Susan Hirt Hagen, the daughter of Henry Orth Hirt, one of the pioneers of the car insurance industry, has been a billionaire for years -- and has never appeared on an international wealth ranking.

Hagen has a net worth of $1.7 billion, according to the Bloomberg Billionaires Index. Shares of Erie, Pennsylvania-based insurer Erie Indemnity Co., the third-largest auto insurer in Pennsylvania, have doubled in the past three years. The 76-year- old controls the majority of the company’s voting stock and 35 percent of its common shares.

“Erie is not a traditionally structured insurance company,” Jonathan Adams, a senior insurance analyst with Bloomberg Industries in Princeton, New Jersey, said by phone. “It has very little exposure to underwriting risk. You have to hand it to the family; it’s a very clever approach.”

Surging U.S. auto sales resulted in a 6.1 percent jump in auto insurance prices in December, according to data compiled by Bloomberg. That is boosting shares of U.S. property and casualty insurers, which have gained almost 6 percent the past month, almost double the advance by the Standard & Poor’s 500 Index.

Hagen’s stake in Erie is valued at $1.4 billion. She has also earned more than $400 million in dividends since 1991.

Leah Knapp, an Erie Indemnity spokesman, said Hagen declined to comment on her net worth.

Family Partnership

According to the company’s 2012 proxy statement filed with the U.S. Securities and Exchange Commission, Hagen controls 16.8 million non-voting Class A shares and 1,339 voting Class B shares. The shares are held in her name, by her husband, Erie chairman Thomas B. Hagen, and in a family partnership and a trust she is the beneficiary of.

Each Class B share is convertible into 2,400 Class A shares. Erie closed at $69.63 yesterday, up 11.9 percent from their 23-month low of $62.22 in October.

H.O. Hirt co-founded Erie Exchange in 1925. The company was one of the first in the U.S. to offer auto insurance, selling premiums for $34 in its first year. He expanded in the following decades to offer fire insurance, inland marine insurance and life insurance.

Erie sold shares in an initial public offering in 1990. Today, it operates in 11 states and is the 12th largest auto insurer in the U.S. by direct premiums written, according to the company’s website.

To keep the business in family hands, Hirt created two trusts that gave his descendants control of Erie’s voting shares, stipulating that his descendants must maintain controlling interest in the voting class or convert all the shares at once to common stock.

Sibling Rivalry

Hagen, who joined Erie’s board as its first female member in 1980, and her brother, Frank William Hirt, each became a beneficiary of one of the trusts, as well as trustees for both entities, when Hirt died in 1982.

Relations between Hagen and her brother were sometimes frayed. In 1999, Hirt, then the company’s chief executive officer, led a board action to reduce the amount of directors by one and to nominate all directors except her for the seats.

When Hagen sued, Hirt accused her of breaching her fiduciary duty as a Hirt family trustee and tried to prevent her from ever nominating board members in the future, according to a 2001 SEC filing that incorporated a judgment by the Common Pleas Court of Erie County, Pennsylvania, Orphan’s Court division, which deals with trust cases. President Judge William R. Cunningham ruled in Hagen’s favor.

Increased Control

Hirt “is seemingly blinded by his animosity towards his sister or his loyalty to present management and/or the Board,” Cunningham wrote in his 2000 decision.

Hagen increased her control of the company in 2006, when her family’s limited partnership purchased 6 percent of voting shares that had been owned by one of Erie’s first non-family employees. She graduated with dual degrees in psychology and English from Wittenberg University, a liberal arts college in Springfield, Ohio.

She has become the school’s biggest donor. Last year, she donated $6 million to endow the university’s Center for Civic and Urban Engagement. It was the largest cash gift ever given to the university from a living individual.

“Service is a cornerstone of my life,” she said at the time of the gift, according to a statement on the school’s website.