Erie Indemnity Company (Form: 8-K)

•

Net income attributable to Indemnity per share-diluted was $0.87 per share in the third quarter of 2011 compared to net income per share-diluted of $0.94 per share in the third quarter of 2010. The third quarter 2010 net income amount includes $0.13 per share related to operations sold to the Exchange.

•

Operating income attributable to Indemnity per share-diluted (excluding net realized gains or losses, impairments on investments and related taxes) was $0.93 per share in the third quarter of 2011 compared to $0.89 per share in the third quarter of 2010. The third quarter 2010 operating income amount includes $0.12 per share related to operations sold to the Exchange.

•

Gross margin from management operations was 21.7 percent in the third quarter of 2011 compared to 21.1 percent in the third quarter of 2010.

•

Indemnity’s investment operations pretax income totaled $5 million for the third quarter of 2011 compared to $20 million for the third quarter of 2010.

Erie, Pa., November 3, 2011 – Erie Indemnity Company (NASDAQ: ERIE) today announced third quarter 2011 earnings of $47 million, compared to earnings of $54 million in the third quarter of 2010. Operating income was $51 million in both the third quarters of 2011 and 2010.

Note: The accompanying consolidated financial statements of Erie Indemnity Company (“Indemnity”) reflect the consolidated results of Indemnity and the Erie Insurance Exchange (“Exchange”), which we refer to collectively as the “Erie Insurance Group.”

Indemnity or Indemnity shareholder interest refers to the interest in Erie Indemnity Company owned by the Class A and Class B shareholders. The Exchange refers to the noncontrolling interest held for the interest of the subscribers (policyholders) and includes its interest in its property and casualty subsidiaries and Erie Family Life Insurance Company (“EFL”).

The following table shows the consolidated results of the Erie Insurance Group by operating segment:


Results of the Erie Insurance Group’s Operations
	Indemnity shareholder interest				Noncontrolling interest (Exchange)					Elimination of related party transactions						Erie Insurance Group
(dollars in millions)		3Q’11		3Q’10		3Q’11			3Q’10		3Q’11			3Q’10			3Q’11			3Q’10

Management operations	$	62	$	58	$	-		$	-	$	(54	)	$	(49	)	$	8		$	9
Property and casualty insurance operations		—		1		(80	)		11		57			52			(23	)		64
Life insurance operations		—		3		13			13		0			0			13			16
Investment operations		5		20		(305	)		299		(3	)		(3	)		(303	)		316

Income (loss) from operations before income taxes and noncontrolling interest		67		82		(372	)		323		—			—			(305	)		405
Provision for income taxes		20		28		(145	)		102		—			—			(125	)		130

Net income (loss)	$	47	$	54	$	(227	)	$	221	$	-		$	-		$	(180	)	$	275

The following sections highlight and discuss the results of management operations, property and casualty insurance operations, life insurance operations and investment operations related to the Indemnity shareholder interest.


Management Operations
	Indemnity shareholder interest						Noncontrolling interest (Exchange)				Elimination of related party transactions						Erie Insurance Group
(dollars in millions)		3Q’11			3Q’10			3Q’11		3Q’10		3Q’11			3Q’10			3Q’11		3Q’10

Management fee revenue, net	$	280		$	266		$	—	$	—	$	(280	)	$	(266	)	$	—	$	—
Service agreement revenue		8			9			—		—		—			—			8		9

Total revenue from management operations		288			275			—		—		(280	)		(266	)		8		9
Cost of management operations		226			217			—		-		(226	)		(217	)		-		-

Income from management operations before taxes		$62		$	58		$	—	$	-	$	(54	)	$	(49	)	$	8	$	9

Gross margin		21.7	%		21.1	%

•

The management fee rate was 25 percent for both the third quarters of 2011 and 2010. Direct written premiums of the property and casualty insurance operations, upon which the management fee is calculated, increased 5.4 percent in the third quarter of 2011, due to a 2.6 percent increase in policies in force and increases in average premium. The year-over-year average premium per policy for all lines of business increased 2.9 percent at September 30, 2011, compared to an increase of 0.4 percent at September 30, 2010.

