ERIE, Pa., Dec. 4, 2013 /PRNewswire/ -- At its regular
meeting held December 3, 2013, the
Board of Directors of Erie Indemnity Company (NASDAQ: ERIE) set the management fee rate charged to
Erie Insurance Exchange, approved an increase in shareholder
dividends and declared the quarterly dividend.
(Logo: http://photos.prnewswire.com/prnh/20041112/ERIELOGO )
The Board agreed to maintain the current management fee rate
paid to Erie Indemnity Company by Erie Insurance Exchange at 25
percent, effective January 1, 2014.
The management fee rate was 25 percent for the period January 1 through December 31, 2013. The Board
has the authority under the agreement with the subscribers
(policyholders) at Erie Insurance Exchange to set the management
fee rate at its discretion; however, the maximum fee rate
permissible by the agreement is 25 percent. This action was taken
based on the Board's consideration and review of the relative
financial positions of Erie Insurance Exchange and Erie Indemnity
Company.
The Board also agreed to increase the regular quarterly cash
dividend from $0.5925 to $0.635 on each Class A share and from
$88.875 to $95.25 on each Class B share. This represents a
7.2 percent increase in the payout per share over the current
dividend rate. The next quarterly dividend is payable January 22, 2014, to shareholders of record as of
January 7, 2014, with a dividend
ex-date of January 3, 2014. Erie
Indemnity Company has paid regular shareholder dividends since
1933.
According to A.M. Best Company, Erie Insurance Group, based in
Erie, Pennsylvania, is the 14th
largest homeowners insurer and 12th largest automobile insurer in
the United States based on direct
premiums written and the 18th largest property/casualty insurer in
the United States based on total
lines net premium written. The Group, rated A+ (Superior) by A.M.
Best Company, has more than 4.7 million policies in force and
operates in 11 states and the District of
Columbia. Erie Insurance Group is a FORTUNE 500 and Barron's
500 company. Erie Insurance is proud to have received the J.D.
Power and Associates' award for "Highest in Customer Satisfaction
with Small Business Commercial Insurance" and "Highest in Customer
Satisfaction with the Auto Insurance Purchase Experience" in 2013,
and to be a J.D. Power and Associates' 2012 Customer Service
Champion. ERIE is one of only 50
U.S. companies so named. Erie Insurance is also recognized on the
list of Ward's 50 Group of top performing insurance companies,
which analyzes the financial performance of 3,000 property and
casualty companies and recognizes the top performers for achieving
outstanding results in safety, consistency and financial
performance over a five-year period (2008-2012).
News releases and more information about Erie Insurance Group
are available at www.erieinsurance.com.
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995:
Statements contained herein that are not historical fact are
forward-looking statements and, as such, are subject to risks and
uncertainties that could cause actual events and results to differ,
perhaps materially, from those discussed herein. Forward-looking
statements relate to future trends, events or results and include,
without limitation, statements and assumptions on which such
statements are based that are related to our plans, strategies,
objectives, expectations, intentions and adequacy of resources.
Examples of forward-looking statements are discussions relating to
premium and investment income, expenses, operating results, agency
relationships, and compliance with contractual and regulatory
requirements. Forward-looking statements are not guarantees of
future performance and involve risks and uncertainties that are
difficult to predict. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such
forward-looking statements. Among the risks and uncertainties, in
addition to those set forth in our filings with the Securities and
Exchange Commission, that could cause actual results and future
events to differ from those set forth or contemplated in the
forward-looking statements include the following:
Risk factors related to the Indemnity shareholder interest:
- dependence on 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,
including information technology systems;
- 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 litigations against
Indemnity.
Risk factors related to the non-controlling interest owned by
the Exchange, which includes the Property and Casualty Group and
EFL:
- 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;
- 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 rating;
- outcome of pending and potential litigations against the
Exchange; and
- dependency upon the service provided by Indemnity.
A forward-looking statement speaks only as of the date on which
it is made and reflects Indemnity's analysis only as of that date.
Indemnity undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events, changes in assumptions, or otherwise.
SOURCE Erie Indemnity Company