10-K – 2026-02-23 – erie-20251231.htm

Financial Condition of Erie Insurance Exchange
Serving in the capacity of attorney-in-fact for the subscribers at the Exchange, we are dependent on the growth and financial condition of the Exchange, who is our sole customer. The strength of the Exchange and its wholly owned subsidiaries is rated annually by AM Best through assessing its financial stability and ability to pay claims. The ratings are generally based upon factors relevant to policyholders and are not directed toward return to investors. On September 5, 2025, the Exchange and each of its property and casualty insurance subsidiaries were downgraded from A+ "Superior" to A "Excellent" and its financial strength rating was revised from negative to stable. The A "Excellent" rating is the third highest financial strength rating assigned to companies that have achieved excellent overall performance when compared to the standards established by AM Best and have an excellent ability to meet obligations to policyholders over the long term. While the Exchange's policyholder surplus continues to be classified in AM Best's strongest category, the downgrade was primarily driven by the Exchange's large underwriting losses in recent years, driven by elevated weather-related events and increased severity in the auto and homeowners' segments. The stable financial strength rating reflects the expectation that the Exchange's profitability initiatives will accelerate and stabilize operating results over the near term. Furthermore, the stable outlook reflects the strongest level of balance sheet strength as assessed by AM Best.

The financial statements of the Exchange are prepared in accordance with statutory accounting principles prescribed by the Commonwealth of Pennsylvania. Financial statements prepared under statutory accounting principles focus on the solvency of the insurer and generally provide a more conservative approach than under U.S. generally accepted accounting principles. Statutory direct written premiums of the Exchange and its wholly owned property and casualty insurance subsidiaries grew 8.9% to $13.0 billion in 2025 from $11.9 billion in 2024. These premiums, along with investment income, are the major sources of cash that support the operations of the Exchange. Policyholders' surplus, determined under statutory accounting principles, was $10.1 billion and $9.3 billion at December 31, 2025 and 2024, respectively. The Exchange and its wholly owned property and casualty insurance subsidiaries' year-over-year policy retention ratio continues to be high at 88.4% at December 31, 2025 and 90.4% at December 31, 2024.

We have prepared our consolidated financial statements considering the financial strength of the Exchange based on its AM Best rating and strong level of surplus. See Part I, Item 1A. "Risk Factors" for possible outcomes that could impact that determination.

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FINANCIAL CONDITION

Investments
Our investment portfolio is managed with the objective of maximizing after-tax returns on a risk-adjusted basis. The following table presents the carrying value of our investments as of December 31:
 

(dollars in thousands) 2025 % to total 2024 % to total
Available-for-sale securities (1)
$ 1,364,828  85  % $ 1,043,615  83  %
Equity securities (2)
90,763  6  85,891  7 
Agent loans (3)
109,331  7  92,731  7 
Other investments (4)
37,342  2  29,610  3 
 Total investments
$ 1,602,264  100  % $ 1,251,847  100  %

(1) This includes $44.4 million and $7.3 million of securities lent under a securities lending agreement as of December 31, 2025 and 2024, respectively.
(2) This includes $20.1 million of securities lent under a securities lending agreement as of December 31, 2025.
(3) The current portion of agent loans is included in the line item "Prepaid expenses and other current assets, net" in the Consolidated Statements of Financial Position.
(4) The current and long-term portions of other investments are included in the line items "Prepaid expenses and other current assets, net" and "Other assets, net", respectively, in the Consolidated Statements of Financial Position.

We continually review our investment portfolio for impairment and determine whether the impairment is a result of credit loss or other factors. We analyze all positions with an emphasis on those in a significant unrealized loss position. If we have the intent to sell or it's more likely than not that we would be required to sell the security before recovery of the amortized cost basis, the entire impairment is recognized in earnings. Factors considered in the evaluation of credit loss include the extent to which fair value is less than cost and fundamental factors specific to the issuer such as financial condition, changes in credit ratings, near and long-term business prospects and other factors, as well as the likelihood of recovery of the amortized cost of the security. Impairment resulting from credit loss is recognized in earnings with a corresponding allowance on the Consolidated Statements of Financial Position. We believe our investment valuation philosophy and accounting practices result in appropriate and timely measurement of fair value and recognition of impairment.

Available-for-sale securities
Under our investment strategy, we maintain an available-for-sale portfolio that is of high quality and well diversified within each market sector. This investment strategy also achieves a balanced maturity schedule. Our available-for-sale portfolio is managed with the goal of achieving reasonable returns while limiting exposure to risk.

Available-for-sale securities are carried at fair value with unrealized gains and losses, net of deferred taxes, included in shareholders' equity. Net unrealized gains on available-for-sale securities, net of deferred taxes, totaled $1.3 million at December 31, 2025, compared to unrealized losses of $17.6 million at December 31, 2024. Our evaluation of deferred tax assets and the need for a valuation allowance included available tax planning strategies that could be implemented, if necessary, to support the realizability of deferred tax assets. We believe those tax strategies are feasible and prudent.

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The following table presents a breakdown of the fair value of our available-for-sale portfolio by industry sector and rating as of December 31, 2025:  (1)

(in thousands) AAA AA A BBB Non-investment
grade Fair
value
Basic materials $ 0  $ 0  $ 1,531  $ 4,899  $ 7,230  $ 13,660 
Communications 0  3,055  15,684  7,782  19,627  46,148 
Consumer 0  8,971  50,525  76,566  51,938  188,000 
Diversified 0  0  0  1,047  1,616  2,663 
Energy 0  908  5,666  42,493  20,293  69,360 
Financial 0  0  134,221  173,493  20,769  328,483 

Industrial 0  1,020  15,277  29,104  38,082  83,483 
Structured securities (2)  
203,375  247,121  21,547  13,827  1,228  487,098 
Technology 1,985  0  0  15,419  15,679  33,083 
U.S. Treasury 0  24,163  0  0  0  24,163 
Utilities 0  0  12,903  56,778  19,006  88,687 
Total
$ 205,360  $ 285,238  $ 257,354  $ 421,408  $ 195,468  $ 1,364,828 

(1)       Ratings are supplied by S&P, Moody's, and Fitch . The table is based upon the lowest rating for each security.
(2)    Structured securities include residential and commercial mortgage-backed securities, collateralized debt obligations, and asset-backed securities.

Equity securities
Equity securities primarily include nonredeemable preferred stocks and are carried at fair value in the Consolidated Statements of Financial Position with all changes in unrealized gains and losses reflected in the Consolidated Statements of Operations.

The following table presents an analysis of the fair value of our equity securities by sector as of December 31:

(in thousands) 2025 2024

Financial services $ 74,614  $ 69,930 
Utilities 3,696  5,629 
Energy 2,713  4,117 
Consumer 5,563  3,341 
Technology 3,224  1,974 

Communications 953  900 

Total
$ 90,763  $ 85,891 

Shareholders' Equity
Postretirement benefit plans
The funded status of our postretirement benefit plans is recognized in the Consolidated Statements of Financial Position, with a corresponding adjustment to accumulated other comprehensive income (loss), net of tax. At December 31, 2025, shareholders' equity amounts related to these postretirement plans decreased by $23.3 million, net of tax, of which $1.1 million primarily represents amortization of net actuarial gain and $22.2 million primarily represents the current period actuarial loss.  The 2025 actuarial loss was driven primarily by the lower discount rate used to measure the future benefit obligations, partially offset by higher than expected return on plan assets. Although we are the sponsor of these postretirement plans and record the funded status of these plans, there are reimbursements between us and the Exchange and its insurance subsidiaries for their allocated share of pension income or cost. See Item 8. "Financial Statements and Supplementary Data - Note 10, Postretirement Benefits, of Notes to Consolidated Financial Statements" contained within this report for additional details on these reimbursements.

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LIQUIDITY AND CAPITAL RESOURCES

We continue to monitor the sufficiency of our liquidity and capital resources given the potential impact of current economic conditions, including the uncertain tariff, inflationary, and interest rate environment. While we did not see a significant impact on our sources or uses of cash in 2025, future market disruptions could occur which may affect our liquidity position. If our normal operating and investing cash activities were to become insufficient to meet future funding requirements, we believe we have sufficient access to liquidity through our cash position, diverse liquid marketable securities, and our $100 million bank revolving line of credit that does not expire until November 2029. See broader discussions of potential risks to our operations in Operating Overview and Part I, Item 1A. "Risk Factors" contained within this report.

Sources and Uses of Cash
Liquidity is a measure of a company's ability to generate sufficient cash flows to meet the short- and long-term cash requirements of its business operations and growth needs.  Our liquidity requirements have been met primarily by funds generated from management fee revenue and income from investments.  Cash provided from these sources is used primarily to fund the costs of our management operations including commissions, salaries and wages, pension plans, share repurchases, dividends to shareholders, the purchase and development of information technology, and other capital expenditures.  We expect that our operating cash needs will be met by funds generated from operations. Cash in excess of our operating needs is primarily invested in investment grade fixed maturities. As part of our liquidity review, we regularly evaluate our capital needs based on current and projected results and consider the potential impacts to our liquidity, borrowing capacity, financial covenants and capital availability.

We have certain obligations and commitments to make future payments under various agreements. Cash requirements within the next twelve months include accounts payable, accrued liabilities, and other current obligations.

Our long-term cash requirements under various contractual obligations and commitments include:

• Pension – We have a funded noncontributory defined benefit pension plan covering substantially all employees and an unfunded SERP for certain members of executive and senior management. See Item 8. "Financial Statements and Supplementary Data - Note 10, Postretirement Benefits, of Notes to Consolidated Financial Statements" for the funding policy and related contributions for our defined benefit pension plan, and accumulated benefit obligation for our unfunded SERP.

• Deferred compensation – We have two deferred compensation plans for our executives, senior vice presidents and other selected officers, and two deferred compensation plans for our outside directors. See Item 8. "Financial Statements and Supplementary Data - Note 11, Incentive and Deferred Compensation Plans, of Notes to Consolidated Financial Statements" for additional details of these obligations and estimated future payments.

• Home office renovations – We have agreements with external contracting firms for renovations to office buildings that are part of our principal headquarters. Remaining commitments related to the underlying contracts total $77.5 million at December 31, 2025, of which the majority is due in the next 12 months. Additional contracts will be executed as we begin each new phase of the overall renovation projects and will be funded using our working capital. See Item 8. "Financial Statements and Supplementary Data - Note 8, Fixed Assets, of Notes to Consolidated Financial Statements" for additional details on construction in progress costs and expected completion date.

• Other commitments – We have commitments for approximately $473 million which include agreements for various services, including information technology, support and maintenance obligations, operating leases for equipment, vehicles, and real estate, and other obligations in the ordinary course of business. We expect to make future cash payments according to the contract terms. These agreements are enforceable and legally binding and specify fixed amounts or minimum quantities to be purchased. Some agreements may contain cancellation provisions, some of which may require us to pay a termination fee. Approximately two-thirds of these commitments are due in the next 12 months. We are reimbursed from the Exchange and its insurance subsidiaries for the portion of these costs related to administrative services.

We maintain relationships and cash balances at diversified and well-capitalized financial institutions and have established processes to monitor them. We believe that our current cash, cash equivalents and marketable securities and cash generated from operations will be sufficient to meet our current and future cash requirements.

Volatility in the financial markets presents challenges to us as we occasionally access our investment portfolio as a source of cash.  Some of our fixed income investments, despite being publicly traded, may be illiquid.  Additionally, if we require significant amounts of cash on short notice in excess of anticipated cash requirements, or if we are required to return cash
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collateral in connection with our securities lending program, we may have difficulty selling investments in a timely manner, or be forced to sell at deep discounts. We believe we have sufficient liquidity to meet our needs from sources other than the liquidation of securities.

Cash flow activities
The following table provides condensed cash flow information for the years ended December 31:

(in thousands) 2025 2024 2023
Net cash provided by operating activities $ 686,657  $ 611,249  $ 381,205 
Net cash used in investing activities (439,328) (226,912) (157,565)
Net cash used in financing activities (199,852) (229,995) (221,675)
Net increase in cash, cash equivalents and restricted cash
$ 47,477  $ 154,342  $ 1,965 

Net cash provided by operating activities was $686.7 million in 2025, compared to $611.2 million in 2024.  Increased cash provided by operating activities in 2025, compared to 2024, was primarily due to an increase in management fees received of $311.1 million driven by growth in direct and affiliated assumed premiums written by the Exchange and a decrease in income taxes paid of $55.9 million driven by lower taxable income compared to 2024, resulting from changes in tax legislation and increased charitable contributions. This was partially offset by increases in cash paid for agent commissions of $165.3 million driven by premium growth, and the charitable contribution to the Erie Insurance Foundation of $100 million.

Net cash used in investing activities was $439.3 million in 2025, compared to $226.9 million in 2024. Increased cash used in investing activities was primarily due to an increase in purchases, net of sales and maturities/calls, of available-for-sale securities of $226.7 million.

Net cash used in financing activities was $199.9 million in 2025, compared to $230.0 million in 2024. Decreased cash used in financing activities was primarily due to increased cash collateral received related to increased lending of securities under our securities lending program. This was partially offset by increased dividends paid to shareholders. We increased both our Class A and Class B shareholder regular quarterly dividends by 7.1% for 2025, compared to 2024.

Capital Outlook
We regularly prepare forecasts evaluating the current and future cash requirements for both normal and extreme risk events.  Should an extreme risk event result in a cash requirement exceeding normal cash flows, we have the ability to meet our future funding requirements through various alternatives available to us.

Outside of our normal operating and investing cash activities, future funding requirements could be met through: 1) unrestricted and unpledged cash and cash equivalents, which totaled approximately $315.0 million at December 31, 2025, 2) $100 million available bank revolving line of credit, and 3) liquidation of unrestricted and unpledged assets held in our investment portfolio, including equity securities and investment grade bonds, which totaled approximately $1.1 billion at December 31, 2025.  Volatility in the financial markets could impair our ability to sell certain fixed income securities or cause such securities to sell at deep discounts.  Additionally, we have the ability to curtail or modify discretionary cash outlays such as those related to shareholder dividends and share repurchase activities. See Item 8. "Financial Statements and Supplementary Data - Note 9, Bank Line of Credit, of Notes to Consolidated Financial Statements" for additional information related to our bank revolving line of credit.

Off-Balance Sheet Arrangements
We have entered into certain contingent obligations for guarantees. See Item 8. "Financial Statements and Supplementary Data - Note 17, Commitments and Contingencies, of Notes to Consolidated Financial Statements" for additional information. We do not believe that these obligations will have a material current or future effect on our consolidated financial condition, results of operations, or cash flows.

Enterprise Risk Management
The role of our Enterprise Risk Management ("ERM") function is to ensure that all significant risks are clearly identified, understood, proactively managed and consistently monitored to achieve strategic objectives for all stakeholders. Our ERM program views risk holistically across all our companies and facilitates implementation of risk responses to mitigate potential impacts. See Part I, Item 1A. "Risk Factors" contained in this report for a list of risk factors.

Our ERM program is founded on a governance framework that includes oversight at multiple levels of our organization, including our Board of Directors and executive management. Accountability to identify, manage, and mitigate risk is
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embedded within all functions and areas of our business. We establish risk tolerance ranges to monitor and manage significant risks. In addition to identifying, evaluating, prioritizing, monitoring, and mitigating significant risks, our ERM process includes extreme event analyses and scenario testing. Given our defined tolerance for risk, risk model output is used to quantify the potential variability of future performance and the sufficiency of capital and liquidity levels.

TRANSACTIONS/AGREEMENTS WITH RELATED PARTIES

Board Oversight
Our Board of Directors has a broad oversight responsibility over our intercompany relationships with the Exchange.  Thus, our Board of Directors may be required to make decisions or take actions that may benefit subscribers at the Exchange and the overall health of the Exchange. These actions may ultimately benefit our shareholders.

Insurance Holding Company System
Most states have enacted legislation that regulates insurance holding company systems, defined as two or more affiliated persons, one or more of which is an insurer. The Exchange has the following wholly owned property and casualty insurance subsidiaries: Erie Insurance Company, Erie Insurance Company of New York, Erie Insurance Property & Casualty Company, and Flagship City Insurance Company, and a wholly owned life insurance company, Erie Family Life Insurance Company. Indemnity and the Exchange, and its wholly owned subsidiaries, meet the definition of an insurance holding company system.

Transactions within a holding company system affecting the member insurers of the holding company system must be fair and reasonable and any charges or fees for services performed must be reasonable.  Approval by the applicable insurance commissioner is required prior to the consummation of certain transactions affecting the members within a holding company system.

Intercompany Agreements
Subscriber's and services agreements
We serve as attorney-in-fact for the subscribers at the Exchange, a reciprocal insurance exchange.  Each applicant for insurance to a reciprocal insurance exchange (a subscriber) signs a subscriber's agreement that contains an appointment of an attorney-in-fact.  Through the designation of attorney-in-fact, we are required to provide policy issuance and renewal services and act as the attorney-in-fact for the subscribers at the Exchange with respect to all administrative services, as discussed previously.  In accordance with the subscriber's agreement, we retain a management fee for these services calculated as a percentage of the direct and affiliated assumed premiums written by the Exchange. Consistent with its legal structure as a reciprocal insurer, the Exchange does not have any employees or officers. Therefore, it enters into contractual relationships by and through the subscribers' attorney-in-fact. The Exchange's insurance subsidiaries also utilize Indemnity for all administrative services in accordance with the service agreements between each of the subsidiaries and Indemnity. The subscriber's agreement and service agreements provide for reimbursement of amounts incurred for these services to Indemnity.  Reimbursements are settled at cost on a monthly basis. State insurance regulations require that intercompany service agreements and any material amendments be approved in advance by the state insurance department.

