Erie Indemnity Company (ERIE, Financial) filed Quarterly Report for the period ended 2009-06-30.
Erie Indemnity Company\'s principal business activity consists of management of the affairs for Erie Insurance Exchange. The company alsoparticipates in the property/casualty insurance business through its three wholly owned subsidiaries Erie Insurance Company Erie Insurance Company of New York and Erie Insurance Property and Casualty Company and through its management of the Flagship City Insurance Company a subsidiary of Erie Insurance Exchange. Erie Indemnity Company has a market cap of $1.95 billion; its shares were traded at around $38.01 with a P/E ratio of 19.1 and P/S ratio of 1.7. The dividend yield of Erie Indemnity Company stocks is 4.7%. Erie Indemnity Company had an annual average earning growth of 8.6% over the past 10 years. GuruFocus rated Erie Indemnity Company the business predictability rank of 2-star.
The Exchange has strong underlying operating cash flows and sufficient liquidity to meet its needs, including the ability to pay the management fees owed to us. Through the six months ended June 30, 2009, the Exchange generated $388.0 million in cash flows from operating activities. At June 30, 2009, the Exchange had $256.6 million in cash and cash equivalents. The Exchange also has an unused $75 million bank line of credit at June 30, 2009. This line of credit was renewed through December 31, 2009. The bank requires compliance with certain covenants. The Exchange was in compliance with all bank covenants at June 30, 2009, which include minimum statutory surplus and risk based capital ratios.
Read the The complete Report
Erie Indemnity Company\'s principal business activity consists of management of the affairs for Erie Insurance Exchange. The company alsoparticipates in the property/casualty insurance business through its three wholly owned subsidiaries Erie Insurance Company Erie Insurance Company of New York and Erie Insurance Property and Casualty Company and through its management of the Flagship City Insurance Company a subsidiary of Erie Insurance Exchange. Erie Indemnity Company has a market cap of $1.95 billion; its shares were traded at around $38.01 with a P/E ratio of 19.1 and P/S ratio of 1.7. The dividend yield of Erie Indemnity Company stocks is 4.7%. Erie Indemnity Company had an annual average earning growth of 8.6% over the past 10 years. GuruFocus rated Erie Indemnity Company the business predictability rank of 2-star.
Highlight of Business Operations:
To the extent that the Exchange incurs underwriting losses or investment losses resulting from declines in the value of its marketable securities or limited partnership investments, the Exchanges policyholders surplus would be adversely affected. If the surplus of the Exchange were to decline significantly from its current level, the Property and Casualty Group could find it more difficult to retain its existing business and attract new business. A decline in the business of the Property and Casualty Group would have an adverse effect on the amount of the management fees we receive and the underwriting results of the Property and Casualty Group. In addition, a significant decline in the surplus of the Exchange from its current level would make it more likely that the management fee rate would be reduced. A decline in surplus could also result from variability in investment markets as realized and unrealized losses are recognized. Due to the continued distress in the securities markets, the Exchange recognized impairment charges of $78.5 million in the second quarter of 2009. To the extent the market downturn continues, the Exchanges investment portfolio may continue to be impacted. In the second quarter of 2009, the Exchange made a capital contribution to EFL in the amount of $43.1 million. The capital will be used to support its life insurance and annuity business and strengthen its surplus as EFLs capital has declined as a result of realized and unrealized investment losses due to the turmoil in the financial markets in the second half of 2008 and the continued volatility in 2009. Despite these recent market events, at June 30, 2009, the Exchange had $3.9 billion in statutory surplus and a premium to surplus ratio of less than 1 to 1.The Exchange has strong underlying operating cash flows and sufficient liquidity to meet its needs, including the ability to pay the management fees owed to us. Through the six months ended June 30, 2009, the Exchange generated $388.0 million in cash flows from operating activities. At June 30, 2009, the Exchange had $256.6 million in cash and cash equivalents. The Exchange also has an unused $75 million bank line of credit at June 30, 2009. This line of credit was renewed through December 31, 2009. The bank requires compliance with certain covenants. The Exchange was in compliance with all bank covenants at June 30, 2009, which include minimum statutory surplus and risk based capital ratios.
Read the The complete Report
