Donegal Group Inc. Announces Fourth Quarter and Full Year 2023 Results
- None.
- Net loss of $2.0 million reported for Q4 2023, compared to net income of $3.5 million in Q4 2022
- Decrease in book value per share from $14.79 in 2022 to $14.39 in 2023
- Expense ratio increased to 34.1% for Q4 2023 from 32.3% in Q4 2022
Insights
The reported financial results from Donegal Group Inc. reveal several critical aspects that warrant attention from a financial perspective. Firstly, the increase in net premiums earned by 6.2% and 7.2% for the fourth quarter and full year, respectively, indicates a growing revenue base, likely reflective of either higher policy sales or rate increases. However, the combined ratio exceeding 100% for both periods suggests that the company's losses and expenses have surpassed earned premiums, which is typically a sign of underwriting inefficiency. A combined ratio above 100% is not sustainable in the long term as it points to an operational loss from the insurance business.
Moreover, the net loss of $2.0 million for the fourth quarter, contrasted with the net income of $3.5 million in the same period last year and the year-over-year decrease in book value per share are indicators that may concern investors. The reduction in book value could potentially lead to a negative market reaction, as it might be interpreted as a decrease in the intrinsic value of the company. However, the net income for the full year and the increase in net investment gains provide a more positive outlook on the company's investment operations and overall profitability.
Investors and analysts should delve into the reasons behind the underperformance in underwriting, such as the higher loss ratios and increased expense ratio, to assess whether these are temporary fluctuations or indicative of deeper issues within the company's operations. The mention of ongoing systems modernization initiatives as a contributor to the increased expense ratio suggests that the company is investing in technology, which could lead to operational efficiencies in the future, albeit impacting current profitability.
From a market research standpoint, the performance of Donegal Group Inc. highlights several strategic movements within the insurance sector. The company's focus on strategic initiatives and profit improvement measures, as well as its response to weather-related losses and the handling of large fire losses, are of particular interest. The insurance industry is highly susceptible to external events such as natural disasters and Donegal Group's experience with weather-related losses, which were lower in Q4 2023 compared to the previous year, could indicate better risk management or simply a more favorable weather pattern.
The company's decision to non-renew commercial accounts in certain geographies as part of its strategic shift could lead to improved profitability in the long term but might result in short-term revenue loss. This strategic realignment, coupled with significant rate increases in personal lines, shows a proactive approach to maintaining rate adequacy in a challenging market environment.
Understanding the competitive landscape, including how Donegal Group's combined ratio compares with industry peers, is crucial. The insurance market is competitive and companies often seek a balance between growing their customer base and maintaining profitability. Donegal Group's investment in modernized small commercial products and agency portals indicates an attempt to enhance its competitive edge and attract profitable market segments. The impact of these investments on customer acquisition and retention, as well as their contribution to the bottom line, will be key areas to monitor going forward.
An analysis of Donegal Group Inc.'s financial results from an insurance industry perspective reveals insights into both their current performance and future outlook. The combined ratio, an essential measure of profitability in insurance, has deteriorated slightly from 103.3% to 104.4% year-over-year. This is above the generally accepted breakeven threshold of 100% and indicates that for every dollar earned in premiums, Donegal Group spent $1.04 on claims and expenses.
The loss ratio component of the combined ratio, which reflects the percentage of premiums paid out as claims, has shown a mixed performance with a slight increase in the full year but a decrease in core losses for the fourth quarter. The report attributes this to factors such as premium rate increases and lower exposures in underperforming states. The increase in the expense ratio is concerning as it implies that the company's operational costs are rising, potentially due to investments in technology and systems modernization.
The industry-specific term 'net prior-year reserve development' refers to adjustments made to the reserves set aside for past claims. Positive development can reduce the loss ratio and improve profitability, as seen in the fourth quarter of 2023. The company's experience with favorable developments could indicate conservative initial claims estimates or effective claims management strategies.
Overall, the insurance industry is closely watching such financial indicators to assess the health and risk management capabilities of insurers. Donegal Group's results suggest that while it is facing some challenges, particularly with its underwriting performance, it is also making strategic decisions to improve profitability and invest in future growth. The effectiveness of these strategies will be crucial in determining the company's long-term success in a highly competitive and risk-prone industry.
