Karen Kraus Phillips – VP, IR Terry Cavanaugh – President and CEO Marcia Dall – EVP and CFO

Ryan Burk – Macquarie

Hello, and welcome to the Erie Indemnity Company First Quarter 2012 Earnings Conference. I’d like to introduce your host for today’s conference call, Karen Kraus Phillips, Vice President of Investor Relations. Please go ahead.

Thank you, Shaun, and good morning. We appreciate all of you joining us. On today’s call, management will discuss our first quarter 2012 results and other matters related to the company’s first quarter operations. 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; and Brian Bolash, Assistant Corporate Secretary and Senior Council. Our earnings release and financial supplement were issued yesterday afternoon and these have been posted on our website, erieinsurance.com. 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 differences, please see the Safe Harbor statements in our latest 10-Q filing with the SEC, dated May 3rd, 2012 and in the related press release. In this call, we will discuss non-GAAP measures, you can find the reconciliation to the GAAP based results in the 10-Q. This is 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 party without the prior written consent of the 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 consent to the recording publication webcast broadcast and use of your name, voice, and comments by Erie Indemnity. If you don’t agree with the terms, please disconnect at this time. I will now turn the call over to Erie’s President and CEO, Terry Cavanaugh. Terry?

Thank you, Karen and good morning, everyone. Indemnity’s first quarter 2012 results show strong top-line growth in our management fee revenue. We also saw higher operating expenses and lower investment results. Combined, these led to Indemnity net income per share of $0.67 compared to $0.78 per share last year. I will talk more about the drivers of our top-line growth in a minute and Marcia will cover our financial results. But first, I want to comment on our operating margin. We recognize that our management margin declined in the first quarter compared to last year due to investments in the business and projected increases in variable agent compensation, because of strong underwriting results. We need to invest in the business to ensure our strong value proposition remains relevant going forward for all of our stakeholders. So we’re investing in things we believe are important for the business, like service, technology, marketing, and our people. We believe these types of investments will take dividends for customers and agents, employees and shareholders over the long-term. Indemnity is independent upon the performance of the exchanges property and casualty group for its primary source of revenue. The fee it earns from managing the operations of the exchange, while claimed losses do not directly impact Indemnity’s results, the healthy exchange that’s growing and profitable is vital to Indemnity. In 2011, the Property and Casualty group ended the year with 108 combined ratio, driven by severe catastrophe losses. I am pleased to say that we ended the first quarter of 2012 with a combined ratio of 93%. Additionally, the exchange grew surplus again in the first quarter. From the perspective of top line growth, we’ve added new policies and we’re taking rate increases where merited. We also continue to retain customers at high levels ending the quarter with a year-over-year retention rate of nearly 91%. Consequently, the direct written premium of the Property and Casualty group grew nearly 7%, which drove the similar increase in Indemnity’s management fee revenue. Toward the end of the fourth quarter last year, we began to see new policy sales increase, and that has continued through the first quarter in all lines of business. Our competitive position is good, and our initiatives to generate new business are working. In personal auto, our largest line of business, we’ve been able to gain positive momentum in new policy sales. New personal auto policies were up over the prior year quarter by more than 9%, with new personal auto premium growing more than 13%. In particular, we’re seeing good adoption of our new Erie rate lock product. It’s a great example of building a product that customers appreciate and agents can sell. In home insurance, given the catastrophe losses of 2011, there is significant disruption in the marketplace. Insurers are raising rates and increasing deductibles and people are actively shopping. We, too, are taking rate increases where exposure and experience support it. We’re also taking a disciplined approach to adding new home insurance customers. Our strategy is around out – in account with auto and home, applying consistent underwriting that allows us to price competitively over the long-term for the benefit of customers, agents, and shareholders. We’re being thoughtful about exposure growth as well, seeking deeper market penetration in areas with less concentrated risk. Consistent with this approach, last year, we introduced a new home insurance product in several states called Erie Secure Home. On a rating platform that supports better risk selection and allows us to target pricing more precisely to the risk. Our commercial business had a strong quarter as well. Our value proposition here is helping agents win new accounts and retain existing customers. We believe the economy is slowly rebounding, and businesses are beginning to reinvest in their operations. This is having a positive effect on our results as evidenced by modest exposure growth and increasing audit premium. As I indicated earlier, we’re also actively reinvesting in the business and working on a number of initiatives to spur growth. For example, in all three of our product lines, personal, commercial, and life, we’re working on significant enhancements to the systems that support the coding and binding process. C-line for commercial business, DS pro web for personal lines, and our life Portal are be improved with continuous input from agents. The objective behind each of these systems is to better enable the transaction between Erie and the agent and between the agent and the customer. In addition, we piloted a new marketing approach in 2011 called Go Local to support our agents’ sales and branding efforts. The approach focuses resources on specific markets through a blitz of sponsorships, community events, and local advertising. The program spotlights the value of Erie and our agents in the local community, which is long been one of Erie’s strengths. Last year, we piloted this approach in three of our markets; Pittsburgh, Indianapolis, and Richmond and energized agent and increased awareness of the Erie brand in these areas. We’re expanding the program in at least three new markets this year; Nashville, Milwaukee, and Columbus. These, among other efforts, are driving positive momentum for the company and our agencies. Now, I will ask Marcia to review the financials for the quarter.

