Net income, excluding net realized capital gains and related federal income taxes increased 31.1 percent to $4.0 million, or $0.42 per share, in the first quarter 2003 compared to $3.1 million, or $0.32 per share, for the same period in 2002.
Total policy revenue increased $0.8 million, or 6.2 percent, to $13.1 million in the first quarter of 2003 from $12.3 million during the same period in 2002. Contributing to this growth was an increase in net premiums on traditional life insurance policies of 13.3 percent to $9.4 million for the quarter ended March 31, 2003.
Net investment income increased 28.1 percent to $18.6 million during the first quarter of 2003 from $14.5 million for the same period in 2002. The Company recorded earnings in limited partnerships of $0.3 million in the first quarter of 2003 compared to earnings of $1.1 million during the same period in 2002. Net realized gains from the sale of investments also increased $0.1 million to $2.2 million in the first quarter of 2003.
Benefits to policyholders decreased $0.4 million to $5.9 million in the first quarter of 2003 from $6.3 million in the first quarter of 2002. Interest expense incurred on annuity and universal life deposits increased 3.6 percent to $11.7 million in the first quarter of 2003 from $11.3 million for the same period in 2002. Amortization of deferred policy acquisition costs increased to $3.3 million in the first quarter of 2003 from $1.6 million in the same period in 2002, due to lower than expected margins realized on term products, which requires increased amortization of deferred policy acquisition costs.
The Company's total assets continued to grow in 2003. Total assets increased to $1.5 billion at March 31, 2003, from $1.4 billion at December 31, 2002.
Erie Family Life Insurance Company is a member company of the Erie Insurance Group that includes the Erie Indemnity Company, Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Company of New York, Flagship City Insurance Company and Erie Insurance Property and Casualty Company.
According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 17th largest automobile insurer in the United States based on direct premiums written and the 25th largest property/casualty insurer in the United States based on total lines net premium written. The Group, rated A+ (Superior) by A.M. Best Company, has more than 3.5 million policies in force and operates in 11 states and the District of Columbia. Erie Insurance Group ranks No. 454 among the FORTUNE 500.
News releases and more information about Erie Insurance Group are available at http://www.erieinsurance.com.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995: Certain forward-looking statements contained herein involve risks and uncertainties. These statements include certain discussions relating to underwriting, premium and investment income volume, business strategies, profitability and business relationships and the Company's other business activities during 2003 and beyond. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expect," "plan," "intend," "anticipate," "believe," "estimate," "project," "predict," "potential" and similar expressions. These forward-looking statements reflect the Company's current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that may cause results to differ materially from those anticipated in those statements. Many of the factors that will determine future events or achievements are beyond our ability to control or predict.