Donegal Group Inc. Announces First Quarter 2025 Results

MARIETTA, Pa., April 24, 2025 (GLOBE NEWSWIRE) -- Donegal Group Inc. (NASDAQ: DGICA) and (NASDAQ: DGICB) today reported its financial results for the first quarter of 2025.

Significant Items for First Quarter of 2025 (all comparisons to first quarter of 2024):

• Net premiums earned increased 2.2% to $232.7 million
• Combined ratio of 91.6%, compared to 102.4%
• Net income of $25.2 million, or $0.71 per diluted Class A share, compared to $6.0 million, or $0.18 per diluted Class A share
• Net investment losses (after tax) of $0.4 million, or 1 cent per diluted Class A share, compared to net investment gains (after tax) of $1.7 million, or 5 cents per diluted Class A share, are included in net income
• Annualized return on average equity of 17.8%, compared to 4.9%
• Book value per share of $16.24 at March 31, 2025, compared to $14.53 at March 31, 2024

Financial Summary

¹The "Definitions of Non-GAAP Financial Measures” section of this release defines and reconciles data that we prepare on an accounting basis other than U.S. generally accepted accounting principles ("GAAP”).

²Not meaningful.

Management Commentary

Kevin G. Burke, President and Chief Executive Officer of Donegal Group Inc., stated, "We are pleased that positive momentum, which began to emerge in the second half of 2024, continued into the first quarter of 2025 with our achievement of record earnings for the second straight quarter. We believe this accomplishment reflects the deliberate actions and strong operational discipline of our team in prioritizing sustained profitability while pursuing targeted premium growth.

"Net premiums earned rose by 2.2% to $232.7 million, while net premiums written¹ declined modestly by 1.7% compared to the prior-year quarter, with that decline primarily due to lower new business volume and planned attrition, offset partially by solid premium rate increases and strong retention of desired risks. We achieved a combined ratio of 91.6% for the first quarter of 2025, marking significant improvement over the 102.4% combined ratio for the prior-year quarter. We attribute the improvement to core loss ratio decreases that resulted from the strategic initiatives and profit improvement plans we implemented over the past several years, coupled with lower-than-average weather-related and large fire losses and a higher level of favorable development of reserves related to prior accident years.

"In our commercial lines business, we are actively promoting our small commercial products and capabilities while actively seeking to grow our middle market business segment. In our personal lines business, our strategic focus remains on maintaining profitability through rate adequacy. Our personal lines growth in the first quarter of 2025 was constrained by two intentional strategies. We limited new business volume and continued the non-renewal of a legacy Maryland book of business. We are taking proactive steps to stabilize personal lines premium level as the year progresses, and we will continue to emphasize higher levels of profitable growth in commercial lines that we believe will lead to long-term success.”

Mr. Burke concluded, "We believe we are well positioned to navigate the evolving insurance landscape, as we continue to enhance and refine our systems and operational capabilities. We are confident in our ability to achieve sustainable excellent financial performance and capitalize on future growth opportunities that will further enhance shareholder value over time.”

Insurance Operations

Donegal Group is an insurance holding company whose insurance subsidiaries and affiliates offer property and casualty lines of insurance in three Mid-Atlantic states (Delaware, Maryland and Pennsylvania), five Southern states (Georgia, North Carolina, South Carolina, Tennessee and Virginia), eight Midwestern states (Illinois, Indiana, Iowa, Michigan, Nebraska, Ohio, South Dakota and Wisconsin) and five Southwestern states (Arizona, Colorado, New Mexico, Texas and Utah). Donegal Mutual Insurance Company and the insurance subsidiaries of Donegal Group conduct business together as the Donegal Insurance Group.

Net Premiums Written

The 1.7% decrease in net premiums written for the first quarter of 2025 compared to the first quarter of 2024, as shown in the table above, represents the net combination of a 3.3% increase in commercial lines net premiums written and a 9.9% decrease in personal lines net premiums written. The $4.4 million decrease in net premiums written for the first quarter of 2025 compared to the first quarter of 2024 included:

• Commercial Lines: $5.1 million increase that we attribute primarily to solid retention and a continuation of renewal premium increases in lines other than workers' compensation, offset partially by lower new business writings.
• Personal Lines: $9.5 million decrease that we attribute primarily to planned attrition due to lower new business writings and non-renewal actions, offset partially by a continuation of renewal premium rate increases and solid retention.

Underwriting Performance

We evaluate the performance of our commercial lines and personal lines segments primarily based upon the underwriting results of our insurance subsidiaries as determined under statutory accounting practices. The following table presents comparative details with respect to the GAAP and statutory combined ratios¹ for the three months ended March 31, 2025 and 2024: