Erie Insurance Group, (NASDAQ: ERIE) is a multi-line insurance company, offering auto, home, commercial and life insurance through a network of independent insurance agents. ERIE’s geographic presence extends to 11 states and the District of Columbia, including Illinois, Indiana, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin.
The Pennsylvania Insurance Department issued a license to the Erie Insurance Exchange as an automobile insurer in 1925 and operations began on April 20, 1925. Erie Insurance Exchange was formed as a reciprocal and Erie Indemnity Company was formed as its managing company. The annual premium charge per auto was $34. The founding purpose of the company was the same as it is today: "To provide our policyholders with as near perfect protection, as near perfect service as is humanly possible and to do so at the lowest possible cost." In 1940 the company added a new line—fire insurance— allowing independent agents to more fully depend on ERIE to fulfill the insurance needs of their customers. In September, 1967 the Erie Family Life Insurance Company was founded adding life insurance to the protection offered by ERIE Agents.
We are proud to announce the Grand Opening of our new independent agency, Canopy Insurance; a full service agency offering a complete line of products throughout the state of Virginia. As we are a very techno savy agency, we cater to the busy professional and have a unique ability to offer the ease of 24 hour communication with the personalized support of local agents.
We believe that it is important to have a personal agent who will take the time to understand your individual circumstances and build a package to address your specific needs. We also realize that ease of doing business is of the utmost importance. Our website empowers our clients to make many types of requests, obtain instant auto quotes, make payments and file claims over a secure platform, 24 hours a day, 7 days a week.
Canopy Insurance was founded by agent, Becky Reid. The following is an excerpt from Becky's blog on ActiveRain:
"Over 17 years in the insurance business in the greater Charlottesville area has taught me that the most important skill I have attained is the ability to listen! I believe that in order to be an effective agent I must first know what it is that I'm trying to protect and what a client's attitudes are towards insurance. Are you someone who likes to understand every aspect of your policy or would you rather not be bothered and would simply prefer recommendations? Do you feel better if you know you have high level of coverage? A thorough evaluation of existing assets, potential risks and any unique concerns will help me determine what products may be best suited. Whether it be your home, auto, life, business, or toys such as motorhome or boats, I can provide guidance and information to help you make an informed decision!"
At Erie Indemnity Company, we provide sales,
underwriting and policy issuance services as the
attorney-in-fact for the Erie Insurance Exchange,
a reciprocal insurance exchange. We are also
engaged in the property/casualty insurance
business through three wholly-owned insurance subsidiaries
and have a common stock interest in Erie Family Life, an
affiliated life insurance company. The Exchange, the Company
and their subsidiaries and affiliates operate collectively under
the name Erie Insurance Group (The ERIE). The ERIE seeks to
insure standard and preferred risks in property/casualty and life
markets, primarily private passenger automobile, homeowners,
commercial lines and life and annuity lines.
Based in Erie, Pa., since 1925, The ERIE is represented in 11
midwestern, mid-Atlantic and southeastern states and the
District of Columbia by nearly 2,000 independent insurance
agencies, and it is staffed by more than 4,100 Employees at its
home office and 23 field offices.
For more than 82 years, Erie Insurance has been
protecting our Policyholders and securing their
peace of mind. Our approach to the insurance
business is simple. We do the right thing.
Policyholders know they can count on our Employees and
Agents to adhere to that philosophy. And we hold ourselves
to that standard everywhere in our organization. Doing so
keeps us strong.
We plan to be here for at least another 82 years, doing
the right thing for the people who depend on us — our
Policyholders and their families.
That’s why after officially retiring early in 2007 (after 38
years at The ERIE), I agreed to come back a few months
later, in August, to serve as ERIE’s president and CEO.
I fully intend to go back to retirement after our Board of
Directors selects a new CEO; but for now, I’m fully engaged
and, together with our leadership team, our Employees,
our Agents, and our Board, we are continuing to move
ERIE forward.
Erie Indemnity Company — your Company — is the
management company of Erie Insurance Exchange. The
Exchange is a reciprocal property and casualty insurer
and the largest of all the companies in the Erie Insurance
Group. Erie Indemnity Company is our only public entity
and a significant portion of its revenues comes from themanagement fee paid by the Exchange. The fee is derived
from the direct written premiums of the Exchange and
cannot exceed 25 percent.
For 2007, the Board of Directors set the fee rate at 25 percent
and maintained that fee rate going forward into 2008.
