ability to meet liquidity needs and access capital; and
|
•
|
outcome of pending and potential litigation.
|
•
|
general business and economic conditions;
|
•
|
dependence upon the independent agency system;
|
•
|
ability to maintain our reputation for customer service;
|
•
|
factors affecting insurance industry competition;
|
•
|
changes in government regulation of the insurance industry;
|
•
|
premium rates and reserves must be established from forecasts of ultimate costs;
|
•
|
emerging claims, coverage issues in the industry, and changes in reserve estimates related to the property and casualty business;
|
•
|
changes in reserve estimates related to the life business;
|
•
|
severe weather conditions or other catastrophic losses, including terrorism and pandemic events;
|
•
|
the Exchange’s ability to acquire reinsurance coverage and collectability from reinsurers;
|
•
|
factors affecting the quality and liquidity of the Exchange’s investment portfolio;
|
•
|
the Exchange’s ability to meet liquidity needs and access capital;
|
•
|
the Exchange’s ability to maintain acceptable financial strength ratings;
|
•
|
outcome of pending and potential litigation; and
|
•
|
dependence upon the service provided by Indemnity.
|
•
|
a management fee of up to
25%
of all property and casualty insurance premiums written or assumed by the Exchange, less the costs associated with the sales, underwriting, and issuance of these policies;
|
•
|
net investment income and results on investments that belong to Indemnity; and
|
•
|
other income and expenses, including income taxes, that are the responsibility of Indemnity.
|
•
|
a
100%
interest in the net underwriting results of the property and casualty insurance operations;
|
•
|
a
100%
interest in the net earnings of EFL's life insurance operations;
|
•
|
net investment income and results on investments that belong to the Exchange and its subsidiaries; and
|
•
|
other income and expenses, including income taxes, that are the responsibility of the Exchange and its subsidiaries.
|
|
|
Indemnity
shareholder interest
|
|
Noncontrolling interest (Exchange)
|
|
Eliminations of
related party
transactions
|
|
Erie Insurance Group
|
||||||||||||||||||||||||
(in millions)
|
|
Three months ended March 31,
|
|
Three months ended March 31,
|
|
Three months ended March 31,
|
|
Three months ended March 31,
|
||||||||||||||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||
Management operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Management fee revenue, net
|
|
$
|
343
|
|
|
$
|
319
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(343
|
)
|
|
$
|
(319
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Service agreement revenue
|
|
8
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
7
|
|
||||||||
Total revenue from management operations
|
|
351
|
|
|
326
|
|
|
—
|
|
|
—
|
|
|
(343
|
)
|
|
(319
|
)
|
|
8
|
|
|
7
|
|
||||||||
Cost of management operations
|
|
298
|
|
|
268
|
|
|
—
|
|
|
—
|
|
|
(298
|
)
|
|
(268
|
)
|
|
—
|
|
|
—
|
|
||||||||
Income from management operations before taxes
|
|
53
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
(51
|
)
|
|
8
|
|
|
7
|
|
||||||||
Property and casualty insurance
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
1,380
|
|
|
1,268
|
|
|
—
|
|
|
—
|
|
|
1,380
|
|
|
1,268
|
|
||||||||
Losses and loss expenses
|
|
—
|
|
|
—
|
|
|
1,033
|
|
|
1,007
|
|
|
(1
|
)
|
|
(1
|
)
|
|
1,032
|
|
|
1,006
|
|
||||||||
Policy acquisition and underwriting expenses
|
|
—
|
|
|
—
|
|
|
386
|
|
|
365
|
|
|
(47
|
)
|
|
(53
|
)
|
|
339
|
|
|
312
|
|
||||||||
(Loss) income from property and casualty insurance operations before taxes
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
(104
|
)
|
|
48
|
|
|
54
|
|
|
9
|
|
|
(50
|
)
|
||||||||
Life insurance operations:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total revenue
|
|
—
|
|
|
—
|
|
|
47
|
|
|
50
|
|
|
0
|
|
|
0
|
|
|
47
|
|
|
50
|
|
||||||||
Total benefits and expenses
|
|
—
|
|
|
—
|
|
|
37
|
|
|
37
|
|
|
0
|
|
|
0
|
|
|
37
|
|
|
37
|
|
||||||||
Income from life insurance operations before taxes
|
|
—
|
|
|
—
|
|
|
10
