Hello and welcome to the Erie Indemnity Company Second Quarter 2011 Earnings Conference. I’d like to introduce to your host for today’s conference call Karen Kraus Phillips, Vice President of Investor Relations.

Thank you, Alley and good morning everyone. We appreciate all of you joining us. On today’s call, management will discuss our second quarter 2011 results and other matters. Joining me are Terry Cavanaugh, President and CEO; Marcia Dall, Executive Vice President and Chief Financial Officer; Chip Dufala, Executive Vice President, Services; John Kearns, Executive Vice President, Sales and Marketing; Jim Tanous, Executive Vice President, Secretary and General Counsel; and Mike Zavasky, Executive Vice President, Insurance Operations. Our earnings release and financial supplements are issued yesterday afternoon and it’s been posted to our website erieinsurance.com. As a reminder, Indemnity’s second quarter 2011 results do not include the results of the property and casualty insurance operations or life operations that result to the Exchange. However the direct written premium produced by the Exchange’s property and casualty operations is a primary driver of Indemnity’s financial results and therefore (inaudible) to our discussion. On today’s call, management will share important information about current and future company initiatives, as a result forward-looking statements may be incorporated into their comments. These forward-looking statements reflect the company’s current views about future events and are based on assumptions subject to known and unknown risks and uncertainties. These risks and uncertainties may cause results to differ materially from those anticipated as described in those statements. For information on important factors that may cause such difference, please see the Safe Harbor statements in our latest 10-Q filing with the SEC dated August 2, 2011 and in the related press release. This call is being recorded and the recording is the property of Erie Indemnity Company. It is not intended for reproduction or rebroadcast by any other parties without the prior written consent of Erie Indemnity Company. A replay will be available on our website today after 12:30 p.m. eastern time. Your participation on this call will constitute consents to the recording, publication, webcast, broadcast and use of your name, voice and comments by Erie Indemnity, if you do not agree with these terms, please disconnect at this time. I'll now turn the call over to Erie’s President and CEO Terry Cavanaugh. Terry?

Good morning and thanks for joining us. Today I’ll provide some context around our second quarter performance and then turn the call over to Marcia for a high level financial review. As we talked before on prior calls, Erie is focused on five key business strength that we believe creates strong performance in our property and casualty, and life and annuity business, understanding our target customers, supporting the success of our independent agencies, developing our internal talent, improving process and technology, and ensuring the strength of our balance sheet. Total revenue from management operations for the second quarter 2011 was up almost 5% driven by a 5.3% increase in direct written premium of the Exchange’s property and casualty group. Modest rate increases and our strong retention rate now 90.8% contributed to this result. Although policy enforced increases were modest in the second quarter, written premium for both our personal and commercial lines was up again. Higher retention and increases in average premium per policy drove this result. As a reminder, Indemnity sold its P&C subsidiaries to the Exchange at the end of 2010. However, I would like to comment on the P&C Group’s combined ratio result for the second quarter, even though the underwriting results of the P&C Group have no effect on Indemnity’s financial results. Beginning late in the first quarter and continuing through the second quarter, the Exchange’s operating territories experienced six severe weather events. For the second quarter of 2011, the Exchange’s combined ratio totaled 140 and included 52 points or $537 million of catastrophe losses. During the first half of 2011, we saw a significant number of catastrophe claims. And in times like these, Erie’s above on service reputation is put to the test. And in true Erie fashion, our agents and employees continue to deliver.…

Thank you, Terry and good morning. I’ll now provide a high level overview of our second quarter 2011 results. Net income for the second quarter of 2011 was $52 million compared to $49 million from the same period a year ago. On a per diluted share basis, net income was $0.94 per share in the current quarter compared to $0.86 per share in the prior year quarter. It is important to note that the second quarter 2010 net income included $6 million or $0.10 per share from the operations that were sold to the Exchange. Second quarter net operating income was $48 million or $0.87 per share compared to $61 million or $0.89 per share in the prior year quarter. In the second quarter 2010, net operating income included $5million, or approximately $0.09 per share related to operations sold to the Exchange. Two operating segments, management operations and investment operations make up Indemnity second quarter financial results. I’ll begin with the review of our management operations. Income before taxes from our management operations were $64 million compared to $62 million in the second quarter of 2010. Management fee revenue was $294 million in the second quarter 2011, representing 5% increase over the prior year period. This is consistent with the percent growth and direct written premiums of the Exchange’s property and casualty insurance operations. This result was driven by policy growth of 3% and a slight increase in the average premium per policy. Cost of management operations increased $13 million or 5.4%, primarily due to increases in agent’s commissions. The gross margin from our management operations in the second quarter 2011 was 21.6% compared to 22% in 2010. Now turning to the results of our investment operations; Indemnity recorded a profit before taxes of $17 million, compared to $11 million…