The fee rate for 2006 was set at 24.75 percent. Because the
performance of Erie Indemnity Company is inextricably
linked to the performance of the Erie Insurance Group of
companies, you’ll see reference to the Property & Casualty
Group and Erie Family Life Insurance Company throughout
this annual report. The way we run our total operation
impacts the results of Erie Indemnity Company
1. Review the adequacy of this Charter at least annually and recommend any proposed changes to the Board for approval.
2. Review the annual audited financial statements prior to filing or distribution. The review should include discussions with management and the independent auditors of any significant issues regarding accounting principles, practices and judgments.
3. Consider the integrity of the Company's financial reporting processes and controls in consultation with management, the independent auditors and the internal auditors. Discuss significant financial risk exposures and the steps management has taken to monitor, control, and report such exposures and to identify any payments or procedures that might be deemed illegal or improper. Review significant findings presented by the independent auditors and the internal audit department together with management's responses.
4. Oversee the Company’s enterprise risk management process by meeting periodically with management to inquire about significant risks and exposures, and to review and assess the steps taken to monitor and manage such risks.
5. Review with management and the independent auditors, the Company's quarterly financial statements prior to the public release of earnings and the filing or distribution of the quarterly financial statements. The review shall encompass discussion of any significant issues arising during the independent auditors’ limited review procedures.
6. Review and discuss any significant changes to the Company's accounting principles and any items required to be communicated by the independent auditors in accordance with the American Institute of Certified Public Accountants Statements of Auditing Standards or other applicable accounting standards.
7. Select, evaluate, and, if appropriate, replace the independent auditors. The independent auditors are ultimately accountable to the Board of Directors and the Audit Committee, as representatives of shareholders.
8.
Approve the fees and other significant compensation to be paid to the independent auditors for the purpose of preparing or issuing an audit report or related work. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of fees and other significant compensation to the independent auditors.
9.
Preapprove all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to the de minimis exceptions for non-audit services described in the Securities Exchange Act of 1934 (hereafter “Exchange Act”) and any applicable rules adopted thereunder by the SEC. The Committee may delegate preapproval authority to a member, provided that decisions of such member shall be presented to the full Audit Committee at its next scheduled meeting.
10.
Review and discuss with the independent auditors annually all significant relationships they have with the Company that could impair the auditors’ independence.
11. Review the independent auditors' audit plan and engagement letter to determine if it is sufficiently detailed and covers any significant areas of concern the Audit Committee may have. This review should include the scope, staffing, locations, reliance upon management and internal audit and general audit approach.
12.
Review and discuss the fourth quarter and year-end earnings with the independent auditors prior to the public release of the year-end results.
- 3 -
13. Review and consider the independent auditors' judgment regarding the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting.
14. Discuss with the independent and internal auditors whether there are any reportable instances of internal control weaknesses.
15.
Review management’s assertion on its assessment of the effectiveness of internal controls as of the end of the most recent fiscal year and the independent auditors’ report on management’s assertion.
16.
Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
In 2007, we enhanced our property/casualty products to
ensure competitive coverages with the flexibility for individual
customer needs. Enhancements include the availability of
flood insurance and new coverages in our commercial line.
We’ve updated our commercial product endorsements with
coverages tailored to specific types of businesses and we
introduced employment practices liability (EPL) coverage.
Erie Family Life introduced a new CD-type annuity series that
offers three, five and seven year options. In keeping with our
commitment to being Above All in ser vice, we expanded
our online quoting options for potential customers and ERIE
Agents, and added online features such as customer call back.
Westfield Insurance has joined Future One, a collaboration of the Big “I” and leading independent agency companies. Future One brings the industry’s stakeholders together to develop policy consensus on both national and state-specific issues and works to implement changes in insurance law.
“Westfield is powered by our independent agency partners,” says Patricia Schiesswohl, Westfield Insurance Group marketing leader. “Our support for Future One is an investment in the success of our partnership as together we strive to grow business by delivering value to customers.”
Established in 1981, Future One is the longest-standing, agent-company coalition in the country. It conducts a biennial Agency Universe Study that investigates and analyzes trends affecting the independent agency system and the decisions of consumers relative to the purchase of insurance. This study, first conducted in 1983, is widely regarded as the most comprehensive and authoritative investigation available on the independent agency distribution force. Carriers then use this information to develop and refine industry-specific best practices.
Recent Future One involvement includes credit scoring, efforts to repeal the McCarran-Ferguson Act’s antitrust exemption, extension/reform of the National Flood Insurance Program (NFIP), natural disaster legislation, agent licensing reform, systemic risk/resolution authority, certificates of insurance, excess and surplus lines reform and health care reform.
In addition to the Big “I” and Westfield Insurance, the Future One coalition includes the following company partners: Allied Insurance, Allstate, Amerisure Insurance, Central Insurance Companies, Chubb Group of Insurance Companies, CNA, Encompass, Erie Insurance, The Hanover Insurance Group, The Hartford, Hartford Steam Boiler, Liberty Mutual Agency Markets, Progressive, Selective Insurance Group, Travelers, and Zurich North America.
