Erie Indemnity Co (ERIE) 2010 Q1 法說會逐字稿

Hello and welcome to the Erie Indemnity Company first quarter 2010 earnings conference. At the request of Erie, this conference is being recorded for replay purposes. At this time, all participants are in a listen-only mode. Following prepared remarks from management we will open the call for questions and answers.

Now I would like to introduce your host for today's conference call, Karen Kraus Phillips, Vice President and Director of Investor Relations. Thank you, Joanne, and good morning. We appreciate all of you joining us. On today's call, management will discuss our first quarter 2010 results. Joining me are Terry Cavanaugh, President and CEO, Marcia Dall, Executive Vice President and Chief Financial Officer, Jim Tanous, Executive Vice President, Secretary, and General Counsel, and Mike Zavasky, Executive Vice President Insurance Operations. Today's prepared remarks will be approximately 30 minutes. Following those remarks, we will open the call for questions.

We issued our earnings release and additional supplements yesterday afternoon. If you need a copy of the press release or any of the exhibit you with find them on the Investor Relations section of our website at Erieinsurance.com. We also filed Form 10-Q with the SEC. For the past several quarters, we have been informing you about a change to the presentation of our financial statement. As a result of Accounting Standards Codification number 810, formerly known as Financial Accounting Standard number 167, Erie Indemnity Company is required to consolidate its financials with the financials of Erie Insurance Exchange. The manifestation of this change can be seen in the first quarter's 10-Q filing and press release. There are some key changes that will affect the way we talk about our results today.

First, we have adopted the following naming convention to help users of the financial statements clearly identify the entities, and the associated results. Erie Indemnity Company, or Indemnity, is a publicly held company, and serves as the Attorney in Fact for the subscribers or policyholders of Erie Insurance Exchange, it also operates as a property and casualty insurer through its wholly-owned subsidiary. Erie InsuranceExchange, also on the as the Exchange, represents the reciprocal insurance exchange for the subscribers or policyholders. It is also a variable interest entity of Erie Indemnity Company, the property and casualty group is the combined property and casualty insurance subsidiary of Indemnity and the Exchange.

Erie Family Life, or EFL is the life insurance operation that is owned 21.6% by Indemnity, and 78.4% by Exchange. Indemnity shareholder interest refers to the interest in Erie Indemnity Company owned by the Class A and Class B shareholder. The non-controlling interest represents the equity held for the benefit of the subscribers or policyholders of the Exchange. And lastly, regarding naming conventions, the consolidated financial statements of Erie Indemnity Company, reflects the combined financial results of Indemnity, and its variable interest entity, the Exchange, which we refer collectively to as Erie Insurance Group.

Another key change is that dollar amounts are rounded to millions, rather than thousands, due to the significance of the Exchange financials. We have also renamed Insurance Underwriting Operating segments, to the Property and Casualty Insurance Operating segment. A fourth operating segment has also been added. The Life Insurance Operations segment, which represents the results of Erie Family Life.

There was one significant change to our reporting as a result of this new segment. Indemnity's 21.6% equity in EFL was previously reported in ourinvestment operations segment after taxes. Now we are showing the pre-tax results, including investment income related to EFL consistent with the additional disclosures in our footnotes, to enable you to see the comprehensive pre-tax results for Erie Family Life. And finally, the presentation of the income statement, balance sheet, statement of cash flows, footnote disclosures, and MD&A reflects the consolidation of Indemnity and the Exchange.

While the presentation of Indemnity's financial results looks significantly different. The acquired adoption of ASC number 810 has not changed the financial results of Indemnity. In order to help the users of our financial statements to understand this change, we also have filed an 8-K, reflecting the consolidation of Indemnity and the Exchange for 2009. This will give you the opportunity to compare the historical results in a consistent format with our new reporting presentation. We will also have an online presentation on our Investor website at Erieinsurance.com, and we will hold a webcast on May 20th at nine o'clock AM Eastern Time, to answer any specific questions you have about the new financial presentation. You can register for the webcast online at Erieinsurance.com.

On today's call Terry and Marcia will discuss only the results related to Indemnity. Management will also share important about current and future initiatives being undertaken at the Company. As a result, certain forward-looking statements may be incorporated into their comments. These forward-looking statements reflect the Company's future views about future events, and are based on assumptions subject to known and unknown risks and uncertainties. These risks and uncertainties may cause results to differ materially from those anticipated as described in those statements.

