Erie Indemnity Company

Good morning and welcome to the Erie and Demony Company third quarter 2023 earnings conference call. This call was pre-recorded and there will be no question and answer session following the recording. Now I'd like to introduce your host for the call, Vice President of Investor Relations, Scott Bielhars.

Thank you and welcome everyone. We appreciate you joining us for this recorded discussion about our third quarter results. This recording will include remarks from Tim DeCastro, President and Chief Executive Officer, and Julie Pukowski, Executive Vice President and Chief Financial Officer. Our earnings release and financial supplement were issued yesterday afternoon after the market closed and are available within the investor relations section of our website, erinsurance.com. Before we begin, I would like to remind everyone that today's discussion may contain forward-looking remarks that reflect the company's current views about future events. These remarks are based on assumptions subject to known and unexpected risks and uncertainties. These risks and uncertainties may cause results to differ materially from those described in these remarks. For information on important factors that may cause such differences, please see the Safe Harbor Statements in our Form 10-Q filing with the SEC, dated October 26, 2023, and the related press release. This prerecorded call is the property of Erie Indemnity Company. It may not be reproduced or rebroadcast by any other party without the prior written consent of Erie Indemnity Company. With that, we'll move on to Tim's remarks. Tim?

Thanks, Scott, and good morning, everyone. Before we get into our financial results for the third quarter, I'd like to share some details around a recent announcement we made related to our approach to hybrid work. When we began to return to on-site work last year, we acknowledged we would need to learn and adapt. We knew we'd likely evolve as we experimented with new ways of working following the pandemic. Now, after more than a year of working in a variety of hybrid arrangements, we've learned we need a more consistent approach to how and where we work. We believe it's important to increase the opportunities for employees to work together in person to collaborate and learn from one another. This helps us build stronger bonds with our colleagues and ultimately stronger teams. We also know that in-person interaction is important to our business for building the relationships vital to our business model and for upholding our service promise to customers and agents. At the same time, we recognize employees have come to value the flexibility hybrid arrangements offer. With all that considered, we landed on a balanced and innovative approach It increases opportunities for in-person interactions while giving employees more choice over when they work remotely. Starting in January, employees in hybrid roles will be given an allotment of 52 days to work remotely each year. Employees will work onsite in our offices on days that they are not using an allotted remote day. This revised approach will help preserve the distinct relationship aspects of our business and the vibrant Erie workplaces that support our collaboration creativity, and success. And now let's turn to our financial performance for the third quarter of 2023. With respect to the Area Insurance Exchange, inflation and weather-related events continue to adversely impact our combined ratio. Our year-to-date net combined ratio climbed from 120.8% through the first two quarters to 121.9% by the end of September. Positive investment income was not enough to offset underwriting losses, resulting in a surplus decline of 6% since the second quarter. However, we remain very strong financially with an overall surplus position of $9.1 billion. Like many other carriers, we've been taking rate increases to improve our profitability. These increases, along with an upsurge in customer shopping in response to rising industry rates, have contributed to the 20-year high for growth in our direct written premium. That growth, which is over 16% year-to-date, is further supported by strong retention of 91% for personal and commercial lines combined. With that, I'll turn it over to our Chief Financial Officer, Julie Kalkowski, for a more detailed review of our financials.