Scott Beilharz – Vice President-Capital Management & Investor Relations Terrence W. Cavanaugh – President and Chief Executive Officer Marcia A. Dall – Executive Vice President and Chief Financial Officer

Ron D. Bobman – Capital Returns Management LLC Adam Klauber – William Blair & Co. LLC

Good morning, and welcome to the Erie Indemnity Company Second Quarter 2014 Earnings Conference Call. I’d like to introduce your host for today’s call, Scott Beilharz, Vice President of Investor Relations. Sir, you may begin.

Thank you, Victoria, and welcome everyone. We appreciate you joining us for today’s discussion about our second quarter 2014 results. Joining me today are Terry Cavanaugh, President and Chief Executive Officer; Marcia Dall, Executive Vice President and Chief Financial Officer; and Sean McLaughlin, Executive Vice President, Secretary and General Counsel. Our earnings release and financial supplements were issued yesterday afternoon after the market closed, and are available within the investor relations section of our website erieinsurance.com. As we typically do we'll start the call today with openings remarks from Terry and Marcia, and then we’ll open the call for your questions. Before we begin, I’d like to remind everyone that today’s discussions 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 latest 10-Q filing with the SEC, dated July 31, 2014, 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 may not be reproduced 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 12:30 PM Eastern time. Your participation on this call constitutes your consent to recording, its publication, webcast and broadcast and the 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'll now turn the call over to Terry. Terrence W. Cavanaugh: Thank you, Scott, and good morning, everyone. Today I will provide a brief overview of our financials, our perspective on the market, and insight in how we are driving profitable growth over the long-term. Marcia then will discuss our financial results for the second quarter and the first half of 2014 in more detail, and then I will provide closing comments. From a financial perspective, Erie Indemnity had a strong second quarter. Reported net income per share was $0.94 versus $0.84 in the second quarter of last year. For the first half of this year, reported net income per share was $1.82, compared to $1.54 for the first half of last year, reflecting strong top line growth and positive year-over-year operating results. For Erie Insurance Exchange, direct written premium increased almost 9%, to $1.5 billion in the second quarter. For the first half of this year, direct written premium was nearly $2.8 billion, an increase of more than 8% over last year. Our results were driven by an increase in both policies in force and average premium per policy, along with our strong retention rate of 90.6%. As you'll see, our combined ratio is higher than we anticipated. This is primarily from the tough year we've had with whether-related events. For me, the real story behind these numbers is how our dedicated team of agents and employees continue to be above all in service, and how they take care of our customers in their time of need. We've already handled roughly 350,000 claims through June, which is nearly 25% higher than at this point last year. Now I'd like to share my perspective on our growth in the market. When we review the market, we use Conning data for the entire U.S. market and then SNL data to measure results specific to our geographic footprint. For 2013, Conning reported industry growth of slightly over 4%. During this period, Erie delivered growth of nearly 10%. Conning is currently projecting premium growth of 4% for 2014. As I mentioned earlier, Erie delivered over 8% growth in the first half of 2014. So we're well on track to once again outpace the industry projection. According to SNL, over the past five years, we've had the second highest market share percentage growth among the top 10 P&C insurers in our footprint. During this period we also grew market share each year in both personal and commercial lines in every state in our footprint. We often get asked how does Erie sustain this kind of premium growth year after year. We believe it comes from the continued strengthening of the relationship with our agents. By having a strong product offering, with excellent coverage and steady pricing, providing exceptional claims and customer services, having target marketing campaigns, and making their lives easier by improving upon processes and systems capabilities. Let me share with you some examples of what we are doing with our products to continue to raise the bar. On the personal lines side, we recently completed the rollout of our enhanced rental car reimbursement coverage. No longer will a customer have to settle for a sedan when what they really need is a SUV. We've also recently completed the rollout of our new homeowners product, which allows customers the flexibility to choose among a variety of coverage options. Whether it's offering guaranteed replacement costs or letting customers vary their deductibles by major peril, we are giving customers the choices they want and deserve by providing the coverage, deductible, and price they prefer. In today's environment, where many personal lines competitors are reducing coverage and mandating deductible amounts, we are proud to be able to allow customers to balance the amount of coverage they select with the premium they pay. We are also enhancing our products within our commercial lines business. For example, commercial customers are under a constant threat of cybersecurity breaches. Cyberattacks aren't just a threat for large corporations, and our small commercial business customers know this, and are now turning to us to help them recover if an attack occurs. We are fulfilling that need with a commercial data breach product that will protect our customers financially if such an event were to occur. We also know how important it is for our small commercial business customers to manage their cash flows. This is why we are not piloting a pay as you go option within our workers compensation line of business. Pay as you