Shared facilities
The Exchange and its insurance subsidiaries have a service agreement with Indemnity to use space in Indemnity-owned properties. See Item 8. "Financial Statements and Supplementary Data - Note 15, Related Party, of Notes to Consolidated Financial Statements" for additional details.

Cost Allocation
The allocation of costs affects our consolidated financial condition and that of the Exchange and its wholly owned insurance subsidiaries. Management's role is to determine that allocations are consistently made in accordance with the subscriber's agreement with the subscribers at the Exchange, intercompany service agreements, and applicable insurance laws and regulations. Allocation of costs under these various agreements requires judgment and interpretation by Indemnity, and such allocations are performed using a consistent methodology, which is intended to adhere to the terms and intentions of the underlying agreements.

Intercompany Receivables
We have significant receivables from the Exchange and its affiliates that result in a concentration of credit risk. These receivables include management fees due for policy issuance and renewal services performed by us under the subscriber's agreement, and certain costs we incur acting as the attorney-in-fact on behalf of the subscribers at the Exchange as well as the service provider for the Exchange's insurance subsidiaries with respect to all administrative services, as discussed previously.
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See Item 8. "Financial Statements and Supplementary Data - Note 16,  Concentrations of Credit Risk, of Notes to Consolidated Financial Statements" for additional details.

Other Loans Receivable
In 2023, we issued two senior secured loans totaling $13.6 million to fund a real estate development project supporting revitalization efforts in our community. Ownership in the project includes related party and unrelated investors. See Item 8. "Financial Statements and Supplementary Data - Note 15,  Related Party, of Notes to Consolidated Financial Statements" for additional details.

Erie Insurance Foundation
In 2025, we made a $100 million charitable contribution to the Erie Insurance Foundation (the "Foundation"). Certain of Indemnity's directors and employees serve as directors and officers of the Foundation. See Item 8. "Financial Statements and Supplementary Data - Note 15,  Related Party, of Notes to Consolidated Financial Statements" for additional details.

ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk
Market risk is the risk of loss arising from adverse changes in interest rates, credit spreads, equity prices, or foreign exchange rates, as well as other relevant market rate or price changes. The volatility and liquidity in the markets in which the underlying assets are traded directly influence market risk. The following is a discussion of our primary risk exposures, including interest rate risk, investment credit risk, concentration risk, liquidity risk, and equity price risk, and how those exposures are currently managed as of December 31, 2025.
 
Interest Rate Risk
We invest primarily in fixed maturity investments, which comprised 85% of our invested assets at December 31, 2025. The value of the fixed maturity portfolio is subject to interest rate risk. As market interest rates decrease, the value of the portfolio increases with the opposite holding true in rising interest rate environments. We do not hedge our exposure to interest rate risk. A common measure of the interest sensitivity of fixed maturity assets is effective duration, a calculation that utilizes maturity, coupon rate, yield, and call terms to calculate an expected change in fair value given a change in interest rates. The longer the duration, the more sensitive the asset is to market interest rate fluctuations. Duration is analyzed at least quarterly to ensure that it remains in the targeted range.
 
A sensitivity analysis is used to measure the potential loss in future earnings, fair values, or cash flows of interest-sensitive instruments resulting from one or more selected hypothetical changes in interest rates and other market rates or prices over a selected period. The following pro forma information is presented assuming a 100-basis point parallel increase in interest rates across the yield curve at December 31 of each year and reflects the estimated effect on the fair value of our fixed maturity portfolio. 
 

(dollars in thousands) 2025 2024

Fair value of fixed maturity portfolio $ 1,369,691  $ 1,048,549 
Fair value assuming 100-basis point rise in interest rates $ 1,327,076  $ 1,018,957 
Effective duration (as a percentage) 3.1 2.9

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While the fixed maturity portfolio is sensitive to interest rates, the future principal cash flows that will be received by contractual maturity date are presented below at December 31, 2025. Actual cash flows may differ from those stated as a result of calls, prepayments, or defaults.

(in thousands)
Year ending December 31, Future Principal Cash Flows
2026 $ 37,516 
2027 92,251 
2028 140,182 
2029 159,425 
2030 160,742 
Thereafter 786,143 
Total $ 1,376,259 
Fair value $ 1,369,691 

 
Investment Credit Risk
Our objective is to earn competitive returns by investing in a diversified portfolio of securities. Our portfolios of fixed maturity securities, equity securities and, to a lesser extent, short-term investments are subject to credit risk. This risk is defined as the potential loss in fair value resulting from adverse changes in the borrower's ability to repay the debt. We manage this risk by performing upfront underwriting analysis and ongoing reviews of credit quality by position and for the portfolio in total. We do not hedge the credit risk inherent in our fixed maturity and equity securities investments.

Generally, the fixed maturities in our portfolio are rated by external rating agencies. If not externally rated, we rate them internally on a basis consistent with that used by the rating agencies. We classify the vast majority of our fixed maturities as available-for-sale securities, allowing us to meet our liquidity needs and provide greater flexibility to appropriately respond to changes in market conditions.

The following tables show our fixed maturity investments by rating (1) :

At December 31, 2025

(dollars in thousands) Amortized cost Fair value Percent of total

AAA, AA, A $ 753,052  $ 747,952  55  %
BBB 415,499  421,408  31 
Total investment grade 1,168,551  1,169,360  86 
BB 106,369  108,067  8 
B 70,593  70,486  5 
CCC, CC, C, and below 22,548  21,778  1 
Total non-investment grade 199,510  200,331  14 
Total $ 1,368,061  $ 1,369,691  100  %

At December 31, 2024

(dollars in thousands) Amortized cost Fair value Percent of total
AAA, AA, A $ 584,600  $ 564,443  54  %
BBB 328,561  326,990  31 
Total investment grade 913,161  891,433  85 
BB 71,000  70,845  7 
B 68,944  69,068  6 
CCC, CC, C, and below 17,684  17,203  2 
Total non-investment grade 157,628  157,116  15 
Total $ 1,070,789  $ 1,048,549  100  %

  (1)           Ratings are supplied by S&P, Moody's, and Fitch with the exception of held-to-maturity securities, which are unrated. The table is based upon the lowest rating for each security.

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We are also exposed to a concentration of credit risk with the Exchange.  See the "Transactions/Agreements with Related Parties, Intercompany Receivables" section of Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained within this report for further discussion of this risk.
 
Concentration Risk
While our portfolio is well diversified within each market sector, there is an inherent risk of concentration in a particular industry or sector. We continually monitor our level of exposure to individual issuers as well as our allocation to each industry and market sector against internally established policies. See the "Financial Condition" section of Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained within this report for details of investment holdings by sector.

Liquidity Risk
Periods of volatility in the financial markets can create conditions where fixed maturity investments, despite being publicly traded, can become illiquid. However, we actively manage the maturity profile of our fixed maturity portfolio such that scheduled repayments of principal occur on a regular basis. 

Equity Price Risk
Our portfolio of equity securities, which primarily includes nonredeemable preferred stock, is carried on the Consolidated Statements of Financial Position at estimated fair value. Equity securities are exposed to the risk of potential loss in estimated fair value resulting from an adverse change in prices ("price risk"). We do not hedge our exposure to price risk inherent in our equity investments.

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ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

  Page Number
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 )
38

Consolidated Statements of Operations for the Years Ended December 31, 202 5 , 202 4 and 20 2 3
40

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 202 5 , 202 4 and 202 3
41

Consolidated Statements of Financial Position - December 31, 202 5 and 20 2 4
42

Consolidated Statements of Shareholders' Equity for the Years ended December 31, 202 5 , 202 4 and 202 3
43

Consolidated Statements of Cash Flows for the Years ended December 31, 202 5 , 202 4 and 202 3
44

Notes to Consolidated Financial Statements - December 31, 202 5
45

Report of Independent Registered Public Accounting Firm

 
To the Shareholders and the Board of Directors of Erie Indemnity Company

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Erie Indemnity Company (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 23, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
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Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Cost of Operations - administrative services

Description of the Matter For the year ended December 31, 2025, the Company’s cost of operations – administrative services totaled $836.6 million. As explained in Note 2 of the consolidated financial statements, the Company serves as the attorney-in-fact on behalf of the subscribers at the Erie Insurance Exchange (Exchange) with respect to its administrative services as enumerated in the subscriber’s agreement. The Exchange’s insurance subsidiaries also utilize the Company for these services in accordance with the service agreements between the subsidiaries and the Company. Certain administrative services costs, which include costs associated with claims handling services, life insurance management services, and investment management services incurred by the Company on behalf of the Exchange and its insurance subsidiaries, are reimbursed to the Company at cost and recorded as administrative services reimbursement revenue based on relevant utilization statistics.

Auditing management’s cost of operations – administrative services was complex due to the multiple costs that are allocated for reimbursement, the extensiveness of the allocation process, and the degree of auditor judgement needed to design the nature and extent of audit procedures required to address the matter.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s cost of operations – administrative services process. This included, among others, testing controls over the determination of the utilization statistics and ultimate allocation of costs to the Exchange and its insurance subsidiaries.

To test the Company’s cost of operations – administrative services, our procedures included, among others, evaluating that the costs included in the allocations are in accordance with the subscriber’s agreement and the service agreements with the Exchange and its insurance subsidiaries. We tested the completeness of the costs subjected to allocation by agreeing the costs recorded in the general ledger to the cost allocation calculation. We performed a test of details over a sample of cost allocations for accuracy.

/s/ Ernst & Young LLP
We have served as the Company's auditor since 2003.
Indianapolis, Indiana
February 23, 2026

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ERIE INDEMNITY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended December 31, 2025, 2024 and 2023
(dollars in thousands, except per share data)

2025 2024 2023
Operating revenue
Management fee revenue - policy issuance and renewal services $ 3,131,806   $ 2,894,074   $ 2,442,073  
Management fee revenue - administrative services 74,058   68,355   63,669  
Administrative services reimbursement revenue 836,639   806,336   737,139  
Service agreement revenue 24,755   26,350   26,059  
Total operating revenue 4,067,258   3,795,115   3,268,940  

Operating expenses
Cost of operations - policy issuance and renewal services 2,513,435   2,312,324   2,011,545  
Cost of operations - administrative services 836,639   806,336   737,139  
Total operating expenses 3,350,074   3,118,660   2,748,684  
Operating income
717,184   676,455   520,256  

Investment income
Net investment income 85,837   70,155   44,572  
Net realized and unrealized investment gains (losses)
2,336   3,229   ( 5,838 )
Net impairment losses recognized in earnings
( 3,312 ) ( 4,124 ) ( 9,766 )

Total investment income
84,861   69,260   28,968  

Other income
8,558   11,564   12,712  
Contribution to charitable foundation ( 100,000 ) —   —  
Income before income taxes 710,603   757,279   561,936  
Income tax expense 151,268   156,965   115,875  
Net income
$ 559,335   $ 600,314   $ 446,061  

Earnings Per Share
Net income per share
Class A common stock – basic $ 12.01   $ 12.89   $ 9.58  
Class A common stock – diluted $ 10.69   $ 11.48   $ 8.53  
Class B common stock – basic $ 1,802   $ 1,934   $ 1,437  
Class B common stock – diluted $ 1,801   $ 1,933   $ 1,437  

Weighted average shares outstanding – Basic
Class A common stock 46,189,024   46,189,044   46,188,981  
Class B common stock 2,542   2,542   2,542  

Weighted average shares outstanding – Diluted
Class A common stock 52,305,424   52,306,266   52,299,411  
Class B common stock 2,542   2,542   2,542  

See accompanying notes to Consolidated Financial Statements. See Note 14, "Accumulated Other Comprehensive Income (Loss)", for amounts reclassified out of accumulated other comprehensive income (loss) into the Consolidated Statements of Operations. 

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ERIE INDEMNITY COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years ended December 31, 2025, 2024 and 2023
(in thousands)

2025 2024 2023
Net income $ 559,335   $ 600,314   $ 446,061  

Other comprehensive loss, net of tax      
Change in unrealized holding gains on available-for-sale securities 18,920   7,079   27,784  
Pension and other postretirement plans
( 23,350 ) ( 41,270 ) ( 33,770 )
Total other comprehensive loss, net of tax ( 4,430 ) ( 34,191 ) ( 5,986 )

Comprehensive income $ 554,905   $ 566,123   $ 440,075  

See accompanying notes to Consolidated Financial Statements. See Note 14, "Accumulated Other Comprehensive Income (Loss)", for amounts reclassified out of accumulated other comprehensive income (loss) into the Consolidated Statements of Operations. 

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ERIE INDEMNITY COMPANY
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
At December 31, 2025 and 2024
(dollars in thousands, except per share data)

2025 2024
Assets
Current assets:
Cash and cash equivalents (includes restricted cash of $ 30,189 and $ 23,559 , respectively)
$ 345,874   $ 298,397  
Available-for-sale securities 33,902   44,604  

Available-for-sale securities lent 3,436   0  
Receivables from Erie Insurance Exchange and affiliates, net 735,589   707,060  
Prepaid expenses and other current assets, net 66,061   83,902  

Accrued investment income 14,311   11,069  
Total current assets 1,199,173   1,145,032  

Available-for-sale securities, net 1,286,566   991,726  
Equity securities 70,624   85,891  
Available-for-sale and equity securities lent 61,063   7,285  

Fixed assets, net 571,476   513,494  
Agent loans, net 93,953   80,597  

Defined benefit pension plan 24,137   21,311  
Other assets, net 48,489   43,278  
Total assets $ 3,355,481   $ 2,888,614  

Liabilities and shareholders' equity
Current liabilities:
Commissions payable $ 425,320   $ 408,309  
Agent incentive compensation 132,560   75,458  
Accounts payable and accrued liabilities 200,701   190,028  
Dividends payable 68,109   63,569  
Contract liability 47,561   42,761  
Deferred executive compensation 9,400   14,874  
Securities lending payable 61,936   7,513  

Total current liabilities 945,587   802,512  

Defined benefit pension plan 33,410   28,070  

Contract liability 23,274   21,170  
Deferred executive compensation 22,050   19,721  
Deferred income taxes, net 24,788   6,418  
Other long-term liabilities 22,998   23,465  
Total liabilities 1,072,107   901,356  

Shareholders' equity
Class A common stock, stated value $ 0.0292 per share; 74,996,930 shares authorized; 68,299,200 shares issued; 46,189,068 shares outstanding
1,992   1,992  
Class B common stock, convertible at a rate of 2,400 Class A shares for one Class B share, stated value $ 70 per share; 3,070 shares authorized; 2,542 shares issued and outstanding
178   178  
Additional paid-in-capital
16,492   16,466  
Accumulated other comprehensive loss
( 52,021 ) ( 47,591 )
Retained earnings
3,462,823   3,162,303  
Total contributed capital and retained earnings 3,429,464   3,133,348  
Treasury stock, at cost; 22,110,132 shares held
( 1,171,014 ) ( 1,169,074 )
Deferred compensation
24,924   22,984  
Total shareholders' equity 2,283,374   1,987,258  
Total liabilities and shareholders' equity $ 3,355,481   $ 2,888,614  

See accompanying notes to Consolidated Financial Statements. 
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ERIE INDEMNITY COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years ended December 31, 2025, 2024 and 2023
(dollars in thousands, except per share data)

Class A common stock Class B common stock Additional paid-in-capital Accumulated other comprehensive loss Retained earnings Treasury stock Deferred compensation Total shareholders' equity
Balance, December 31, 2022 $ 1,992   $ 178   $ 16,481   $ ( 7,414 ) $ 2,583,261   $ ( 1,168,949 ) $ 22,859   $ 1,448,408  

Net income 446,061   446,061  
Other comprehensive loss ( 5,986 ) ( 5,986 )
Dividends declared:
Class A $ 4.845 per share
( 223,786 ) ( 223,786 )
Class B $ 726.75 per share
( 1,847 ) ( 1,847 )
Net purchase of treasury stock (1)
( 15 ) 0   ( 15 )
Deferred compensation ( 2,228 ) 2,228   0  
Rabbi trust distribution (2)
2,012   ( 2,012 ) 0  

Balance, December 31, 2023 $ 1,992   $ 178   $ 16,466   $ ( 13,400 ) $ 2,803,689   $ ( 1,169,165 ) $ 23,075   $ 1,662,835  

Net income 600,314   600,314  
Other comprehensive loss ( 34,191 ) ( 34,191 )
Dividends declared:
Class A $ 5.19 per share
( 239,721 ) ( 239,721 )
Class B $ 778.50 per share
( 1,979 ) ( 1,979 )
Net purchase of treasury stock (1)
0   0   0  
Deferred compensation ( 2,156 ) 2,156   0  
Rabbi trust distribution (2)
2,247   ( 2,247 ) 0  
Balance, December 31, 2024 $ 1,992   $ 178   $ 16,466   $ ( 47,591 ) $ 3,162,303   $ ( 1,169,074 ) $ 22,984   $ 1,987,258  
Net income 559,335   559,335  
Other comprehensive loss ( 4,430 ) ( 4,430 )
Dividends declared:
Class A $ 5.5575 per share
( 256,696 ) ( 256,696 )
Class B $ 833.625 per share
( 2,119 ) ( 2,119 )
Net purchase of treasury stock (1)
26   26  
Deferred compensation ( 2,514 ) 2,514   0  
Rabbi trust distribution (2)
574   ( 574 ) 0  

Balance, December 31, 2025 $ 1,992   $ 178   $ 16,492   $ ( 52,021 ) $ 3,462,823   $ ( 1,171,014 ) $ 24,924   $ 2,283,374  

(1) Net purchases of treasury stock in 2023, 2024 and 2025 include the purchase of our Class A common stock in the open market that were subsequently distributed to satisfy stock-based compensation awards. See Note 11, "Incentive and Deferred Compensation Plans".
(2) Distributions of our Class A shares were made from the rabbi trust to five incentive compensation deferral plan participants in both 2023 and 2024 and three incentive compensation plan deferral participants in 2025. See Note 11, "Incentive and Deferred Compensation Plans".

