Scott Beilharz – IR Terry Cavanaugh – President and CEO Marcia Dall – EVP and CFO

Chris Maimone – Macquarie Adam Klauber – William Blair

Good morning and welcome to the Erie Indemnity Company First Quarter 2013 Earnings Conference Call. I’d like to introduce your host for today’s call, Scott Beilharz. Please go ahead.

Thank you, Pablo and welcome everyone. We appreciate all of you joining us. On today’s call, management will discuss our first quarter 2013 results and other matters related to the company’s first quarter operations. Joining me today are Terry Cavanaugh, President and CEO; Marcia Dall, Executive Vice President and Chief Financial Officer; Rick Burt, Executive Vice President, Product; Chip Dufala, Executive Vice President, Services; Bob Ingram, Executive Vice President, Information Technology and Chief Information Officer; John Kearns, Executive Vice President, Sales and Marketing; and Jim Tanous, Executive Vice President, Secretary and General Counsel. Our earnings release and financial supplement were issued yesterday afternoon and are currently available on our website erieinsurance.com. We will hear brief remarks from Terry and Marcia and then open the call for questions. Before we begin, let me remind everyone that today’s discussion may contain forward-looking statements. 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 April 29, 2013 and in the related press release. Also in this call we may discuss non-GAAP measures. A reconciliation to the GAAP based results can be found in the 10-Q. This call is being recorded and 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 Erie Indemnity Company. A replay will be available on our website today after of 12.30 PM 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 do not agree with these terms, please disconnect at this time. With that, I will now turn the call over to Terry.

Thank you, Scott, and good morning, everyone. During the first quarter Indemnity delivered net income per share of $0.69. This reflects both strong top line growth and positive year-over-year investment results. In fact the momentum we saw in 2012 has continued during the first quarter of 2013. Direct written premium of the Exchange grew 10% with increases in retention, new policies and average premium per policy. Many factors contributed to this healthy growth. A solid portfolio of products with a value proposition that creates industry leading retention, our ongoing localized marketing efforts, and our effective dedicated loyal independent agency force. One of the core elements of Erie’s growth strategy is to ensure our agents have a solid portfolio of products to sell. This goes hand in hand with our commitment to drive innovation, execution throughout the enterprise. We’re seeing this with products such as ERIE Rate Lock and ErieSecure Home, our newest personal line products and our updated universal life product that we call ERIEflex4. We’ve also just recently introduced a new term life product, ERIE LifeSense that conveniently provides up to $90,000 worth of coverage. With LifeSense, we can make an underwriting decision in about 15 minutes. The revenue we gain from our life businesses that impact Indemnity directly, but products like ERIEflex4 and LifeSense help us meet the full complement of needs our customers have for financial protection and help our agents serve and retain our customers. Other recent results indicate our brand awareness efforts are beginning to take hold. We’ve expanded our Go Local Marketing strategy to several more markets. In addition, we’ve extended our shared buy program that leverages Erie’s buying power and expertise to help our agents more cost effectively and efficiently purchase co-branded marketing material and media. Through these two efforts alone, we now have locally based brand advertising programs available in more than 70% of our designated market areas. These efforts and many others enabled Erie in 2012 to grow market share in every state where we write business. With that, I’ll now turn the call over to Marcia to review the financials for the quarter.

Thank you, Terry and good morning everyone. Net income was $0.69 per share in the current quarter, compared to $0.67 per share in the prior year quarter, reflecting growth in our management operations income and a slight decrease in our investment income. And our management operations income before taxes was $49 million, up $3 million over the prior year quarter. Revenues from our management operations grew to $27 million to $303 million. This represents a 10% increase over the prior year period and is consistent with the 10% increase in direct written premium of the property and casualty group. With the half of our independent agents, we delivered a policy growth of a little over 4% and nearly 5% increase in year-over-year average premium for policies. Our retention rate remains as strong as ever at 91%. And we are attracting new customers as well, delivering a 17% increase in new business premiums. Cost of management operations grew $24 million to $254 million. Commission expense grew $10 million or 10% consistent with our growth in direct written premiums. Non-commission expenses increased $9 million or 12% over the prior year quarter, driven primarily by higher levels of acquisition-related costs and personnel related expenses. Indemnity’s net income for the quarter also reflects investment income of $7 million pre-tax, a $1 million decrease compared to the prior year quarter. This decrease reflects lower levels of realized gains on the investment portfolio in the first quarter of 2013 compared to the prior year, partially offset by higher earnings from our alternative investment portfolio. Regarding our share repurchases, during the first quarter, the company repurchased approximately 190,000 shares of our outstanding Class A common stock at the total cost of almost $14 million. As of April 19, 2013, we have approximately $54 million remaining in our repurchase program. Now I’ll turn the call back over to Terrence.