Many of the factors that will determine future events or achievements are beyond our ability to control or predict. For information on important factors that may cause such differences, please see the Safe Harbor statements in our latest 10-Q filing with the SEC, dated May 6th 2010, and in the related press release in the 2009 8-K filing. In this call we will discuss some non-GAAP measures, you can find the reconciliations of those measures to GAAP measures in Form 10-Q.

This call is being recorded and the recording is the property of Eric Indemnity Company. It is not intended for reproduction or rebroadcast by any other party without the prior written consent of Erie Indemnity Company. A replay will be available on our website today after Twelve Thirty PM Eastern Time. Your participation on this call will constitute consent to the recording, publication, webcast broadcast, and the use of your name, voice, and comments by Erie Indemnity. If you do not agree with these terms please disconnect at this time.

And now Erie's President and CEO, Terry Cavanaugh.

Thank you, Karen. And thanks to all of you for joining us on today's call. As Karen said we issued our new Form 10-Q with the new consolidated format. We are hopeful that the online presentation and webcast will help you better understand this new consolidated format. I want to stress, while the presentation has changed, the way the manage and operate the Company have not changed. So let's get to the results for Indemnity for the first quarter of 2010.

Our Indemnity management operations produced a higher management margin in the quarter. We continue to see growth in written premium, up 3% for the quarter, driven by an increase in personal and commercial policies in force, and we are also successful at managing our costs. While catastrophes contributed almost 12 points to the quarter's combined ratio, favorable development on prior accident years helped to mitigate the impact. This combined with positive results from the Indemnity investment operations, produced Indemnity net income per share of $0.82, compared to $0.19 a year ago. Indemnity net operating income per share increased to $0.77, compared to $0.29 at the end of first quarter 2009.

On the fourth quarter call, and again at our Annual Shareholders Meeting, I talked about our strategy and the imperatives we have in play to move the needle. Today I will focus on three. Enhancing distribution, target marketing, and process and information management. First, enhancing distribution. Erie has a unique relationship with the independent agents who sell our products. This relationship gives us an edge in the marketplace. The men and women who represent us are smart, successful business people. They share Erie's values and are well-known and respected in the communities where they live and work. These are the kind of people we carefully recruit to be part of the Erie team.

To further strengthen that bond, last fall we set in motion a comprehensive business-planning process, to identify and capitalize on product-line growth opportunities through our current footprint. We work with each of our agencies to create a game plan to help them grow their businesses with Erie. We are providing the tools and the resources to make these plans actionable. Things like agency-management support, perpetuation planning,marketing support, financial tools, and sales training. This process is bearing fruit for our agencies, and having a positive impact on our results.

In the area of target marketing, we are engaged in extensive demographic research. With this information, we are able to identify those consumers who are most likely to buy Erie's personal, commercial, and life insurance products. We are also using this information to cross-sell our customers within our book of more than 4 million P&C policies. Sales opportunities exist for life insurance and annuities, identity recovery, employment practices liability, and our personal lines umbrella, to name just a few. We are also using cross-sells within our life book. It is equally important we find the P&C opportunities that will allow us to grow revenue, and strengthen the relationship with our EFL customers.

Effective target marketing hinges or our ability to access customer data. That is a critical component of the work we are doing to improve our processes, and manage our information. For example, we are expanding our data warehouse, merging internal and external data that will allow us to access information about customers and prospects quickly and easily. These are the type of initiatives that are driving our growth and profitability, and will continue to position Erie as a leader in this competitive and challenging insurance market.

We recently held our Annual Shareholders Meeting on April 20th,the 85th anniversary of our Company. We are elected 13 Directors to our Board. 11 incumbent directors and two additions. Martin Sheffield, who has an extensive insurance background, including AM Best and Ward Financial Group, and Richard Stover, who brings deep experience in financial services to the Board. We are very pleased to have them join our Board of Directors.

I should also mention that Erie Insurance Group was named among the Fortune 500 in April. And finally, I would like to acknowledge the great work of our claims employees, and agents who responded so fully to our customers needs after the winter storms that hit during the first quarter. It is in times like these that Erie shrines.

Thank you all. Now Marcia will take us through the financials.

