Eventually there is the occasional rare person who builds an enterprise that lasts and grows for generations. One of these particular rare persons started as a school teacher in the early 1900s, got tuberculosis, went back home to be close to family, turned around a money-losing grocery store, and then leapt into the insurance industry as an agent. He only lasted a few years working for someone else before he started chafing at the bit. He and a fellow employee wanted to do things their own way because they knew they and their clients would be better off for it.

These two wound up founding one of the great success stories in the insurance industry over the last hundred years. At first, they would work seven days a week in their venture. One of the men personally delivered policies in an open-air touring car on cold Pennsylvania evenings, blanket thrown over a patient spouse in the passenger seat. He did this because he believed, more stubbornly than anyone else, that his product was valuable, was the best in the land, and his company was above all else when it came to service.

Henry Orth Hirt (“H.O.”) was that person. And on April 20, 2025, the company he co-founded—Erie Insurance—turned 100 years old. This is not a small thing. Erie weathered the Great Depression, World War II, the inflationary 1970s, a decade of catastrophic storms, the digital revolution, and a global pandemic. It survived and thrived all this while remaining true to the principles he set down in 1925: “To provide its policyholders with as near perfect protection, as near perfect service, as is humanly possible, and to do so at the lowest possible cost.”1

Throughout his entire life, H.O. was a booster. For the business he founded, for its employees, and for the Erie community that was his home. He espoused a plain-spoken common sense for business and for doing right that preceded Warren Buffett by many decades. Follow the Golden Rule: treat others the way you’d want to be treated in the same situation. Provide great value at the lowest possible price. Put the reputation of Erie Insurance before any worries about profits and losses. H.O. in particular had a disdain for rules and frequently told Erie employees (and many others) to “THINK!”

This is the story of how Erie Insurance came to be. I hope anyone reading this, whether in business, in service, or simply navigating life, can learn from the man who made it so: H.O. Hirt.

Part One: The Boy Who Liked to Argue

On June 14, 1887, Henry Orth Hirt was born as the fifth and final child of Frank and Sarah Hirt on East 10th Street in Erie, Pennsylvania. He arrived with no particular destiny in hand. He did arrive with something more valuable: an unusual combination of stubbornness, curiosity, and common sense that would prove invaluable over his next 95 years.

H.O.’s father Frank was a man of industry and ambition. Frank was a foreman at the Erie City Ironworks who then left iron for stone to found the Erie Mantel and Tile Company. Bates’ History of Erie County described Frank’s firm as “in the hands of men whose ambition is not measured by small results.”2 That sentence could later sum up H.O.’s life.

The Hirt family moved to 1016 Wayne Street in 1893. It was at the Wayne Street homestead—particularly around its dinner table—that H.O. absorbed the values he would carry for the rest of his life. Thomas Hagen, H.O.’s son-in-law and one of Erie’s later board chairmen, described it simply: “His family homestead at 1016 Wayne Street was where he really learned the values that guided him all the rest of his life — values as much in the dining room as any other place, because that’s where the family gathered for meals.”3

Young H.O. entered the workforce at age nine, working at his father’s shop while attending Erie Public School Number 13. By high school H.O. began to work for Metric Metal as a timekeeper. However, he occupied himself with much more than just work at this point. He filled his spare hours with detailed, precise sketches of insects and flora, a habit befitting someone who would earn a biology degree. His Erie High School yearbook caption in 1905 was perhaps the most accurate prediction in yearbook history. Mortimer Graham, Vice President and General Counsel of Hammermill Paper Company, as well as one of Erie’s long-serving board chairmen, introduced H.O. at the 1971 Newcomen Society dinner:

“The Erie High School year book of 1905 carried a picture of a member of the graduating class of that year, an eager looking curly-haired youth named Orth Hirt. Accompanying the name and picture is this prophetic couplet:

‘To argue was joy / For this little boy.’”4

Hagen, H.O.’s son-in-law, noted that arguing remained characteristic throughout H.O.’s life: “The only person I ever saw win an argument with him was my wife—his daughter. Almost every time, she could out-logic him, and that was something.”5

H.O. worked for roughly ten years before going to college, paying his own way through Wittenberg College—a Lutheran school in Ohio—borrowing small sums from his mother and sister only when necessary and repaying both with interest. This was a preview of how he would run everything else in his life: on his own terms and with honest accounting to the people who trusted him.