MARIETTA, Pa., Feb. 22, 2024 (GLOBE NEWSWIRE) -- Donegal Group Inc. (NASDAQ:DGICA) and (NASDAQ:DGICB) today reported its financial results for the fourth quarter and full year ended December 31, 2023.
Significant items for fourth quarter of 2023 (all comparisons to fourth quarter of 2022):
- Net premiums earned increased
6.2% to$226.2 million - Combined ratio of
106.8% , compared to102.8% - Net loss of
$2.0 million , or 6 cents per Class A share, compared to net income of$3.5 million , or 11 cents per diluted Class A share - Net investment gains (after tax) of
$1.8 million , or 5 cents per Class A share, compared to$0.5 million , or 2 cents per diluted Class A share, are included in net (loss) income
Significant items for full year of 2023 (all comparisons to full year of 2022):
- Net premiums earned increased
7.2% to$882.1 million - Combined ratio of
104.4% , compared to103.3% - Net income of
$4.4 million , or 14 cents per diluted Class A share, compared to net loss of$2.0 million , or 6 cents per Class A share - Net investment gains (after tax) of
$2.5 million , or 8 cents per diluted Class A share, compared to net investment losses (after tax) of$8.0 million , or 26 cents per Class A share, are included in net income (loss) - Book value per share of
$14.39 at December 31, 2023, compared to$14.79 at year-end 2022
Financial Summary
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
| 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||||
| (dollars in thousands, except per share amounts) | |||||||||||||||||||||
| Income Statement Data | |||||||||||||||||||||
| Net premiums earned | $ | 226,185 | $ | 212,991 | 6.2 | % | $ | 882,071 | $ | 822,490 | 7.2 | % | |||||||||
| Investment income, net | 10,710 | 9,385 | 14.1 | 40,853 | 34,016 | 20.1 | |||||||||||||||
| Net investment gains (losses) | 2,243 | 626 | 258.3 | 3,173 | (10,185 | ) | NM2 | ||||||||||||||
| Total revenues | 239,468 | 223,444 | 7.2 | 927,338 | 848,221 | 9.3 | |||||||||||||||
| Net (loss) income | (1,970 | ) | 3,479 | NM | 4,426 | (1,959 | ) | NM | |||||||||||||
| Non-GAAP operating (loss) income1 | (3,742 | ) | 2,985 | NM | 1,919 | 6,087 | -68.5 | ||||||||||||||
| Annualized (loss) return on average equity | -1.7 | % | 2.9 | % | NM | 0.9 | % | -0.4 | % | NM | |||||||||||
| Per Share Data | |||||||||||||||||||||
| Net (loss) income – Class A (diluted) | $ | (0.06 | ) | $ | 0.11 | NM | $ | 0.14 | $ | (0.06 | ) | NM | |||||||||
| Net (loss) income – Class B | (0.06 | ) | 0.09 | NM | 0.11 | (0.07 | ) | NM | |||||||||||||
| Non-GAAP operating (loss) income – Class A (diluted) | (0.11 | ) | 0.09 | NM | 0.06 | 0.20 | -70.0 | % | |||||||||||||
| Non-GAAP operating (loss) income – Class B | (0.11 | ) | 0.08 | NM | 0.04 | 0.16 | -75.0 | ||||||||||||||
| Book value | 14.39 | 14.79 | -2.7 | % | 14.39 | 14.79 | -2.7 | ||||||||||||||
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, “As we closed out 2023 and shifted our focus to 2024, we have continued to execute on our numerous strategic initiatives, particularly focusing on action items related to individual state strategies and profit improvement measures. Our independent agents are responding favorably to our new and modernized small commercial products and agency portal, and we are employing our advanced capabilities to attract growth within that profitable market segment. During the fourth quarter, we saw a continuation of improvement within our commercial lines underwriting results, partly due to the lowest quarterly impact of weather-related losses we have experienced since the first quarter of 2022, coupled with lower-than-average large fire loss severity. Our personal lines underwriting results continued to reflect the impact of increased claim severity and residual inflationary impacts on loss trends. We are implementing various measures to reduce our operating expenses incrementally over the next several years, noting that the expense ratio impact from costs associated with our major systems modernization project will peak in 2024 before beginning to subside gradually.