•

The cost of management operations increased to $226 million in the third quarter 2011 from $217 million in the third quarter of 2010. Third quarter 2011 commissions increased $2 million compared to the third quarter of 2010, while third quarter 2011 non-commission expense increased $7 million. The increase in non-commission expense was primarily due to increases in personnel costs of $2 million, professional fees of $3 million and software expenses of $2 million.


Property and Casualty Insurance Operations
	Indemnity shareholder interest					Noncontrolling interest (Exchange)						Elimination of related party transactions						Erie Insurance Group
(dollars in millions)		3Q’11		3Q’10			3Q’11			3Q’10			3Q’11			3Q’10			3Q’11			3Q’10

Net premiums earned	$	—	$	55		$	1,045		$	935		$	-		$	-		$	1,045		$	990

Losses and loss expenses		—		38			823			652			(1	)		(1	)		822			689
Policy acquisition and other underwriting expenses		—		16			302			272			(56	)		(51	)		246			237

Total losses and expenses		—		54			1,125			924			(57	)		(52	)		1,068			926

Income (loss) from property and casualty insurance operations before taxes	$	—	$	1		$	(80	)	$	11		$	57		$	52		$	(23	)	$	64

Combined ratio		—		98.7	%		107.7	%		98.7	%

•

Prior to and through December 31, 2010, the underwriting results retained by Erie Insurance Company (“EIC”) and Erie Insurance Company of New York (“ENY”) accrued to the Indemnity shareholder interest. Due to the sale of Indemnity’s property and casualty subsidiaries to the Exchange on December 31, 2010, all property and casualty underwriting results accrue to the interest of the subscribers (policyholders) of the Exchange, or noncontrolling interest, beginning in the first quarter of 2011.

•

Beginning late in the first quarter and continuing through the third quarter of 2011, many of the Exchange’s operating territories experienced severe weather events. For the third quarter of 2011, the Exchange’s GAAP (U.S. generally accepted accounting principles) combined ratio totaled 107.7 and included 16.7 points, or $174 million of catastrophe related losses. These losses did not impact Indemnity’s financial results.


Life Insurance Operations
	Indemnity shareholder interest				Noncontrolling interest (Exchange)				Elimination of related party transactions					Erie Insurance Group
(dollars in millions)		3Q’11		3Q’10		3Q’11		3Q’10		3Q’11		3Q’10			3Q’11		3Q’10

Total revenue	$	—	$	10	$	46	$	33	$	0	$	(1	)	$	46	$	42
Total benefits and expenses		—		7		33		20		0		(1	)		33		26

Income from life insurance operations before taxes	$	—	$	3	$	13	$	13	$	0	$	0		$	13	$	16

•

Prior to and through March 31, 2011, Indemnity retained a 21.6 percent ownership interest in EFL which accrued to the Indemnity shareholder interest. Due to the sale of Indemnity’s ownership interest in EFL to the Exchange on March 31, 2011, all life insurance results accrue to the interest of the subscribers (policyholders) of the Exchange, or noncontrolling interest, beginning in the second quarter of 2011.


Investment Operations
	Indemnity shareholder interest					Noncontrolling interest (Exchange)					Elimination of related party transactions						Erie Insurance Group
(dollars in millions)		3Q’11			3Q’10		3Q’11			3Q’10		3Q’11			3Q’10			3Q’11			3Q’10

Net investment income	$	4		$	10	$	83		$	79	$	(3	)	$	(3	)	$	84		$	86
Net realized (losses) gains on investments		(6	)		5		(421	)		197		—			—			(427	)		202
Net impairment losses recognized in earnings		0			0		0			0		—			—			0			0
Equity in earnings of limited partnerships		7			5		33			23		—			—			40			28
Income (loss) from investment operations before taxes	$	5		$	20	$	(305	)	$	299	$	(3	)	$	(3	)	$	(303	)	$	316

•

Net investment income, which primarily includes interest and dividends on bonds and stocks, decreased $6 million in the third quarter of 2011. The third quarter of 2010 includes $6 million of net investment income from EIC, ENY and Erie Insurance Property & Casualty Company which were sold to the Exchange on December 31, 2010.