Thank you Terry, and good morning. I am pleased to share our results for first quarter 2010. In my discussion of the results, I will focus only on the results that pertain to Erie Indemnity Company, and not the financial results of the Exchange. So let's look at the first quarter 2010 results. Indemnity net income was $47 million in first quarter 2010, compared to $11 million in first quarter 2009. On a per-diluted share basis, net income was $0.82 per share in the current quarter, compared to $0.19 per share in the prior-year quarter. Net operating income per share was $0.77 per share, compared to $0.29 per share in the prior-year quarter.

Income before taxes from our management operations was $53 million, compared to $45 million in first quarter 2009. Our first quarter 2010 result was driven by a 2.9% increase in management-fee revenue, and relatively flat operating expenses. The increase in management-fee revenue for the current quarter is consistent with the 3% increase in the Property & Casualty group's direct written premium. This growth was driven by a 3.6% year-over-year increase in policies in force that offset a 1.3% decline in average premium per policy, primarily driven by the decline in average premium per policy in our commercial business.

We continue to have a strong overall retention rate of 90.7%. Our personalized premium grew 5.3%, reflecting a 3.6% growth in policies in force, a 0.7% increase in average premium per policy, and a strong 91.5% retention rate. Commercial lines written premiums decreased 2.1%, reflecting a 3.2% growth in policies in force, that was more than offset by a 6.1% decrease in average premium per policy. The commercial lines policy retention rate increased from 84.9% in the fourth quarter 2009, to 85.4% in first quarter 2010.

Operating costs were relatively flat in the quarter compared to a year ago. First quarter 2010 expenses benefited from a $5 million favorable resolution of a legal case, that was offset by increased expenses related to contract labor, and software costs pertaining to various technology initiatives. The gross margins from our management operations in the first quarter 2010 increased to 21.8%, compared to 18.9% in 2009. The current quarter gross margin benefited 2 points from the favorable legal ruling.

Now I will review the results of our Property & Casualty insurance operations. We realized a $2 million loss before taxes from our Property & Casualty operations in first quarter 2010, compared to a $6 million loss before taxes a year ago. The first quarter 2010 GAAP combined ratio for the P&C group was 104.3%, compared to 111.2% a year ago.

The decrease in the combined ratio was driven primarily by favorable developments on prior accident years of $50 million, compared to $39 million of adverse development in the prior-year quarter. For the first quarter 2010, this was partially offset by an increase in catastrophic losses. Catastrophes contributed 11.7 points to the first quarter 2010 combined ratio, compared to 7.8 points a year ago.

Now I will review the results of our new life insurance operations segment. Indemnity's first quarter 2010 income includes $2 million of earnings before taxes from Erie Family Life, compared to a $1 million loss before taxes in first quarter 2009, driven primarily by improved investment results.

Now I will review Indemnity's Investment operations, Indemnity's Investment operations recorded a profit before taxes of $14 million, compared to losses before taxes of $24 million in the prior-year quarter. Net investment income decreased $4 million compared to a year ago. This was driven primarily by an increase in bond amortization that was recognized in the first quarter of 2009, and lower dividend income on preferred stock holdings. Net realized gains on investments were $5 million in the quarter, compared to losses of $4 million a year ago.

Due to improvements in the financial markets, there were no impairments in the first quarter 2010, compared to impairment losses of $5 million in the prior-year quarter. Our income from equity and limited partnership investments was zero in the first quarter 2010, compared to losses of $28 million in the prior-year quarter. We saw increases in the fair value of our private equity and mezzanine debt limited partnerships, which offset continued losses in our commercial real estate limited partnership. During the first quarter 2010, we repurchased 74,967 shares of our Class A common stock, at an average price of $40.87, and a total cost of $3 million.

Our Board has approved a continuation of our stock-repurchase program through June 30th, 2011. As a result, Indemnity may repurchase up to $100 million of its outstanding Class A common stock through June 30th, 2011.

Now I would like to turn the call back over to Karen. Thank you, Marcia. Now we will open the call for your questions. We would ask that your questions focus on the results of Erie Indemnity Company for first quarter 2010. We also ask that you review the online presentation related to the consolidated financials for Erie Indemnity Company, and join the call on May 20th at 9am, when we will answer any questions on the change in the financial presentation. Joanne, you can open the call to questions.

Thank you. (Operator Instructions). Our first question comes from Vincent D'Agostino, your line is open.