Good morning. Thank you for joining us on the call today. I will briefly review our first quarter 2012 results and then turn the call back to Terry. For the first quarter 2012, net income was $36 million, compared to $44 million a year ago. On a per diluted share basis net income was $0.67 per share in the current quarter, compared to $0.78 per share in the prior year quarter. First quarter net operating income was $34 million or $0.64 per share compared to $43 million or $0.77 per share in the prior year quarter. As Terry indicated, higher operating costs and lower limited partnership earnings in the first quarter 2012 were the primary reasons for the year-over-year decrease. Also of note, the 2011 net and operating income includes $2 million or $0.02 per share of earnings from Indemnity’s interest in Erie Family Life, which was sold to the exchange on March 31st, 2011. In our management operations, income before taxes was $46 million, compared to $48 million in the first quarter of 2011. Management fee revenue was $269 million in the first quarter 2012, representing a 7% increase over the prior year period. This is consistent with the 6.9% increase in direct written premium of the Property and Casualty group. This result was driven by policy growth of nearly 3% and a 3.3% increase in average premium per policy. We are taking rate increases where needed, particularly in our property lines, and as a result of our employees and agents efforts, we continue to retain customers, invite new business in both personal and commercial lines at higher levels than the prior year quarter. New business premiums increased nearly 17%, compared to a year ago driven by an 8.8% increase in new policies written and a 5.9% increase in year-over-year average premium per policy on new business. Renewal premiums increased nearly 6% over the prior year quarter, as a result of the 3% increase in policies and average premium per policy. The Property and Casualty group’s retention ratio was 90.7% at the end of first quarter 2012. Cost of management operations increased to $230 million, a nearly 9% over the prior-year quarter. Agent commissions increased $11 million are more than 8% in the first quarter 2012, compared to the same quarter last year due to growth and direct written premium and current estimates around Indemnity’s profitability bonus for agents, given the exchanges, lower combined ratio in the first quarter. Non-commissioned expenses increased $8 million, a more than 9% over the prior-year quarter, driven primarily by increases in salaries and benefits, software and technology-related professional fees. As a result, the first quarter 2012, gross margin for management operations was 16.8%, compared to 18.6% in the first quarter of 2011. Now turning to the results of our investment operations. Indemnity recorded profit before taxes of $8 million, compared to the profit before taxes of $16 million in the prior-year quarter. Net investment income was $4 million for both the first quarters of 2012, and 2011. Net realized gains on investments were $3 million, compared to gains of $1 million in the prior-year quarter. There were no impairments in the first quarters of 2012 and 2011. Our income from equity and limited partnership investments was $1 million in the first quarter 2012, compared to $11 million last year. The 2012 result was due to lower earnings from the private equity in real estate sectors. Now turning to our share repurchases. The company repurchased approximately 200,000 shares of our outstanding class A common stock through the first quarter of 2012 and the total cost of $17 million. As of April 19, 2012, we had approximately $117 million in repurchase authority remaining under the program.