“Actions related to our strategic decision to non-renew commercial accounts in geographies and classes we targeted for exit or profit improvement continued to progress and contributed to the modest decrease in commercial lines net premiums earned. While attrition from this effort more than offset strong renewal and retention rates, we expect the removal of those underperforming accounts will accelerate our return to target profitability levels in future periods. As planned, we slowed new business growth in our personal lines and implemented significant rate increases for retained policies throughout 2023. We will continue to take significant rate increases through 2024 to achieve and maintain rate adequacy in our personal lines segment. While the insurance landscape continues to evolve, our dedicated team remains keenly focused on execution as we navigate both the current and future environment with the ultimate goal of achieving sustained excellent financial performance,” Mr. Burke concluded.
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), two New England states (Maine and New Hampshire), 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.
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
| 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||
| (dollars in thousands) | |||||||||||||||||
| Net Premiums Earned | |||||||||||||||||
| Commercial lines | $ | 133,602 | $ | 134,185 | -0.4 | % | $ | 533,029 | $ | 521,227 | 2.3 | % | |||||
| Personal lines | 92,583 | 78,806 | 17.5 | 349,042 | 301,263 | 15.9 | |||||||||||
| Total net premiums earned | $ | 226,185 | $ | 212,991 | 6.2 | % | $ | 882,071 | $ | 822,490 | 7.2 | % | |||||
| Net Premiums Written | |||||||||||||||||
| Commercial lines: | |||||||||||||||||
| Automobile | $ | 39,888 | $ | 38,228 | 4.3 | % | $ | 174,741 | $ | 167,774 | 4.2 | % | |||||
| Workers' compensation | 22,283 | 25,019 | -10.9 | 107,598 | 111,892 | -3.8 | |||||||||||
| Commercial multi-peril | 48,010 | 47,867 | 0.3 | 195,632 | 200,045 | -2.2 | |||||||||||
| Other | 10,544 | 11,416 | -7.6 | 50,458 | 51,135 | -1.3 | |||||||||||
| Total commercial lines | 120,725 | 122,530 | -1.5 | 528,429 | 530,846 | -0.5 | |||||||||||
| Personal lines: | |||||||||||||||||
| Automobile | 54,609 | 45,429 | 20.2 | 215,957 | 181,129 | 19.2 | |||||||||||
| Homeowners | 34,653 | 29,705 | 16.7 | 139,688 | 120,087 | 16.3 | |||||||||||
| Other | 2,706 | 2,749 | -1.6 | 11,623 | 11,468 | 1.4 | |||||||||||
| Total personal lines | 91,968 | 77,883 | 18.1 | 367,268 | 312,684 | 17.5 | |||||||||||
| Total net premiums written | $ | 212,693 | $ | 200,413 | 6.1 | % | $ | 895,697 | $ | 843,530 | 6.2 | % | |||||
Net Premiums Written
The
- Commercial Lines:
$1.8 million decrease that we attribute primarily to planned attrition in states we are exiting or have targeted for profit improvement and lower new business writings, offset partially by strong premium retention and a continuation of renewal premium increases in lines other than workers’ compensation. - Personal Lines:
$14.1 million increase that we attribute primarily to a continuation of renewal premium rate increases and strong policy retention.