•

Net realized losses on investments totaled $6 million in the third quarter of 2011 compared to gains of $5 million recorded in the third quarter of 2010. The realized losses generated in the third quarter of 2011 were primarily due to decreases in the valuation on the common stock portfolio.

•

Equity in earnings of limited partnerships increased $2 million in the third quarter of 2011, driven by improved performance in the mezzanine debt and private equity sectors compared to the third quarter of 2010.

Net income attributable to Indemnity per share-diluted was $2.59 per share for the nine months ended September 30, 2011, compared to $2.62 per share for the nine months ended September 30, 2010. The net income for 2011 and 2010 includes $0.02 and $0.33 per share, respectively, related to operations sold to the Exchange.

Operating income attributable to Indemnity per share-diluted (excluding net realized gains or losses, impairments on investments and related taxes) was $2.57 per share in the first nine months of 2011, compared to $2.55 in the first nine months of 2010. The 2011 and 2010 operating income amounts include $0.02 and $0.29 per share, respectively, related to operations sold to the Exchange.

In the third quarter of 2011, we repurchased 0.6 million shares of our outstanding Class A nonvoting common stock at a total cost of $42 million in conjunction with our current stock repurchase program. For the year through October 20, 2011, shares repurchased under this program totaled 2.0 million at a total cost of $141 million. In December 2010, our Board of Directors approved a continuation of the current stock repurchase program for a total of $150 million. As of October 20, 2011, we had approximately $5 million in repurchase authority remaining under the program. Additionally, on October 26, 2011, our Board of Directors approved a continuation of the current stock repurchase program for a total of $150 million, with no time limitation. This repurchase authority includes, and is not in addition to, any unspent amounts remaining under the prior authorization.

According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 12th largest automobile and homeowners insurer in the United States based on direct premiums written and the 20th 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 over 4.3 million policies in force and operates in 11 states and the District of Columbia. Erie Insurance Group is a FORTUNE 500 company.
Erie Insurance is proud to be named a J.D. Power and Associates’ 2011 Customer Service Champion and is only one of 40 companies so named in the U.S. Erie Insurance has also been recognized on the list of Ward’s 50 Group of top performing insurance companies. The Ward’s 50 award analyzes the financial performance of 3,000 property and casualty companies and recognizes the top performers for achieving outstanding financial results in safety and consistency over a five-year period (2006-2010).

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:

•

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 maintain the uninterrupted operations of our business, including our information technology system;

Risk factors related to the non-controlling interest owned by the Exchange, which includes the Property and Casualty Group and EFL:

•

government regulation of the insurance industry, including approval of rate increases and rating factors such as credit and prior experience, and required processes related to underwriting and claims handling;

•

the uncertain role of the Federal Government, and the ongoing role of the States, in regulating the property/casualty or life insurance industries;

•

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;

•

severe weather conditions or other catastrophic losses, including terrorism;

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.


	Three			Three		Nine			Nine
	months			months		months			months
	ended			ended		ended			ended
	September 30,			September 30,		September 30,			September 30,
Revenues	2011			2010		2011			2010
Premiums earned	$	1,061		$	1,005	$	3,138		$	2,972
Net investment income		108			110		326			322
Net realized investment (losses) gains		(422	)		205		(234	)		117
Net impairment losses recognized in earnings		0			0		0			(6	)
Equity in earnings of limited partnerships		40			28		150			58
Other income		9			9		26			26

Total revenues		796			1,357		3,406			3,489

Benefits and expenses
Insurance losses and loss expenses		848			710		2,724			2,208
Policy acquisition and underwriting expenses		253			242		749			699

Total benefits and expenses		1,101			952		3,473			2,907

(Loss) income from operations before income taxes
and noncontrolling interest		(305	)		405		(67	)		582
Provision for income taxes		(125	)		130		(54	)		176

Net (loss) income		(180	)		275		(13	)		406
Less: Net (loss) income attributable to noncontrolling
interest in consolidated entity – Exchange		(227	)		221		(156	)		256

Net income attributable to Indemnity	$	47		$	54	$	143		$	150

Earnings Per Share
Net income attributable to Indemnity per share
Class A common stock – basic	$	0.97		$	1.05	$	2.90		$	2.92