Thank you, Marcia. A few weeks ago, we held our 87th Annual Shareholder meeting here at our home office in Erie, Pennsylvania. At that meeting, all 13 members of our Board of Directors were re-elected to serve another year. I would like to express my sincere gratitude to our directors for their continued support and guidance. Ours is a hard-working and committed board. Also during the first quarter, Erie was included for the second year in a row on the J.D. Power and Associates list of 50 customer service champions. The list recognizes the top service companies across all industries. On the list, Erie stands alongside well-known service brands such as the Ritz-Carlton, Cadillac, and Southwest Airlines. It’s a distinction we’re proud of and it affirms our above all service and brand. At Erie, we take a long-term view of our business. We believe we’re doing the right things to grow profitably and to ensure the Erie Insurance brand remains relevant and strong for the benefit of our customers, agents, employees, and shareholders who invest in the business today to yield greater future returns. Operator, you can new open the call for questions.

Thank you. (Operator Instructions) Our first question comes from Ryan Burk with Macquarie. Please go ahead with your question. Ryan Burk – Macquarie: Hi. Good morning, everybody. I just had a quick question on how much longer the investments in the business, I guess, will affect the margins going forward. I just want to see kind of the run rate on that and how we should be looking kind of model that going forward?

We don’t make forward-looking projections, and we just continue to manage the business affectively in terms of making sure that the brand that we have today is well-served for the benefit of our agents and for our customers. And I think we’re, as you can see from the insurance operations, doing a very effective job there. And we continue to, obviously, make strategic decisions in terms of how we build a better model going forward across, as I indicated all platforms, whether it’s be service, marketing, or technology or people to make sure again that we continue to be able to grow the business in the quarters and years to come. Ryan Burk – Macquarie: Okay. Great. And then with the – obviously the 7% DPW increase, can you guys break that up between, I guess, rate increase versus new policy increase? I wanted to see what kind of, I guess rate increases you guys are seeing right now?

That – there is, obviously, numbers and dollars in both of that and varies by line of business. In terms of, I would suggest, the generalized statement in the personal lines arena, clearly a more robust rate increases in the home owner line of business, and less so in the personal lines, auto arena. Again, I will say, again, similar to the, also in the commercial lines again, the property rates are, again, seeing some pretty good increases. But again, it’s inconsistent. There is – I would day – there is not any dramatic movement across the board in the commercial lines arena. I don’t know if anyone else has any other flavor on that.

Yeah and Ryan just to answer the very specific question for the quarter, we have policy growth of nearly 3%, and our average premium per policy was up 3.3%. And as Terry mentioned that obviously varies by the line of business, but those are the numbers for the overall company. Ryan Burk – Macquarie: Okay. Okay. Great. Thanks for the answers, guys.

Yeah. We’re also getting some exposure I think in terms of when you see in there I think I mean you saw the new car sales increasing so again you have got the opportunity, you obviously get greater valuations on the personal auto policy. And we’re beginning to see a little bit, in terms of our commercial book where there is exposure of growth going on, where people are beginning to add back to also you know the Plummer who had four trucks went down to two and now is up to three. Ryan Burk – Macquarie: Okay, got you. All right, that’s all I have. Thanks for the answers, guys.

Thanks, Ryan.

(Operator Instructions) One moment, please. I am not showing any other questions at this time.

Well, thank you all so much for being on the call. As a reminder a recording will posted on our website at erieinsurance.com after 12:30 pm eastern time today. If you have any questions at all please give me a call at 814-870-4665. Thanks again and make it a great day.

Thank you, ladies and gentlemen and thank you for your participation in today’s conference. This does conclude the conference you may now disconnect. Good day.