Good morning, and welcome to the Erie Indemnity Company Third Quarter 2019 Earnings Conference Call. This call was prerecorded, and there will be no question-and-answer session following the recording. Now I'd like to introduce your host for the call, Vice President of Investor Relations, Scott Beilharz.

Thank you, and welcome, everyone. We appreciate you joining us for this recorded discussion about our 2019 third quarter results. This recording will include remarks from Tim NeCastro, President and Chief Executive Officer; and Greg Gutting, Executive Vice President and Chief Financial Officer. Our earnings release and financial supplement were issued yesterday afternoon after the market close and are available within the Investor Relations section of our website, erieinsurance.com. Before we begin, I would like to remind everyone that today's discussion may contain forward-looking remarks that reflect the company's current views about future events. These remarks are based on assumptions, subject to known and unexpected risks and uncertainties. These risks and uncertainties may cause results to differ materially from those described in these remarks. For information on important factors that may cause such differences, please see the safe harbor statements in our Form 10-Q filing with the SEC, dated October 24, 2019, and in the related press release. This prerecorded call is the property of Erie Indemnity Company. It may not be reproduced or rebroadcast by any other party without the prior written consent of Erie Indemnity Company. With that, we'll move on to Tim's remarks.

Thanks, Scott, and thanks to all of you who have a continued interest in the Erie's results and success. During our third quarter of 2019, Erie Indemnity continued the strong favorable performance we saw through the first half of the year. As we reported in our press release, filed yesterday, Indemnity's net income was $94 million or $1.80 per diluted share. That's an increase of $14 million over our third quarter in 2018, and it brings net income year-to-date to $257 million compared to $226 million in the first nine months of 2018, an increase of 14%. Greg will get into the details around Indemnity's results, but before he does, I'll share some of the highlights of the insurance operation we manage, Erie Insurance Exchange. Direct written premium grew by over 5% for the third quarter and year-to-date compared to 2018, which positions the exchange well to once again outperform the industry. Conning's latest forecast for industry growth in direct premium is 4.4%. As we mentioned in the last earnings report, we're continuing to see a more competitive marketplace, with softening prices in private passenger auto. In challenging markets, we, at Erie, maintained a steady, long-term approach to pricing that reinforces our reputation for reliability and stability. Finally, we saw some improvement in the weather during the third quarter. Our claims teams and agents responded to 5 major weather events over the past 3 months, down from 9 in the second quarter. The most recent storms were more localized, affecting customers in North Carolina, Virginia and Wisconsin as well as in parts of Pennsylvania, Ohio and Maryland. That's about half our operating territory. But again, the damaging wind and hail of summer caused more localized damage compared to what we saw in the spring. Our combined ratio for the third…

Thanks, Tim. As Tim mentioned, we are very pleased with the financial results we are seeing this year. They reflect the dedication of our agents and our employees as well as our commitment to be above all in service. Starting with the third quarter of 2019, net income was $94 million or $1.80 per diluted share compared to $80 million or $1.54 per diluted share in the third quarter of 2018. For the first nine months of 2019, net income was $257 million or $4.92 per diluted share compared to $226 million or $4.32 per diluted share in the first nine months of 2018. Total operating revenue outpaced the growth in total operating expenses in both the third quarter and the first nine months of 2018. That resulted in growth in operating income of $9 million or 10% in the third quarter of 2019 compared to the third quarter of 2018. For the first nine months of this year, operating income increased $19 million or 7% over the first 3 quarters of last year. Total management fee revenue increased $24 million in the third quarter and $77 million in the first nine months of 2019 compared to the same period in 2018. This is due to an increase in the direct and assumed premiums written of over 5% in both periods. The increase in both policies in force and average premium per policy contributed to this growth in premiums. Indemnity's total cost of operations for policy issuance and renewal services increased $15 million for the third quarter compared to the third quarter of 2018. For the first nine months of 2019, total cost of operations grew $57 million. Commissions increased $10 million in the third quarter and $31 million year-to-date compared to 2018 as a result of the 5% increase…

Thanks, Greg. As we discussed on each earnings call, our strategic focus at Erie is centered on 4 strategic areas that we believe are critical for moving us into the future, we're building on our strong business model and distinctive ability to deliver service with a human touch. The 4 areas are: strengthening our business platforms and use of data, continuing to enhance the Erie experience, identifying and developing new sources of revenue and creating our workforce for the future. I'd like to talk more about the first area, strengthening our platforms and data and how that is leading us to the second, enhancing the Erie experience. I talked a bit about the impact of our service earlier. It's an important but not always obvious, part of the picture, whenever we discuss results. Our service, claims service and customer care is closely tied to our competitive position. The work we are doing to enhance the Erie experience is aimed at improving the experience of all stakeholders, customers, agents and employees, while thoughtfully driving down costs with technology and process that lets us work smarter, but still delivering ways that are personal and customized for the needs and preferences of the individual. Our teams have developed deep understanding of the key drivers of satisfaction in the claims experience. We know, for instance, that customer satisfaction is higher when the initial loss is reported to the agent. We also know that a quarter of customers want the option to report a claim digitally. Our digital strategy is focused on leveraging that kind of knowledge with the power of data and platforms. For example, with better agent access to claims tracking and more billing and payment information online for both agents and customers, we are experiencing reduced call volume and providing greater convenience…