|
|
|
13
|
|
|
0
|
|
|
0
|
|
|
10
|
|
|
13
|
|
||||||||
Investment operations:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income
|
|
4
|
|
|
4
|
|
|
88
|
|
|
84
|
|
|
(3
|
)
|
|
(3
|
)
|
|
89
|
|
|
85
|
|
||||||||
Net realized gains on investments
|
|
0
|
|
|
1
|
|
|
56
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|
51
|
|
||||||||
Net impairment losses recognized in earnings
|
|
0
|
|
|
0
|
|
|
(2
|
)
|
|
0
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
0
|
|
||||||||
Equity in earnings of limited partnerships
|
|
2
|
|
|
6
|
|
|
25
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
50
|
|
||||||||
Income from investment operations before taxes
|
|
6
|
|
|
11
|
|
|
167
|
|
|
178
|
|
|
(3
|
)
|
|
(3
|
)
|
|
170
|
|
|
186
|
|
||||||||
Income from operations before
income taxes and noncontrolling
interest
|
|
59
|
|
|
69
|
|
|
138
|
|
|
87
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|
156
|
|
||||||||
Provision for income taxes
|
|
20
|
|
|
23
|
|
|
41
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|
47
|
|
||||||||
Net income
|
|
$
|
39
|
|
|
$
|
46
|
|
|
$
|
97
|
|
|
$
|
63
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
136
|
|
|
$
|
109
|
|
(1)
|
Earnings on life insurance related invested assets are integral to the evaluation of the life insurance operations because of the long duration of life products. On that basis, for presentation purposes, the life insurance operations in the table above include life insurance related investment results. However, the life insurance investment results are included in the investment operations segment discussion as part of the Exchange’s investment results.
|
|
|
|
Indemnity Shareholder Interest
|
||||||
(in millions, except per share data)
|
|
Three months ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
|
|
(Unaudited)
|
||||||
Operating income attributable to Indemnity
|
|
$
|
39
|
|
|
$
|
45
|
|
Net realized gains and impairments on investments
|
|
0
|
|
|
1
|
|
||
Income tax expense
|
|
0
|
|
|
0
|
|
||
Realized gains and impairments, net of income taxes
|
|
0
|
|
|
1
|
|
||
Net income attributable to Indemnity
|
|
$
|
39
|
|
|
$
|
46
|
|
|
|
|
|
|
||||
Per Indemnity Class A common share-diluted:
|
|
|
|
|
||||
Operating income attributable to Indemnity
|
|
$
|
0.74
|
|
|
$
|
0.87
|
|
Net realized gains and impairments on investments
|
|
0.00
|
|
|
0.02
|
|
||
Income tax expense
|
|
0.00
|
|
|
(0.01
|
)
|
||
Realized gains and impairments, net of income taxes
|
|
0.00
|
|
|
0.01
|
|
||
Net income attributable to Indemnity
|
|
$
|
0.74
|
|
|
$
|
0.88
|
|
|
|
Indemnity Shareholder Interest
|
||||||||||
|
|
Three months ended March 31,
|
||||||||||
(dollars in millions)
|
|
2015
|
|
2014
|
|
% Change
|
||||||
|
|
(Unaudited)
|
|
|
|
|||||||
Management fee revenue, net
|
|
$
|
343
|
|
|
$
|
319
|
|
|
7.7
|
|
%
|
Service agreement revenue
|
|
8
|
|
|
7
|
|
|
NM
|
|
|
||
Total revenue from management operations
|
|
351
|
|
|
326
|
|
|
7.5
|
|
|
||
Cost of management operations
|
|
298
|
|
|
268
|
|
|
11.4
|
|
|
||
Income from management operations – Indemnity
(1)
|
|
$
|
53
|
|
|
$
|
58
|
|
|
(10.3
|
)
|
%
|
Gross margin
|
|
14.9
|
%
|
|
17.9
|
%
|
|
(3.0
|
)
|
pts.
|
(1)
|
The Indemnity shareholder interest retains 100% of the income from the management operations.
|
|
|
Indemnity Shareholder Interest
|
|||||||||
|
|
Three months ended March 31,
|
|||||||||
(dollars in millions)
|
|
2015
|
|
2014
|
|
% Change
|
|||||
|
|
(Unaudited)
|
|
|
|
||||||
Property and Casualty Group direct written premium
|
|
$
|
1,377
|
|
|
$
|
1,279
|
|
|
7.7
|
%
|
Management fee rate
|
|
25
|
%
|
|
25
|
%
|
|
|
|
||
Management fee revenue, gross
|
|
344
|
|
|
320
|
|
|
7.7
|
|
||
Change in allowance for management fee returned on cancelled policies
(1)
|
|
(1
|
)
|
|
(1
|
)
|
|
NM
|
|
||
Management fee revenue, net of allowance
|
|
$
|
343
|
|
|
$
|
319
|
|
|
7.7
|
%
|
(1)
|
Management fees are returned to the Exchange when policies are cancelled mid-term and unearned premiums are refunded. We record an estimated allowance for management fees returned on mid-term policy cancellations.