The Pennsylvania Insurance Department issued a license to the Erie Insurance Exchange as an automobile insurer in 1925 and operations began on April 20, 1925. Erie Insurance Exchange was formed as a reciprocal and Erie Indemnity Company was formed as its managing company. The annual premium charge per auto was $34. The founding purpose of the company was the same as it is today: "To provide our policyholders with as near perfect protection, as near perfect service as is humanly possible and to do so at the lowest possible cost." In 1940 the company added a new line—fire insurance— allowing independent agents to more fully depend on ERIE to fulfill the insurance needs of their customers. In September, 1967 the Erie Family Life Insurance Company was founded adding life insurance to the protection offered by ERIE Agents.
We are proud to announce the Grand Opening of our new independent agency, Canopy Insurance; a full service agency offering a complete line of products throughout the state of Virginia. As we are a very techno savy agency, we cater to the busy professional and have a unique ability to offer the ease of 24 hour communication with the personalized support of local agents.
We believe that it is important to have a personal agent who will take the time to understand your individual circumstances and build a package to address your specific needs. We also realize that ease of doing business is of the utmost importance. Our website empowers our clients to make many types of requests, obtain instant auto quotes, make payments and file claims over a secure platform, 24 hours a day, 7 days a week.
Canopy Insurance was founded by agent, Becky Reid. The following is an excerpt from Becky's blog on ActiveRain:
"Over 17 years in the insurance business in the greater Charlottesville area has taught me that the most important skill I have attained is the ability to listen! I believe that in order to be an effective agent I must first know what it is that I'm trying to protect and what a client's attitudes are towards insurance. Are you someone who likes to understand every aspect of your policy or would you rather not be bothered and would simply prefer recommendations? Do you feel better if you know you have high level of coverage? A thorough evaluation of existing assets, potential risks and any unique concerns will help me determine what products may be best suited. Whether it be your home, auto, life, business, or toys such as motorhome or boats, I can provide guidance and information to help you make an informed decision!"
At Erie Indemnity Company, we provide sales,
underwriting and policy issuance services as the
attorney-in-fact for the Erie Insurance Exchange,
a reciprocal insurance exchange. We are also
engaged in the property/casualty insurance
business through three wholly-owned insurance subsidiaries
and have a common stock interest in Erie Family Life, an
affiliated life insurance company. The Exchange, the Company
and their subsidiaries and affiliates operate collectively under
the name Erie Insurance Group (The ERIE). The ERIE seeks to
insure standard and preferred risks in property/casualty and life
markets, primarily private passenger automobile, homeowners,
commercial lines and life and annuity lines.
Based in Erie, Pa., since 1925, The ERIE is represented in 11
midwestern, mid-Atlantic and southeastern states and the
District of Columbia by nearly 2,000 independent insurance
agencies, and it is staffed by more than 4,100 Employees at its
home office and 23 field offices.
For more than 82 years, Erie Insurance has been
protecting our Policyholders and securing their
peace of mind. Our approach to the insurance
business is simple. We do the right thing.
Policyholders know they can count on our Employees and
Agents to adhere to that philosophy. And we hold ourselves
to that standard everywhere in our organization. Doing so
keeps us strong.
We plan to be here for at least another 82 years, doing
the right thing for the people who depend on us — our
Policyholders and their families.
That’s why after officially retiring early in 2007 (after 38
years at The ERIE), I agreed to come back a few months
later, in August, to serve as ERIE’s president and CEO.
I fully intend to go back to retirement after our Board of
Directors selects a new CEO; but for now, I’m fully engaged
and, together with our leadership team, our Employees,
our Agents, and our Board, we are continuing to move
ERIE forward.
Erie Indemnity Company — your Company — is the
management company of Erie Insurance Exchange. The
Exchange is a reciprocal property and casualty insurer
and the largest of all the companies in the Erie Insurance
Group. Erie Indemnity Company is our only public entity
and a significant portion of its revenues comes from themanagement fee paid by the Exchange. The fee is derived
from the direct written premiums of the Exchange and
cannot exceed 25 percent.
For 2007, the Board of Directors set the fee rate at 25 percent
and maintained that fee rate going forward into 2008.
The fee rate for 2006 was set at 24.75 percent. Because the
performance of Erie Indemnity Company is inextricably
linked to the performance of the Erie Insurance Group of
companies, you’ll see reference to the Property & Casualty
Group and Erie Family Life Insurance Company throughout
this annual report. The way we run our total operation
impacts the results of Erie Indemnity Company
1. Review the adequacy of this Charter at least annually and recommend any proposed changes to the Board for approval.
2. Review the annual audited financial statements prior to filing or distribution. The review should include discussions with management and the independent auditors of any significant issues regarding accounting principles, practices and judgments.