Good morning, everyone. Thanks for taking the questions in advance. My first question comes from, in regards to the promotional incentive structure that became effective on February 1st, can you talk about the impact to this quarter from previous quarters that the new program had, and then secondly, in regards to the agent bonus component for profitability, since that is basically as I understand it, is a rolling calculation, and now that 2007 is out, and 2008 profitability fades out of that calculation, I am guessing that we should start to see agent bonuses come down from 2009 levels. So maybe something more in line with 1Q 2010, but maybe a little bit lower going forward? Thank you.

This is Terry. There are a couple of I guess points you wanted us to deal with. I will deal with a broader issue. We have a contingent program that is a three-year rolling program, as you indicate, would in terms of 2010 go back to 2008. Based upon the collective and individual results of those agents, they are rewarded for any number of metrics that revolve around profitability as well as growth, and we do, as you look at the numbers, and you can make your own estimation, in terms of where our costs are going in that regard. You mentioned a new commercial program. I am not sure what you are referring to there. Could you give me more specifics?

Yes, sure. Just in the 10-K, you said that there is a new commission structure that became effective February 1st, and then you go on to say which will increase commissions for qualifying new private passenger auto policies?

Oh private passenger auto, but you said commercial policies.

I am sorry, commission.

Okay. That is fine. Okay. We did eliminate a program that we had in place last year, that was giving specific dollar bonuses based upon production of personal automobile, and we eliminated that program, and then put in place a commission structure of 15% for all new private passenger automobile for all of our agents. So we believe that rewards the right behavior in terms of again, having all of our agents stay focused on selling new automobile policies, and we think quite frankly that it is a good program. It is a fair program, and that it will create good results for the organization.

Just one more question if I may.

Sure.

In terms of favorable reserve development stemming from PPA. It was noted that it came from better than expected accident frequency. I am just curious if that is coming from accident years 2008 and 2009, with reduced driving behavior in those years. Or if there are other accident years that that development is coming from, and then in regards to the large-claims development?Were those just two anomalies in terms of size, or are there other similarly sized outstanding claims that could go either way in terms of development within the bucket of outstanding claims? Thank you.

This is Marcia. We they we think about it is our reserves at the end of the year are our best estimate. We do do a review of all of our past years during the first quarter to look at the prior-year development, so it is actually a combination of all of the favorable improvements over those years. I do not have the specifics to confirm if that was 2008 and 2009 development only.

And then regarding, we are periodically updating our case reserve forecast for some of the other massive injury, and non-massive injury case reserves that we have, and so you can have movements in those cases when they are settled, that can cause movements like you saw in some of the quarters in 2009.

All right. Great. That is all I have for right now. I will hop back in. Thank you. Joanne, do we have another question in the queue?

Our next question comes from Dan Schlemmer. Your line is open.

Hi, good morning. Real nice quarter. Congratulations. I was wondering if you can give us a little more detail on the $5 million favorable ruling that was mentioned, and realizing on a court case, maybe you can't comment on it at all, but just is there any way for you to comment in terms of the one-time nature, versus anything ongoing that if we are trying to model expenses or think about it going forward, is it a total anomaly, and we should just be looking at the last year in terms of expense? Or any guidance you can give along those lines would be appreciated.

Yes, Dan, it was a one-time case. I will let Jim give you the details behind that.

Yes, Dan, this is Jim Tanous, General Counsel. As Terry said it was a one-time, this was a jury verdict in September of 2007 that was reported at that time. It was a business lawsuit in West Virginia with one of our terminated agents. In September of 2007 there was an adverse jury verdict against us. At that time, we reflected the amount of the judgment, which was approximately $4.2 million, and since then we have been accruing interest at the legal rate.

We appealed that judgment, and we were successful. The Supreme Court of the Appeals of West Virginia upheld our motion to overturn the verdict, and that was finalized in March of this year, so that is where we reversed the prior booking of the 4.3 plus the accrued interest, so it was a one-time experience. Fortunately we don't have a lot of those, none currently. So how you use that is up to you, but we just, we reported it to reflect the reversal.

Very helpful. Thanks. And just to clarify, you sort of, I think you described it as a final verdict. So at this point there is no open appeal on either side of anything relating to that one instance?

That is correct. We have a decision in our favor from the highest court in West Virginia. This case is closed.

Very helpful. Thank you.

It was 5-0.

Sounds good. I didn't know that happened in West Virginia in favor of companies, only the other way, so.

No comment.

And then separately on just your agents, and I think if my notes are right, you had 17 new agents in the quarter, which is about 1% of your total force. Can you talk about what your targets are, in terms of adding agents, and how you look at that for the remainder of 2010?