After graduating from Wittenberg with a biology degree in 1911, H.O. took up what he considered the noblest profession: teaching. He taught biology in Iowa and then pivoted to history at a private boys’ school in Texas. But before moving to Texas, H.O. spent a summer at Penn State getting himself up to speed on the subject before walking into the new classroom. H.O. did not believe in being underprepared. He loved teaching and his students loved him. A fine career was before him.

Then tuberculosis intervened.

TB was a killer in 1915. Vaccines and antibiotics were decades away. H.O. went to New Mexico to recover in the dry desert air. This was one of the few treatments available at the time. He survived, which was more than could be said for many of his contemporaries, but the illness changed everything. After two years of “chasing the cure”, H.O. returned to Erie to be close to family. Upon his return, H.O. performed some odd jobs until he joined the board of a nearly bankrupt grocer. From there, the board asked him to become president and manager of the business to turn it around. H.O. accepted the challenge and started on December 1, 1920.

The store had no money in the bank, owed hundreds to various wholesalers, and weekly sales were $300. He had $53 a week to work with for employees, $35 of which was for his own weekly salary. However, H.O. refused the salary and negotiated a flat 4% commission. If he only did as well as the prior manager he’d only get $12 a week.

When H.O. got to work, he turned in sales of $585 in the first week. And this was in spite of prices dropping on most items and commodities after the end of World War I. By Christmas of 1921, weekly sales were up to $2,714 (a weekly salary of $108 for H.O.) and all debts had been paid. How did H.O. do this? As H.O. later wrote, he knew the store had to have customers, and to have customers, the prices had to be attractive. Since the store wasn’t physically attractive and he didn’t have the time or money to make it so, H.O. plastered the outside windows with attractive prices.

That was H.O.: put him in front of a problem, and the problem generally did not last long.

But it was insurance that called H.O.’s name. In 1922, just before he turned 35, his brother John—who managed a branch of the Pennsylvania Indemnity Exchange (PIE)—needed a salesman. H.O. left the grocery business and took the new job at $35 per week plus commissions. In a decision that would alter the history of Erie, Pennsylvania, he convinced his brother to hire a second salesman: a Navy veteran and railroad brakeman named Oliver Grover Crawford, whom everyone called O.G. or “Ollie”.

Part Two: The Day Two Men Quit and Changed Everything

For two years, H.O. Hirt and O.G. Crawford sold insurance together at the PIE and were exceptional at it. Despite their success, the pair were unhappy. The pay felt inadequate for the value they were generating. The working conditions chafed. H.O. had a difficult relationship with his brother John, who ran the branch. When the two men thought of forming their own mutual insurance agency, they found the mutual companies would not give them agency appointments. H.O.’s son-in-law later explained the bind as engineered in part by H.O.’s own brother:

“He didn’t get along too well with his older brother. He and Crawford decided, ‘Let’s go off on our own, because we know what we can do, the two of us.’ He found out later on that the reason they didn’t get those appointments is because his brother went around and picked up all those agencies so that they couldn’t get them.”6

Unable to set up their own agency, H.O. and O.G. decided to start their own insurance company, the Erie Indemnity Company. To impress upon you how great H.O. and O.G. were at selling insurance, when they left, their former employer had to hire six salesmen to replace the two of them. Regarding the corporate form of the insurance company, they only knew of one type—a reciprocal exchange, like the PIE for which they had worked—so that is what they decided to build. In his address to the Newcomen Society in 1971, H.O. described the founding moment:

“So on December 31, 1924, we resigned our jobs and on January 1, 1925, plunged into our self-created jobs of organizing a reciprocal auto insurer, the ERIE INSURANCE EXCHANGE and the Erie Indemnity Company, its corporate managing company. We had been receiving $55 and $60 per week as salesmen for the Philadelphia Reciprocal. However, during the whole period of organization the two promoters received absolutely nothing in the way of salary, expenses or stock.