The
- Commercial Lines:
$2.4 million decrease that we attribute primarily to planned attrition in states we are exiting or have targeted for profit improvement and lower new business writings, offset partially by strong premium retention and a continuation of renewal premium increases in lines other than workers’ compensation. - Personal Lines:
$54.6 million increase that we attribute primarily to a continuation of renewal premium rate increases and strong policy 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 and full years ended December 31, 2023 and 2022:
| Three Months Ended | Year Ended | ||||||||||
| December 31, | December 31, | ||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||
| GAAP Combined Ratios (Total Lines) | |||||||||||
| Loss ratio - core losses | 61.8 | % | 62.7 | % | 57.5 | % | 59.8 | % | |||
| Loss ratio - weather-related losses | 5.9 | 7.7 | 8.3 | 7.7 | |||||||
| Loss ratio - large fire losses | 4.8 | 6.2 | 5.2 | 6.5 | |||||||
| Loss ratio - net prior-year reserve development | -0.4 | -6.7 | -1.9 | -5.4 | |||||||
| Loss ratio | 72.1 | 69.9 | 69.1 | 68.6 | |||||||
| Expense ratio | 34.1 | 32.3 | 34.7 | 34.1 | |||||||
| Dividend ratio | 0.6 | 0.6 | 0.6 | 0.6 | |||||||
| Combined ratio | 106.8 | % | 102.8 | % | 104.4 | % | 103.3 | % | |||
| Statutory Combined Ratios | |||||||||||
| Commercial lines: | |||||||||||
| Automobile | 104.8 | % | 96.0 | % | 97.3 | % | 98.0 | % | |||
| Workers' compensation | 107.9 | 107.0 | 96.6 | 97.3 | |||||||
| Commercial multi-peril | 107.8 | 122.5 | 112.3 | 116.9 | |||||||
| Other | 95.0 | 77.9 | 85.5 | 80.8 | |||||||
| Total commercial lines | 105.8 | 107.4 | 101.6 | 103.7 | |||||||
| Personal lines: | |||||||||||
| Automobile | 119.7 | 114.0 | 109.7 | 103.8 | |||||||
| Homeowners | 101.3 | 88.7 | 108.6 | 111.0 | |||||||
| Other | 59.2 | 58.7 | 75.8 | 52.1 | |||||||
| Total personal lines | 111.1 | 101.2 | 108.2 | 102.8 | |||||||
| Total lines | 107.8 | % | 104.9 | % | 104.2 | % | 103.3 | % | |||
Loss Ratio – Fourth Quarter
For the fourth quarter of 2023, the loss ratio increased to
Weather-related losses of
Large fire losses, which we define as individual fire losses in excess of
Net favorable development of reserves for losses incurred in prior accident years of
Loss Ratio – Full Year
For the full year of 2023, the loss ratio increased modestly to
Weather-related losses for the full year of 2023 were
Large fire losses were
Net favorable development of reserves for losses incurred in prior accident years of
Expense Ratio
The expense ratio was
The expense ratio was
Investment Operations
Donegal Group’s investment strategy is to generate an appropriate amount of after-tax income on its invested assets while minimizing credit risk through investment in high-quality securities. As a result, we had invested
| December 31, 2023 | December 31, 2022 | ||||||||||||
| Amount | % | Amount | % | ||||||||||
| (dollars in thousands) | |||||||||||||
| Fixed maturities, at carrying value: | |||||||||||||
| U.S. Treasury securities and obligations of U.S. | |||||||||||||
| government corporations and agencies | $ | 176,991 | 13.3 | % | $ | 166,883 | 12.8 | % | |||||
| Obligations of states and political subdivisions | 415,280 | 31.3 | 422,253 | 32.4 | |||||||||
| Corporate securities | 399,640 | 30.1 | 393,787 | 30.2 | |||||||||
| Mortgage-backed securities | 278,260 | 21.0 | 229,308 | 17.5 | |||||||||
| Allowance for expected credit losses | (1,326 | ) | -0.1 | - | 0.0 | ||||||||
| Total fixed maturities | 1,268,845 | 95.6 | 1,212,231 | 92.9 | |||||||||
| Equity securities, at fair value | 25,903 | 2.0 | 35,105 | 2.7 | |||||||||
| Short-term investments, at cost | 32,306 | 2.4 | 57,321 | 4.4 | |||||||||
| Total investments | $ | 1,327,054 | 100.0 | % | $ | 1,304,657 | 100.0 | % | |||||
| Average investment yield | 3.1 | % | 2.6 | % | |||||||||
| Average tax-equivalent investment yield | 3.2 | % | 2.7 | % | |||||||||
| Average fixed-maturity duration (years) | 4.3 | 5.9 | |||||||||||
Total investments at December 31, 2023 increased by
Net investment income of
Net investment gains were
Net investment gains were
Our book value per share was
Definitions of Non-GAAP Financial Measures
We prepare our consolidated financial statements on the basis of GAAP. Our insurance subsidiaries also prepare financial statements based on statutory accounting principles state insurance regulators prescribe or permit (“SAP”). In addition to using GAAP-based performance measurements, we also utilize certain non-GAAP financial measures that we believe provide value in managing our business and for comparison to the financial results of our peers. These non-GAAP measures are net premiums written, operating income or loss and statutory combined ratio.