Yes, I think our plan is somewhere north of 100 for the year. But I that is just a stick count. What we are doing now is spending more time looking at the caliber of the agents that we are appointing, as well as making sure that those agents we appointed in last year, and 2009, 2008, 2007 are maturing and growing their books of business, and having a connection with us that makes them an effective relationship.

So we are spending a lot of time with our existing agents, making sure they have the resources to be successful. We don't want to ignore our important partners that have been with us for many years. At the same time we do have a focused plan to add agencies in geographies that are underrepresented by our current work force, and that create opportunity for us in terms of being able to grow market share, and we are dealing with them on an effective basis, in terms of their business plan, and making sure they meet the numbers they need to be successful Erie agents. So we will continue, it is a strength of ours, but we do it on a regular basis. The first quarter I would say was online. We did not plan an aggressive first quarter, because again we wanted to make sure we were treating think agents that we have put on in the last couple of years fairly. You will see that number accelerate in the future quarters.

And when you talk about the 17 for the quarter, or the 100 for the full year, can you talk about in terms of exclusive agents versus independent agents? Can you just talk a little bit about that?

Well all of them are independent agents in terms of again, the model that they have the right to contract with any insurance company that they wish to, and they own their own book of business. We clearly have a successful model of attracting, I will put it in three buckets there, Dan.

One would be one that are new talent to the industry. So again we bring them in. It might be a real estate agent or a mortgage broker, that expresses interest in being a successful insurance agent. We test them, we have them develop a significant business plan. We make sure that they have their finances in line, and then we appoint them and run with them. So obviously in that model, we get the majority, if not all of their revenue during that ramp-up time.

The second type of agent that we go after, are agents that are in the business, would primarily have been working for a captive company, where they do not have ownership rights to the book of business, and they become attracted to the Erie model, and they leave their employer, and go across the street, and comply with all of the rules and regulations, and non-competes, but become an Erie agent and have a nice ramp-up in terms of again, their ability to be a successful independent agent.

The third type of agent we appoint are agents that are already in the marketplace, and would have multiple representations in terms of companies they represent, and we go to them, and make sure they have good reason why they would want to do business with Erie. We again put a business plan in place,and we expect to be a significant trading partner with those agents going forward in future years. And the good news is the numbers would indicate that we are getting significant new business from all three types of agents, and in fact we are growing our, I will call it our shelf space with all of those agents. So I think what you see in terms of our success in the first quarter is indicative of, one, the planning process that we are doing now, and the communication that we are managing with our agents, and our expectations of them.

So it would be fair to characterize that in terms of the three different buckets, the agents that are maybe just coming over to be with Erie specifically versus that are already out there, you don't have a viewpoint that you need to target a particular one of those three buckets, but as much as, it is more of whatever is out there that fits with the profile you are looking for? Is that a fair way of thinking about it?

It is not whatever is out there. We do have a plan. We do want to grow our own agents. I think it's a great strength of ours to be able to do that. I think it is important for the industry, to get some new blood into the industry. If you look at the demographics of independent agents, I think again our focus on that is a very healthy thing for the industry, and is very healthy for us. But I will say we are more focused on making sure that we have the right mix of all three types.

So again, we look at opportunities. There might be a state where we think there is a captive agency company that is struggling, by virtue of some of the things that they are doing, so we would go in there and have a plan that says let's go after some of those. We would go find another territory where we think we have some opportunities to increase penetration with new talent. And then we would go out and look for existing agents. But we like all three. Although I would, we spend a lot of time on the first two, because we think that is a great success for us.

That is great background. Thanks for sharing that.

Thank you. Our next question comes from James Tan, your line is open.

First, congratulations on the good results. I thank you for that. And also, thank you for re-upping your buy back. I have a very broad-based question. And perhaps, Terrence, I know you have only been there a couple of years, and I know the CFO there is also relatively new, but just from your grasp of history, have you ever seen Erie, the combination of companies, ever in a more healthy position than it is currently? Or am I reading that wrong?

I am not sure I have the perspective or the viewpoint to do it, and I don't know how you would define healthy?

Well, how do you define healthy? I am kind of curious how you think?

Okay. I would say it is a broad-based look at the business, in terms of obviously the balance sheet, it is the pricing, it is our agency representation, it is our product portfolio. It is the economy. It is our reserve capability. It is our ERM capability, so this is a business where you have got to stay focused on a multitude of things to create a balance that lets you have some success, in terms of growing revenue, creating margin, and being able to continue to move forward with an effective agency relationship and market share.