Our investment in promotional material, the total cost of which was absorbed personally by the promoters, was one ten-cent pencil tablet, in which we outlined the great benefits of the proposed new industry to the City of Erie.”7

Part of the climate in the country during the Roaring Twenties, as H.O. described it, was one of “Boosterism”—a civic fever in which every business, institution, and civic organization was competing to attract new industry and investment to their particular community. It was also a time of tremendous business boosterism. H.O. in a 1960s speech described it thus (emphasis is H.O.’s):8

H.O. recognized the pervasive boosterism and optimism and channeled it. H.O. wrote, “Promoters Crawford and Hirt had no real difficulty in disposing of their Erie Indemnity Company Stock. In fact, it was truly common for Friends whom they (we) did not call upon to be highly incensed, when they heard about the deal, if they were not cut in on the deal at once.”9

One tantalizing example H.O. used in the prospectus for Erie Indemnity was the 15-year track record of the Glens Falls Insurance Company: a $100 investment made in 1910 had grown by 1925 to $500 in stock and had paid $1,285 in cash dividends without the investor committing a single additional penny.⁶ H.O. also pulled on the heartstrings of local businessmen. Erie Indemnity was not merely a new insurance company that would make money for shareholders, but it would also keep money inside Erie for the benefit of the city. As H.O. put it in the Newcomen address: “Why can’t Erie people create new industries for Erie? Aren’t self-created industries just as desirable as the imported kind that don’t seem willing to be imported?”10

H.O. and O.G. easily raised $31,000 in three months from almost 100 local Erie citizens, despite not allowing anyone to invest more than $1,000. H.O. himself invested $5,000 into the business—roughly $94,347 in 2026 money. $25,000 of the total raised was for the guarantee fund for the Exchange and $6,000 for working capital.

Erie Indemnity opened its doors for business on April 20, 1925. H.O. was 37 and O.G. was 40. Their first policy was written for George Epp and the Epp Furniture Company. H.O.’s own 1920 Dodge was insured on the company’s eleventh policy. The annual auto premium was $34. That first year, Erie wrote $31,900 in premiums mostly because H.O. and O.G. worked seven days a week.

Another important part to the story is H.O. continually gave credit to his partner O.G. Crawford. It was H.O. himself that needed the most pushing to strike out on their own together. “I must give Mr. Crawford the chief credit. He had more nerve than I had, and it took a good deal of prodding on his part to get me moving along with him and carrying out his idea.”⁷ Humility was a genuine characteristic of H.O. To the day he retired, H.O. never referred to himself as the founder. I was always co-founder. He never stopped giving O.G. the credit he believed his partner deserved. Decades after O.G. had retired, the only picture hanging on the walls outside H.O.’s office was a portrait of O.G. Crawford.11

Part Three: A Company Built on a Simple Promise

Erie Insurance was founded on high principles and a promise. H.O. stated it from the beginning, and repeated it throughout his career:

“To provide its Policyholders with as near PERFECT PROTECTION, as near PERFECT SERVICE, as is HUMANLY POSSIBLE, and to do so at the LOWEST POSSIBLE COST.”12

That sentence contains several ideas that are remarkable in combination. It names the customer—the policyholder—first and foremost. It acknowledges that perfection is impossible while committing to the pursuit of it. And it insists that cost must be kept low because protection that is unaffordable is no protection at all. Shortly after founding the Erie, H.O. added a motto that distilled the promise into six words: “The Erie is Above All in Service”. Note well the clever typography of the word “Service” which H.O. himself designed.

