Good morning and welcome to the Erie Indemnity Company’s Fourth Quarter and Year-End 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 fourth 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-K filing with the SEC dated February 27, 2020, 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 everyone for your interest in Erie’s performance in the fourth quarter of 2019 and our year-end results. Your company has ended the year with solid financials, well equipped to take on the New Year, our 95th year of operations. In our press release filed yesterday, we reported net income of $60 million, or $1.14 per diluted share for the fourth quarter. Comparing the fourth quarter of 2019 to 2018, we saw a decrease in net income of nearly $3 million. However, for the total year 2019, we increased that income by nearly $29 million compared to 2018 driven by strong operating and investment income. Greg will talk in more detail about the financial performance of Erie Indemnity Company. But first, I'd like to share some highlights for the year for the Erie Insurance Exchange, the insurance operations we manage, recognizing that a healthy exchange is an integral part of Indemnity’s success. In 2019, the exchange grew property/casualty premium by 5.2% over 2019 to $7.5 billion. This result exceeds Conning's industry growth forecast of 4.6%, making 12 straight years that Erie’s premium growth has outpaced the industry. Driving Erie’s premium growth was a combination of strong retention and higher average premium per policy, particularly in our commercial lines business. Erie’s growth this past year came against the backdrop of a highly competitive market, as I’ve shared on past calls. Pricing indices for the industry show that 2019 saw one of the softest markets for auto insurance in the past two decades. At Erie, we maintained a consistent sustainable approach that reinforces our reputation for reliability and stability and we make pricing decisions with care and a focus on long-term profitability. Both our customers and agents appreciate that stability as reflected in our strong retention rates consistently at…

Thanks, Tim. As Tim mentioned, we saw a solid performance during 2019 and we are positioned to have a successful 95th year in 2020 despite a continued challenging market. I am pleased to share with you both the quarterly and year-end results. Starting with the fourth quarter of 2019, net income was $60 million, or $1.14 per diluted share, compared to $62 million, or $1.19 per diluted share in the fourth quarter of 2018. Although the fourth quarter saw operating revenue increased $20 million, operating income in the quarter decreased $6 million, down 8.1% compared to the fourth quarter of 2018. Management fee revenue from policy issuance and renewal services increased $17 million, or 4.1%, in the fourth quarter of 2019, driven by a 4.1% increase in the direct and assumed premiums written of the exchange while total cost of operations from policy issuance and renewal services increased $23 million for the quarter. Commission expenses increased $10 million as a result of the 4.1% increase in the direct and assumed premiums written by the exchange. Non-commission expenses increased $13 million in the quarter compared to the fourth quarter of last year. Information technology cost increased $6 million due to increased professional fees and hardware and software costs. Administrative and other expenses increased $5 million, primarily due to increased personnel costs, as well as several multi-year commitments we made during the quarter to support community development initiatives. And lastly, underwriting and policy processing costs increased $2 million due to elevated underwriting report costs and other policy acquisition costs. Total pretax investment income in the quarter was nearly $7 million, up $2 million compared to the same period in 2018 driven by an increase in net realized gains on investments. Turning to the full year 2019 results, net income was $317 million,…

Thanks, Greg. We coupled our strong 2019 financials with steady progress on key initiatives during 2019. We continue to invest in our areas of focus as I've shared on each of our calls this past year. These four areas are critical to our future success while we build on our longstanding business model and our deep commitment to service. Those four areas are first strengthening our business platforms and use of data; second, continuing to enhance the Erie experience we create for our customers, agents and employees; third, identifying and developing new sources of revenue; and four, preparing the workforce for the future. We've invested heavily in platforms and data and the Erie experience, two areas of focus that are closely linked. Stronger platforms and use of data enables us to enhance the experience of our customers, agents and employees. Our recent accomplishments include moving nearly half of our legacy homeowners policies online to our contemporary ErieSecure Home product. This was an ongoing transition that is creating new efficiencies for Erie and our agents, while also expanding coverage options for customers. The transition has been largely seamless. We also accelerated delivery of a refreshed Rate Lock product in personal auto. Rate Lock offers customers the ability to lock in their auto insurance rate until they've made a qualifying change. With this refresh, Rate Lock will allow us to provide a more competitive rate to support our agents in pursuing new business more aggressively, while we adhere to steady as you go pricing philosophy and sound underwriting principles. Agents in Pennsylvania, our largest premium volume state, began quoting the refreshed product in January and early indications are positive. The new version of Rate Lock will be rolled out to additional States throughout the year. Well, 2019 was a busy year for…

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.