Thank you, Marcia. A few weeks ago we held our Annual Shareholder Meeting here at our home office in Erie and that same week we celebrated the 80th anniversary of Erie’s founding. At our shareholder meeting, all 13 members of our Board of Directors were re-elected to serve another year. I’d like to express my sincere gratitude to our directors for their continued support, guidance and steadfast commitment to our success. Before we get to your questions, I’d like to mention a couple of recognitions the company recently received. In March, we were named as one of the top insurance companies along Professional Women’s Magazine’s Best of the Best list. This award reflected our diversity inclusion practices and policies, an area of great importance at Erie, where we work to attract, recruit, develop and retain top talent who share our dedication to service. In April, J.D. Power and Associates’ released their 2012 Property Claim Satisfaction Study. This particular study focuses on the interactions insurers have with customers throughout the property claims experience. I’m very pleased with the Erie’s performance this year remaining in the highest satisfaction tier. Yesterday, J.D. Power and Associates’ released the results of its 2013 Auto Shopping Study. Three factors, policy, price and distribution contribute to customer satisfaction in this study. We are proud to report that Erie and our agents placed first. This is the fourth time in the past seven years that Erie has placed first, a testament to our continued focus on being above all in service. And now I’ll turn the call back over to the operator to open the line for questions.

Thank you. And we will now conduct our question-and-answer session. (Operator Instructions) And the first question comes from Ray Iardella of Macquarie. Your line is open. Please go ahead. Chris Maimone – Macquarie: Hi good morning, this is Chris Maimone calling in for Ray. Thanks for taking the call. I was hoping maybe you could just expand a little bit on one of the comments you made earlier about having higher levels of acquisition related costs and personnel related expenses. Is there any change, if you could just add a little more detail on what your expectations are maybe some kind of time horizon for these relatively elevated costs and what you anticipate the margin outlook over the foreseeable future as it’s related to those expenses? Thanks.

Good morning, Chris. I will give you some flavor I guess on our current and our past activities. I’m not going necessarily I guess respond to a forward-looking statement. Our business is a brand that we take great pride in terms of making sure that we do things, kind of – that’s explain the results that we’ve shown both operationally as well as the reputation that we have. In our business, we will have expenses and investments in things like sales contest and incentives. We’re looking to obviously build out a stronger technology platform. We are again very focused on the service component of our business. And that all leads to again I think a model that creates strong written premium growth. It creates a great retention. It creates great loyalty to our agents. And so I am comfortable that we’re investing in the business effectively and that will play out to an appropriate margin and performance in future quarters. Chris Maimone – Macquarie: Sure, that’s helpful, thank you. And kind of touching on what you just mentioned in terms of investment in the platform, do you guys feel that the investments you’ve made thus far are adequate or do you still see further opportunities for incremental investment to drive more long-term value in the platform?

These folks who are on the table are never satisfied. But two things, I think the minute you think you have a model that’s going to work either customer expectations change or better [ph] does something, so this is a business that you constantly got to keep one foot in today with the understanding that tomorrow is going to produce another opportunity or another issue you have to deal with. So I think we are more competitive and we are more confident today than we were three years ago and five years ago, but that doesn’t mean we don’t have to invest and be aware that others will be doing things that we’ve got to respond to in the future. Chris Maimone – Macquarie: That’s helpful, thanks. And then one more follow-up if I could. Is there any sort of indication or expectations internally for what kind of returns on the limited partnerships you guys are expecting over the course of ‘13 just trying to get a sense for what we as analysts maybe able to look at as indications of the performance of those investments if that’s possible or not?

No, I don’t think it’s possible – I think it’s a very lumpy business. I think we’re very comfortable with again the selections we’ve made and then the discussions we’re having with the GPs but in order to do any kind of a forecast that would create any kind of accuracy would be inappropriate. Chris Maimone – Macquarie: Okay, great. Thanks very much for taking the questions.