|
|
|
Indemnity Shareholder Interest
|
|||||||||
|
|
Three months ended March 31,
|
|||||||||
(in millions)
|
|
2015
|
|
2014
|
|
% Change
|
|||||
|
|
(Unaudited)
|
|
|
|||||||
Commissions:
|
|
|
|
|
|
|
|||||
Total commissions
|
|
$
|
194
|
|
|
$
|
174
|
|
|
11.2
|
%
|
Non-commission expense:
|
|
|
|
|
|
|
|||||
Sales and advertising
|
|
$
|
15
|
|
|
$
|
14
|
|
|
NM
|
|
Underwriting and policy processing
|
|
32
|
|
|
32
|
|
|
NM
|
|
||
Information technology
|
|
33
|
|
|
28
|
|
|
17.3
|
|
||
Customer service
|
|
7
|
|
|
7
|
|
|
NM
|
|
||
Administrative and other
|
|
17
|
|
|
13
|
|
|
40.5
|
|
||
Total non-commission expense
|
|
104
|
|
|
94
|
|
|
11.7
|
|
||
Total cost of management operations
|
|
$
|
298
|
|
|
$
|
268
|
|
|
11.4
|
%
|
|
|
Property and Casualty Group
|
||||||||||
|
|
Three months ended March 31,
|
||||||||||
(dollars in millions)
|
|
2015
|
|
2014
|
|
% Change
|
||||||
|
|
(Unaudited)
|
|
|
||||||||
Premiums:
|
|
|
|
|
|
|
|
|||||
Direct written premium
|
|
$
|
1,377
|
|
|
$
|
1,279
|
|
|
7.7
|
|
%
|
Reinsurance premium – assumed and ceded
|
|
(6
|
)
|
|
(7
|
)
|
|
8.5
|
|
|
||
Net written premium
|
|
1,371
|
|
|
1,272
|
|
|
7.8
|
|
|
||
Change in unearned premium
|
|
9
|
|
|
(4
|
)
|
|
NM
|
|
|
||
Net premiums earned
|
|
1,380
|
|
|
1,268
|
|
|
8.9
|
|
|
||
Losses and loss expenses:
|
|
|
|
|
|
|
|
|||||
Current accident year, excluding catastrophe losses
|
|
969
|
|
|
927
|
|
|
4.4
|
|
|
||
Current accident year catastrophe losses
|
|
85
|
|
|
93
|
|
|
(9.3
|
)
|
|
||
Prior accident years, including prior year catastrophe losses
|
|
(21
|
)
|
|
(13
|
)
|
|
NM
|
|
|
||
Losses and loss expenses
|
|
1,033
|
|
|
1,007
|
|
|
2.4
|
|
|
||
Policy acquisition and other underwriting expenses
|
|
386
|
|
|
365
|
|
|
6.0
|
|
|
||
Total losses and expenses
|
|
1,419
|
|
|
1,372
|
|
|
3.4
|
|
|
||
Underwriting loss – Exchange
(1)
|
|
$
|
(39
|
)
|
|
$
|
(104
|
)
|
|
NM
|
|
%
|
|
|
|
|
|
|
|
|
|||||
Loss and loss expense ratios:
|
|
|
|
|
|
|
|
|||||
Current accident year loss ratio, excluding catastrophe losses
|
|
70.2
|
%
|
|
73.2
|
%
|
|
(3.0
|
)
|
pts.
|
||
Current accident year catastrophe loss ratio
|
|
6.1
|
|
|
7.3
|
|
|
(1.2
|
)
|
|
||
Prior accident year loss ratio, including prior year catastrophe losses
|
|
(1.5
|
)
|
|
(1.0
|
)
|
|
(0.5
|
)
|
|
||
Total loss and loss expense ratio
|
|
74.8
|
|
|
79.5
|
|
|
(4.7
|
)
|
|
||
Policy acquisition and other underwriting expense ratio
|
|
28.0
|
|
|
28.8
|
|
|
(0.8
|
)
|
|
||
Combined ratio
|
|
102.8
|
%
|
|
108.3
|
%
|
|
(5.5
|
)
|
pts.
|
•
|
Private passenger auto new business premiums written increased
10.9%
in the
first
quarter of
2015
, compared to
7.6%
in the
first
quarter of
2014
. New business policies written for private passenger auto increased
7.2%
in the
first
quarter of
2015
, compared to
4.0%
in the
first
quarter of
2014
, while the new business year-over-year average premium per policy for private passenger auto increased
3.3%
at
March 31, 2015
, compared to
3.5%
at
March 31, 2014
.