Thank you, Marcia. Erie's financial results thus far in 2011 are consistent with our long-term pattern of success. That consistent and effective performance has recently been recognized by two external agencies. First, A.M. Best in June affirmed the A+ Superior rating of the Erie Insurance Group. In its rating announcement, A. M. Best decided Erie’s superior capital position, well established agency relationships, outstanding business persistency reflected by our high retention rates, and controlled operating expenses among other attributes as reasons for our A+ Superior rating. But again last month, we learned that Erie was listed among Ward's 50 top performing insurance companies. It is the fourth consecutive year we’ve achieved this honor. The top 50 list is based on Ward’s annual financial analysis of over 3,000 property casualty insurers in the US. The company's name to the list have passed specific safety and consistency measures and achieved superior performance over the previous five years. This is the 21st year of Ward’s top 50 list, and the 14th time that Erie has been among that name. Our inclusion on the Ward’s list speaks directly to the consistency of our performance and our results. It recognizes our financial stability and focus on service upon which all of our stake holders rely. It takes each of us thinking critically day in and day out to create and sustain that level of performance. I am proud to say that our employees and leaders are motivated to do just that. Operator, you can now open the line for questions.

(Operator Instructions) Our first question comes from Bill Broomall of Macquarie. Please go ahead. Bill Broomall – Macquarie Research Equities: Great, thank you. My first question is up on in the management operations business, direct written premiums was up 5.3% I think in the quarter. What do you think that goes going forward? I mean, in what lines you think can drive that going forward in this level kind of [consisted] sustainable?

We’re not prepared to make any good forward-looking statement like that obviously, we're trying to manage the business in an effective way that where we can take advantage of the marketplace opportunities, take advantage of our great agency relationships. Doing that in the economic climate we’re in, it’s difficult. But I think it’s very good news that we continue to one, grow customers; two, have retention rate that continues to grow and are spectacular; and three, our average premium per policy continues to grow. So I think that bodes well for us. Bill Broomall – Macquarie Research Equities: Got it, okay. And then, next, I’ll move on over to the, I think you said about the technology rollout that you had. Is that going to be a ongoing expense, how should we think about that as well as maybe I think you said about changes in agent commission fees, how are those going to look going forward?

I made no commentary on agency commission fees at all. Bill Broomall – Macquarie Research Equities: Okay. I’m sorry, all right. But what’s on the technology side.

I think we continue to make technology that I call investments, you know while a lot (inaudible) it’s also an investment to make sure that our platform continues to meet the needs of agents, our customers and our employees. So it is a, I’ll say, an ongoing focus of ours, it can be a bit lumpy in terms of how it plays out in the income statement, but we are focused in making sure that we do what’s necessary, and continue to grow our technology capability.

All right. And then, just on the, moving over to the personal cost of $2 million in the management operations, where was that in the business like what’s over that are we’re adding people?

It’s just a normal increase that you’ve would see this is, Marcia. It’s a normal increase that you would just see in salaries and benefits year-over-year based on some additions of people, but also just the increasing benefit costs and (inaudible) increases.

We are investing in our business we’ve doubled our efforts in terms of building a sales force, so we’ve got two classes of new people coming in, in terms of being able to be groomed to be more effective sales organization in the field. We’ve selectively added to some, I think, some of the infrastructure here in terms of enterprise risk management, some of the things in actuarial field again the investment in our business to be prepared for the future. Bill Broomall – Macquarie Research Equities: Okay, great. Thank you very much.

(Operator Instructions) And I am showing no further questions at this time.

Great, thank you, Alley. Well as a reminder, a recording of the call will be posted on our website erieinsurance.com after 12:30 pm Eastern Time today. If you have any questions, please call me at 814-870-4665. Thanks again and make it a great day.

Ladies and gentlemen, this does conclude today’s conference. You may all disconnect and have a wonderful day.