Net premiums written and operating income or loss are non-GAAP financial measures investors in insurance companies commonly use. We define net premiums written as the amount of full-term premiums our insurance subsidiaries record for policies effective within a given period less premiums our insurance subsidiaries cede to reinsurers. We define operating income or loss as net income or loss excluding after-tax net investment gains or losses, after-tax restructuring charges and other significant non-recurring items. Because our calculation of operating income or loss may differ from similar measures other companies use, investors should exercise caution when comparing our measure of operating income or loss to the measure of other companies.
The following table provides a reconciliation of net premiums earned to net premiums written for the periods indicated:
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||
| 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Reconciliation of Net Premiums | |||||||||||||||||||
| Earned to Net Premiums Written | |||||||||||||||||||
| Net premiums earned | $ | 226,185 | $ | 212,991 | 6.2 | % | $ | 882,071 | $ | 822,490 | 7.2 | % | |||||||
| Change in net unearned premiums | (13,492 | ) | (12,578 | ) | 7.3 | 13,626 | 21,040 | -35.2 | |||||||||||
| Net premiums written | $ | 212,693 | $ | 200,413 | 6.1 | % | $ | 895,697 | $ | 843,530 | 6.2 | % | |||||||
The following table provides a reconciliation of net (loss) income to operating (loss) income for the periods indicated:
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
| 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||||
| (dollars in thousands, except per share amounts) | |||||||||||||||||||||
| Reconciliation of Net (Loss) Income | |||||||||||||||||||||
| to Non-GAAP Operating (Loss) Income | |||||||||||||||||||||
| Net (loss) income | $ | (1,970 | ) | $ | 3,479 | NM | $ | 4,426 | $ | (1,959 | ) | NM | |||||||||
| Investment (gains) losses (after tax) | (1,772 | ) | (494 | ) | 258.7 | % | (2,507 | ) | 8,046 | NM | |||||||||||
| Non-GAAP operating (loss) income | $ | (3,742 | ) | $ | 2,985 | NM | $ | 1,919 | $ | 6,087 | -68.5 | % | |||||||||
| Per Share Reconciliation of Net (Loss) Income | |||||||||||||||||||||
| to Non-GAAP Operating (Loss) Income | |||||||||||||||||||||
| Net (loss) income – Class A (diluted) | $ | (0.06 | ) | $ | 0.11 | NM | $ | 0.14 | $ | (0.06 | ) | NM | |||||||||
| Investment (gains) losses (after tax) | (0.05 | ) | (0.02 | ) | 150.0 | % | (0.08 | ) | 0.26 | NM | |||||||||||
| Non-GAAP operating (loss) income – Class A | $ | (0.11 | ) | $ | 0.09 | NM | $ | 0.06 | $ | 0.20 | -70.0 | % | |||||||||
| Net (loss) income – Class B | $ | (0.06 | ) | $ | 0.09 | NM | $ | 0.11 | $ | (0.07 | ) | NM | |||||||||
| Investment (gains) losses (after tax) | (0.05 | ) | (0.01 | ) | 400.0 | % | (0.07 | ) | 0.23 | NM | |||||||||||
| Non-GAAP operating (loss) income – Class B | $ | (0.11 | ) | $ | 0.08 | NM | $ | 0.04 | $ | 0.16 | -75.0 | % | |||||||||
The statutory combined ratio is a standard non-GAAP measurement of underwriting profitability that is based upon amounts determined under SAP. The statutory combined ratio is the sum of:
- the statutory loss ratio, which is the ratio of calendar-year incurred losses and loss expenses, excluding anticipated salvage and subrogation recoveries, to premiums earned;
- the statutory expense ratio, which is the ratio of expenses incurred for net commissions, premium taxes and underwriting expenses to premiums written; and
- the statutory dividend ratio, which is the ratio of dividends to holders of workers’ compensation policies to premiums earned.