|
•
|
Homeowners new business premiums written increased
7.3%
in the
first
quarter of
2015
, compared to
0.7%
in the
first
quarter of
2014
. New business policies written for homeowners increased
6.0%
in the
first
quarter of
2015
, compared to a decrease of
2.9%
in the
first
quarter of
2014
. The new business year-over-year average premium per policy for homeowners increased
3.0%
at
March 31, 2015
, compared to
5.5%
at
March 31, 2014
.
|
•
|
Private passenger auto renewal premiums written increased
5.6%
in both the
first
quarters of
2015
and
2014
. The year-over-year average premium per policy on private passenger auto renewal business increased
2.2%
at
March 31, 2015
, compared to
1.6%
at
March 31, 2014
. The private passenger auto year-over-year policy retention ratio was
91.6%
at
March 31, 2015
,
91.7%
at
December 31, 2014
, and
92.0%
at
March 31, 2014
.
|
•
|
Homeowners renewal premiums written increased
6.9%
in the
first
quarter of
2015
, compared to
13.1%
in the
first
quarter of
2014
. The year-over-year average premium per policy on homeowners renewal business increased
5.9%
at
March 31, 2015
, compared to
8.1%
at
March 31, 2014
. The homeowners year-over-year policyholder retention ratio was
89.6%
at
March 31, 2015
,
89.8%
at
December 31, 2014
, and
90.0%
at
March 31, 2014
.
|
|
|
Property and Casualty Group
|
||||||
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2015
|
|
2014
|
||||
|
|
(Unaudited)
|
||||||
Direct business, including reserves for catastrophe losses and salvage and subrogation
|
|
$
|
(27
|
)
|
|
$
|
(17
|
)
|
Assumed reinsurance business
|
|
8
|
|
|
8
|
|
||
Ceded reinsurance business
|
|
(2
|
)
|
|
(4
|
)
|
||
Total prior year loss development
|
|
$
|
(21
|
)
|
|
$
|
(13
|
)
|
|
|
Erie Family Life Insurance Company
|
||||||||||
|
|
Three months ended March 31,
|
||||||||||
(in millions)
|
|
2015
|
|
2014
|
|
% Change
|
||||||
|
|
(Unaudited)
|
|
|
|
|||||||
Individual and group life premiums, gross
|
|
$
|
31
|
|
|
$
|
30
|
|
|
4.1
|
|
%
|
Reinsurance premiums – ceded
|
|
(9
|
)
|
|
(10
|
)
|
|
NM
|
|
|
||
Individual and group life premiums, net
|
|
22
|
|
|
20
|
|
|
5.4
|
|
|
||
Other revenue
|
|
0
|
|
|
1
|
|
|
NM
|
|
|
||
Total net policy revenue
|
|
22
|
|
|
21
|
|
|
6.1
|
|
|
||
Net investment income
|
|
24
|
|
|
24
|
|
|
NM
|
|
|
||
Net realized gains on investments
|
|
0
|
|
|
5
|
|
|
(93.1
|
)
|
|
||
Impairment losses recognized in earnings
|
|
0
|
|
|
0
|
|
|
NM
|
|
|
||
Equity in earnings of limited partnerships
|
|
1
|
|
|
0
|
|
|
NM
|
|
|
||
Total revenues
|
|
47
|
|
|
50
|
|
|
(3.8
|
)
|
|
||
Benefits and other changes in policy reserves
|
|
28
|
|
|
28
|
|
|
NM
|
|
|
||
Amortization of deferred policy acquisition costs
|
|
3
|
|
|
3
|
|
|
NM
|
|
|
||
Other operating expenses
|
|
6
|
|
|
6
|
|
|
NM
|
|
|
||
Total benefits and expenses
|
|
37
|
|
|
37
|
|
|
NM
|
|
|
||
Income before taxes – Exchange
(1)
|
|
$
|
10
|
|
|
$
|
13
|
|
|
(15.2
|
)
|
%
|
(1)
|
The Exchange retains 100% of the income from the life insurance operations.