Class A common stock – diluted	$	0.87		$	0.94	$	2.59		$	2.62

Class B common stock – basic and diluted	$	146.67		$	150.87	$	439.39		$	421.91

Weighted average shares outstanding attributable to
Indemnity – Basic
Class A common stock		48,503,383			50,499,551		49,176,124			50,897,035

Class B common stock		2,546			2,546		2,546			2,546

Weighted average shares outstanding attributable to
Indemnity – Diluted
Class A common stock		54,685,021			56,678,321		55,357,762			57,075,805

Class B common stock		2,546			2,546		2,546			2,546

Dividends declared per share
Class A common stock	$	0.515		$	0.48	$	1.545		$	1.44

Class B common stock	$	77.25		$	72.00	$	231.75		$	216.00


																Eliminations of
																related party
	Indemnity shareholder interest								Noncontrolling interest (Exchange)							transactions						Erie Insurance Group
				Three months ended							Three months ended					Three months ended						Three months ended
				September 30,							September 30,					September 30,						September 30,
	Percent			2011			2010		Percent		2011			2010		2011			2010			2011			2010
Management operations:

Management fee revenue, net		100.0	%	$	280		$	266			$	0		$	0	$	(280	)	$	(266	)	$	0		$	0
Service agreement revenue		100.0	%		8			9				0			0		0			0			8			9

Total revenue from management operations					288			275				0			0		(280	)		(266	)		8			9
Cost of management operations		100.0	%		226			217				0			0		(226	)		(217	)		0			0

*Income from management operations before taxes*					62			58				0			0		(54	)		(49	)		8			9

Property and casualty insurance operations: ⁽²⁾

Net premiums earned		5.5%⁽²⁾			0			55		94.5%⁽²⁾		1,045			935		0			0			1,045			990
Losses and loss expenses		5.5%⁽²⁾			0			38		94.5%⁽²⁾		823			652		(1	)		(1	)		822			689
Policy acquisition and other underwriting expenses		5.5%⁽²⁾			0			16		94.5%⁽²⁾		302			272		(56	)		(51	)		246			237

Income(loss) from property and casualty insurance operations before taxes					0			1				(80	)		11		57			52			(23	)		64

Life insurance operations:⁽¹⁾

Total revenue		21.6%⁽³⁾			0			10		78.4%⁽³⁾		46			33		0			(1	)		46			42
Total benefits and expenses		21.6%⁽³⁾			0			7		78.4%⁽³⁾		33			20		0			(1	)		33			26

*Income from life insurance operations before taxes*					0			3				13			13		0			0			13			16

Investment operations:

Net investment income ⁽²⁾					4			10				83			79		(3	)		(3	)		84			86
Net realized (losses) gains on investments ⁽²⁾					(6	)		5				(421	)		197		0			0			(427	)		202
Net impairment losses recognized in earnings⁽²⁾					0			0				0			0		0			0			0			0
Equity in earnings of limited partnerships					7			5				33			23		0			0			40			28

*Income (loss) from investment operations before taxes* ⁽²⁾					5			20				(305	)		299		(3	)		(3	)		(303	)		316

Income (loss) from operations before income taxes and noncontrolling interest					67			82				(372	)		323		0			0			(305	)		405
Provision for income taxes					20			28				(145	)		102		0			0			(125	)		130
Net income (loss)				$	47		$	54			$	(227	)	$	221	$	0		$	0		$	(180	)	$	275

(1)

Earnings on life insurance related invested assets are integral to the evaluation of the life insurance operations because of the long duration of life products. On that basis, for presentation purposes, the life insurance operations in the table above include life insurance related investment results.

(2)

Prior to and through December 31, 2010, the underwriting results retained by EIC and ENY and the investment results of EIC, ENY and EPC accrued to the Indemnity shareholder interest. Due to the sale of Indemnity’s property and casualty subsidiaries to the Exchange on December 31, 2010, all property and casualty underwriting results and all investment results for these companies accrue to the interest of the subscribers (policyholders) of the Exchange, or noncontrolling interest, after December 31, 2010.