Yes.

Thank you. Our next question is from the line of Adam Klauber of William Blair. Your line is open. Adam Klauber – William Blair: Thanks, good morning everyone.

Good morning, Adam. Adam Klauber – William Blair: Couple of different questions. You’re growing nicely in the last couple of quarters, really over the last year in the auto line, traditionally pretty competitive business. One, if you can give us any sense, do you think some of that growth is coming more from the large nationals, regional or direct, I’m not looking for exact, just a sense and also how much of that the PIF growth in auto is being sold on a package basis with home or some other products?

Okay. The first question is where the new business is coming from, ideally all of the above. Adam Klauber – William Blair: Okay.

I think again I am pleased that how we’ve been able to create a value proposition with our very good agents on the ground, it appears it is resonating with the consumer. And while we see everything in the press about the consumer shopping more on the internet, I think again many of them shop but they also want a decision face-to-face. And so we’ve been very fortunate to be able to upgrade agents that are now I think are enabled with some better technology from our platform with some good products and some good pricing and we’re winning in the marketplace out there against everyone. I guess if I were to make some commentary I think maybe some of the regional companies by virtue of the catastrophes that they have pulled back a little bit and we maybe winning more from some of the single state and smaller regional all the way we’ll tell you, I think we’re also taking market share away from some of the big players too, so we’re very happy with what we’re doing. In terms of your second comment in terms of… Adam Klauber – William Blair: When you’re getting new customers.

We do not have a package policy. Adam Klauber – William Blair: Right.

What we have – again one thing we’re doing and we’re very conscious of is managing our exposure for both auto and home and we are – I would suggest you in most cases on new business writing both the auto and the home. Adam Klauber – William Blair: Okay.

As well as trying to sell umbrella, as well as talking about the life business as well as asking that customer whether they have small business they are. So again I think that’s the power of our brand is to have an agent that is embedded in that town whether it’d be Chicago or Scranton or Parkersburg, West Virginia and to be able to go through and have that kind of dialog with their neighbors and friends. Adam Klauber – William Blair: Okay. Also sticking with the auto, it seems like you’ve been getting some nice rate there as well the industry I guess as far as the first quarter what we can say, did you say it slowed down in that or is that – with the momentum keeping what we’ve seen in the last couple of quarters or even building?

I’m not sure I understand the question. Adam Klauber – William Blair: Sorry, so are you seeing any slowdown in auto rate in the last quarter?

I don’t think, no, again it’s a postures [ph] we’re in 11 states in the District of Columbia. We are constantly every month, we have a process by which we’re looking at territories for each products, and so you know it’s an ongoing process and based upon what states come up and what needs are evident we’ll move rates for those products in those territories and then based upon what we’re doing in those states we’ll have revenue and exposure and pure rate play itself out of the quarter that we’re talking about. Adam Klauber – William Blair: Okay.

I would suggest there is nothing that would indicate that automobile rates are slowing down. Adam Klauber – William Blair: Okay. And then on the commercial side you’re also experiencing very good growth, I mean your PIF is up to almost 5%, do you continue to have appetite to expand in the commercial area?

Yes, I think we do. Again, we don’t – again our market share is not – it has opportunity to grow, again I don’t think we have any place where we can’t grow our business. I think again what you are seeing there is a disciplined underwriting approach. We’re managing the exposure I think effectively. We’re making sure we get the right rate, we’re making sure that the credits that we give if any are appropriate. And I think our business is I’ll call it a mainstream business, it’s an attractive business. It has a low severity, frequency has been controllable and so we are excited about being able to go down Main Street and write the florist [ph] and the funeral homes and the restaurants and the power contractors. And so we think there that continuous to be a great business and a business that will grow for us. Adam Klauber – William Blair: Okay, thank you very much.

Thank you. (Operator Instructions) And with that I am showing no further questions in queue, I’d like to turn it back to Scott Beilharz. Please go ahead.

Thank you, and thanks again for joining us. A recording of this call will be posted on our website, erieinsurance.com after 12:30 PM Eastern Time today. If you have any further questions, please call me at area code 814-870-7312. Thank you.

Thank you. Again, thank you ladies and gentlemen for joining today’s conference. You may now disconnect. Have a great day.