See accompanying notes to Consolidated Financial Statements.

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ERIE INDEMNITY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2025, 2024 and 2023
(in thousands)

2025 2024 2023
Cash flows from operating activities
Management fee received $ 3,209,511   $ 2,898,367   $ 2,420,192  
Administrative services reimbursements received 814,106   776,150   721,928  
Service agreement revenue received 24,751   26,346   26,018  
Net investment income received 78,699   67,643   57,448  

Commissions paid to agents ( 1,608,605 ) ( 1,443,296 ) ( 1,200,014 )
Incentive compensation paid to agents ( 94,794 ) ( 94,864 ) ( 120,211 )
Salaries and wages paid ( 264,406 ) ( 249,137 ) ( 226,036 )
Pension contribution and employee benefits paid ( 115,260 ) ( 110,764 ) ( 169,762 )
General operating expenses paid ( 316,643 ) ( 308,273 ) ( 293,857 )
Administrative services expenses paid ( 836,702 ) ( 791,050 ) ( 730,129 )
Contribution to charitable foundation ( 100,000 ) —   —  
Income taxes paid ( 104,000 ) ( 159,873 ) ( 104,372 )

Net cash provided by operating activities 686,657   611,249   381,205  

Cash flows from investing activities
Purchase of investments:
Available-for-sale securities ( 693,066 ) ( 473,647 ) ( 279,999 )
Equity securities ( 36,926 ) ( 32,799 ) ( 35,480 )

Other investments ( 50 ) ( 7,075 ) ( 88 )
Proceeds from investments:
Available-for-sale securities sales 205,965   205,159   160,614  
Available-for-sale securities maturities/calls 188,569   196,641   76,617  
Equity securities 34,339   35,894   24,458  

Other investments 167   54   871  
Purchase of fixed assets ( 115,692 ) ( 124,845 ) ( 92,647 )

Loans to agents and others
( 35,505 ) ( 36,362 ) ( 20,525 )
Collections on agent and other loans 12,871   10,068   8,614  

Net cash used in investing activities ( 439,328 ) ( 226,912 ) ( 157,565 )

Cash flows from financing activities

Dividends paid to shareholders ( 254,275 ) ( 237,508 ) ( 221,675 )

Net changes in cash collateral for securities lent 54,423   7,513   —  

Net cash used in financing activities ( 199,852 ) ( 229,995 ) ( 221,675 )

Net increase in cash, cash equivalents and restricted cash 47,477   154,342   1,965  
Cash, cash equivalents and restricted cash, beginning of year
298,397   144,055   142,090  
Cash, cash equivalents and restricted cash, end of year
$ 345,874   $ 298,397   $ 144,055  

Supplemental disclosure of noncash transactions
Liability incurred to purchase fixed assets $ 26,361   $ 15,254   $ —  
Operating lease assets obtained in exchange for lease liabilities $ 4,000   $ 7,871   $ 5,866  
Receipt of donated equipment $ 1,967   $ —   $ —  

See accompanying notes to Consolidated Financial Statements. See Note 12, "Income Taxes", for additional information on income taxes paid. See Note 18, "Supplementary Data on Cash Flows", for additional supplemental cash flow information.

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ERIE INDEMNITY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Nature of Operations

Erie Indemnity Company ("Indemnity", "we", "us", "our") is a publicly held Pennsylvania business corporation that has since its incorporation in 1925 served as the attorney-in-fact for the subscribers (policyholders) at the Erie Insurance Exchange ("Exchange").  The Exchange, which also commenced business in 1925, is a Pennsylvania-domiciled reciprocal insurer that writes property and casualty insurance.

Our primary function as attorney-in-fact is to perform policy issuance and renewal services on behalf of the subscribers at the Exchange. We also act as attorney-in-fact on behalf of the subscribers at the Exchange with respect to all claims handling and investment management services, as well as the service provider for all claims handling, life insurance, and investment management services for the Exchange's insurance subsidiaries, collectively referred to as "administrative services". Acting as attorney-in-fact in these two capacities is done in accordance with a subscriber's agreement (a limited power of attorney) executed individually by each subscriber (policyholder), which appoints Indemnity as each subscriber's attorney-in-fact to transact certain business on their behalf.  In accordance with the subscriber's agreement for acting as attorney-in-fact in these two capacities, we retain a management fee calculated as a percentage of the direct and affiliated assumed premiums written by the Exchange.

The policy issuance and renewal services we provide on behalf of the subscribers at the Exchange are related to the sales, underwriting, and issuance of policies. The sales related services we provide include agent compensation and certain sales and advertising support services. Agent compensation includes scheduled commissions to agents based upon premiums written as well as incentive compensation, which is earned by achieving targeted measures. Agent compensation comprised approximately 71 % of our 2025 policy issuance and renewal expenses. The underwriting services we provide include underwriting and policy processing and comprised approximately 8 % of our 2025 policy issuance and renewal expenses. The remaining services we provide include customer service and administrative support. We also provide information technology services that support all the functions listed above that comprised approximately 10 % of our 2025 policy issuance and renewal expenses. Included in these expenses are allocations of costs for departments that support these policy issuance and renewal functions.

Consistent with its legal structure as a reciprocal insurer, the Exchange does not have any employees or officers. Therefore, it enters into contractual relationships by and through the subscribers' attorney-in-fact. Indemnity serves as the attorney-in-fact on behalf of the subscribers at the Exchange with respect to its administrative services as enumerated in the subscriber's agreement. The Exchange's insurance subsidiaries also utilize Indemnity for these services in accordance with the service agreements between each of the subsidiaries and Indemnity. Claims handling services include costs incurred in the claims process, including the adjustment, investigation, defense, recording, and payment functions. Life insurance management services include costs incurred in the management and processing of life insurance business. Investment management services are related to investment trading activity, accounting, and all other functions attributable to the investment of funds. Included in these expenses are allocations of costs for departments that support these administrative functions. The subscriber's agreement and service agreements provide for reimbursement of amounts incurred for these services to Indemnity. Reimbursements are settled at cost. State insurance regulations require that intercompany service agreements and any material amendments be approved in advance by the state insurance department.

Our results of operations are tied to the growth and financial condition of the Exchange. We continually monitor the financial strength of the Exchange. If any events occurred that impaired the Exchange's ability to grow or sustain its financial condition, including but not limited to a significant downgrade in financial strength ratings, disruption in the independent agency relationships, significant catastrophe losses, or products not meeting customer demands, the Exchange could find it more difficult to retain its existing business and attract new business. A decline in the business of the Exchange almost certainly could have as a consequence a decline in the total premiums paid and a correspondingly adverse effect on the amount of the management fee revenue we receive. We also have an exposure to a concentration of credit risk related to the unsecured receivables due from the Exchange for net management fee and other reimbursements. See Note 16, "Concentrations of Credit Risk".

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Note 2.  Significant Accounting Policies

Basis of presentation
The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") and include the accounts of Indemnity and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recently adopted accounting standards
We adopted Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" , effective with the annual reporting period ending December 31, 2025. We applied the guidance retrospectively to prior periods presented in the consolidated financial statements for disclosure purposes, including the disclosure of specific categories in an effective tax rate reconciliation and certain information about income taxes paid. The additional disclosures required by this guidance have been included in Note 12, "Income Taxes". The adoption of this guidance had no other impact on our consolidated financial statements.

Recently issued accounting standards
In November 2024, the Financial Accounting Standards Board ("FASB") issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" , which requires entities to disclose disaggregated information about certain income statement expense line items. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments can be applied on either a prospective or retrospective basis. This will have no impact on our consolidated financial statements, and we are currently evaluating the impact of adoption on our disclosures.

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets" , which provides a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under "Revenue from Contracts with Customers (Topic 606)" . Under the practical expedient, entities may assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. Early adoption is permitted. An entity that elects the practical expedient should apply the amendments on a prospective basis. We do not expect the standard will have a material impact on our consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software" , which removes all references to prescriptive and sequential software development project stages and requires an entity to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. The amendments can be applied on a prospective, modified or retrospective basis. We are currently evaluating the impact of adoption on our consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11 "Interim Reporting (Topic 270) - Narrow-Scope Improvements" , which clarifies current interim disclosure requirements and provides a comprehensive list of required interim disclosures. The guidance also incorporates a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in this ASU are required to be adopted for interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments can be applied on a prospective or retrospective basis. We do not expect the standard will have a material impact on our disclosures, and will have no other impact on our consolidated financial statements.

Cash and cash equivalents
Cash, money market accounts, and other short-term, highly liquid investments with a maturity of three months or less at the date of purchase, are considered cash and cash equivalents.
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Restricted cash – Restricted cash represents deposits held for the benefit of third parties related primarily to our agent loan participation program. These restricted funds are invested in bank deposits, contractually restricted as to withdrawal or usage, and included with "Cash and cash equivalents" in our Consolidated Statements of Financial Position.

Investments
Available-for-sale securities – Fixed maturity debt securities and redeemable preferred stock are classified as available-for-sale and reported at fair value with unrealized investment gains and losses, net of income taxes, recognized in other comprehensive income. Available-for-sale securities with a remaining maturity of 12 months or less and any security that we intend to sell as of the reporting date are classified as current assets.

Available-for-sale securities in an unrealized loss position are evaluated to determine whether the impairment is a result of credit loss or other factors. If we have the intent to sell or it's more likely than not that we would be required to sell the security before recovery of the amortized cost basis, the entire impairment is recognized in earnings. Securities that have experienced a decline in fair value that we do not intend to sell, and that we will not be required to sell before recovery, are evaluated to determine if the decline in fair value is credit related. Impairment resulting from a credit loss is recognized in earnings with a corresponding allowance on the Consolidated Statement of Financial Position. Future recoveries of credit loss result in an adjustment to the allowance and earnings in the period the credit conditions improve. Factors considered in the evaluation of credit loss include the extent to which fair value is less than cost and fundamental factors specific to the issuer such as financial condition, changes in credit ratings, near and long-term business prospects, and other factors, as well as the likelihood of recovery of the amortized cost of the security. If the qualitative review indicates credit impairment, the allowance for credit loss is measured as the amount that the security's amortized cost exceeds the present value of cash flows expected to be collected and is limited to the amount that fair value is below amortized cost.

Equity securities – Equity securities primarily include non-redeemable preferred stocks that are reported at fair value with changes in the fair value recognized in net realized and unrealized investment gains (losses). Securities that we intend to sell as of the reporting date are classified as current assets.

Realized gains and losses and investment income – Realized gains and losses on sales of available-for-sale and equity securities are recognized in income based upon the specific identification method and reported in net realized and unrealized investment gains (losses). Interest income is recognized as earned and includes amortization of premium and accretion of discount. Income is recognized based on the constant effective yield method, which includes periodically updated prepayment assumptions obtained from third party data sources on our prepaying securities. The effective yield for prepaying securities is recalculated on a retrospective basis.  Dividend income is recognized at the ex-dividend date. Interest and dividend income and the results of our limited partnership investments are reported as net investment income. We do not record an allowance for credit losses on accrued investment income on our available-for-sale securities as any amount deemed uncollectible is reversed from interest income in the period the expected payment defaults.

Securities lending – We have securities lending transactions, managed by a third-party banking institution, whereby securities are loaned to unaffiliated financial institutions for short periods of time. The securities lending activity is accounted for as a secured borrowing and therefore the securities loaned, including available-for-sale and equity securities, are carried as invested assets on our Consolidated Statements of Financial Position, while the obligation to return the cash collateral is recorded as a current liability. The cash collateral received at the inception of the loan is reinvested and the related income is recognized in net investment income. Noncash collateral is not recorded in the Consolidated Statements of Financial Position, as we do not have the right to sell, repledge, or otherwise reinvest the noncash collateral.

The collateral is required to equal a minimum of 102 % of the estimated fair value of the securities loaned, and maintained at a level greater than or equal to 100 % for the duration of the loan. We monitor the ratio of the collateral held to the estimated fair value of the securities loaned on a daily basis and obtain additional collateral as necessary. A securities lending transaction may be terminated at any time by the borrower or the lender. If terminated, we would repay our securities lending obligations from the sale of reinvested collateral or the proceeds of sales from our investment portfolio, which includes liquid securities.

Deferred taxes
Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and the reported amounts in the consolidated financial statements, using the statutory tax rates in effect for the year in which the differences are expected to settle or be realized.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date under the law.  The need for valuation allowances on deferred tax assets are estimated based upon our assessment of the realizability of such amounts.

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Fixed assets
Fixed assets are stated at cost less accumulated depreciation and amortization. Fixed assets are primarily comprised of software, which includes internal-use capitalized software and development costs, as well as buildings and building improvements, equipment, furniture and fixtures, and leasehold improvements. Assets in use are depreciated using the straight-line method over the estimated useful life except for leasehold improvements, which are depreciated over the shorter of their economic useful life or the remaining lease term. Software is depreciated over periods ranging from 3 - 7 years, buildings and building improvements are depreciated over 20 - 45 years, equipment is depreciated over 3 - 7 years, and furniture and fixtures are depreciated over 7 years. We review long-lived assets for impairment whenever events or changes indicate that the carrying value may not be recoverable. Under these circumstances, if the fair value were less than the carrying amount of the asset, we would recognize a loss for the difference.

Agent loans
Agent loans, the majority of which are senior secured, are carried at unpaid principal balance net of a current expected credit loss allowance with interest recorded in investment income as earned. The allowance is estimated using available loss history and/or external loss rates based on comparable loan losses and considers current market conditions and forecasted information. Changes to the allowance are recognized in earnings as adjustments to net impairment recoveries (losses). Any current portion of agent loans is recorded in prepaid expenses and other current assets.

Other assets
Other assets primarily include limited partnership investments, other loans receivable, held-to-maturity securities, operating lease assets, and other long-term prepaid assets. Limited partnership investments are recorded using the equity method of accounting. Other loans receivable and held-to-maturity securities include investments to fund real estate development projects supporting revitalization efforts in our community. The loans are carried at unpaid principal balance, including any paid-in-kind interest capitalized as additional principal, if applicable, net of a current expected credit loss allowance. Any current portion of other loans receivable is recorded in prepaid expenses and other current assets. Held-to-maturity securities are carried at amortized cost, net of a current expected credit loss allowance. The allowances are calculated using the estimated value of, and priority rights to, collateral in the event of default or external loss rates based on comparable losses, and considers current market conditions and forecasted information. Changes to the allowances are recognized in earnings as adjustments to net impairment recoveries (losses) or other income (expense) depending on the nature of the asset. Interest on other loans receivable and held-to-maturity securities is recorded primarily in investment income as earned.

Agent incentive compensation liability
Our more significant agent incentive compensation plan is based upon an individual agency's property and casualty underwriting profitability and also includes a component for growth in agency property and casualty premiums if the agency's underwriting profitability targets for the book of business are met.  The estimated liability for this agent incentive compensation plan is based upon the performance over 36 months, and is modeled on a monthly basis using actual underwriting results for the two prior years and current year-to-date actual results and forecasted results for the remainder of the year. Our second agent incentive compensation plan is based on an agency's one-year underwriting profitability and uses a similar model but considers actual and forecasted results for a calendar year only. At December 31 of each year, we use actual data available and record an accrual based upon the expected payment amount.  These costs are included in cost of operations - policy issuance and renewal services.

Recognition of management fee revenue
We retain management fees from the Exchange under the subscriber's agreement for services provided. In accordance with the subscriber's agreement, we may retain up to 25 % of all direct and affiliated assumed premiums written by the Exchange. The management fee rate is set at least annually by our Board of Directors. The management fee revenue is calculated by multiplying the management fee rate by the direct and affiliated assumed premiums written by the Exchange and is allocated between the two performance obligations we have under the subscriber's agreement. The first performance obligation is to provide policy issuance and renewal services. The second performance obligation is acting as the attorney-in-fact with respect to various administrative services as enumerated in the subscriber's agreement.

Management fee revenue allocated to the policy issuance and renewal services is recognized at the time of policy issuance or renewal, because it is at the time of policy issuance or renewal when the economic benefit of the service we provide (the substantially completed policy issuance or renewal service) and the control of the promised asset (the executed insurance policy) transfers to the customer.

Management fee revenue allocated to the second performance obligation relates to us acting as the attorney-in-fact on behalf of the subscribers at the Exchange, as well as the service provider for the Exchange's insurance subsidiaries, with respect to the
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administrative services and is recognized over a four-year period representing the time over which the economic benefit of the services provided (i.e. management of the administrative services) transfers to the customer.