go is an additional payment option that allows our customers greater financial flexibility in managing their premiums, and takes away end of the year audit surprises. For the life business, we are very excited that our personal lines web-based quoting system, DS Pro, now has the capability to automatically quote life at the same time as auto and home. Additionally, we are giving our agents and life customers an easy quote option. This innovative tool enables our agents to more easily explain our life products, allowing agents and customers to focus on the life insurance need and protection, as opposed to dealing with stilted life insurance terminology. Our life products are a great complement to our PNC product line, helping to strengthen our retention and build even greater customer loyalty with Erie Insurance. These are just a few examples of our many product enhancements, and how we are making it easier for our agents and customers to do business with us. We will never rest on our laurels in our pursuit to being above all in service. This is a key to our ability to grow profitably at a rate that is faster than the industry over the long-term. We are very proud of our accomplishments, and what that means to our customers. I’d like to thank our agents and employees. Without their unwavering commitment to Erie, we would not be the successful company, we are today. With that, I will now ask Marcia to provide you with more details on our financial performance. Marcia A. Dall: Thank you, Terry, and good morning everyone. As Terry mentioned, net income for Erie Indemnity was $0.94 per share in the current quarter, compared to $0.84 per share in the prior year quarter, reflecting increased revenue from management operations and lower expense growth. In our management operations, income before taxes was $58 million, up $9 million over the prior year quarter. Our revenue growth outpaced our growth and expenses, increasing our gross margin from 17.3% to 18.2%. Revenue from our management operations grew $13 million to $374 million. This represents an 8.7% increase over the prior year period, and is consistent with the 8.8% increase in direct written premium of the property and casualty group. In the second quarter of 2014, premium per policy grew 4.2%. In addition, our strong policy holder retention, and the increase in new policies, resulted in policy growth of 4.5%. Cost of management operations grew $21 million or 7.6% to $306 million. Commission expense grew $18 million, or 10%. Commission growth outpaced direct written premium growth, primarily due to an increase in agent incentive costs compared to the prior year quarter. Non-commission expenses increased $3 million, or 2.8%, over the prior year quarter. Our non-commission expenses for the quarter benefited from a decrease in projected employee incentive plan costs and pension costs. Income from investment operations decreased to $7 million in the second quarter of 2014, compared to $8 million in the second quarter of 2013, due to lower equity and earnings of limited partnerships. Now let’s look at our results for the first six months of 2014. Indemnity’s net income totaled $95 million, compared to $81 million for the same period last year. On a per share diluted basis, net income was $1.82 per share, compared to $1.54 per share for the prior year. In our management operations, income before taxes grew $18 million to $126 million. The gross margin for management operations for the first half of 2014 was 18%, compared to 16.7% for 2013. Revenue from our management operations grew $53 million to $700 million, an increase of more than 8%. Cost of management operations grew $35 million to $574 million, or 6.4%. Commission expense grew $28 million to $379 million, primarily from the increase in direct written premiums of the property and casualty group. Non-commission expenses increased $7 million, or 3.2%, over the prior year quarter. Our non-commission expenses for the first six months of the year benefited from a decrease in projected employee incentive plan costs and pension costs. Indemnity’s income from investment operations grew $3 million to $18 million for the first half of 2014. Turning to our balance sheet, our disciplined capital allocation process allows us to invest in the company’s long-term growth, while returning cash to investors through attractive dividends and accretive stock repurchases. Dividends paid to shareholders totaled $59 million for the six months of 2014. Indemnity repurchased approximately 114,000 shares of our outstanding Class A common stock at a total cost of $8.2 million during the second quarter. As of July 18, 2014, we have approximately $18 million remaining in our repurchase program. Now I’ll turn the call back over to Terry. Terrence W. Cavanaugh: Thank you, Marcia. Before we take your questions, I’d like to highlight a number of recognitions Erie Insurance has received since our last call. In June, A.M. Best affirmed the A plus superior rating of the property and casualty affiliates of Erie Insurance Group as well as the A excellent rating of Erie Family Life Insurance Company. Erie property and casualty affiliates have maintained an A.M. Best rating of A excellent or better since 1939. Erie was again named to the Fortune 500 list of the largest American companies based on total revenue. And in July, Ward Group recognized Erie as one of the 50 top performing property and casualty companies. This is our seventh consecutive year receiving this award. Erie is only one of seven organizations to be named on both Ward’s 50 top performing life health companies. JD power released its 2014 U.S. auto insurance study and Erie continued to be ranked in the high satisfaction tier for the two geographic territories we serve, the Mid-Atlantic and North Central regions. Our scores improved on price, billing, and payment. While these recognitions like these are nice, the real recognition comes from our loyal customer base who entrust us with what matters most to them. Seeing the continued growth in our customer base every year is the best recognition of all. And now, I’ll turn call over to the operator to open the line for your questions.