|
|
Erie Insurance Group
|
||||||||||
(in millions)
|
Three months ended March 31,
|
||||||||||
|
2015
|
|
2014
|
|
% Change
|
||||||
Indemnity
|
(Unaudited)
|
|
|
|
|
||||||
Net investment income
|
$
|
4
|
|
|
$
|
4
|
|
|
3.4
|
|
%
|
Net realized gains on investments
|
0
|
|
|
1
|
|
|
NM
|
|
|
||
Net impairment losses recognized in earnings
|
0
|
|
|
0
|
|
|
NM
|
|
|
||
Equity in earnings of limited partnerships
|
2
|
|
|
6
|
|
|
(62.3
|
)
|
|
||
Net revenue from investment operations – Indemnity
|
$
|
6
|
|
|
$
|
11
|
|
|
(43.6
|
)
|
%
|
Exchange
|
|
|
|
|
|
|
|
|
|||
Net investment income
|
$
|
112
|
|
|
$
|
108
|
|
|
4.8
|
|
%
|
Net realized gains on investments
|
56
|
|
|
55
|
|
|
0.6
|
|
|
||
Net impairment losses recognized in earnings
|
(2
|
)
|
|
0
|
|
|
NM
|
|
|
||
Equity in earnings of limited partnerships
|
26
|
|
|
44
|
|
|
(40.7
|
)
|
|
||
Net revenue from investment operations – Exchange
(1)
|
$
|
192
|
|
|
$
|
207
|
|
|
(6.8
|
)
|
%
|
(1)
|
The Exchange’s investment results for the
first
quarters of
2015
and
2014
include net investment revenues from EFL’s operations of
$25 million
and
$29 million
, respectively.
|
|
|
Erie Insurance Group
|
||||||
(in millions)
|
|
Three months ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Indemnity
|
|
(Unaudited)
|
||||||
Securities sold:
|
|
|
|
|
|
|
||
Fixed maturities
|
|
$
|
0
|
|
|
$
|
0
|
|
Equity securities
|
|
0
|
|
|
1
|
|
||
Total net realized gains – Indemnity
(1)
|
|
$
|
0
|
|
|
$
|
1
|
|
Exchange
|
|
|
|
|
|
|
||
Securities sold:
|
|
|
|
|
|
|
||
Fixed maturities
|
|
$
|
2
|
|
|
$
|
5
|
|
Equity securities
|
|
5
|
|
|
7
|
|
||
Common stock equity securities
|
|
105
|
|
|
67
|
|
||
Common stock decreases in fair value
(2)
|
|
(56
|
)
|
|
(24
|
)
|
||
Total net realized gains – Exchange
(1) (3)
|
|
$
|
56
|
|
|
$
|
55
|
|
(1)
|
See Item 1. “Financial Statements – Note 7. Investments,” contained within this report for additional disclosures regarding net realized gains (losses) on investments.
|
(2)
|
The fair value on our common stock portfolio is based upon exchange traded prices provided by a nationally recognized pricing service.
|
(3)
|
The Exchange’s results for the
first
quarter of
2015
and
2014
include net realized gains from EFL’s operations of $0.3 million and
$5 million
, respectively.
|
|
|
Erie Insurance Group
|
||||||
(in millions)
|
|
Three months ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Indemnity
|
|
(Unaudited)
|
||||||
Private equity
|
|
$
|
0
|
|
|
$
|
4
|
|
Mezzanine debt
|
|
1
|
|
|
0
|
|
||
Real estate
|
|
1
|
|
|
2
|
|
||
Total equity in earnings of limited partnerships – Indemnity
|
|
$
|
2
|
|
|
$
|
6
|
|
Exchange
|
|
|
|
|
|
|
||
Private equity
|
|
$
|
8
|
|
|
$
|
27
|
|
Mezzanine debt
|
|
6
|
|
|
6
|
|
||
Real estate
|
|
12
|
|
|
11
|
|
||
Total equity in earnings of limited partnerships – Exchange
(1)
|
|
$
|
26
|
|
|
$
|
44
|
|
(1)
|
The Exchange’s results for the
first
quarter of
2015
and
2014
include equity in earnings of limited partnerships from EFL's operations of $1 million and $0.3 million, respectively.