Administrative services
Consistent with its legal structure as a reciprocal insurer, the Exchange does not have any employees or officers. Therefore, it enters into contractual relationships by and through the subscribers' attorney-in-fact. Indemnity serves as the attorney-in-fact on behalf of the subscribers at the Exchange with respect to its administrative services as enumerated in the subscriber's agreement. The Exchange's insurance subsidiaries also utilize Indemnity for these services in accordance with the service agreements between each of the subsidiaries and Indemnity. Claims handling services include costs incurred in the claims process, including the adjustment, investigation, defense, recording and payment functions. Life insurance management services include costs incurred in the management and processing of life insurance business. Investment management services are related to investment trading activity, accounting and all other functions attributable to the investment of funds. Common overhead expenses and certain service department costs incurred by us on behalf of the subscribers at the Exchange and its insurance subsidiaries are reimbursed by the proper entity based upon relevant utilization statistics specifically measured to accomplish proportional allocations, which we believe are reasonable. In 2025, approximately 71 % of the administrative services expenses were entirely attributable to the respective administrative functions (claims handling, life insurance management, and investment management), while the remaining 29 % of these expenses were allocations of costs for departments that support these administrative functions. The expenses we incur and related reimbursements we receive for administrative services are presented gross in our Consolidated Statements of Operations. The subscriber's agreement and service agreements provide for reimbursement of amounts incurred for these services to Indemnity. Reimbursements are settled at cost on a monthly basis. State insurance regulations require that intercompany service agreements and any material amendments be approved in advance by the state insurance department.

Recognition of service agreement revenue
Service agreement revenue primarily consists of service charges we collect from subscribers (policyholders) for providing multiple payment plans on policies written by the Exchange and its property and casualty subsidiaries.  Service charges, which are fixed dollar charges for each installment billed beyond the first installment, are recognized as revenue when bills are rendered to the policyholder. Service agreement revenue also includes late payment and policy reinstatement fees, which are also recognized as revenue when bills are rendered to the policyholder. We also have a service agreement with the Exchange for the use of shared office space. Revenue related to this agreement is recognized at the time the space is used based on relevant utilization statistics.

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Note 3.  Revenue

The majority of our revenue is derived from the subscriber's agreement between us and the subscribers (policyholders) at the Exchange. In accordance with the subscriber's agreement, we retain a management fee calculated as a percentage, not to exceed 25 %, of all direct and affiliated assumed written premiums of the Exchange. We allocate a portion of our management fee revenue, currently 25 % of the direct and affiliated assumed written premiums of the Exchange, between the two performance obligations we have under the subscriber's agreement. The first performance obligation is to provide policy issuance and renewal services to the subscribers (policyholders) at the Exchange, and the second is to act as attorney-in-fact on behalf of the subscribers at the Exchange, as well as the service provider for the Exchange's insurance subsidiaries, with respect to all administrative services.
The transaction price, including management fee revenue and administrative services reimbursement revenue, includes variable consideration and is allocated based on the estimated standalone selling prices developed using industry information and other available information for similar services. A constraining estimate of variable consideration exists related to the potential for management fees to be returned if a policy were to be cancelled mid-term. Management fees are returned to the Exchange when policyholders cancel their insurance coverage mid-term and premiums are refunded to them. The constraining estimate is determined using the expected value method, based on both historical and current information. The estimated transaction price, as reduced by the constraint, reflects consideration expected for performance of our services. We update the transaction price and the related allocation at least annually based upon the most recent information available or more frequently if there have been significant changes in any components considered in the transaction price.
The first performance obligation is to provide policy issuance and renewal services that result in executed insurance policies between the Exchange or one of its insurance subsidiaries and the subscriber (policyholder). The subscriber (policyholder) receives economic benefits when substantially all the policy issuance or renewal services are complete and an insurance policy is issued or renewed by the Exchange or one of its insurance subsidiaries. It is at the time of policy issuance or renewal that the allocated portion of revenue is recognized.

Consistent with its legal structure as a reciprocal insurer, the Exchange does not have any employees or officers. Therefore, it enters into contractual relationships by and through the subscribers' attorney-in-fact. Indemnity serves as the attorney-in-fact on behalf of the subscribers at the Exchange with respect to its administrative services as enumerated in the subscriber's agreement. The Exchange's insurance subsidiaries also utilize Indemnity for these services in accordance with the service agreements between each of the subsidiaries and Indemnity. Collectively, these services represent a second performance obligation under the subscriber's agreement and the service agreements. The revenue allocated to this performance obligation is recognized over a four-year period representing the time over which these services are provided. The portion of revenue not yet earned is recorded as a contract liability in the Consolidated Statements of Financial Position. For the years ended December 31, 2025, 2024, and 2023, we recognized revenue of $ 42.8  million, $ 41.2  million, and $ 36.5  million, respectively, that was included in the contract liability balance at the beginning of the respective periods. The administrative services expenses we incur and the related reimbursements we receive are recorded gross in the Consolidated Statements of Operations.

Indemnity records a receivable from the Exchange for management fee revenue when the premium is written or assumed from affiliates by the Exchange. Indemnity collects the management fee from the Exchange when the Exchange collects the premiums from the subscribers (policyholders). As the Exchange issues policies almost exclusively with annual terms, cash collections generally occur within one year.

The following table disaggregates revenue by our two performance obligations for the years ended December 31:

(in thousands) 2025 2024 2023
Management fee revenue - policy issuance and renewal services $ 3,131,806   $ 2,894,074   $ 2,442,073  

Management fee revenue - administrative services 74,058   68,355   63,669  
Administrative services reimbursement revenue 836,639   806,336   737,139  
Total revenue from administrative services $ 910,697   $ 874,691   $ 800,808  

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Note 4.  Segment Information

We have one reportable segment: management operations. All segment revenue is derived in the United States, the majority of which is from the subscriber's agreement between us and the subscribers (policyholders) at the Exchange, our sole customer, as further described in Note 3, "Revenue". Our chief operating decision maker ("CODM") is our Executive Council, which includes our Chief Executive Officer ("CEO"), Chief Financial Officer, executive vice presidents and certain senior vice presidents reporting directly to the CEO as applicable. The CODM assesses performance for the management operations segment and decides how to allocate resources based on net income, as reported in our Consolidated Statements of Operations. Net income is used to monitor budget versus actual results. Total assets as reported in our Consolidated Statements of Financial Position, all of which are located in the United States, are reviewed by the CODM for purposes of decision making. The accounting policies of our management operations segment are the same as those described in Note 2, "Significant Accounting Policies".

The following table presents our management operations segment revenue, significant segment expenses regularly provided to the CODM, and net income for the years ended December 31:

(in thousands) 2025 2024 2023
Management fee revenue $ 3,205,864   $ 2,962,429   $ 2,505,742  
Administrative services reimbursement revenue 836,639   806,336   737,139  
Service agreement revenue 24,755   26,350   26,059  
Total operating revenue 4,067,258   3,795,115   3,268,940  

Commissions 1,777,043   1,601,401   1,348,530  
Underwriting and policy processing 204,245   199,485   181,003  
Information technology 239,789   215,488   216,746  
Sales and advertising 66,475   66,480   58,905  
Customer service 46,538   43,045   34,391  
Administrative and other 179,345   186,425   171,970  
Cost of operations - policy issuance and renewal services
2,513,435   2,312,324   2,011,545  
Cost of operations - administrative services
836,639   806,336   737,139  
Total operating expenses (1)
3,350,074   3,118,660   2,748,684  
Operating income
717,184   676,455   520,256  

Total investment income 84,861   69,260   28,968  

Other income 8,558   11,564   12,712  
Contribution to charitable foundation ( 100,000 ) —   —  
Income tax expense 151,268   156,965   115,875  
Net income
$ 559,335   $ 600,314   $ 446,061  

(1)    See Note 8, "Fixed Assets", for management operations segment depreciation and amortization expense included primarily in "Total operating expenses", as reported on our Consolidated Statements of Operations. See our Consolidated Statements of Cash Flows for segment
expenditures on fixed asset additions.

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Note 5.  Earnings Per Share
 
Class A and Class B basic earnings per share and Class B diluted earnings per share are calculated under the two-class method. The two-class method allocates earnings to each class of stock based upon its dividend rights.  Class B shares are convertible into Class A shares at a conversion ratio of 2,400 to 1. See Note 13, "Capital Stock".

Class A diluted earnings per share are calculated under the if-converted method, which reflects the conversion of Class B shares to Class A shares. Diluted earnings per share calculations include the dilutive effect of assumed issuance of stock-based awards under compensation plans that have the option to be paid in stock using the treasury stock method. See Note 11, "Incentive and Deferred Compensation Plans".
 
A reconciliation of the numerators and denominators used in the basic and diluted per-share computations is presented as follows for each class of common stock:

(dollars in thousands, except per share data) For the years ended December 31,
2025 2024 2023
Allocated net income (numerator) Weighted shares (denominator) Per- share amount Allocated net income (numerator) Weighted shares (denominator) Per- share amount Allocated net income (numerator) Weighted shares (denominator) Per- share amount
Class A – Basic EPS:
Income available to  Class A stockholders
$ 554,755   46,189,024   $ 12.01   $ 595,399   46,189,044   $ 12.89   $ 442,409   46,188,981   $ 9.58  
Dilutive effect of stock-based awards
0   15,600   —  0   16,422   —  0   9,630   — 
Assumed conversion of Class B shares
4,580   6,100,800   —  4,915   6,100,800   —  3,652   6,100,800   — 
Class A – Diluted EPS:      
Income available to Class A stockholders on Class A equivalent shares
$ 559,335   52,305,424   $ 10.69   $ 600,314   52,306,266   $ 11.48   $ 446,061   52,299,411   $ 8.53  
Class B – Basic EPS:
     
Income available to Class B stockholders
$ 4,580   2,542   $ 1,802   $ 4,915   2,542   $ 1,934   $ 3,652   2,542   $ 1,437  
Class B – Diluted EPS:
     
Income available to Class B stockholders
$ 4,579   2,542   $ 1,801   $ 4,914   2,542   $ 1,933   $ 3,652   2,542   $ 1,437  

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Note 6. Fair Value
 
Financial instruments carried at fair value
Our available-for-sale and equity securities are recorded at fair value, which is the price that would be received to sell the asset in an orderly transaction between willing market participants as of the measurement date.
 
Valuation techniques used to derive the fair value of our available-for-sale and equity securities are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources. Unobservable inputs reflect our own assumptions regarding fair market value for these securities. Financial instruments are categorized based upon the following characteristics or inputs to the valuation techniques:
 
• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3 – Unobservable inputs for the asset or liability.
 
Estimates of fair values for our investment portfolio are obtained primarily from a nationally recognized pricing service. Our Level 1 securities are valued using an exchange traded price provided by the pricing service. Pricing service valuations for Level 2 securities include multiple verifiable, observable inputs including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data. Pricing service valuations for Level 3 securities are based upon proprietary models and are used when observable inputs are not available or in illiquid markets.
 
Although virtually all of our prices are obtained from third party sources, we also perform internal pricing reviews, including evaluating the methodology and inputs used to ensure that we determine the proper classification level of the financial instrument and reviewing securities with price changes that vary significantly from current market conditions or independent price sources. Price variances are investigated and corroborated by market data and transaction volumes. We have reviewed the pricing methodologies of our pricing service as well as other observable inputs and believe that the prices adequately consider market activity in determining fair value. 

In limited circumstances we adjust the price received from the pricing service when, in our judgment, a better reflection of fair value is available based upon corroborating information and our knowledge and monitoring of market conditions such as a disparity in price of comparable securities and/or non-binding broker quotes. In other circumstances, certain securities are internally priced because prices are not provided by the pricing service.
 
When a price from the pricing service is not available, values are determined by obtaining broker/dealer quotes and/or market comparables. When available, we obtain multiple quotes for the same security. The ultimate value for these securities is determined based upon our best estimate of fair value using corroborating market information. As of December 31, 2025, nearly all of our available-for-sale and equity securities were priced using a third party pricing service.

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The following tables present our fair value measurements on a recurring basis by asset class and level of input as of:

December 31, 2025

(in thousands) Total Level 1 Level 2 Level 3

Available-for-sale securities:

Corporate debt securities $ 844,479   $ 998   $ 839,542   $ 3,939  
Collateralized debt obligations 133,267   0   133,267   0  
Commercial mortgage-backed securities 140,541   0   117,520   23,021  
Residential mortgage-backed securities 187,226   0   186,432   794  
Other debt securities 35,152   0   35,152   0  
U.S. Treasury 24,163   0   24,163   0  
Total available-for-sale securities (1)
1,364,828   998   1,336,076   27,754  
Equity securities:
Financial services sector 74,614   2,593   66,350   5,671  
Utilities sector 3,696   0   3,696   0  
Energy sector 2,713   0   2,713   0  
Consumer sector 5,563   0   2,393   3,170  
Technology sector 3,224   0   0   3,224  

Communications sector 953   0   953   0  
Total equity securities (2)
90,763   2,593   76,105   12,065  
Total $ 1,455,591   $ 3,591   $ 1,412,181   $ 39,819  

(1)    This includes $ 44.4 million of securities lent under a securities lending agreement.
(2)    This includes $ 20.1 million of securities lent under a securities lending agreement.

December 31, 2024

(in thousands) Total Level 1 Level 2 Level 3

Available-for-sale securities:

Corporate debt securities $ 643,943   $ 0   $ 637,675   $ 6,268  
Collateralized debt obligations 114,127   0   114,127   0  
Commercial mortgage-backed securities 124,982   0   100,893   24,089  
Residential mortgage-backed securities 133,812   0   133,812   0  
Other debt securities 26,751   0   26,751   0  

Total available-for-sale securities (1)
1,043,615   0   1,013,258   30,357  
Equity securities:
Financial services sector 69,930   1,052   65,378   3,500  
Utilities sector 5,629   0   5,629   0  
Energy sector 4,117   0   4,117   0  
Consumer sector 3,341   54   1,787   1,500  
Technology sector 1,974   0   0   1,974  

Communications sector 900   0   900   0  

Total equity securities 85,891   1,106   77,811   6,974  
Total $ 1,129,506   $ 1,106   $ 1,091,069   $ 37,331  

(1)    This includes $ 7.3 million of securities lent under a securities lending agreement.
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We review the fair value hierarchy classifications each reporting period. Transfers between hierarchy levels may occur due to changes in available market observable inputs.

Level 3 Assets – 2025 Year-to-Date Change:

(in thousands) Beginning balance at December 31, 2024 Included in
earnings (1)
Included
in other
comprehensive
income (loss) Purchases Sales Transfers
into
Level 3 (2)
Transfers
out of Level 3 (2)
Ending balance at December 31, 2025
Available-for-sale securities:

Corporate debt securities $ 6,268   $ ( 37 ) $ ( 48 ) $ 4,773   $ ( 2,324 ) $ 5,399   $ ( 10,092 ) $ 3,939  
Collateralized debt obligations 0   ( 4 ) 0   700   ( 696 ) 0   0   0  
Commercial mortgage-backed securities 24,089   ( 1,089 ) 429   4,769   ( 3,142 ) 26,476   ( 28,511 ) 23,021  
Residential mortgage-backed securities 0   0   13   0   ( 42 ) 2,207   ( 1,384 ) 794  

Total available-for-sale securities 30,357   ( 1,130 ) 394   10,242   ( 6,204 ) 34,082   ( 39,987 ) 27,754  
Equity securities 6,974   681   —   4,750   0   158   ( 498 ) 12,065  
Total Level 3 securities $ 37,331   $ ( 449 ) $ 394   $ 14,992   $ ( 6,204 ) $ 34,240   $ ( 40,485 ) $ 39,819  

Level 3 Assets – 2024 Year-to-Date Change:

(in thousands) Beginning balance at December 31, 2023 Included in
earnings (1)
Included
in other
comprehensive
income (loss) Purchases Sales Transfers
into
Level 3 (2)
Transfers
out of Level 3 (2)
Ending balance at December 31, 2024
Available-for-sale securities:

Corporate debt securities $ 4,506   $ ( 129 ) $ 126   $ 6,708   $ ( 1,821 ) $ 8,379   $ ( 11,501 ) $ 6,268  

Commercial mortgage-backed securities 10,994   ( 1,519 ) 664   3,826   ( 1,571 ) 30,340   ( 18,645 ) 24,089  
Residential mortgage-backed securities 1,534   ( 5 ) ( 24 ) 0   ( 40 ) 0   ( 1,465 ) 0  

Total available-for-sale securities 17,034   ( 1,653 ) 766   10,534   ( 3,432 ) 38,719   ( 31,611 ) 30,357  
Equity securities 7,334   670   —   2,019   ( 84 ) 553   ( 3,518 ) 6,974  
Total Level 3 securities $ 24,368   $ ( 983 ) $ 766   $ 12,553   $ ( 3,516 ) $ 39,272   $ ( 35,129 ) $ 37,331  

(1)    These amounts are reported as net investment income and net realized and unrealized investment gains (losses) for each of the periods presented above.
(2)    Transfers into and/or (out) of Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs.

Financial instruments not carried at fair value
The following table presents the carrying values and fair values of financial instruments categorized as Level 3 in the fair value hierarchy that are recorded at carrying value as of:

December 31, 2025 December 31, 2024
(in thousands) Carrying Value Fair Value Carrying Value Fair Value

Agent loans, net (1)
$ 109,331   $ 113,850   $ 92,731   $ 90,713  
Other loans receivable, net (2)
15,491   12,509   11,555   11,555  
Held-to-maturity securities, net (3)
4,833   4,863   4,833   4,934  

(1)    The current portion of agent loans is included in the line item "Prepaid expenses and other current assets, net" in the Consolidated Statements of Financial Position.
(2)    The current and long-term portions of other loans receivable are included in the line items "Prepaid expenses and other current assets, net" and "Other assets, net", respectively, in the Consolidated Statements of Financial Position.
(3)    Held-to-maturity securities are included in the line item "Other assets, net" in the Consolidated Statements of Financial Position.
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Note 7.  Investments
 
Fixed maturity securities
See Note 6, "Fair Value" for additional fair value disclosures. The following tables summarize the amortized cost and estimated fair value, net of credit loss allowance, of our fixed maturity securities as of:

December 31, 2025
(in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value
Available-for-sale securities:

Corporate debt securities $ 834,885   $ 12,779   $ 3,185   $ 844,479  
Collateralized debt obligations 133,224   207   164   133,267  
Commercial mortgage-backed securities 139,516   2,808   1,783   140,541  
Residential mortgage-backed securities 196,624   982   10,380   187,226  
Other debt securities 34,863   543   254   35,152  
U.S. Treasury 24,116   106   59   24,163  
Total available-for-sale securities, net (1)
1,363,228   17,425   15,825   1,364,828  
Held-to-maturity securities - states & political subdivisions 4,833   30 0 4,863  
Total fixed maturity securities, net $ 1,368,061   $ 17,455   $ 15,825   $ 1,369,691  

(1)     This includes an estimated fair value of $ 44.4 million of securities lent under a securities lending agreement.

