Key questions from the second quarter earnings call conducted by Erie Indemnity Co. on July 31, 2008.

Meyer Shields (Stifel Nicolaus): Can you talk about the rate increases you are seeing in personnel and commercial lines for the insurance that you are targeting?

Terrence W. Cavanaugh: In the market we are in the auto line. We see rational pricing out there in the marketplace. I think you heard on some of the other calls of what we are seeing is modest increases in personal auto almost across the board, some minor decreases but mostly increases and we will see that in our jurisdictions, but we think it is rational. On commercial our average premium continues to drop as you have seen and commercial is more competitive and you are seeing more price decreases in commercial than your in personal lines.

Meyer Shields (Stifel Nicolaus): With regard to the decreases you have taken before, we have seen an up-tick in the retention in new business. How the changes match up with your expectations when you took decreases?

Terrence W. Cavanaugh: When people open their renewals and they do not see large increases they tend not to shop and so what is happening in out there in micro environment price wise also affects our retention. The pricing has been rational and so people are not shopping and so our retention is about where we projected it would be at this point.

Dan Schlemmer (Fox-Pitt Kelton): The loss ratio went up year-over-year 55.6 to 63.8 and the tax get about 2% on pricing year-over-year and about 1 point from prior year development and another point from catastrophes. That is about 4% loss ratio deterioration from loss trends. Could you comment on that?

Terrence W. Cavanaugh: You have got an extra point of caps; from you are talking about the quarter right. For the quarter we have an extra point of cap, and we had less in development this year than we did last year in the second quarter and then about 2.5 points of accident year deterioration from a combination of severity and frequency and price.

Dan Schlemmer (Fox-Pitt Kelton): Where are you seeing the frequency and severity trends break out favorable or unfavorably most significantly?

Terrence W. Cavanaugh: Our frequency trends continued to be positive. On our actuaries we believe that when gas prices come back down, that we will see the return to the same frequency trend. That is not something necessarily that they are looking to price into the product going forward. We are seeing positive frequency trends and moderating severity trends. That deterioration in our accident year result is mostly result of our price actions. Our price actions have trended down in 2008 and our estimates for 2009 are trending down from where they were, they are up about half a point.

Dan Schlemmer (Fox-Pitt Kelton): Your growth rate in policies enforce is favorable. why it seems like there is a disconnect between you take rate decreases at the same time as you are already seeing good test growth?

Philip A. Garcia: Over the last 48 hours I have seen a significantly vibrant organization and last night I spent four hours with an agency group that does a lot of business with us and I can assure you that the organization has been focused over the last 12 months under John's direction and they are excited about the capabilities of the ERIE both in terms of our field organization and the product capability that we are building in our corporate offices here. You are seeing a dissection of two events occurring and that is why we are more confident in terms of the fact that we are going to be able take rate modestly in 2009 and you couple that then with the focused ERIE organization in terms of field and home office and we are looking forward to a much more competitive playing field.

Terrence W. Cavanaugh: We have seen in our auto business and you have seen quarter after quarter that we have had positive trends in prior reserve estimates in particularly in automobile bodily injury and un-insured and under insured motors. So, we factor that under indications and it allow us to moderate our price and we want to provide a competitive price for our agents out there too.

Dan Schlemmer (Fox-Pitt Kelton): You went live with West Virginia workers comp about a month ago. Is there a significant amount pick up there?

Michael S. Zavasky: We are seeing about exactly what we expected. We went through a lot of trading with our agents, gave them a program, got them comfortable with how to operate in the workers comp market that they never operated in before. It has proven to have been a good strategic move. Business is coming in on at about the level we anticipated it being and I am pleased with the quality of the business that we are seeing as well.