The structure of the company reinforced these principles at every level. By establishing Erie as a reciprocal exchange rather than a stock company, H.O. ensured that the policyholders themselves owned the company. Management was contractually limited to 25% of each premium to cover all expenses—salaries, buildings, overhead, etc.—with the remaining 75% reserved to pay claims and return dividends to policyholders. H.O. described the cumulative results of Erie in 1971:

“The ERIE INSURANCE EXCHANGE Reciprocal, which actually belongs to its policyholders, has returned from 10% to 30% of their premiums to its policyholders each year since its founding, for a grand total of $43,000,000 to date, and it is a fact that ERIE’s policyholders have received their insurance at less than cost, since these dividends have totaled more than the total of all underwriting profits. As a consequence, the Surplus of the ERIE has been built up entirely from the income from its invested assets, and not at all from premiums paid by policyholders.”13

One of H.O.’s many philosophies was the insurance company only deserved an “appropriate profit.” Appropriate to whom? He was clear on the order of priorities: policyholders first, because in his words, “they feed and support us.”14 Agents second, because they bring the policyholders to the company. Management was third—and in his telling, a distant third.

The new company faced opposition from the moment it opened its doors. Larger, more established insurance companies resented the new competition and were not shy about saying so. They lobbied the Pennsylvania legislature to raise the capital reserve requirement just before Erie’s first anniversary, engineering a crisis that left the young company $67,000 short of the new $100,000 Guarantee Fund requirement. H.O. secured bank loans, rallied supporters, and got a 90-day extension. In what became a company legend, O.G. Crawford set what was described as a world record by writing 243 auto insurance policies in a single month to help raise the funds.15 The old-line carriers, for all their entrenched power, had underestimated what two driven men with a simple promise could do.

When Edwin Nick, an early Erie board member, asked H.O. how on earth an infant reciprocal exchange could possibly survive the deadly competition of entrenched national carriers, H.O.’s answer has echoed through the company ever since:16

It’s hard for me not to feel H.O.’s sentiment is the same as when the character Rorschach in Watchmen exclaims, “None of you seem to understand. I’m not locked in here with you. You’re locked in here with me!”

Part Four: No Rules — Just Thinking

If there is one idea at the intellectual center of H.O. Hirt’s approach to business, it is this: THINK. Do not follow the rulebook. Do not simply defer to precedent. Just. THINK.

H.O. actually had a sign behind his desk that read: “THINK.” IBM may have popularized the slogan in the 1950s, but H.O. had been preaching it long before the technology company made it famous.17 For him, thinking was a professional obligation and his refusal to substitute rules for judgment was a core principle.

His position on rules was clear. In a 1968 letter to a physician concerning a policyholder with psychiatric difficulties, he wrote (emphasis mine):

“We doubt whether we ever would take an absolute position because we are in the habit of not following rules but giving due consideration to each individual case that comes to our attention. We tell our underwriters that we can hire people at $75 a week who can follow rules, but we are willing to pay proper salaries to people who are capable of thinking and we want them to give due thought to each individual case that comes to their attention and always add a little flavoring of compassion when making judgments in individual cases. We have no fixed rules. We try to be fair to individuals as their cases are brought to our attention.”18

He went further. When pressed on why he refused to establish standard underwriting rules, he was candid about what rule-seeking actually represented: “In other words, like most humans, they hate to think, and prefer to follow rules blindly, but I still insist upon them trying to think, and so I refuse to lay down rules for their guidance.”19

In September 1972, H.O. put into writing his even more fervent views on thinking and rules. I transcribed the entirety and kept the original formatting as best as possible down to the exact number of exclamation points(!):20

Let that last sentence sink in. Does it sound harsh? Or is it just the overflowing passion of a man who started a business from scratch, had a high bar for quality and service, and believed his approach would differentiate the Erie so that it would prosper long after he left the mortal plane?