December 31, 2024
(in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value
Available-for-sale securities:

Corporate debt securities $ 647,861   $ 4,767   $ 8,685   $ 643,943  
Collateralized debt obligations 114,142   372   387   114,127  
Commercial mortgage-backed securities 126,509   1,458   2,985   124,982  
Residential mortgage-backed securities 150,212   62   16,462   133,812  
Other debt securities 27,232   147   628   26,751  

Total available-for-sale securities, net (1)
1,065,956   6,806   29,147   1,043,615  
Held-to-maturity securities - states & political subdivisions 4,833   101 0   4,934  
Total fixed maturity securities, net $ 1,070,789   $ 6,907   $ 29,147   $ 1,048,549  

(1)     This includes an estimated fair value of $ 7.3 million of securities lent under a securities lending agreement.

The amortized cost and estimated fair value of our fixed maturity securities at December 31, 2025 are shown below by remaining contractual term to maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

December 31, 2025
Amortized Estimated
(in thousands) cost fair value
Available-for-sale securities:
Due in one year or less $ 37,273   $ 37,302  
Due after one year through five years 552,240   558,399  
Due after five years through ten years 249,274   251,231  
Due after ten years 524,441   517,896  
Total available-for-sale securities, net (1) (2)
1,363,228   1,364,828  
Held-to-maturity securities - due after ten years 4,833   4,863  
Total fixed maturity securities, net $ 1,368,061   $ 1,369,691  

(1)    The contractual maturities of our available-for-sale securities are included in the table. However, given our intent to sell certain impaired securities, these securities are classified as current assets in our Consolidated Statement of Financial Position at December 31, 2025.
(2)    This includes an estimated fair value of $ 44.4 million of securities lent under a securities lending agreement.
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The below securities have been evaluated for credit impairment using criteria described within Note 2, "Significant Accounting Policies". The gross unrealized losses are primarily attributable to changes in interest rates and are not deemed to be credit-related. We do not have the intent to sell these securities and it is more likely than not that we would not be required to sell these securities before the anticipated recovery of the amortized cost basis.

The following tables present available-for-sale securities based on length of time in a gross unrealized loss position as of:

December 31, 2025
Less than 12 months 12 months or longer Total
(dollars in thousands) Fair
value Unrealized losses Fair
value Unrealized losses Fair
value Unrealized losses No. of holdings

Corporate debt securities $ 72,699   $ 1,555   $ 41,040   $ 1,630   $ 113,739   $ 3,185   418  
Collateralized debt obligations 57,917   120   3,909   44   61,826   164   83  
Commercial mortgage-backed securities 16,103   59   19,956   1,724   36,059   1,783   70  
Residential mortgage-backed securities 17,675   27   92,019   10,353   109,694   10,380   146  
Other debt securities 3,936   39   3,655   215   7,591   254   27  
U.S. Treasury 13,296   59   0   0   13,296   59   3  
Total available-for-sale securities $ 181,626   $ 1,859   $ 160,579   $ 13,966   $ 342,205   $ 15,825   747  
Quality breakdown of available-for-sale securities:              
Investment grade $ 144,472   $ 433   $ 144,604   $ 12,773   $ 289,076   $ 13,206   371  
Non-investment grade 37,154   1,426   15,975   1,193   53,129   2,619   376  
Total available-for-sale securities $ 181,626   $ 1,859   $ 160,579   $ 13,966   $ 342,205   $ 15,825   747  

December 31, 2024
Less than 12 months 12 months or longer Total
(dollars in thousands) Fair
value Unrealized losses Fair
value Unrealized losses Fair
value Unrealized losses No. of holdings

Corporate debt securities $ 197,619   $ 2,486   $ 156,059   $ 6,199   $ 353,678   $ 8,685   567  
Collateralized debt obligations 33,686   71   11,762   316   45,448   387   77  
Commercial mortgage-backed securities 28,333   407   24,966   2,578   53,299   2,985   131  
Residential mortgage-backed securities 38,003   1,289   90,209   15,173   128,212   16,462   169  
Other debt securities 11,663   150   5,045   478   16,708   628   42  

Total available-for-sale securities $ 309,304   $ 4,403   $ 288,041   $ 24,744   $ 597,345   $ 29,147   986  
Quality breakdown of available-for-sale securities:              
Investment grade $ 280,332   $ 3,701   $ 260,480   $ 22,664   $ 540,812   $ 26,365   616  
Non-investment grade 28,972   702   27,561   2,080   56,533   2,782   370  
Total available-for-sale securities $ 309,304   $ 4,403   $ 288,041   $ 24,744   $ 597,345   $ 29,147   986  

Credit loss allowances
The following tables present a roll-forward of the allowances for credit losses on investments for the years ended December 31:

2025
(in thousands) Available-for-sale securities Held-to-maturity securities Other loans receivable
Agent loans
Balance, beginning of period $ 513   $ 2,167   $ 12,198   $ 1,312  
Provision and recoveries 1,389   0   2,928   368  
Sales/collections and write-offs ( 1,000 ) 0   ( 25 ) 0  
Balance, end of period $ 902   $ 2,167   $ 15,101   $ 1,680  

2024
(in thousands) Available-for-sale securities Held-to-maturity securities Other loans receivable
Agent loans
Balance, beginning of period $ 597   $ 0   $ 11,081   $ 957  
   Provision and recoveries 484   2,167   1,117   355  
   Sales/collections and write-offs ( 568 ) 0   0   0  
Balance, end of period $ 513   $ 2,167   $ 12,198   $ 1,312  

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Net investment income
Investment income (loss), net of expenses, was generated from the following portfolios for the years ended December 31:

(in thousands) 2025 2024 2023

Available-for-sale securities $ 57,093   $ 49,605   $ 42,563  
Equity securities 4,637   4,758   4,493  
Limited partnerships (1)
3,549   1,971   ( 11,308 )
Agent loans (2)
6,417   4,368   3,236  
Cash equivalents and other (2)
16,551   11,093   5,943  
Total investment income 88,247   71,795   44,927  
Less: investment expenses 2,410   1,640   355  
Net investment income $ 85,837   $ 70,155   $ 44,572  

(1)    Limited partnership income (losses) include both realized gains (losses) and unrealized valuation changes. Our limited partnership investments are included in the line item "Other assets, net" in the Consolidated Statements of Financial Position. We have made no new significant limited partnership commitments since 2006, and the balance of limited partnership investments is expected to decline over time as additional distributions are received.
(2)    2024 and 2023 amounts have been reclassified to conform to the current period presentation.

Net realized and unrealized investment gains (losses)
Realized and unrealized gains (losses) on investments were as follows for the years ended December 31:

(in thousands) 2025 2024 2023
Available-for-sale securities:

Gross realized gains $ 2,891   $ 3,415   $ 804  
Gross realized losses ( 2,838 ) ( 5,035 ) ( 7,523 )
Net realized gains (losses) on available-for-sale securities 53   ( 1,620 ) ( 6,719 )

Equity securities 2,278   4,848   871  

Miscellaneous 5   1   10  

Net realized and unrealized investment gains (losses) $ 2,336   $ 3,229   $ ( 5,838 )

The portion of net unrealized gains (losses) recognized during the reporting period related to equity securities held at the reporting date is calculated as follows for the years ended December 31:

(in thousands) 2025 2024 2023
Equity securities:
Net gains recognized during the period $ 2,278   $ 4,848   $ 871  
Less: net gains (losses) recognized on securities sold 341   1,213   ( 2,328 )
Net unrealized gains recognized on securities held at reporting date $ 1,937   $ 3,635   $ 3,199  

Net impairment losses recognized in earnings
Impairments on investments were as follows for the years ended December 31:

(in thousands) 2025 2024 2023
Available-for-sale securities:
Intent to sell $ ( 495 ) $ ( 299 ) $ ( 1,759 )
Credit impaired ( 1,389 ) ( 484 ) ( 670 )
Total available-for-sale securities ( 1,884 ) ( 783 ) ( 2,429 )
Expected credit losses:

Held-to-maturity securities 0   ( 2,167 ) —  
Agent loans ( 368 ) ( 355 ) 0  
Other loans receivable
( 1,060 ) ( 819 ) ( 7,337 )
Net impairment losses recognized in earnings $ ( 3,312 ) $ ( 4,124 ) $ ( 9,766 )

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Securities lending transactions
As of December 31, 2025, the estimated fair value of loaned securities was $ 64.5 million, consisting of $ 44.4 million of available-for sale securities and $ 20.1 million of equity securities. As of December 31, 2024, the estimated fair value of loaned securities was $ 7.3 million, consisting of available-for-sale securities. Cash collateral received in connection with these securities lending transactions totaled $ 61.9 million and $ 7.5 million as of December 31, 2025 and 2024, respectively. The cash collateral was reinvested in cash equivalents and is included in "Cash and cash equivalents" in the Consolidated Statements of Financial Position. As of December 31, 2025, we also received $ 4.5 million of non-cash collateral, which we are not permitted to sell or repledge. There were no securities lending transactions outstanding with contractual maturities extending beyond one year from the reporting date.

If we have to return cash collateral on short notice, we may have difficulty selling investments in a timely manner, be forced to sell them for less than we otherwise would have been able to realize, or both. In addition, in the event of such forced sale, for securities in an unrealized loss position, realized losses would be incurred on securities sold and impairments would be incurred, if there is a need to sell securities prior to recovery, which may negatively impact our financial condition.

Note 8.  Fixed Assets

The following table summarizes our fixed assets by category as of December 31:

(in thousands) 2025 2024
Software $ 412,789   $ 351,814  
Land, buildings, and building improvements 235,915   233,647  
Equipment 57,968   52,122  
Furniture and fixtures 22,944   22,944  
Leasehold improvements 1,654   1,378  
Construction in progress 78,148   46,302  
Projects in progress 77,955   81,616  
Total fixed assets, gross 887,373   789,823  
Less: Accumulated depreciation and amortization ( 315,897 ) ( 276,329 )
Fixed assets, net $ 571,476   $ 513,494  

Software increased primarily due to internal-use software projects that were completed and placed in service as well as the renewal of mainframe software licenses.

Construction in progress includes ongoing renovations to office buildings that are part of our principal headquarters and not yet subject to depreciation. The renovations are expected to be completed in phases with full completion expected in 2027.

Projects in progress include certain computer software and software development costs for internal use that are not yet subject to amortization.

Depreciation and amortization expense totaled $ 69.5 million, $ 56.5 million and $ 47.4 million for the years ended December 31, 2025, 2024 and 2023, respectively, and is primarily included in total operating expenses. The Exchange and its insurance subsidiaries reimbursed us for approximately 31 %, 28 % and 27 % in 2025, 2024 and 2023, respectively, for annual depreciation and amortization expense on assets supporting administrative services.

Note 9.  Bank Line of Credit

We have access to a $ 100  million bank revolving line of credit with a $ 25 million letter of credit sublimit that expires on November 1, 2029. As of December 31, 2025, a total of $ 99.2 million remains available under the facility due to $ 0.8 million outstanding letters of credit, which reduce the availability for letters of credit to $ 24.2 million. We had no borrowings outstanding on our line of credit as of December 31, 2025. Investments with a fair value of $ 111.4 million were pledged as collateral on the line of credit at December 31, 2025. These investments have no trading restrictions and are reported as available-for-sale securities and cash and cash equivalents on our Consolidated Statement of Financial Position as of December 31, 2025.  The bank requires compliance with certain covenants, which include leverage ratios and debt restrictions.  We are in compliance with all covenants at December 31, 2025.

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Note 10.  Postretirement Benefits

Pension plans
Our pension plans consist of a noncontributory defined benefit pension plan covering substantially all employees and an unfunded supplemental employee retirement plan ("SERP") for certain members of executive and senior management. The pension plan provides benefits to covered individuals satisfying certain age and service requirements. The defined benefit pension plan and SERP each provide benefits through a final average earnings formula.

Although we are the sponsor of these postretirement plans and record the funded status of these plans, there are reimbursements between us and the Exchange and its insurance subsidiaries for their allocated share of pension cost or income. These reimbursements represent pension benefits for employees performing administrative services and an allocated share of plan cost (income) for employees in departments that support the administrative functions. In 2025, the Exchange and its insurance subsidiaries reimbursed us for approximately 61 % of the annual defined benefit pension cost and 33 % of the annual SERP cost. For our funded pension plan, amounts are settled in cash for the portion of pension cost (income) allocated to the Exchange and its insurance subsidiaries. For our unfunded SERP, we pay the obligations when due and amounts are settled in cash between entities when there is a payout.

Pension plan cost (income)
Pension plan cost (income) includes the following components for the years ended December 31:

(in thousands)
2025 2024 2023
Service cost for benefits earned $ 35,471   $ 34,554   $ 28,763  
Interest cost on benefit obligation 58,748   52,688   50,193  
Expected return on plan assets ( 80,276 ) ( 80,793 ) ( 68,869 )
Prior service cost amortization 1,688   1,611   1,446  
Net actuarial gain amortization ( 2,519 ) ( 6,859 ) ( 15,331 )
Settlement gain (1)
( 572 ) ( 1,338 ) —  
Pension plan cost (income) (2)
$ 12,540   $ ( 137 ) $ ( 3,798 )

(1)    Settlement accounting was required due to lump sum payments made under the SERP to former officers in 2025 and 2024.
(2)     Pension plan cost (income) represents total plan cost (income) before reimbursements between Indemnity and the Exchange and its insurance subsidiaries. The components of pension plan cost (income) other than the service cost components are included in the line item " Other income " in the Consolidated Statements of Operations, net of reimbursements between Indemnity and the Exchange and its insurance subsidiaries.

Actuarial assumptions
The following table describes the weighted-average assumptions used to measure benefit obligations at December 31:

2025 2024

Employee pension plan:
Discount rate 5.72   % 5.87   %
Expected return on assets 7.00   7.00  
Rate of compensation increase – age-graded 5.07   5.01  

SERP:
Discount rate 5.44   % 5.65   %
Rate of compensation increase 7.00   7.00  

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The following table describes the weighted-average assumptions used to measure net periodic benefit costs for the years ended December 31:

2025 2024 2023

Employee pension plan:
Discount rate 5.87   % 5.34   % 5.67   %
Expected return on assets 7.00   7.00   6.50  
Rate of compensation increase – age-graded 5.05   4.31   3.30  

SERP:
Discount rate (1)
5.29   % 5.12   % 5.46   %
Rate of compensation increase 7.00   5.00   5.00  

(1)    Settlement accounting was required due to lump sum payments made under the SERP in 2025 and 2024. The 2025 discount rates in effect at the January 1, September 1, and November 1 measurement dates were 5.65 %, 5.51 %, and 5.29 %, respectively. The 2024 discount rates in effect at the January 1, June 1, and September 1 measurement dates were 5.11 %, 5.53 %, and 5.12 %, respectively.

The economic assumptions that have the most impact on the postretirement benefits expense are the discount rate and the long-term rate of return on plan assets. The discount rate assumption used to determine the benefit obligation for all periods presented was based upon a yield curve developed from corporate bond yield information.

The pension plan's expected long-term rate of return represents the average rate of return to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid. To determine the expected long-term rate of return assumption, we utilized models based upon historical analysis and forward-looking views of the financial markets based upon key factors such as historical returns for the asset class' applicable indices, the correlations of the asset classes under various market conditions, and consensus views on future real economic growth and inflation. The expected future return for each asset class is then combined by considering correlations between asset classes and the volatilities of each asset class to produce a reasonable range of asset return results within which our expected long-term rate of return assumption falls.

Funding policy/funded status
Our defined benefit pension plan funding policy is generally to contribute an amount equal to the greater of the target normal cost for the plan year, or the amount necessary to fund the plan to 100 %. Accordingly, we made contributions of $ 39 million and $ 33  million in 2025 and 2024, respectively. We also made a contribution of $ 47  million in January 2026. The pension asset is presented separately from the unfunded SERP plan as a non-current asset on the Consolidated Statements of Financial Position. The following table sets forth the funded status of the pension plans and the amounts recognized in the Consolidated Statements of Financial Position at December 31:

(in thousands)
2025 2024

Funded status at end of year $ ( 11,484 ) $ ( 11,718 )

Pension asset $ 24,137   $ 21,311  
Pension liabilities – due within one year (1)
( 2,211 ) ( 4,959 )
Pension liabilities – due after one year ( 33,410 ) ( 28,070 )
Net amount recognized $ ( 11,484 ) $ ( 11,718 )

(1)    The current portion of pension liabilities for the unfunded plan is included in accounts payable and accrued liabilities.