(Operator Instructions) Our first question comes from the line of Ron Bobman of Capital Returns. Your line is now open. Ron D. Bobman – Capital Returns Management LLC: Hi, good morning. Terrence W. Cavanaugh: Good morning. Ron D. Bobman – Capital Returns Management LLC: This is principally directed at Terry. The stock price for Erie Indemnity basically hasn’t really gone anywhere since early 2011. When are management’s actions or management’s intentions going to shift for the benefit of shareholders? Or when will your efforts be reflected in the stock price, if it’s your opinion, it’s not yet? Terrence W. Cavanaugh: Well, I can never judge how the external parties view the performance and economics of the organization. I always have in my perspective and in my actions the thoughts of all the constituencies, shareholders, again, agents, customers, and employees. And so to me, it’s a balancing act that requires some thoughtful strategy, as well as effective execution. I think, again, as evidenced by our performance and evidenced by the way our agents are performing and how loyal they are to us in terms of the loyalty we have with our customers, I think we’re running an effective business and I’ll leave it up to others to determine what the economics should be for that. Ron D. Bobman – Capital Returns Management LLC: But what are you – I mean the company’s gotten commended by awards. as you highlighted, it’s gotten commended by Best, as you highlighted, which are sort of basically, policyholder and sort of size-oriented and service-oriented commendations. So the company’s being sort of applauded for its high marks in those sorts of constituents services. But as relates to shareholders, what are you doing or what are you going to begin doing that’s going to begin to reward shareholders? Because what’s transpired, I mean listen, the stock market’s the score board and the company’s not being and shareholders are not being rewarded, or at least not being recognized, for shareholder efforts that you’re pursuing to date or at least for the last three years. So what comes to mind or what are you pursuing or what do you propose changing in your pursuit and your efforts to get sort of the commendation that shareholders desire that you’re getting elsewhere for the other constituents. And that’s it from me. Thanks a lot. Terrence W. Cavanaugh: One, again, I think is running an effective business. And I think over the – again, we look at it over the long period of time so I guess if I look a bit in the rear view, I think we have rewarded shareholders both in terms of, again, capital appreciation and the dividends that have been paid over the years. And as, obviously, always difficult to predict the future both in terms of operating results, how those compare to others in the industry, and how that would be recognized by those that wish to invest their capital in the property casualty space. So I guess I spend my time trying to run the best business I can, again, for those constituencies I mentioned, and I think over the long haul, if we do that effectively, our results will be rewarded as relates to others in the property casualty space.