H.O.’s position was (and still is) unique for a leader of an insurance company in which the entire business is practically defined by actuarial tables, standard policies, and rules. H.O. saw rigidity as the source of his competitors’ weakness, not a strength. He told his underwriters to look just as hard for reasons to accept applicants as for reasons to reject them. He constantly preached the obligation to treat each case with individual judgment and compassion.

The philosophy of THINKING also extended to his hiring practices. H.O. sought people with common sense and the willingness to use it. Tom Hagen described the results (emphasis mine):

“We had a wonderful cast of characters—and I mean it most complimentarily—at Erie Insurance. We had people that other companies would not have hired for one reason or another, licitly or illicitly. He hired them. And what do you suppose the reaction was? Unfettered loyalty.”21

Starting in 1941, H.O. held weekly meetings to teach agents and employees about Erie’s policies. This was not to hand down mandates, but to examine what had gone well and badly, and to think through improvements together. This was not corporate training. It was teaching, carried out by a man who had never stopped being a teacher despite tuberculosis diverting his life in a different direction. His commandments to agents were threefold: “Know your stuff. Believe your stuff. Do your stuff.”22

His belief in independent thinking extended into his broader philosophy of what separated Erie from its competitors. On the question of coverage superiority, he was direct and specific. In his Newcomen address, H.O. described Erie’s policy comparison against its largest competitor in terms that left no room for vagueness:

“In our published comparison of the ERIE Pioneer Family Auto Policy with that of our largest competitor, we need six full pages to detail the more than 50 ways the ERIE’s policy is superior. Most of these features give hundreds of dollars of coverage that the competitor does not give, while at least two give thousands of dollars of coverage that it does not give.”23

The instruction to salespeople, distilled from decades of competition, was equally crisp. In the company’s Yellow Book—an internal guide for agents—H.O. wrote: “Beware of the short weight, half-cotton cheap policies that look like bargains. It isn’t what you pay, it’s what you get for what you pay that counts.”24 He argued that most people who could afford a car would not settle for the cheapest food (chicken feed), the cheapest clothing (a half-wool suit), or the cheapest housing (to quote Chris Farley in his famous SNL skit, “a van down by the river”), so why would they settle for the cheapest and lowest quality insurance on the most important protection they could buy?

And on the nature of success in any business, H.O. reduced the entire formula to a simple two sentences:

“Success in Business is not a matter of tricks or gimmicks, or even of education and training. It is just a matter of simple common sense, mixed with just plain decency.”25

Part Five: A Century of Growth

Erie’s financial trajectory over 100 years is not a story of luck or timing, though both played their roles. It is the story of a business philosophy that worked and was constantly tended by people who believed in it.

The early numbers were modest by any standard. Net premiums at the end of 1925 stood at $31,900, or just $601,931 in 2026 dollars. By the time the stock market crashed in October 1929, premiums had reached $171,956.26 When the country collapsed into the Great Depression—during which 85,000 businesses failed between 1930 and 1932—Erie kept growing, in marked contrast to its challenged competition.

In 1933, O.G. Crawford retired, and the company that had begun as a partnership became H.O.’s singular mission. He served as its president and chief executive for decades more. In 1934, he introduced what he called the Super Standard Auto Policy. This was a policy so full of extra features that Erie marked each superior provision in the margin with an “X” so policyholders could count how many ways it outperformed a competitor’s standard offering. There were 31 officially named features. In practice, there were over 50. Some of those features, like coverage when driving a vehicle other than one’s own, were so logical that they eventually became standard across the entire U.S. insurance industry. Erie was there first.

The post-war boom transformed the company. Erie hit $1 million in annual premiums in 1946, then doubled in just two years. Net premiums jumped from $755,080 in 1945 to $7,729,114 in 1955—a tenfold increase in a single decade. By 1958, Erie had crossed the $10 million mark and was operating as a multi-state insurer across four states.27

Shares of the Erie became publicly tradeable over the counter sometime in 1993. The company eventually registered its shares with the SEC and uplisted to the NASDAQ on October 2, 1995. It closed its first day of trading on the NASDAQ at a split adjusted price of $7.42. As of April 29, 2026, the share price sits at $219.68. Since moving to the NASDAQ, the Erie share has compounded at 11.7% versus the 10.4% of the S&P 500.