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Benefit obligations
Benefit obligations are described in the following tables. Accumulated and projected benefit obligations represent the obligations of a pension plan for past service as of the measurement date. The accumulated benefit obligation is the present value of pension benefits earned as of the measurement date based on employee service and compensation prior to that date. It differs from the projected benefit obligation in that the accumulated benefit obligation includes no assumptions to reflect expected future compensation. The following table sets forth a reconciliation of beginning and ending balances of the projected benefit obligation, as well as the accumulated benefit obligation at December 31:

(in thousands)
2025 2024
Projected benefit obligation, beginning of year $ 1,013,767   $ 993,554  
Service cost for benefits earned 35,471   34,554  
Interest cost on benefit obligation 58,748   52,688  
Plan amendments 1,935   1,146  
Actuarial loss (gain)
36,300   ( 28,250 )
Benefits paid ( 39,887 ) ( 35,924 )
Settlements
( 3,252 ) ( 4,001 )
Projected benefit obligation, end of year $ 1,103,082   $ 1,013,767  

Accumulated benefit obligation, end of year $ 935,049   $ 860,855  

Projected benefit obligations increased $ 89.3 million at December 31, 2025 compared to December 31, 2024 primarily due to the lower discount rate used to measure the future benefit obligations. The discount rate for the employee pension plan decreased to 5.72 % in 2025 from 5.87 % in 2024.

The SERP had a projected benefit obligation in excess of plan assets at December 31:

(in thousands)
2025 2024
Projected benefit obligation $ 35,621   $ 33,029  

Plan assets —   —  

The SERP had an accumulated benefit obligation in excess of plan assets at December 31:

(in thousands)
2025 2024

Accumulated benefit obligation $ 23,523   $ 22,761  
Plan assets —   —  

Plan assets
The following table sets forth a reconciliation of beginning and ending balances of the fair value of plan assets at December 31:

(in thousands)
2025 2024
Fair value of plan assets, beginning of year $ 1,002,049   $ 996,879  
Actual return on plan assets 90,357   8,034  
Employer contributions 42,331   37,061  
Benefits paid ( 39,887 ) ( 35,924 )
Settlements
( 3,252 ) ( 4,001 )
Fair value of plan assets, end of year $ 1,091,598   $ 1,002,049  

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Accumulated other comprehensive loss
Net actuarial loss and prior service cost included in accumulated other comprehensive loss that were not yet recognized as components of net benefit costs were as follows at December 31:

(in thousands)
2025 2024
Net actuarial loss
$ 56,062   $ 26,752  
Prior service cost 11,297   11,050  
Net amount not yet recognized $ 67,359   $ 37,802  

Other comprehensive loss
Amounts recognized in other comprehensive loss for pension plans were as follows for the years ended December 31:

(in thousands)
2025 2024 2023
Net actuarial loss arising during the year $ 26,219   $ 44,509   $ 28,279  
Amortization of net actuarial gain 2,519   6,859   15,331  
Amortization of prior service cost ( 1,688 ) ( 1,611 ) ( 1,446 )
Plan amendments (1)
1,935   1,146   583  
Settlement gain
572   1,338   —  
Total recognized in other comprehensive loss $ 29,557   $ 52,241   $ 42,747  

(1)    Plan amendments relate to new SERP participants.

Asset allocation
The employee pension plan utilizes a return seeking and a liability asset matching allocation strategy.  It is based upon the understanding that 1) equity investments are expected to outperform debt investments over the long-term, 2) the potential volatility of short-term returns from equities is acceptable in exchange for the larger expected long-term returns, and 3) a portfolio structured across investment styles and markets (both domestic and foreign) reduces volatility.  As a result, the employee pension plan's investment portfolio utilizes a broadly diversified asset allocation across domestic and foreign equity and debt markets.  The investment portfolio is composed of commingled pools, an exchange traded fund, and a separate account that are dedicated exclusively to the management of employee benefit plan assets.

The target and actual asset allocations for the portfolio are as follows for the years ended December 31:

Target asset
allocation Target asset
allocation Actual asset
allocation Actual asset
allocation
Asset allocation: 2025 2024 2025 2024
Equity securities:
U.S. equity securities 21   % 21   % 22   % (1) 21   %
Non-U.S. equity securities 14   14   15   (2) 14  
Total equity securities 35   35   37   35  
Debt securities 64   64   62   (3) 63  
Other 1   1   1   (4) 2  
Total 100   % 100   % 100   % 100   %

(1)    U.S. equity securities – 100 % seek to achieve excess returns relative to the Russell 3000 Index.
(2)    Non-U.S. equity securities – 11 % are allocated to international small cap investments, while another 21 % are allocated to international emerging market investments.  The remaining 68 % of the Non-U.S. equity securities are allocated to investments seeking to achieve excess returns relative to an international market index.
(3)    Debt securities – 59 % are allocated to long U.S. Treasury Strips, 41 % are allocated to U.S. corporate bonds with an emphasis on long duration bonds rated A or better.
(4)    Institutional money market fund.

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The following tables present fair value measurements for the pension plan assets by major category and level of input as of:

December 31, 2025

(in thousands) Total  Level 1
Fair Value Level 2
Fair Value Level 3
Fair Value Net Asset
Value (NAV)
Equity securities:
U.S. equity securities $ 235,431   $ 224,370   $ 0   $ 0   $ 11,061  
Non-U.S. equity securities 160,644   108,651   0   0   51,993  
Total equity securities 396,075   333,021   0   0   63,054  
Debt securities 679,966   0   0   0   679,966  
Other 15,557   15,557   0   0   0  
Total $ 1,091,598   $ 348,578   $ 0   $ 0   $ 743,020  

December 31, 2024

(in thousands) Total Level 1
Fair Value Level 2
Fair Value Level 3
Fair Value Net Asset
Value (NAV)
Equity securities:
U.S. equity securities $ 214,942   $ 204,588   $ 0   $ 0   $ 10,354  
Non-U.S. equity securities 142,401   98,115   0   0   44,286  
Total equity securities 357,343   302,703   0   0   54,640  
Debt securities 628,961   0   0   0   628,961  
Other 15,745   15,745   0   0   0  
Total $ 1,002,049   $ 318,448   $ 0   $ 0   $ 683,601  

Estimates of fair values of the pension plan assets are obtained primarily from the trustee and custodian of our pension plan.  Our Level 1 category includes a money market mutual fund, an exchange traded fund, and a separate account for which the fair value is determined using an exchange traded price provided by the trustee and custodian.  Commingled pools are valued based on NAV per share or unit as a practical expedient as reported by the fund manager, multiplied by the number of shares or units held as of the measurement date. Accordingly, these NAV-based investments have been excluded from the fair value hierarchy. These investments have minimal redemption notice periods and are redeemable daily at the NAV, less transaction fees, without significant restrictions. There are no significant unfunded commitments related to these investments.

Estimated future benefit payments
The following table sets forth amounts of benefits expected to be paid over the next 10 years from our pension plans as of:

(in thousands)
Year ending
December 31, Expected future
benefit payments
2026 $ 44,346  
2027 47,555  
2028 51,396  
2029 54,999  
2030 59,093  
2031 - 2035 346,104  

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Employee savings plan
All full-time and regular part-time employees are eligible to participate in a qualified 401(k) savings plan.  We match 100 % of the participant contributions up to 3 % of compensation and 50 % of participant contributions over 3 % and up to 5 % of compensation.  Matching contributions paid to the plan were $ 21.3 million in 2025, $ 21.0 million in 2024, and $ 18.4 million in 2023.  The Exchange and its insurance subsidiaries reimbursed us for approximately 61 % of the matching contributions. Employees are permitted to invest the employer-matching contributions in our Class A common stock.  Employees, other than executive and senior officers, may sell the shares at any time without restriction, provided they are in compliance with applicable insider trading laws; sales by executive and senior officers are subject to additional pre-clearance restrictions imposed by our insider trading policies.  The plan acquires shares in the open market necessary to meet the obligations of the plan.  Plan participants held 0.1 million shares of our Class A common stock at December 31, 2025 and 2024.

Note 11.  Incentive and Deferred Compensation Plans
 
We have two incentive plans and two deferred compensation plans for our executives, senior vice presidents and other selected officers, and two deferred compensation plans for our outside directors. Executives, senior vice presidents and other selected officers and key employees are also eligible to receive awards under an equity compensation plan, subject to the discretion of the Executive Compensation and Development Committee of our Board of Directors ("ECDC") or the chief executive officer.

Annual incentive plan
Our annual incentive plan ("AIP") is a bonus plan that pays cash to our executives, senior vice presidents and other selected officers annually. Participants can elect to defer up to 100 % of the award under either the deferred compensation plan or the incentive compensation deferral plan. If the funding qualifier is met, plan participants are eligible to receive the award based upon attainment of corporate and individual performance measures, which can include various financial measures. The measures are established at the beginning of each year by the ECDC, with ultimate approval by the full Board of Directors. The corporate performance measures included the reported growth in direct written premium and policies in force, and statutory combined ratio of the Exchange and its property and casualty subsidiaries for all periods presented.

Long-term incentive plan
Our long-term incentive plan ("LTIP") is an incentive plan designed to reward executives, senior vice presidents and other selected officers who can have a significant impact on our long-term performance, and to further align the interests of such employees with those of our shareholders. Participants can elect to defer up to 100 % of the award under the incentive compensation deferral plan.

The LTIP permits grants of performance-vesting and time-vesting awards. Performance-vesting awards can take the form of performance shares or units, or phantom performance shares, based on the level of achievement of performance goals as defined by us. Time-vesting awards can take the form of restricted shares or units, or phantom shares, including payment of dividends or dividend equivalent credits on the time-vesting awards, based on continued employment for a specified restricted period. Performance measures and a peer group of property and casualty companies to be used for comparison are determined by the ECDC for performance-vesting awards. The performance measures for all periods presented were the reported growth in direct written premium, statutory combined ratio, and return on invested assets of the Exchange and its property and casualty subsidiaries over a three-year performance period as compared to the results of the peer group over the same period. Because the performance component of the award is based upon a comparison to results of a peer group over a three-year period, the award accrual is based upon estimates of probable results for the remaining performance period. This estimate is subject to variability if our results or the results of the peer group are substantially different than the results we project. The type of award and form of payment, either in shares of our Class A common stock or cash, are determined by the ECDC at the beginning of each performance period, which is generally a three-year period. For the 2023-2025 performance period, the LTIP plan provides grants of performance-vesting awards. For the 2024-2026 and 2025-2027 performance periods, the LTIP plans provide grants of both a 75 % performance-vesting award and a 25 % time-vesting award. The plan awards for all three performance periods will be paid in cash.

The number of shares of our common stock authorized for grant under the LTIP is 1.5 million shares. We do not issue new shares of common stock to settle stock awards. We purchase our Class A common stock on the open market to settle stock awards under the plan. LTIP awards are considered vested at the end of each applicable performance period. The fair value of LTIP awards granting shares is measured at each reporting date at the current share price of our Class A common stock, and the fair value of LTIP awards granting units is measured at each reporting date based on the number of units earned. A liability is recorded and compensation expense is recognized ratably over the performance period.

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The following table presents the fully vested plan awards for the related performance periods at December 31 : (1)

(dollars in thousands)   2025 (2)
2024 2023 2022
LTIP performance period 2023-2025 2022-2024 2021-2023 2020-2022
Fully vested plan award fair value $ 2,631   $ 4,902   $ 249   $ 3,801  

(1)    Distributions to participants are made in June of the year following the close of the performance period.
(2)    The 2025 award is estimated based upon the peer group information as of September 30, 2025. Distributions will be made in 2026 once peer group financial information becomes available.

The following table presents the total compensation cost charged to operations related to the LTIP awards, net of forfeitures, and the related tax benefits recognized in income, for the years ended December 31:

(in thousands) 2025 2024 2023
Total compensation cost $ 663   $ 1,542   $ 7,332  
Tax benefit $ 139   $ 324   $ 1,540  

The Exchange and its insurance subsidiaries reimburse us for compensation costs of employees performing administrative services. Earned compensation costs are allocated to these entities and reimbursed to us in cash once the payout is made. The Exchange and its insurance subsidiaries reimbursed us for approximately 36 %, 39 %, and 35 % of the awards paid under these plans in 2025, 2024, and 2023, respectively. At December 31, 2025, there was $ 7.9 million of total unrecognized compensation cost for non-vested LTIP awards related to open performance periods, which is expected to be recognized over a period of two years .

Deferred compensation plan
Our deferred compensation plan allows executives, senior vice presidents and other selected officers to elect to defer receipt of a portion of their compensation and AIP cash awards until a later date. Employer 401(k) matching contributions that are in excess of the annual contribution or compensation limits are also credited to the participant accounts for those who elected to defer receipt of some portion of their base salary. Participants select hypothetical investment funds for their deferrals, which are credited with the hypothetical returns generated.

Incentive compensation deferral plan
We have an unfunded, non-qualified incentive compensation deferral plan for participants of the AIP and LTIP. Deferred awards will be credited to a deferred stock account as credits denominated in shares of our Class A common stock until retirement or other separation from service. Participants are 100 % vested at date of deferral. We do not issue new shares of common stock to participants. We purchase shares of our Class A common stock in the open market to satisfy these awards. The shares are then held in a rabbi trust, which was established to hold the shares earned under both the incentive compensation deferral plan and the deferred stock compensation plan for outside directors. Tax withholdings on rabbi trust distributions are paid from funds outside the trust. As a result, shares withheld from distributions to satisfy those withholdings reduce the number of shares that must be purchased in the future to fund the rabbi trust for both plans. The rabbi trust is classified and accounted for as equity in a manner consistent with the accounting for treasury stock. Dividends received on the shares in the rabbi trust are used to purchase additional shares. Vested share credits will be paid to participants from the rabbi trust upon separation from service in approximate equal annual installments of Class A shares for a period of three years .

The following table presents amounts related to shares purchased by the rabbi trust to satisfy the liability of awards deferred under the plan, and dividend equivalent credits on rabbi trust shares, for the years ended December 31:

(dollars in thousands, except per share data) 2025 2024 2023
LTIP performance period 2022-2024 2021-2023 2020-2022
AIP performance period 2024 2023 2022
Shares purchased 0 0 1,608
Average price paid per share $ 0.00   $ 0.00   $ 230.71  
Cost of shares purchased $ 0   $ 0   $ 371  

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Deferred compensation plans for outside directors
We have a deferred compensation plan for our outside directors that allows participants to defer receipt of a portion of their annual compensation until a later date. Participants select hypothetical investment funds for their deferrals, which are credited with the hypothetical returns generated.

We also have a deferred stock compensation plan for our outside directors to further align the interests of directors with those of our shareholders that provides for payment of a portion of the directors' annual compensation in shares of our Class A common stock. Each director vests in the grant 25 % every three months over the course of a year. Dividends paid by us are credited to each director's account and vest immediately. We do not issue new shares of common stock to directors. We purchase shares of our Class A common stock in the open market to satisfy these awards, which are then held in the rabbi trust. The plan includes a maximum of 250,000 shares that may be issued under the plan and no shares may be credited later than ten years from the date our shareholders last approved the plan. The shares are distributed to the outside director from the rabbi trust upon ending board service.

The following table presents amounts related to shares purchased by the rabbi trust to satisfy the liability of the plan and dividend equivalent credits on rabbi trust shares, and the total compensation cost charged to operations, for the years ended December 31:

(dollars in thousands, except per share data) 2025 2024 2023
Shares purchased 77 4,044 5,894
Average price paid per share $ 283.14   $ 405.60   $ 238.73  
Cost of shares purchased $ 22   $ 1,640   $ 1,407  
Total compensation cost $ 547   $ 1,052   $ 893  

The following table sets forth a reconciliation of beginning and ending balances of our deferred executive compensation liability as of December 31:

(in thousands)
2025 2024 2023

Deferred executive compensation, beginning of the year $ 34,595   $ 31,918   $ 25,760  
Annual incentive plan awards 5,571   8,574   7,401  
Long-term incentive plan awards 698   1,786   7,332  

Employer match and hypothetical earnings on deferred compensation 2,962   4,680   2,828  
Total plan awards and earnings 9,231   15,040   17,561  
Total plan awards paid ( 12,899 ) ( 8,105 ) ( 10,211 )
Compensation deferred 2,414   1,701   1,809  
Distributions from the deferred compensation plans ( 1,434 ) ( 2,372 ) ( 313 )
Forfeitures (1)
( 35 ) ( 244 ) —  
Funding of rabbi trust for deferred stock compensation plan for outside directors ( 22 ) ( 1,640 ) ( 1,407 )
Funding of rabbi trust for incentive compensation deferral plan (2)
( 400 ) ( 1,703 ) ( 1,281 )
Deferred executive compensation, end of the year $ 31,450   $ 34,595   $ 31,918  

(1)    Forfeitures are the result of plan participants who separated from service and are recognized in the year they occur.
(2)    In 2025, 2024, and 2023, funding includes $ 0.4  million, $ 1.7  million and $ 0.9  million, respectively, representing shares held back to satisfy tax withholding on rabbi trust distributions that reduce funding requirements for performance award deferrals.

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Equity compensation plan
Our equity compensation plan ("ECP") is designed to reward executives, senior vice presidents and other selected officers and key employees who can have a significant impact on our long-term performance, and to further align the interests of such employees with those of our shareholders. The ECP permits grants of restricted shares, restricted share units and other share based awards, to be satisfied with shares of our Class A common stock or cash. The ECDC determines the form of the award to be granted at the beginning of each performance period. The ECP allows for the grant of up to 250,000 shares of our Class A common stock, and no individual may receive more than 10,000 shares in any calendar year. We do not issue new shares of common stock to satisfy plan awards. Share awards are settled through the purchase of our Class A common stock on the open market. Restricted share awards may be entitled to receive dividends payable during the performance period, or, if subject to performance goals, to receive dividend equivalents payable upon vesting.  Dividend equivalents may provide for the crediting of interest or hypothetical investment experience, payable after expiration of the performance period. Vesting conditions are determined at the time the award is granted and may include continuation of employment for a specific period, satisfaction of performance goals within a defined performance period, and the satisfaction of any other terms and conditions as determined to be appropriate.