Fair enough. But I guess from my perspective, from a balance sheet perspective, from having as many investments or assets per share, I think, it is a pretty healthy situation right now. Would you disagree?

We are happy with our results for this quarter.

Okay. Great. No, and so am I. And that is basically what I am saying. What I am getting to, is I would just hope that you take that into consideration and be a little bit more aggressive in actually buying back the shares. But again, I appreciate the share buyback, and all I am saying is that you are pretty healthy now, you historically have brought shares higher than this valuation, and again, that is why I ask, have you seen it as healthy as this, and my opinion from a financial point of view, I am not talking about market share or economy, I haven't seen it in my 10 years of owning your stock, and I would just hope that you would take that into consideration, when you actually execute on the buyback. Thank you very much.

I appreciate your comments and your complement, and we appreciate your viewpoint, and your feedback. Joanne, are there any other questions in queue? Operator?

Thank you. Our next question comes from the line of Vincent D'Agostino. Vincent, can you hear us?

Are you there? Hi, Vincent, can you hear us.

I can. Okay. Great.

Great. Thank you. Just in terms of the past winter's storm claims, can you talk about how working through those claims is going, and maybe perhaps what percent of claims from those catastrophe events are still open, or are on a closed basis? And lastly, any early thoughts on development, in maybe Q2 2010, now that we are a little bit further in the process of closing those claims?

As we sit here today, obviously it was a major event. It was, what is nice about our business, with only 12 jurisdictions we have the ability to be pretty tight and on top of these claims, and based upon our book of business, they were primarily very small, relatively inconsequential first-party claims, in terms of being able to manage them from a financial standpoint. And we are very pleased at how the organization responds, and how our agents responded. I would say as we sit here today, we probably have all of them reserved, and probably 80% of them paid and out the door. In terms of development, there should be, it is not a significant event in terms of first-party activity that we had. So the development on this should be minimal.

And last one, I promise no more after this.

That is fine.

Just in terms of pricing, just curious with the average premium per policy, and personal lines being up about 0.7 of a percent, just curious what the pricing impact of that is, and just curious to see if it is in line with the average premium per policy, or if there is a bit more, I guess wrapping into that renewal pricing, if you could?

I am not sure of your question. Are you asking in terms of the average premium, how much of it is related to rate versus exposure?

You could say it that way, yes.

Okay. I would say based upon our current activity, it is all related to rate. As a matter of fact we might even have some exposure leakage in terms of some of our business. Even on the personal lines side.

So personal lines pricing, you are saying is probably somewhere up about 1%.

Certainly ours would be in that range, yes. And again, we would say that homeowners would be the leading product for us, in terms of moving price along than with private passenger automobile.

Thank you. That is all I have. You guys have a great day. Thank you.

Thank you. Thanks, Vincent.

(Operator Instructions). We have a follow-up question from Mr. Dan Schlemmer. Your line is open.

Yes, real quick question on the limited partnership, which looked a little more stable in the quarter, and I think we have talked about it in the past, that it's pretty, I think there is a lot of global exposure in there. Correct me if I am wrong. And I am just won wondering, do you have a sense for any amount of exposure in the 'hot countries' right now? The Greece, Portugal, Spain that everybody is talking about. Is there anything in there in do you get that level? How granular do you even, maybe you don't even get that granular of detail on that, but any comments would be appreciated?

If you think about our portfolio, it is the diversified as far as relatively smaller levels of investments, but we do not have any investments in those hot countries that you mentioned.

That is all I wanted. Thanks. Congratulations again, it was a really nice quarter.

Thank you.

Thank you.

Thank you. (Operator Instructions). Pardon me, Ms. Phillips, I am showing no further questions. You may proceed. Thank you all for joining us on the call today. I would like to remind you about the online presentation that will walk you through the new consolidated format of Erie Indemnity Company's financials, that will be up on the ErieInsurance.com on the Investor website next week, Tuesday of next week. Also please register for the May 20th webcast at 9am on May 20th, you can do that at Erieinsurance.com. And today's call will be replayed on our website at around Twelve-thirty today. So thank you again, all for you, for joining us on the call, and if you have any questions, please give me a call at 814-870-4665. Thank you.

Ladies and gentlemen, that does conclude the program. You may now disconnect. Have a great day.