The following table traces the financial arc of the Erie up until 2025:28

Over 100 years, annual earned premiums from the Erie Insurance Exchange increased 374,634x while policyholders’ surplus increased 292,622x!

When H.O. retired in 1976, at age 90, Erie was collecting more than $1 million in premiums every three days, netting more than $143 million for the year. He had run the company for its first 50 years.

The trajectory continued after his retirement. By 1994, the Erie Insurance Exchange was earning $1.64 billion in premiums with $1.45 billion in policyholders’ surplus. One industry analyst noted that policyholders’ surplus had compounded at 22% annually since 1970, a rate that any serious investor would recognize as exceptional.29 By 1998, Erie crossed $2 billion in direct written premium. In 2003, it made its debut on the Fortune 500 list.30

In his 1971 Newcomen address, H.O. placed Erie’s achievement in historical perspective with a flourish that revealed his competitive pride:

“That’s right! The oldest stock insurance company in the United States is the Insurance Company of North America, founded in 1792, and hence is 133 years older than the ERIE, and yet it had only $29,000,000 of Net Premiums in 1925, when the Erie was founded. On the other hand, the Travelers Insurance Company, founded in 1854, and its running mate, the Travelers Indemnity Company, founded in 1903, had a combined total of only $56,530,000—$6,470,000 less in Net Premiums in 1925 than the ERIE has today. Today, out of nearly 3,000 Property and Liability Insurance Companies, the Erie ranks 96th with respect to premium volume, or in the top 3%.”31

That was 1971. Fifty five years later, the company is considerably larger. And the retention number that may tell the whole story. In the last few years, 88%-91% of Erie’s policyholders renewed their policies each year.32 This is far better than the current industry average for auto insurance retention which has declined to 78%. I feel certain Erie’s situation is what happens when you keep a promise, year after year, without exception.

Part Six: The Character Behind the Company

Numbers are interesting. Character is more interesting. And H.O. Hirt’s character was, by all accounts, one of the most remarkable features of the enterprise he built.

He was stubborn. He said so himself, and he recommended the trait to anyone who would listen. In H.O’s June 16, 1976, response to a letter from a colleague wishing him Happy 89th Birthday, H.O. described what had actually driven Erie’s survival in terms that cut through any mythology that might have gathered around the company’s origins:

“Dear Mr. Thomas,

Your most kind letter of June 10th quite overwhelms me. You attribute whatever success I and the Erie may have had to a number of great virtues.

If you knew the true story, you would know that it was due to just one characteristic—a very stubborn nature. Our competitors predicted that we would never get our first license. Then after receiving it they predicted we wouldn’t last 60 days, and then six months, then two years, and then seven years. But many of those who predicted our failure have long since made it from the scene.

We recommend the virtue of stubbornness to our friends. The easiest thing in the world to do is fail, but if you stubbornly refuse to fail, you won’t fail, and if you live long enough, you would have succeeded in some degree.

But what a fool we would be if we took the entire credit for what the ERIE is today. We call it the ERIE Family and it is the fine quality of the members of that ever growing ERIE Family that has made the ERIE what it is today.”33

Life gave H.O. ample opportunity to practice that stubbornness. He survived tuberculosis in his 20s. He recovered from a broken back in his 50s. He managed the onset of blinding cataracts in his 60s. He was struck by a truck in his 70s. He underwent a double hernia operation in his 80s.34 And he still kept working, kept answering complaints personally, kept showing up. He retired at 90, on his own terms.

