ERIE, Pa., Dec. 3, 2014
/PRNewswire/ -- At its regular meeting held December 2, 2014, 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.
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,
2015. The management fee rate was 25 percent for the period
January 1 through December 31,
2014. 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 $0.635 to $0.681 on each Class A share and from
$95.25 to $102.15 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 21, 2015, to shareholders of
record as of January 6, 2015, with a
dividend ex-date of January 2,
2015. 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
11th largest homeowners insurer and 12th
largest automobile insurer in the United
States based on direct premiums written and the
16th 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 4.9 million policies in force and operates
in 12 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 award for
"Highest in Customer Satisfaction with the Auto Insurance Purchase
Experience" two years in a row. ERIE has also been recognized by Forbes as one
of America's 50 Most Trustworthy Financial Companies and is 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 (2009-2013).
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;
- 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 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 litigation against the
Exchange; and
- dependence 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.
(ERIE – F)
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SOURCE Erie Indemnity Company