|
|
|
Erie Insurance Group
|
||||||||||||
|
|
Carrying value at
|
|
|
|
Carrying value at
|
|
|
||||||
(in millions)
|
|
March 31, 2015
|
|
% to total
|
|
December 31, 2014
|
|
% to total
|
||||||
Indemnity
|
|
(Unaudited)
|
|
|
|
|
|
|
||||||
Fixed maturities
|
|
$
|
556
|
|
|
82
|
%
|
|
$
|
564
|
|
|
80
|
%
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||
Preferred stock
|
|
12
|
|
|
2
|
|
|
12
|
|
|
2
|
|
||
Common stock
|
|
13
|
|
|
2
|
|
|
13
|
|
|
2
|
|
||
Limited partnerships:
|
|
|
|
|
|
|
|
|
||||||
Private equity
|
|
49
|
|
|
7
|
|
|
52
|
|
|
7
|
|
||
Mezzanine debt
|
|
14
|
|
|
2
|
|
|
14
|
|
|
2
|
|
||
Real estate
|
|
37
|
|
|
5
|
|
|
47
|
|
|
7
|
|
||
Real estate mortgage loans
|
|
1
|
|
|
0
|
|
|
1
|
|
|
0
|
|
||
Total investments – Indemnity
|
|
$
|
682
|
|
|
100
|
%
|
|
$
|
703
|
|
|
100
|
%
|
Exchange
|
|
|
|
|
|
|
|
|
||||||
Fixed maturities
|
|
$
|
9,499
|
|
|
67
|
%
|
|
$
|
9,007
|
|
|
65
|
%
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||
Preferred stock
|
|
738
|
|
|
5
|
|
|
710
|
|
|
5
|
|
||
Common stock
|
|
3,195
|
|
|
22
|
|
|
3,363
|
|
|
24
|
|
||
Limited partnerships:
|
|
|
|
|
|
|
|
|
||||||
Private equity
|
|
404
|
|
|
3
|
|
|
418
|
|
|
3
|
|
||
Mezzanine debt
|
|
172
|
|
|
1
|
|
|
170
|
|
|
1
|
|
||
Real estate
|
|
239
|
|
|
2
|
|
|
278
|
|
|
2
|
|
||
Life policy loans
|
|
19
|
|
|
0
|
|
|
18
|
|
|
0
|
|
||
Real estate mortgage loans
|
|
2
|
|
|
0
|
|
|
2
|
|
|
0
|
|
||
Total investments – Exchange
|
|
$
|
14,268
|
|
|
100
|
%
|
|
$
|
13,966
|
|
|
100
|
%
|
Total investments – Erie Insurance Group
|
|
$
|
14,950
|
|
|
|
|
$
|
14,669
|
|
|
|
|
|
Erie Insurance Group
(1)
|
||||||||||||||||||||||
|
|
At March 31, 2015
|
||||||||||||||||||||||
(in millions)
|
|
(Unaudited)
|
||||||||||||||||||||||
Industry Sector
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
Non- investment
grade
|
|
Fair
value
|
||||||||||||
Indemnity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic materials
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
10
|
|
Communications
|
|
0
|
|
|
0
|
|
|
0
|
|
|
15
|
|
|
9
|
|
|
24
|
|
||||||
Consumer
|
|
0
|
|
|
0
|
|
|
8
|
|
|
26
|
|
|
27
|
|
|
61
|
|
||||||
Energy
|
|
0
|
|
|
0
|
|
|
3
|
|
|
0
|
|
|
14
|
|
|
17
|
|
||||||
Financial
|
|
0
|
|
|
2
|
|
|
39
|
|
|
37
|
|
|
7
|
|
|
85
|
|
||||||
Government-municipal
|
|
104
|
|
|
104
|
|
|
16
|
|
|
1
|
|
|
0
|
|
|
225
|
|
||||||
Industrial
|
|
0
|
|
|
0
|
|
|
1
|
|
|
5
|
|
|
8
|
|
|
14
|
|
||||||
Structured securities
(2)
|
|
30
|
|
|
23
|
|
|
31
|
|
|
15
|
|
|
1
|
|
|
100
|
|
||||||
Technology
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
4
|
|
|
4
|
|
||||||
Utilities
|
|
0
|
|
|
0
|
|
|
8
|
|
|
7
|
|
|
1
|
|
|
16
|
|
||||||
Total – Indemnity
|
|
$
|
134
|
|
|
$
|
129
|
|
|
$
|
109
|
|
|
$
|
109
|
|
|
$
|
75
|
|
|
$
|
556
|
|
Exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic materials
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
63
|
|
|
$
|
194
|
|
|
$
|
58
|
|
|
$
|
315
|
|
Communications
|
|
0
|
|
|
0
|
|
|
175
|
|
|
401
|
|
|
131
|
|
|
707
|
|
||||||
Consumer
|
|
0
|
|
|
40
|
|
|
392
|
|
|
818
|
|
|
240
|
|
|
1,490
|
|
||||||
Diversified
|
|
0
|
|