The following table presents amounts related to shares purchased to satisfy ECP plan liabilities and the total compensation cost charged to operations, for the years ended December 31:

(dollars in thousands, except per share data) 2025   2024 (1)
2023
Shares purchased 5,215 0 1,610
Average price paid per share $ 418.26   $ 0.00   $ 252.32  
Cost of shares purchased $ 2,181   $ 0   $ 406  
Total compensation cost (2)
$ 2,830   $ 6,895   $ 4,022  

(1)    No shares were required to be purchased in the open market. The plan liability was satisfied in cash totaling $ 3.2  million.
(2)    The fluctuations in all years are due to changes in number of participants and/or our stock price.

The Exchange and its insurance subsidiaries reimburse us for earned compensation costs of employees performing administrative services, which can fluctuate each year based on the plan participants. The Exchange and its insurance subsidiaries reimbursed us for approximately 32 %, 35 %, and 35 % of the awards paid in 2025, 2024, and 2023 respectively. Unrecognized compensation cost at December 31, 2025 of $ 0.5 million is expected to be recognized in 2026.
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Note 12.  Income Taxes

The provision for income taxes consists of the following for the years ended December 31:

(in thousands)
2025 2024 2023
Federal
Current income tax expense $ 131,645   $ 152,926   $ 116,874  
Deferred income tax expense (benefit) 19,547   4,026   ( 1,002 )
State
Current income tax expense 76   13   3  
Deferred income tax expense —   —   —  
Income tax expense $ 151,268   $ 156,965   $ 115,875  

A reconciliation of the provision for income taxes, with amounts determined by applying the statutory federal income tax rate to pre-tax income, is as follows for the years ended December 31:

(dollars in thousands)
2025 2024 2023
Amount % Amount % Amount %
U.S. federal tax at statutory rate $ 149,227   21.0   % $ 159,029   21.0   % $ 118,007   21.0   %
State and local income taxes, net of federal income tax effect (1)
60   0.0   10   0.0   2   0.0  

Tax credits ( 1,432 ) ( 0.2 ) ( 2,000 ) ( 0.3 ) ( 1,300 ) ( 0.2 )

Nontaxable or nondeductible items 2,703   0.4   569   0.1   651   0.1  

Other adjustments 710   0.1   ( 643 ) ( 0.1 ) ( 1,485 ) ( 0.3 )
Income tax provision $ 151,268   21.3   % $ 156,965   20.7   % $ 115,875   20.6   %

(1)    State taxes in Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this category.

Temporary differences and carry-forwards, which give rise to deferred tax assets and liabilities, are as follows as of December 31:

(in thousands)
2025 2024
Deferred tax assets:
Other employee benefits $ 18,213   $ 18,409  
Allowance for management fee returned on cancelled policies 7,322   4,647  
Charitable contributions 5,221   —  
Deferred revenue 4,457   4,181  

Current expected credit loss allowance 3,647   2,966  
Unrealized losses on investments —   3,827  
Other 4,958   4,617  
   Total deferred tax assets 43,818   38,647  
Deferred tax liabilities:
Depreciation 47,017   27,089  
Pension and other postretirement benefits 13,919   12,276  
Unrealized gains on investments 2,532   —  
Prepaid expenses 1,506   2,013  

Other 3,632   3,687  
   Total deferred tax liabilities 68,606   45,065  
   Net deferred tax liability $ ( 24,788 ) $ ( 6,418 )

If we determine that any of our deferred tax assets will not result in future tax benefits, a valuation allowance must be established for the portion of the assets that are not expected to be realized. We had no valuation allowance recorded at December 31, 2025 or 2024.

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We do not have any unrecognized tax benefit that, if recognized, would affect our effective tax rate as of December 31, 2025 and 2024. Any interest expense related to uncertain tax positions would be recognized in income tax expense.

New tax legislation, commonly referred to as the One Big Beautiful Bill Act ("OBBBA"), was signed into law on July 4, 2025. The OBBBA included changes to the timing of tax deductions related to depreciation and software development expenditures in 2025. The legislation also introduced a 1% taxable income floor for charitable deductions effective January 1, 2026. The effects of the OBBBA are reflected in our income tax provisions and effective tax rate for the year ended December 31, 2025.

Federal income taxes paid were $ 106.5  million, $ 163.0  million, and $ 104.0  million in 2025, 2024, and 2023, respectively. Federal income tax refunds received were $ 2.6  million and $ 3.1  million in 2025 and 2024, respectively. State income taxes paid, net of state income tax refunds received, were $ 0.1  million in 2025.

Tax years ending December 31, 2024, 2023 and 2022 remain open to IRS examination. We are not currently under IRS audit, nor have we been notified of an upcoming IRS audit.

We are the attorney-in-fact for the subscribers (policyholders) at the Exchange, a reciprocal insurance exchange.  In that capacity, we provide all services and facilities necessary to conduct the Exchange's insurance business.  Indemnity and the Exchange together constitute a single insurance business.  Consequently, we are not subject to state corporate income or franchise taxes in states where the Exchange conducts its business and the states collect premium tax in lieu of corporate income or franchise tax, as a result of the Exchange's remittance of premium taxes in those states.

Note 13.   Capital Stock
 
Class A and B common stock
We have two classes of common stock: Class A, which has a dividend preference, and Class B, which has voting power and a conversion right.  Each share of Class A common stock outstanding at the time of the declaration of any dividend upon shares of Class B common stock shall be entitled to a dividend payable at the same time, at the same record date, and in an amount at least equal to 2/3 of 1.0% of any dividend declared on each share of Class B common stock.  We may declare and pay a dividend in respect to Class A common stock without any requirement that any dividend be declared and paid in respect to Class B common stock.  Sole shareholder voting power is vested in Class B common stock except insofar as any applicable law shall permit Class A common shareholders to vote as a class in regards to any changes in the rights, preferences, and privileges attaching to Class A common stock.  Holders of Class B shares may, at their option, convert their shares into Class A shares at the rate of 2,400 Class A shares per Class B share.  There were no shares of Class B common stock converted into Class A common stock in 2025, 2024 or 2023.

Stock repurchases
Our Board of Directors authorized a stock repurchase program effective January 1, 1999 allowing the repurchase of our outstanding Class A nonvoting common stock. In 2011, our Board of Directors approved a continuation of the current stock repurchase program for a total of $ 150 million, with no time limitation.  Treasury shares are recorded in the Consolidated Statements of Financial Position at total cost based upon trade date.  There were no shares repurchased under this program during 2025, 2024 or 2023.  We had approximately $ 17.8 million of repurchase authority remaining under this program at December 31, 2025, based upon trade date.

We made stock repurchases in 2025, 2024, and 2023 outside of our publicly announced share repurchase program related to stock-based awards. See Note 11, "Incentive and Deferred Compensation Plans" for additional information.

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Note 14.  Accumulated Other Comprehensive Income (Loss)
 
Changes in accumulated other comprehensive income ("AOCI") (loss) by component, including amounts reclassified to other comprehensive income ("OCI") (loss) and the related line item in the Consolidated Statements of Operations where net income is presented, are as follows for the year ended December 31:

(in thousands) 2025 2024 2023
Before Tax Income Tax Net Before Tax Income Tax Net Before Tax Income Tax Net
Investment securities:
AOCI (loss), beginning of year $ ( 22,442 ) $ ( 4,714 ) $ ( 17,728 ) $ ( 31,402 ) $ ( 6,595 ) $ ( 24,807 ) $ ( 66,571 ) $ ( 13,980 ) $ ( 52,591 )
OCI before reclassifications 22,119   4,645   17,474   6,557   1,377   5,180   26,021   5,464   20,557  
Realized investment (gains) losses ( 53 ) ( 11 ) ( 42 ) 1,620   340   1,280   6,719   1,411   5,308  
Impairment losses 1,884   396   1,488   783   164   619   2,429   510   1,919  

OCI 23,950   5,030   18,920   8,960   1,881   7,079   35,169   7,385   27,784  
AOCI (loss), end of year $ 1,508   $ 316   $ 1,192   $ ( 22,442 ) $ ( 4,714 ) $ ( 17,728 ) $ ( 31,402 ) $ ( 6,595 ) $ ( 24,807 )

Pension and other postretirement plans:
AOCI (loss), beginning of year $ ( 37,802 ) $ ( 7,939 ) $ ( 29,863 ) $ 14,439   $ 3,032   $ 11,407   $ 57,186   $ 12,009   $ 45,177  
OCI (loss) before reclassifications ( 28,154 ) ( 5,912 ) ( 22,242 ) ( 45,655 ) ( 9,588 ) ( 36,067 ) ( 28,862 ) ( 6,061 ) ( 22,801 )
Amortization of prior service costs (1)
1,688   354   1,334   1,611   338   1,273   1,446   304   1,142  
Amortization of net actuarial gain (1)
( 2,519 ) ( 529 ) ( 1,990 ) ( 6,859 ) ( 1,440 ) ( 5,419 ) ( 15,331 ) ( 3,220 ) ( 12,111 )
Settlement gain (1)
( 572 ) ( 120 ) ( 452 ) ( 1,338 ) ( 281 ) ( 1,057 ) —   —   —  
OCI (loss) ( 29,557 ) ( 6,207 ) ( 23,350 ) ( 52,241 ) ( 10,971 ) ( 41,270 ) ( 42,747 ) ( 8,977 ) ( 33,770 )
AOCI (loss), end of year $ ( 67,359 ) $ ( 14,146 ) $ ( 53,213 ) $ ( 37,802 ) $ ( 7,939 ) $ ( 29,863 ) $ 14,439   $ 3,032   $ 11,407  

Total
AOCI (loss), beginning of year $ ( 60,244 ) $ ( 12,653 ) $ ( 47,591 ) $ ( 16,963 ) $ ( 3,563 ) $ ( 13,400 ) $ ( 9,385 ) $ ( 1,971 ) $ ( 7,414 )
Investment securities 23,950   5,030   18,920   8,960   1,881   7,079   35,169   7,385   27,784  
Pension and other postretirement plans ( 29,557 ) ( 6,207 ) ( 23,350 ) ( 52,241 ) ( 10,971 ) ( 41,270 ) ( 42,747 ) ( 8,977 ) ( 33,770 )
OCI (loss) ( 5,607 ) ( 1,177 ) ( 4,430 ) ( 43,281 ) ( 9,090 ) ( 34,191 ) ( 7,578 ) ( 1,592 ) ( 5,986 )
AOCI (loss), end of year $ ( 65,851 ) $ ( 13,830 ) $ ( 52,021 ) $ ( 60,244 ) $ ( 12,653 ) $ ( 47,591 ) $ ( 16,963 ) $ ( 3,563 ) $ ( 13,400 )

(1) These components of AOCI (loss) are included in the computation of net periodic pension cost (income). See Note 10, "Postretirement Benefits", for additional information.
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Note 15.  Related Party

Management fee
A management fee is retained for services we provide under the subscriber's agreement with subscribers at the Exchange. The fee is a percentage of direct and affiliated assumed premiums written by the Exchange. This percentage rate is set at least annually by our Board of Directors but cannot exceed 25 %. The management fee rate charged the Exchange was 25 % in 2025, 2024, and 2023. The Board of Directors elected to maintain the fee at 25 % beginning January 1, 2026.

There is no provision in the subscriber's agreement for termination of our appointment as attorney-in-fact by the subscribers at the Exchange and the appointment is not affected by a policyholder's disability or incapacity.

Insurance holding company system
Most states have enacted legislation that regulates insurance holding company systems, defined as two or more affiliated persons, one or more of which is an insurer. The Exchange has the following wholly owned property and casualty insurance subsidiaries: Erie Insurance Company, Erie Insurance Company of New York, Erie Insurance Property & Casualty Company, and Flagship City Insurance Company, and a wholly owned life insurance company, Erie Family Life Insurance Company. Indemnity and the Exchange, and its wholly owned subsidiaries, meet the definition of an insurance holding company system.

Transactions within a holding company system affecting the member insurers of the holding company system must be fair and reasonable and any charges or fees for services performed must be reasonable.  Approval by the applicable insurance commissioner is required prior to the consummation of certain transactions affecting the members within a holding company system.

Shared facilities
The Exchange and its insurance subsidiaries have a service agreement with Indemnity to use space in Indemnity-owned properties. The amount charged is based on rental rates of like property in Erie, Pennsylvania and the square footage occupied. Income earned from the Exchange and its insurance subsidiaries for the use of space totaled $ 3.0 million, $ 2.9 million, and $ 2.6 million in 2025, 2024, and 2023, respectively. Operating expenses for Indemnity-owned properties under this service agreement include utilities, cleaning, repairs, real estate taxes, property insurance, and leasehold improvements. These expenses totaled $ 25.2 million, $ 21.9 million, and $ 20.0 million in 2025, 2024, and 2023, respectively.  The Exchange and its insurance subsidiaries reimbursed us for operating expenses of shared facilities used to perform administrative services, which are allocated based upon square footage occupied. Reimbursements related to the use of this space totaled $ 6.9 million, $ 5.9 million, and $ 5.2 million in 2025, 2024, and 2023, respectively.

Other loans receivable
In 2023, we issued two senior secured loans totaling $ 13.6 million to fund a real estate development project supporting revitalization efforts in our community. Ownership in the project consists of related party investors, including affiliate entities and two Indemnity directors, as well as other unrelated investors. The first loan issued for $ 4.6 million accrues paid-in-kind interest at a fixed rate of 5 % and matures December 15, 2027, with both principal and accrued interest due at maturity. The second loan issued for $ 9.0 million accrues paid-in-kind interest at a fixed rate of 5 % and matures December 15, 2033, with both principal and accrued interest due at maturity. The loans, net of current expected credit loss allowances totaling $ 8.8 million and $ 8.0 million as of December 31, 2025 and 2024, respectively, are reported in "Other assets, net" in our Consolidated Statements of Financial Position, with changes in credit loss allowances reported in "Net impairment losses recognized in earnings" in our Consolidated Statements of Operations.

Erie Insurance Foundation
In 2025, we made a $ 100  million charitable contribution to the Erie Insurance Foundation (the "Foundation"). The Foundation is a separate entity from Indemnity. It is a tax-exempt private charitable foundation formed to create long-term sustainability for charitable contributions and grantmaking. Certain of Indemnity's directors and employees serve as directors and officers of the Foundation. The $ 100  million contribution is reported as non-operating expense in the Consolidated Statements of Operations.

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Note 16. Concentrations of Credit Risk

Financial instruments could potentially expose us to concentrations of credit risk, including our unsecured receivables from the Exchange. The majority of our revenue and receivables are from the Exchange and its affiliates. See also Note 1, "Nature of Operations". Net management fee amounts and other reimbursements due from the Exchange and its affiliates were $ 735.6 million, or 21.9 % of total assets, at December 31, 2025, and $ 707.1 million, or 24.5 % of total assets, at December 31, 2024. Both periods include a current expected credit loss allowance of $ 0.7 million.

Note 17.  Commitments and Contingencies

We have an agreement with a bank for an agent loan participation program. The maximum amount of loans to be funded through this program is $ 150 million. We have committed to fund a minimum of 30 % of each loan executed through this program. As of December 31, 2025, outstanding loans executed under this agreement totaled $ 146.6 million, of which our portion of the loans is $ 55.6 million. Additionally, we have agreed to guarantee a portion of the funding provided by the other participants in the program in the event of default. As of December 31, 2025, our maximum potential amount of future payments on the guaranteed portion is $ 17.7 million. All loan payments under the participation program are current as of December 31, 2025.

We also have contingent obligations for guarantees related to certain real estate development projects supporting revitalization efforts in our community. As of December 31, 2025, our maximum potential obligation related to the guarantees is $ 6.4 million.

We are involved in litigation arising in the ordinary course of conducting business.  In accordance with current accounting standards for loss contingencies and based upon information currently known to us, we establish reserves for litigation when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss or range of loss can be reasonably estimated.  When no amount within the range of loss is a better estimate than any other amount, we accrue the minimum amount of the estimable loss.  To the extent that such litigation against us may have an exposure to a loss in excess of the amount we have accrued, we believe that such excess would not be material to our consolidated financial condition, results of operations, or cash flows.  Legal fees are expensed as incurred.  We believe that our accruals for legal proceedings are appropriate and, individually and in the aggregate, are not expected to be material to our consolidated financial condition, results of operations, or cash flows.

We review all litigation on an ongoing basis when making accrual and disclosure decisions.  For certain legal proceedings, we cannot reasonably estimate losses or a range of loss, if any, particularly for proceedings that are in their early stages of development or where the plaintiffs seek indeterminate damages.  Various factors, including, but not limited to, the outcome of potentially lengthy discovery and the resolution of important factual questions, may need to be determined before probability can be established or before a loss or range of loss can be reasonably estimated.  If the loss contingency in question is not both probable and reasonably estimable, we do not establish an accrual and the matter will continue to be monitored for any developments that would make the loss contingency both probable and reasonably estimable.  In the event that a legal proceeding results in a substantial judgment against, or settlement by, us, there can be no assurance that any resulting liability or financial commitment would not have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.