Thank you. Our next question comes from the line of Adam Klauber if William Blair. Your line is now open. Adam Klauber – William Blair & Co. LLC: Good morning, thanks. The margin’s beginning to come up. Do you think there’s room for it to continue to rise and what’s going to drive that rise if you think there is further room? Terrence W. Cavanaugh: Again I think it’s difficult to predict always the future. I think we’ve obviously, started off with a strong year. We are cognizant of the need to continue to run an effective organization. Obviously, margins are based upon the top line in terms of again how we continue to drive the top line and then manage the effective investments of the business to manage our cost side. And so I would hope that, it’s going to continue as I talked about. The way our business runs, it’s a lumpy, not a linear cost structure for us. And so therefore there will be inevitably need to invest in the business in certain quarters going forward that might cause some margin compression. But I think, again, we recognize the need to continue to run an effective business that produces margins. Adam Klauber – William Blair & Co. LLC: Excluding commissions and excluding investments, what do you think your core growth rate of expenses is? Terrence W. Cavanaugh: Outside of commissions and investments – and my investments… Adam Klauber – William Blair & Co. LLC: Like investing in systems or special projects (indiscernible) as you just mentioned. Terrence W. Cavanaugh: Again, it’s sort of lumpy there. Obviously, any number of things that can cause that go up and down in terms of agency – variable compensation on the agency side, incentive plans, staffing requirements. And so, you know, we would like to, again, run an effective business. We would want to be able to have margins continue to increase, and have the business run effectively. But I guess I’m not necessarily going to bifurcate the business and make a comment on that right now. I would be more than happy to think about and get back to you. Adam Klauber – William Blair & Co. LLC: Okay. As far as the auto insurance segment, could you comment on the competitive landscape? Have you see an increase in competition in the last six months, through the first half of 2014? Or would you say the competitive level is relatively stable with 2013? Terrence W. Cavanaugh: Again, it varies by territory. I guess if you ask me one way, I would say it’s a little bit more competitive. I think people are, based upon what’s happened on the property side, maybe again, redirecting and refocusing on the automobile side. There’s obviously no lack of competitors in that space. So I would suggest that there’s maybe a little bit more competition around the auto product line than there was a year ago. Adam Klauber – William Blair & Co. LLC: Okay. That’s helpful. And then as far as frequency in auto, we’ve seen some good results at some other carriers. How’s your frequency running in the last three to six months? Terrence W. Cavanaugh: It is up, primarily based upon we had a significant weather activity that really hit our auto line very, very hard. And so we – it actually is one of our larger auto events by virtue of this weather that came through central Pennsylvania. And so it had a tendency to drive that up significantly where we had it significantly – it also increased severity because there’s a lot of totals that came through the hail damage in that storm. Outside of that, our numbers are looking okay both in terms of frequency and severity. Adam Klauber – William Blair & Co. LLC: Okay. And then as far as home owners, I mean for the last couple years, a lot of the industry has pulled back, has been really restructuring their home owner’s books of business. Is that still going on, or is competition beginning to seep back in that market? Terrence W. Cavanaugh: I think there’s some more competition. I think, again, the industry had a good year last year and, therefore, I think memories have a tendency to fade a little bit in terms of again what can happen on your property book of business. I think there’s also a belief that the industry’s getting smarter in terms of its predictive modeling and what is a good property risk versus a less than good property risk. And so I think the competition is smarter, stronger. I think there’s more thoughtful approach to, again, what other lines of business they can sell around the home owner line and we’re trying to do the same thing. And so, again, it’s a business that is a significant opportunity for the industry if people can figure out how to price it properly and how to underwrite it effectively. Adam Klauber – William Blair & Co. LLC: Okay. Great. Thank you very much.

Thank you. (Operator Instructions) One moment. And at this time I’m showing no further participants in the queue. I would like to turn the call over to Terry Cavanaugh, for any closing remarks. Terrence W. Cavanaugh: I’d like to thank everyone for their time this morning. As I said at the beginning of this call, we are off to a good start in 2014, and I believe we are in a strong financial and operational position to build upon this momentum. We appreciate the dialogue and feedback, and we look forward to our call. Thank you.

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

Ladies and gentlemen, thank you for participating on today’s conference. This does conclude today’s program. You may all disconnect. Everyone, have a great day.

You too. Thank you.