(3)

Prior to and through March 31, 2011, Indemnity retained a 21.6% ownership interest in EFL, which accrued to the Indemnity shareholder interest, and the Exchange retained a 78.4% ownership interest in EFL, which accrued to the interest of the subscribers (policyholders) of the Exchange, or noncontrolling interest. Due to the sale of Indemnity’s 21.6% ownership interest in EFL to the Exchange on March 31, 2011, 100% of the life insurance results of EFL accrue to the interest of the subscribers (policyholders) of the Exchange, or noncontrolling interest, after March 31, 2011.

RESULTS OF THE ERIE INSURANCE GROUP’S OPERATIONS BY INTEREST (unaudited)
(in millions)


																	Eliminations of
																	related party
	Indemnity shareholder interest								Noncontrolling interest (Exchange)								transactions						Erie Insurance Group
																	Nine months
				Nine months ended							Nine months ended						ended						Nine months ended
				September 30,							September 30,						September 30,						September 30,
	Percent			2011		2010			Percent		2011			2010			2010			2010			2011			2010
Management operations:

Management fee revenue, net		100.0	%	$	816	$	773				$	0		$	0		$	(816	)	$	(773	)	$	0		$	0
Service agreement revenue		100.0	%		25		26					0			0			0			0			25			26

Total revenue from management operations					841		799					0			0			(816	)		(773	)		25			26
Cost of management operations		100.0	%		667		626					0			0			(667	)		(626	)		0			0

*Income from management operations before taxes*					174		173					0			0			(149	)		(147	)		25			26

Property and casualty insurance operations: ⁽²⁾

Net premiums earned		5.5%⁽²⁾			0		161			94.5%⁽²⁾		3,089			2,765			0			0			3,089			2,926
Losses and loss expenses		5.5%⁽²⁾			0		118			94.5%⁽²⁾		2,653			2,027			(4	)		(4	)		2,649			2,141
Policy acquisition and other underwriting expenses		5.5%⁽²⁾			0		46			94.5%⁽²⁾		882			783			(154	)		(151	)		728			678

(*Loss) income from property and casualty insurance operations before taxes*					0		(3	)				(446	)		(45	)		158			155			(288	)		107

Life insurance operations:⁽¹⁾

Total revenue		21.6%⁽³⁾			10		28			78.4%⁽³⁾		124			99			(1	)		(2	)		133			125
Total benefits and expenses		21.6%⁽³⁾			7		20			78.4%⁽³⁾		89			70			0			(2	)		96			88

*Income from life insurance operations before taxes*					3		8					35			29			(1	)		0			37			37

Investment operations:

Net investment income ⁽²⁾					12		28					252			232			(8	)		(8	)		256			252
Net realized gains (losses) on investments ⁽²⁾					1		7					(247	)		99			0			0			(246	)		106
Net impairment losses recognized in earnings⁽²⁾					0		(1	)				0			(3	)		0			0			0			(4	)
Equity in earnings of limited partnerships					25		11					124			47			0			0			149			58

*Income from investment operations before taxes* ⁽²⁾					38		45					129			375			(8	)		(8	)		159			412

Income (loss) from operations before income taxes and noncontrolling interest					215		223					(282	)		359			0			0			(67	)		582
Provision for income taxes					72		73					(126	)		103			0			0			(54	)		176
Net income (loss)				$	143	$	150				$	(156	)	$	256		$	0		$	0		$	(13	)	$	406

(1)

(2)

(3)

We disclose operating income, a non-GAAP financial measure, to enhance our investors’ understanding of our performance related to the Indemnity shareholder interest. Our method of calculating this measure may differ from those used by other companies, and therefore comparability may be limited.

Indemnity defines operating income as income generated from management operations, life insurance operations⁽¹⁾, property and casualty insurance underwriting operations⁽²⁾, net investment income⁽²⁾, and equity in earnings or losses of limited partnerships, net of related federal income taxes. It does not include realized capital gains and losses, impairment losses and related federal income taxes.

Indemnity uses operating income to evaluate the results of its operations. It reveals trends that may be obscured by the net effects of realized capital gains and losses including impairment losses. Realized capital gains and losses including impairment losses, may vary significantly between periods and are generally driven by business decisions and economic developments such as capital market conditions which are not related to our ongoing operations. We are aware that the price to earnings multiple commonly used by investors as a forward-looking valuation technique uses operating income as the denominator. Operating income should not be considered as a substitute for net income prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and does not reflect Indemnity’s overall profitability.