|
0
|
|
|
19
|
|
|
1
|
|
|
4
|
|
|
24
|
|
||||||
Energy
|
|
7
|
|
|
85
|
|
|
154
|
|
|
520
|
|
|
114
|
|
|
880
|
|
||||||
Financial
|
|
0
|
|
|
133
|
|
|
963
|
|
|
1,744
|
|
|
188
|
|
|
3,028
|
|
||||||
Foreign government
|
|
0
|
|
|
5
|
|
|
2
|
|
|
68
|
|
|
7
|
|
|
82
|
|
||||||
Government-municipal
|
|
460
|
|
|
859
|
|
|
160
|
|
|
27
|
|
|
0
|
|
|
1,506
|
|
||||||
Government sponsored entity
|
|
0
|
|
|
4
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
4
|
|
||||||
Industrial
|
|
0
|
|
|
11
|
|
|
130
|
|
|
273
|
|
|
71
|
|
|
485
|
|
||||||
Structured securities
(2)
|
|
41
|
|
|
69
|
|
|
32
|
|
|
35
|
|
|
0
|
|
|
177
|
|
||||||
Technology
|
|
0
|
|
|
48
|
|
|
62
|
|
|
95
|
|
|
34
|
|
|
239
|
|
||||||
U.S. Treasury
|
|
0
|
|
|
6
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
6
|
|
||||||
Utilities
|
|
0
|
|
|
3
|
|
|
180
|
|
|
338
|
|
|
35
|
|
|
556
|
|
||||||
Total – Exchange
|
|
$
|
508
|
|
|
$
|
1,263
|
|
|
$
|
2,332
|
|
|
$
|
4,514
|
|
|
$
|
882
|
|
|
$
|
9,499
|
|
(1)
|
Ratings are supplied by S&P, Moody’s, and Fitch. The table is based upon the lowest rating for each security.
|
(2)
|
Structured securities include residential mortgage-backed securities, commercial mortgage-backed securities, collateralized debt obligations, and asset-backed securities.
|
|
|
Erie Insurance Group
|
||||||||||||||
|
|
Fair value at:
|
||||||||||||||
(in millions)
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
|
(Unaudited)
|
|
|
|
|
||||||||||
Industry sector
|
|
Preferred
stock
|
|
Common
stock
|
|
Preferred
stock
|
|
Common
stock
|
||||||||
Indemnity
|
|
|
|
|
|
|
|
|
||||||||
Communications
|
|
$
|
1
|
|
|
$
|
0
|
|
|
$
|
1
|
|
|
$
|
0
|
|
Financial
|
|
7
|
|
|
0
|
|
|
7
|
|
|
0
|
|
||||
Funds
(1)
|
|
0
|
|
|
13
|
|
|
0
|
|
|
13
|
|
||||
Utilities
|
|
4
|
|
|
0
|
|
|
4
|
|
|
0
|
|
||||
Total – Indemnity
|
|
$
|
12
|
|
|
$
|
13
|
|
|
$
|
12
|
|
|
$
|
13
|
|
Exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic materials
|
|
$
|
0
|
|
|
$
|
91
|
|
|
$
|
0
|
|
|
$
|
88
|
|
Communications
|
|
6
|
|
|
257
|
|
|
6
|
|
|
278
|
|
||||
Consumer
|
|
28
|
|
|
970
|
|
|
16
|
|
|
980
|
|
||||
Diversified
|
|
0
|
|
|
13
|
|
|
0
|
|
|
19
|
|
||||
Energy
|
|
0
|
|
|
162
|
|
|
0
|
|
|
187
|
|
||||
Financial
|
|
588
|
|
|
590
|
|
|
587
|
|
|
590
|
|
||||
Funds
(1)
|
|
0
|
|
|
345
|
|
|
0
|
|
|
435
|
|
||||
Government
|
|
14
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||
Industrial
|
|
0
|
|
|
446
|
|
|
0
|
|
|
456
|
|
||||
Technology
|
|
1
|
|
|
275
|
|
|
1
|
|
|
268
|
|
||||
Utilities
|
|
101
|
|
|
46
|
|
|
100
|
|
|
62
|
|
||||
Total – Exchange
|
|
$
|
738
|
|
|
$
|
3,195
|
|
|
$
|
710
|
|
|
$
|
3,363
|
|
(1)
|
Includes certain exchange traded funds with underlying holdings of fixed maturity securities totaling
$13 million
for Indemnity and
$99 million
for the Exchange at
March 31, 2015
, and
$13 million
for Indemnity and
$140 million
for the Exchange at
December 31, 2014
. These securities meet the criteria of a common stock under U.S. GAAP, and are included on the balance sheet as available-for-sale equity securities. Remaining common stock investments are classified as trading securities.