H.O. was also a compassionate person. He wrote in bulletins, over and over, on this subject. The archivist at Erie’s Heritage Center described his insistence on this point:

“He wrote over and over again in the bulletins, encouraging agents and employees to exercise compassion and empathy—because in the type of industry that we’re in, if you’re not able to provide those things to our policyholders, then you’re in the wrong industry. You’re often encountering a customer on one of the worst days of their lives. They’ve experienced some sort of catastrophic loss. They’ve had a car accident. Their house has burned down. Something horrible has happened to them. And if you can’t exercise compassion and give them dignity and respect, then this is not the right job for you.”35

His door was also literally open all the time. The door knocker on his office door was installed on the inside, because the door was never shut. He answered complaints personally into his 90s. When employees pooled their money for a Christmas gift, he directed them to put it toward the War Orphans Fund instead.36

H.O. also put the honor and reputation of Erie on a pedestal that was the equal of providing excellent service. In 1956, during a period when Erie was suffering severe excessive underwriting losses, H.O. gathered the Claims Managers and District Managers to explain and discuss the situation. In a bulletin reporting on the matter, H.O. informed everyone (bold and italics emphasis is mine):37

“But while we pled with our District Managers to do everything in their power to persuade our Agents to use care in the selection of risks, we at the same time, told our Claims Managers that this high Loss Ratio was absolutely none of their business. It was not a claim Adjuster’s problem, but rather a problem of Management and it was up to Management to solve and not our Adjusters.

We told our Adjusters that we still expected them to treat others as they would like to be treated themselves, that there was to be no chiseling. We told them that while the ERIE was losing some money, it did not propose to lose its HONOR. And now that those dark days are six months behind us (thank goodness!) we are most happy to record that the rare complaints received about adjustments have been more rare than ever this past year!” The ERIE is indeed above all in Claims SᴱᴿVᴵCᴱ!

If this H.O. quote rings a bell in your head, it is because you’re remembering the testimony of Warren Buffett during a congressional hearing on September 4, 1991, regarding Salomon Brothers rigging the U.S. Treasury auction. Buffett, having stepped in as CEO Chairman of Solomon to turn around the situation and salvage his investment in the company, relayed his expectations of how he expected all Salomon employees should act (emphasis mine):

“After they first obey all rules, I then want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper to be read by their spouses, children and friends with the reporting done by an informed and critical reporter. If they follow this test, they need not fear my other message to them: Lose money for the firm and I will be understanding; lose a shred of reputation for the firm and I will be ruthless.”

Whether or not Buffett had been reading the Bulletins H.O. had been penning for decades is irrelevant. Buffett echoed H.O. 35 years later in a similarly trying time. The fact that both had similar principles is the important thing.

But getting back to H.O. When an insurance company is losing money, the temptation is usually to tighten claim payments, find technicalities, stall. H.O. refused this. This was simply maximizing the short-term at the expense of the long-term. It was sacrificing reputation at the altar of profits. The honor of Erie was not for sale at any price. And when the losses cleared six months later, claim complaints had fallen rather than risen. The policyholders noticed.

Near the end of his presidency, when H.O. passed the helm to his son Bill, he left a note. It contained five words: “Never lose the human touch.”38

What H.O. Hirt Left Behind

When H.O. Hirt died on June 19, 1982, at age 95, Mortimer Graham—the man who had introduced him at the Newcomen dinner eleven years earlier and who had served the Erie family for decades—offered what may be the most fitting tribute ever spoken at a funeral: “If you want a monument, just look around you.”39

One hundred years after two men walked out of the Pennsylvania Indemnity Exchange on the last day of 1924 and set about building something better, the Erie stands as one of the exceptional business stories in American history. It is now a Fortune 500 company. It currently carries an “A” (Excellent) rating from A.M. Best. Its employees routinely celebrate 40- and 50-year service anniversaries. And its policyholders, roughly nine times out of ten, come back every year.