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Note 18.  Supplementary Data on Cash Flows

A reconciliation of net income to net cash provided by operating activities as presented in the Consolidated Statements of Cash Flows is as follows for the years ended December 31:
(in thousands) 2025 2024 2023

Cash flows from operating activities:
Net income $ 559,335   $ 600,314   $ 446,061  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 69,450   56,530   47,415  
Deferred income tax expense (benefit) 19,547   4,026   ( 1,002 )

Lease amortization expense 7,333   7,377   6,177  
Losses and impairments on investments 976   895   15,604  

Loss on disposal and impairments of fixed assets 5,741   3,874   1,607  
Net investment (income) loss ( 4,385 ) ( 874 ) 13,772  
    Receipt of donated equipment and other ( 2,634 ) —   —  
(Decrease) increase in deferred compensation ( 3,119 ) 2,677   6,143  

Increase in receivables from affiliates ( 28,529 ) ( 81,722 ) ( 100,401 )
Increase in accrued investment income ( 3,242 ) ( 1,611 ) ( 1,157 )

Increase in pension asset
( 29,380 ) ( 34,516 ) ( 101,250 )

Decrease (increase) in prepaid expenses and other assets 22,345   ( 2,996 ) 7,729  
(Decrease) increase in accounts payable and accrued expenses ( 7,798 ) ( 7,517 ) 7,237  
Increase in commissions payable 17,011   54,600   53,681  
Increase (decrease) in accrued agent incentive compensation 57,102   7,381   ( 27,089 )
Increase in contract liability 6,904   2,811   6,678  
Net cash provided by operating activities $ 686,657   $ 611,249   $ 381,205  

Note 19.  Subsequent Events
 
No items were identified in this period subsequent to the financial statement date that required adjustment or additional disclosure, other than the disclosure made in Note 10, "Postretirement Benefits" regarding the January 2026 pension contribution.

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ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
None.

ITEM 9A.     CONTROLS AND PROCEDURES
 
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures.
 
As required by the Securities and Exchange Commission Rule 13a-15(e), we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2025.  Based upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.
 
Changes in Internal Control over Financial Reporting
There has been no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect our internal controls over financial reporting.  Our process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures.
 
Management's Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting of Erie Indemnity Company, as defined in Rules 13a-15(f) under the Exchange Act.  Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the Erie Indemnity Company's internal control over financial reporting based upon the framework in the Internal Control-Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission.  Based upon our evaluation under the framework in the Internal Control-Integrated Framework issued in 2013, management has concluded that Erie Indemnity Company's internal control over financial reporting was effective as of December 31, 2025.
 

/s/ Timothy G. NeCastro   /s/ Julie M. Pelkowski   /s/ Jorie L. Novacek  
Timothy G. NeCastro   Julie M. Pelkowski   Jorie L. Novacek  
President and   Executive Vice President   Senior Vice President  
Chief Executive Officer   and Chief Financial Officer   and Controller  
February 23, 2026   February 23, 2026   February 23, 2026  

 
Our independent auditor, Ernst & Young LLP, a registered public accounting firm, has issued an attestation report on our internal control over financial reporting.  This report appears on the following page.

ITEM 9B.     OTHER INFORMATION
 
There was no additional information in the fourth quarter of 2025 that has not already been filed in a Form 8-K.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.
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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Erie Indemnity Company

Opinion on Internal Control Over Financial Reporting

We have audited Erie Indemnity Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Erie Indemnity Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 23, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
                    
/s/ Ernst & Young LLP

Indianapolis, Indiana    
February 23, 2026

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PART III

ITEM 10.     DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
The information with respect to our outside directors, audit committee and audit committee financial experts, Section 16(a) beneficial ownership reporting compliance, and insider trading policy is incorporated herein by reference to the information statement on Schedule 14C to be filed with the Securities and Exchange Commission no later than 120 days after December 31, 2025.
 
We have adopted a Code of Conduct that applies to all of our outside directors, officers and employees.  We have previously filed a copy of the Code of Conduct as Exhibit 14.1 to the Registrant's Form 8-K filed with the Securities and Exchange Commission on October 30, 2025. In addition to this, we have adopted a Code of Ethics for Senior Financial Officers that also applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and any other person performing similar functions. We have previously filed a copy of the Code of Ethics for Senior Financial Officers as Exhibit 14.2 to the Registrant's Form 8-K filed with the Securities and Exchange Commission on October 30, 2025. Our Code of Conduct and Code of Ethics for Senior Financial Officers are also available on our website at www.erieinsurance.com .

Executive Officers of the Registrant
Name Age as of 12/31/2025 Principal Occupation and Positions for Past Five Years

President & Chief Executive Officer:    
Timothy G. NeCastro 65 President and Chief Executive Officer of the Company since August 2016; Director, Erie Family Life Insurance Company ("EFL"), Erie Insurance Company ("EIC"), Flagship City Insurance Company ("Flagship"), Erie Insurance Company of New York ("ENY") and Erie Insurance Property & Casualty Company ("EPC").
Executive Vice Presidents:    
Brian W. Bolash 60 Executive Vice President, Secretary and General Counsel since January 2022; Senior Vice President, Secretary and General Counsel, October 2018 through December 2021; Director, EFL, EIC, Flagship, ENY and EPC.

Cody W. Cook 44 Executive Vice President, Claims since January 2025; Senior Vice President, Claims, October 2020 through December 2024.

Sean D. Dugan 57 Executive Vice President, Human Resources and Corporate Services since January 2023; Senior Vice President, Human Resources, March 2020 through December 2022; Director, EFL, EIC, Flagship, ENY and EPC.

Julie M. Pelkowski 56 Executive Vice President and Chief Financial Officer since May 2023; Senior Vice President, Enterprise Office, March 2022 through April 2023; Senior Vice President and Controller, August 2016 through February 2022; Director, EFL, EIC, Flagship, ENY and EPC.

Sarah J. Shine 47 Executive Vice President, Experience & Customer Service since January 2025; Senior Vice President, Experience & Customer Service, May 2024 through December 2024; Senior Vice President, Commercial Products, August 2017 through April 2024.

Douglas E. Smith 51 Executive Vice President, Sales & Products since November 2016.

Parthasarathy Srinivasa 54 Executive Vice President and Chief Information Officer since joining the Company in April 2022. Prior to joining the Company: Senior Vice President and Chief Data and Insurance Information Officer Verisk Analytics, 2019 through April 2022.

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ITEM 11.     EXECUTIVE COMPENSATION
 
The information required by this item with respect to executive compensation is incorporated by reference to the information statement on Schedule 14C to be filed with the Securities and Exchange Commission no later than 120 days after December 31, 2025.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
The information with respect to security ownership of certain beneficial owners and management and securities authorized for issuance under equity compensation plans, is incorporated by reference to the information statement on Schedule 14C to be filed with the Securities and Exchange Commission no later than 120 days after December 31, 2025.

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 
Information with respect to certain relationships with our outside directors is incorporated by reference to the information statement on Schedule 14C to be filed with the Securities and Exchange Commission no later than 120 days after December 31, 2025.

ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
The information required by this item is incorporated by reference to the information statement on Schedule 14C to be filed with the Securities and Exchange Commission no later than 120 days after December 31, 2025.
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PART IV  

ITEM 15.     EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
(a)   The following documents are filed as part of this report:
 
1.                Financial Statements
Included in Part II, Item 8. "Financial Statements and Supplementary Data" contained in this report.
 
Erie Indemnity Company :
• Report of Independent Registered Public Accounting Firm on the Effectiveness of Internal Control over Financial Reporting  
• Report of Independent Registered Public Accounting Firm on the Financial Statements  
• Consolidated Statements of Operations for the three years ended December 31, 2025, 2024 and 2023
• Consolidated Statements of Comprehensive Income for the three years ended December 31, 2025, 2024 and 2023
• Consolidated Statements of Financial Position as of December 31, 2025 and 2024  
• Consolidated Statements of Shareholders' Equity for the three years ended December 31, 2025, 2024 and 2023  
• Consolidated Statements of Cash Flows for the three years ended December 31, 2025, 2024 and 2023  
• Notes to Consolidated Financial Statements
 
2.                Financial Statement Schedules
All schedules are not required, not applicable, or the information is included in the consolidated financial statements or notes thereto.    

Page
3. Exhibit Index
80

ITEM 16.     FORM 10-K SUMMARY
 
None.
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EXHIBIT INDEX

(Pursuant to Item 601 of Regulation S-K)

Exhibit  
Number Description of Exhibit
   
3.1 Amended and Restated Articles of Incorporation of Registrant dated April 19, 2011. Such exhibit is incorporated by reference to Exhibit No. 3.1 to the Registrant’s Form 10-Q that was filed with the Commission on August 2, 2011.

3.2 Erie Indemnity Company Amended and Restated Bylaws dated April 30, 2019. Such exhibit is incorporated by reference to Exhibit 3.10 to the Registrant's Form 8-K that was filed with the Commission on May 3, 2019.

4.1 Erie Indemnity Company Description of Capital Stock. Such exhibit is incorporated by reference to Exhibit 4.1 to the Registrant’s Form 10-K that was filed with the Commission on February 25, 2021.

10.1 Form of Subscriber’s Agreement whereby policyholders of Erie Insurance Exchange appoint Registrant as their Attorney-in-Fact. Such exhibit is incorporated by reference to Exhibit 10.12 to the Registrant’s Form 10-Q that was filed with the Commission on November 6, 2002.

10.2 Services Agreement between Erie Indemnity Company and Erie Family Life Insurance Company effective March 31, 2011. Such exhibit is incorporated by reference to Exhibit 99.1 to the Registrant’s Form 8-K that was filed with the Commission on March 31, 2011.

10.3 Form of Indemnification Agreement by and between Erie Indemnity Company and each Director and Executive Officer of Erie Indemnity Company. Such exhibit is incorporated by reference to Exhibit 10.108 to the Registrant’s Form 10-K that was filed with the Commission on February 26, 2009.

10.4* Erie Indemnity Company Annual Incentive Plan effective January 1, 2020. Such exhibit is incorporated by reference to Exhibit 10.204 to the Registrant's Form 10-K that was filed with the Commission on February 27, 2020.

   
10.5*
Erie Indemnity Company Amended and Restated Long Term Incentive Plan, dated April 23, 2024. Such exhibit is incorporated by reference to the Appendix B to the Registrant’s Information Statement for the 2024 Annual Meeting of Shareholders filed with the Commission on March 22, 2024.

10.6*
Erie Indemnity Company Equity Compensation Plan (As Amended and Restated April 26, 2022), dated June 28, 2022. Such exhibit is incorporated by reference to Exhibit 10.2 to the Registrant's Form 10-Q that was filed with the Commission on July 28, 2022.

10.7*
First Amendment to Erie Indemnity Company Equity Compensation Plan (As Amended and Restated April 26, 2022), dated April 23, 2024. Such exhibit is incorporated by reference to the Appendix A-2 to the Registrant’s Information Statement for the 2024 Annual Meeting of Shareholders filed with the Commission on March 22, 2024.

10.8 Appointment of Administrator to Deferred Compensation Plan of Erie Indemnity Company, Erie Indemnity Company Incentive Compensation Deferral Plan, and Supplemental Retirement Plan for Certain Members of the Erie Insurance Group Retirement Plan for Employees, dated December 21, 2021. Such exhibit is incorporated by reference to Exhibit 10.224 to the Registrant's Form 10-K that was filed with the Commission on February 24, 2022.

10.9*
Deferred Compensation Plan of Erie Indemnity Company (As Amended and Restated as of January 1, 2009). Such exhibit is incorporated by reference to Exhibit 10.104 to the Registrant’s Form 10-K that was filed with the Commission on February 26, 2009.

10.10*
Appendix B to Deferred Compensation Plan of Erie Indemnity Company (As Amended and Restated Effective as of January 1, 2019). Such exhibit is incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q that was filed with the Commission on July 25, 2019.

10.11*
Second Amendment to Appendix B to Deferred Compensation Plan of Erie Indemnity Company (As Amended and Restated Effective as of January 1, 2009), dated December 24, 2020. Such exhibit is incorporated by reference to Exhibit 10.209 to the Registrant’s Form 10-K that was filed with the Commission on February 25, 2021.

10.12*
Third Amendment to Deferred Compensation Plan of Erie Indemnity Company (As Amended and Restated as of January 1, 2009), dated December 21, 2021. Such exhibit is incorporated by reference to Exhibit 10.223 to the Registrant's Form 10-K that was filed with the Commission on February 24, 2022.

10.13*
Post-2021 Deferred Compensation Plan of the Erie Indemnity Company, effective January 1, 2022, dated December 9, 2021. Such exhibit is incorporated by reference to Exhibit 10.218 to the Registrant's Form 10-K that was filed with the Commission on February 24, 2022.

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Exhibit
Number Description of Exhibit

10.14*
Erie Indemnity Company Incentive Compensation Deferral Plan (Effective January 1, 2017), dated December 7, 2016. Such exhibit is incorporated by reference to Exhibit 10.177 to the Registrant’s Form 10-K that was filed with the Commission on February 23, 2017.

10.15*
First Amendment to Erie Indemnity Company Incentive Compensation Deferral Plan (Effective January 1, 2017), dated July 1, 2019. Such exhibit is incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q that was filed with the Commission on July 25, 2019.

10.16*
Second Amendment to Erie Indemnity Company Incentive Compensation Deferral Plan (Effective as of January 1, 2017), dated December 24, 2020. Such exhibit is incorporated by reference to Exhibit 10.207 to the Registrant’s Form 10-K that was filed with the Commission on February 25, 2021.

10.17*
Third Amendment to Erie Indemnity Company Incentive Compensation Deferral Plan (Effective as of January 1, 2017), dated December 21, 2021. Such exhibit is incorporated by reference to Exhibit 10.222 to the Registrant's Form 10-K that was filed with the Commission on February 24, 2022.

10.18*
Erie Indemnity Company Deferred Stock Plan for Outside Directors (As Amended and Restated as of April 25, 2023), dated April 25, 2023. Such exhibit is incorporated by reference to the Appendix to the Registrant’s Information Statement for the 2023 Annual Meeting of Shareholders filed with the Commission on March 24, 2023.

10.19*
Erie Indemnity Company Deferred Compensation Plan for Outside Directors (As Amended and Restated as of July 29, 2015), dated October 20, 2015. Such exhibit is incorporated by reference to Exhibit 10.158 to the Registrant’s Form 10-K that was filed with the Commission on February 25, 2016.

10.20*
First Amendment to Erie Indemnity Company Deferred Compensation Plan for Outside Directors (As of July 29, 2015), dated December 21, 2021. Such exhibit is incorporated by reference to Exhibit 10.217 to the Registrant's Form 10-K that was filed with the Commission on February 24, 2022.

10.21*
Erie Insurance Group Retirement Plan for Employees (As Amended and Restated Effective December 31, 2022), dated June 19, 2023. Such exhibit is incorporated by reference to Exhibit 10.4 to the Registrant's Form 10-Q that was filed with the Commission on July 27, 2023.

10.22*
First Amendment to Erie Insurance Group Retirement Plan for Employees (As Amended and Restated Effective December 31, 2022), dated December 19, 2023. Such exhibit is incorporated by reference to Exhibit 10.21 to the Registrant's Form 10-K that was filed with the Commission on February 26, 2024.

10.23*
Supplemental Retirement Plan for Certain Members of the Erie Insurance Group Retirement Plan for Employees (Amended and Restated as of January 1, 2023), dated August 15, 2023. Such exhibit is incorporated by reference to Exhibit 10.1 to the Registrant's Form 10-Q that was filed with the Commission on October 26, 2023.

10.24*
Erie Insurance Group Employee Savings Plan (As Amended and Restated Effective as of January 1, 2023), dated June 19, 2023. Such exhibit is incorporated by reference to Exhibit 10.3 to the Registrant's Form 10-Q that was filed with the Commission on July 27, 2023.

10.25 Credit Agreement among PNC Bank, National Association, as Administrative Agent; the Lenders named therein; and Erie Indemnity Company, dated October 29, 2021. Such exhibit is incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K that was filed with the Commission on November 4, 2021.

10.26
First Amendment to Credit Agreement among PNC Bank, National Association, as Administrative Agent; the Lenders named therein; and Erie Indemnity Company, dated November 1, 2024. Such exhibit is incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K that was filed with the Commission on November 4, 2024.

10.27 Pledge Agreement made by Erie Indemnity Company in favor of PNC Bank, National Association, as administrative agent, for itself and certain other Lenders, dated October 29, 2021. Such exhibit is incorporated by reference to Exhibit 10.2 to the Registrant's Form 8-K that was filed with the Commission on November 4, 2021.

10.28 Agreement of Lease between Erie Insurance Exchange and Erie Indemnity Company for the Erie Insurance Home Office Campus, dated July 1, 2021. Such exhibit is incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-Q that was filed with the Commission on October 28, 2021.

10.29 Amendment to Agreement of Lease between Erie Insurance Exchange and Erie Indemnity Company for the Erie Insurance Home Office Campus, (As of July 1, 2021), dated January 1, 2022. Such exhibit is incorporated by reference to Exhibit 10.226 to the Registrant's Form 10-K that was filed with the Commission on February 24, 2022.

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Exhibit
Number Description of Exhibit

10.30 Second Amendment to Agreement of Lease between Erie Insurance Exchange and Erie Indemnity Company for the Erie Insurance Home Office Campus, (As of July 1, 2021), dated January 1, 2023. Such exhibit is incorporated by reference to Exhibit 10.62 to the Registrant's Form 10-K that was filed with the Commission on March 1, 2023.

10.31 Third Amendment to Agreement of Lease between Erie Insurance Exchange and Erie Indemnity Company for the Erie Insurance Home Office Campus, (As of July 1, 2021), dated October 1, 2025. Such exhibit is incorporated by reference to Exhibit 10.1 to the Registrant's Form 10-Q that was filed with the Commission on October 30, 2025.

14.1 Code of Conduct. Such exhibit is incorporated by reference to Exhibit 14.1 to the Registrant's Form 8-K that was filed with the Commission on October 30, 2025.