The following table reconciles operating income and net income for the Indemnity shareholder interest:^{(1) (2)}


	Indemnity Shareholder interest
	Three			Three			Nine			Nine
	months ended			months ended			months ended			months ended
	September 30,			September 30,			September 30,			September 30,
	2011			2010			2011			2010
(in millions, except per share data)
Operating income attributable to Indemnity	$	51		$	51		$	142		$	146

Net realized (losses) gains and impairments on investments		(6	)		5			1			6
Income tax benefit (expense)		2			(2	)		0			(2	)

Realized (losses) gains and impairments, net of income taxes		(4	)		3			1			4

Net income attributable to Indemnity	$	47		$	54		$	143		$	150

Per Indemnity Class A common share – diluted:
Operating income attributable to Indemnity	$	0.93		$	0.89		$	2.57		$	2.55

Net realized (losses) gains and impairments on investments		(0.09	)		0.08			0.03			0.11
Income tax benefit (expense)		0.03			(0.03	)		(0.01	)		(0.04	)

Realized (losses) gains and impairments, net of income taxes		(0.06	)		0.05			0.02			0.07

Net income attributable to Indemnity	$	0.87		$	0.94		$	2.59		$	2.62

(1)

Prior to and through March 31, 2011, Indemnity retained a 21.6% ownership interest in EFL, which accrued to the Indemnity shareholder interest, and the Exchange retained a 78.4% ownership interest in EFL, which accrued to the interest of the subscribers (policyholders) of the Exchange or noncontrolling interest. Due to the sale of Indemnity’s 21.6% ownership interest in EFL to the Exchange on March 31, 2011, 100% of the life insurance results of EFL accrue to the interest of the subscribers (policyholders) of the Exchange, or noncontrolling interest, after March 31, 2011.

(2)


	September 30,		December 31,
	2011		2010
Assets	(unaudited)
Investments-Indemnity
Available-for-sale securities, at fair value:
Fixed maturities	$	517	$	264
Equity securities		22		24
Trading securities, at fair value		26		28
Limited partnerships		223		216
Other invested assets		1		1
Investments-Exchange
Available-for-sale securities, at fair value:
Fixed maturities		7,331		7,279
Equity securities		591		570
Trading securities, at fair value		2,085		2,306
Limited partnerships		1,187		1,108
Other invested assets		19		19

Total investments		12,002		11,815
Cash and cash equivalents (Exchange portion of $42 and $120, respectively)		76		430
Premiums receivable from policyholders – Exchange		1,035		942
Reinsurance recoverable – Exchange		197		201
Deferred acquisition costs – Exchange		495		467
Other assets (Exchange portion of $349 and $357, respectively)		458		489
Total assets	$	14,263	$	14,344

Liabilities and shareholders’ equity
Liabilities
Indemnity liabilities
Deferred income taxes	$	6	$	26
Other liabilities		381		382
Exchange liabilities
Losses and loss expense reserves		3,686		3,584
Life policy and deposit contract reserves		1,659		1,603
Unearned premiums		2,249		2,082
Deferred income taxes		97		257
Other liabilities		87		76

Total liabilities		8,165		8,010

Indemnity’s shareholders’ equity		845		912
Noncontrolling interest in consolidated entity – Exchange		5,253		5,422

Total equity		6,098		6,334

Total liabilities, shareholders’ equity and noncontrolling interest	$	14,263	$	14,344


Pennsylvania	0-24000	25-0466020
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)

100 Erie Insurance Place, Erie, Pennsylvania		16530
_________________________________ (Address of principal executive offices)		___________ (Zip Code)


	Erie Indemnity Company

November 3, 2011	By:	Marcia A. Dall

		Name: Marcia A. Dall
		Title: Executive Vice President & CFO


Exhibit No.		Description

99.1		Press Release Text
99.2		Financial Information


Date of Report (Date of Earliest Event Reported):		November 3, 2011


Registrant’s telephone number, including area code:		(814)870-2000