What did H.O. believe? From his own words and the words of those who knew him, a distilled set of principles emerge:

1. A teacher at heart. H.O.’s first profession was teaching. Although he officially ended it after his TB diagnosis, he never formally resigned. He continued to guide, teach, instill values, and encourage every human he possibly could throughout his life.

2. The customer comes first. Not as a slogan, but as an operating reality. The policyholder, as H.O. put it, “feeds and supports us.” Every decision flows from that fact.

3. THINK—and refuse to follow rules blindly. Rules exist for people who do not want to use judgment. Judgment, applied with compassion and common sense, is the actual product you are selling. As H.O. said to his underwriters: anyone can follow a rule for $75 a week. The question is whether you are willing to think.

4. Service is not a department. It is the entire company. Every employee is in the service business. H.O. stated this with the simplicity it deserves: “If you give your policyholders the proper service that they have a right to expect, you will grow and you will prosper. That is the secret of the success of the Erie Insurance Exchange.”¹¹

5. Honor is not negotiable. In 1956, when the company was losing money, H.O. refused to allow claim adjusters to chisel policyholders. The company proposed to lose some money. It did not propose to lose its honor.

6. Credit belongs to the team. H.O. never stopped saying “co-founder.” He never appropriated what the Erie Family built together. This was not performance. It was genuine respect for all the people who helped build Erie alongside him.

7. Stubbornness, properly directed, is a virtue. The easiest thing in the world is to fail. If you refuse to fail long enough, with sufficient determination and an honest model, you will eventually succeed. This is not a guarantee, but it is a filter that eliminates a great deal of noise.

8. Never lose the human touch. In insurance, in business, in life: the people across the counter are human beings with real problems. They deserve judgment, compassion, and honest effort in return for their trust and respect.

Again, Mortimer Graham, introducing H.O. at the 1971 Newcomen dinner, answered his own question of how an obscure reciprocal born into an ultra-competitive and hostile industry became one of the great American insurance companies:

“The answer lies in the character of your guest speaker of the evening, in his dedication to the principle of consumer-oriented reciprocal insurance, his courage in fighting for that principle against all odds, and his plain hard-nosed selling ability.”40

In the WQLN documentary of Erie’s 100th Anniversary, Marty Eisert, a retired Executive VP of Planning & Administration for Erie, said this about H.O. before breaking down into tears:

“He would say to us, ‘We all have a price for which we can be bought.’ And he paused and he said, ‘I hope I get to the grave before I find my price.’ And there's been temptations in life. Maybe to want to take the shortcut, but no, you don't take it.

Now at age 84, I look back on my life proudly and contently and I owe so much of that to H.O. Hirt.

…

I was so privileged simply by circumstance to have been able to work with him. I think he’d be very proud to know that service and the other core values are still very much alive.”

One hundred years later, the Erie is still around and continues to grow, grow, grow. And the man who started it—the stubborn, argumentative, self-effacing, compassionate, rule-rejecting, and service-obsessed biology teacher from Erie, PA—deserves every bit of the celebration his company’s centennial can provide.

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Additional Viewing and Reading

Chronicles | H.O. HIRT : From Erie Origins, For Erie Values (S3E004)

Erie Insurance at 100 A Remarkable Past and Promising Future | Jefferson Educational Society Of Erie

Disclaimers for this Substack

The content of this publication is for entertainment and educational purposes only and should not be considered a recommendation to buy or sell any particular security. The opinions expressed herein are those of Douglas Ott in his personal capacity and are subject to change without notice. Consider the investment objectives, risks, and expenses before investing.

Investment strategies managed by Andvari Associates LLC, Doug’s employer, may have a position in the securities or assets discussed in any of its writings. Doug himself may have a position in the securities or assets discussed in any of his writings. Securities mentioned may not be representative of Andvari’s or Doug’s current or future investments. Andvari or Doug may re-evaluate their holdings in any mentioned securities and may buy, sell or cover certain positions without notice.

Data sources for all charts come from SEC filings, Koyfin, and other publicly available information.

Endnotes