3. Consider the integrity of the Company's financial reporting processes and controls in consultation with management, the independent auditors and the internal auditors. Discuss significant financial risk exposures and the steps management has taken to monitor, control, and report such exposures and to identify any payments or procedures that might be deemed illegal or improper. Review significant findings presented by the independent auditors and the internal audit department together with management's responses.
4. Oversee the Company’s enterprise risk management process by meeting periodically with management to inquire about significant risks and exposures, and to review and assess the steps taken to monitor and manage such risks.
5. Review with management and the independent auditors, the Company's quarterly financial statements prior to the public release of earnings and the filing or distribution of the quarterly financial statements. The review shall encompass discussion of any significant issues arising during the independent auditors’ limited review procedures.
6. Review and discuss any significant changes to the Company's accounting principles and any items required to be communicated by the independent auditors in accordance with the American Institute of Certified Public Accountants Statements of Auditing Standards or other applicable accounting standards.
7. Select, evaluate, and, if appropriate, replace the independent auditors. The independent auditors are ultimately accountable to the Board of Directors and the Audit Committee, as representatives of shareholders.
8.
Approve the fees and other significant compensation to be paid to the independent auditors for the purpose of preparing or issuing an audit report or related work. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of fees and other significant compensation to the independent auditors.
9.
Preapprove all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to the de minimis exceptions for non-audit services described in the Securities Exchange Act of 1934 (hereafter “Exchange Act”) and any applicable rules adopted thereunder by the SEC. The Committee may delegate preapproval authority to a member, provided that decisions of such member shall be presented to the full Audit Committee at its next scheduled meeting.
10.
Review and discuss with the independent auditors annually all significant relationships they have with the Company that could impair the auditors’ independence.
11. Review the independent auditors' audit plan and engagement letter to determine if it is sufficiently detailed and covers any significant areas of concern the Audit Committee may have. This review should include the scope, staffing, locations, reliance upon management and internal audit and general audit approach.
12.
Review and discuss the fourth quarter and year-end earnings with the independent auditors prior to the public release of the year-end results.
- 3 -
13. Review and consider the independent auditors' judgment regarding the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting.
14. Discuss with the independent and internal auditors whether there are any reportable instances of internal control weaknesses.
15.
Review management’s assertion on its assessment of the effectiveness of internal controls as of the end of the most recent fiscal year and the independent auditors’ report on management’s assertion.
16.
Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
In 2007, we enhanced our property/casualty products to
ensure competitive coverages with the flexibility for individual
customer needs. Enhancements include the availability of
flood insurance and new coverages in our commercial line.
We’ve updated our commercial product endorsements with
coverages tailored to specific types of businesses and we
introduced employment practices liability (EPL) coverage.
Erie Family Life introduced a new CD-type annuity series that
offers three, five and seven year options. In keeping with our
commitment to being Above All in ser vice, we expanded
our online quoting options for potential customers and ERIE
Agents, and added online features such as customer call back.
Westfield Insurance has joined Future One, a collaboration of the Big “I” and leading independent agency companies. Future One brings the industry’s stakeholders together to develop policy consensus on both national and state-specific issues and works to implement changes in insurance law.
“Westfield is powered by our independent agency partners,” says Patricia Schiesswohl, Westfield Insurance Group marketing leader. “Our support for Future One is an investment in the success of our partnership as together we strive to grow business by delivering value to customers.”
Established in 1981, Future One is the longest-standing, agent-company coalition in the country. It conducts a biennial Agency Universe Study that investigates and analyzes trends affecting the independent agency system and the decisions of consumers relative to the purchase of insurance. This study, first conducted in 1983, is widely regarded as the most comprehensive and authoritative investigation available on the independent agency distribution force. Carriers then use this information to develop and refine industry-specific best practices.
Recent Future One involvement includes credit scoring, efforts to repeal the McCarran-Ferguson Act’s antitrust exemption, extension/reform of the National Flood Insurance Program (NFIP), natural disaster legislation, agent licensing reform, systemic risk/resolution authority, certificates of insurance, excess and surplus lines reform and health care reform.
In addition to the Big “I” and Westfield Insurance, the Future One coalition includes the following company partners: Allied Insurance, Allstate, Amerisure Insurance, Central Insurance Companies, Chubb Group of Insurance Companies, CNA, Encompass, Erie Insurance, The Hanover Insurance Group, The Hartford, Hartford Steam Boiler, Liberty Mutual Agency Markets, Progressive, Selective Insurance Group, Travelers, and Zurich North America.
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