|
|
|
Erie Insurance Group
|
||||||
(in millions)
|
|
At March 31, 2015
|
|
At December 31, 2014
|
||||
Indemnity
|
|
(Unaudited)
|
|
|
||||
Private equity
|
|
$
|
49
|
|
|
$
|
52
|
|
Mezzanine debt
|
|
14
|
|
|
14
|
|
||
Real estate
|
|
37
|
|
|
47
|
|
||
Total limited partnerships – Indemnity
|
|
$
|
100
|
|
|
$
|
113
|
|
Exchange
|
|
|
|
|
|
|
||
Private equity
|
|
$
|
404
|
|
|
$
|
418
|
|
Mezzanine debt
|
|
172
|
|
|
170
|
|
||
Real estate
|
|
239
|
|
|
278
|
|
||
Total limited partnerships – Exchange
|
|
$
|
815
|
|
|
$
|
866
|
|
|
|
Property and Casualty Group
|
||||||
(in millions)
|
|
At March 31, 2015
|
|
At December 31, 2014
|
||||
|
|
(Unaudited)
|
|
|
||||
Gross reserve liability
(1)
:
|
|
|
|
|
|
|
||
Personal auto
|
|
$
|
1,232
|
|
|
$
|
1,245
|
|
Automobile massive injury
|
|
327
|
|
|
330
|
|
||
Homeowners
|
|
332
|
|
|
279
|
|
||
Workers compensation
|
|
653
|
|
|
636
|
|
||
Workers compensation massive injury
|
|
71
|
|
|
82
|
|
||
Commercial auto
|
|
391
|
|
|
388
|
|
||
Commercial multi-peril
|
|
697
|
|
|
630
|
|
||
All other lines of business
|
|
178
|
|
|
179
|
|
||
Assumed reinsurance
|
|
85
|
|
|
84
|
|
||
Gross reserves
|
|
3,966
|
|
|
3,853
|
|
||
Less: reinsurance recoverable
|
|
143
|
|
|
142
|
|
||
Net reserve liability — Exchange
|
|
$
|
3,823
|
|
|
$
|
3,711
|
|
(1)
|
Loss reserves are set at estimated ultimate costs, except for workers compensation loss reserves which have been discounted using an interest rate of
2.5%
. This discounting reduced unpaid losses and loss expenses by
$88 million
at
March 31, 2015
and
$89 million
at
December 31, 2014
.
|
(in millions)
|
|
Erie Insurance Group
|
||||||
|
|
2015
|
|
2014
|
||||
Net cash provided by operating activities
|
|
$
|
90
|
|
|
$
|
54
|
|
Net cash used in investing activities
|
|
(155
|
)
|
|
(95
|
)
|
||
Net cash used in financing activities
|
|
(29
|
)
|
|
(32
|
)
|
||
Net decrease in cash and cash equivalents
|
|
$
|
(94
|
)
|
|
$
|
(73
|
)
|
(in millions)
|
|
Indemnity Shareholder Interest
|
||||||
|
|
2015
|
|
2014
|
||||
Net cash used in operating activities
|
|
$
|
(15
|
)
|
|
$
|
(9
|
)
|
Net cash provided by investing activities
|
|
13
|
|
|
44
|
|
||
Net cash used in financing activities
|
|
(32
|
)
|
|
(40
|
)
|
||
Net decrease in cash and cash equivalents
|
|
$
|
(34
|
)
|
|
$
|
(5
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 6.
|
EXHIBITS
|
Exhibit
|
|
|
Number
|
|
Description of Exhibit
|
|
|
|
10.1
|
|
First Amendment to Erie Indemnity Company Long-Term Incentive Plan (As Amended and Restated Effective as of January 1, 2014), dated March 25, 2015.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
Erie Indemnity Company
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
April 30, 2015
|
By:
|
/s/ Terrence W. Cavanaugh
|
|
|
|
|
Terrence W. Cavanaugh, President & CEO
|
|
|
|
|
|
|
|
|
By:
|
/s/ Marcia A. Dall
|
|
|
|
|
Marcia A. Dall, Executive Vice President & CFO
|
|
Date:
|
April 30, 2015
|
|
|
|
|
|
|
/s/ Terrence W. Cavanaugh
|
|
|
Terrence W. Cavanaugh
|
|
|
President & CEO
|
Date:
|
April 30, 2015
|
|
|
|
|
|
|
/s/ Marcia A. Dall
|
|
|
Marcia A. Dall
|
|
|
Executive Vice President & CFO
|
(1)
|
The
Quarterly
Report on Form
10-Q
of the Company for the
quarterly
period ended
March 31, 2015
(the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Terrence W. Cavanaugh
|
|
Terrence W. Cavanaugh
|
|
President & CEO
|
|
|
|
/s/ Marcia A. Dall
|
|
Marcia A. Dall
|
|
Executive Vice President & CFO
|
|
|
|
|
|
April 30, 2015
|
|