The statutory combined ratio does not reflect investment income, federal income taxes or other non-operating income or expense. A statutory combined ratio of less than
Dividend Information
On December 21, 2023, we declared regular quarterly cash dividends of
Pre-Recorded Webcast
At approximately 8:30 am EDT on Thursday, February 22, 2024, we will make available in the Investors section of our website a pre-recorded audio webcast featuring management commentary on our quarterly and annual results and general business updates. You may listen to the pre-recorded webcast by accessing the link on our website at http://investors.donegalgroup.com. A supplemental investor presentation is also available via our website.
About the Company
Donegal Group Inc. is an insurance holding company whose insurance subsidiaries and affiliates offer property and casualty lines of insurance in certain Mid-Atlantic, Midwestern, New England, Southern and Southwestern states. Donegal Mutual Insurance Company and the insurance subsidiaries of Donegal Group Inc. conduct business together as the Donegal Insurance Group. The Donegal Insurance Group has an A.M. Best rating of A (Excellent).
The Class A common stock and Class B common stock of Donegal Group Inc. trade on the NASDAQ Global Select Market under the symbols DGICA and DGICB, respectively. We are focused on several primary strategies, including achieving sustained excellent financial performance, strategically modernizing our operations and processes to transform our business, capitalizing on opportunities to grow profitably and delivering a superior experience to our agents and policyholders.
Safe Harbor
We base all statements contained in this release that are not historic facts on our current expectations. Such statements are forward-looking in nature (as defined in the Private Securities Litigation Reform Act of 1995) and necessarily involve risks and uncertainties. Forward-looking statements we make may be identified by our use of words such as “will,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “seek,” “estimate” and similar expressions. Our actual results could vary materially from our forward-looking statements. The factors that could cause our actual results to vary materially from the forward-looking statements we have previously made include, but are not limited to, adverse litigation and other trends that could increase our loss costs (including labor shortages and escalating medical, automobile and property repair costs), adverse and catastrophic weather events (including from changing climate conditions), our ability to maintain profitable operations (including our ability to underwrite risks effectively and charge adequate premium rates), prolonged economic challenges resulting from the COVID-19 pandemic, the adequacy of the loss and loss expense reserves of our insurance subsidiaries, the availability and successful operation of the information technology systems our insurance subsidiaries utilize, the successful development of new information technology systems to allow our insurance subsidiaries to compete effectively, business and economic conditions in the areas in which we and our insurance subsidiaries operate, interest rates, competition from various insurance and other financial businesses, terrorism, the availability and cost of reinsurance, legal and judicial developments (including those related to COVID-19 business interruption coverage exclusions), changes in regulatory requirements, our ability to attract and retain independent insurance agents, changes in our A.M. Best rating and the other risks that we describe from time to time in our filings with the Securities and Exchange Commission. We disclaim any obligation to update such statements or to announce publicly the results of any revisions that we may make to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
Investor Relations Contacts
Karin Daly, Vice President, The Equity Group Inc.
Phone: (212) 836-9623
E-mail: kdaly@equityny.com
Jeffrey D. Miller, Executive Vice President & Chief Financial Officer
Phone: (717) 426-1931
E-mail: investors@donegalgroup.com
Financial Supplement
| Donegal Group Inc. | ||||||||
| Consolidated Statements of (Loss) Income | ||||||||
| (unaudited; in thousands, except share data) | ||||||||
| Quarter Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Net premiums earned | $ | 226,185 | $ | 212,991 | ||||
| Investment income, net of expenses | 10,710 | 9,385 | ||||||
| Net investment gains | 2,243 | 626 | ||||||
| Lease income | 85 | 89 | ||||||
| Installment payment fees | 245 | 353 | ||||||
| Total revenues | 239,468 | 223,444 | ||||||
| Net losses and loss expenses | 163,154 | 148,833 | ||||||
| Amortization of deferred acquisition costs | 39,149 | 37,563 | ||||||
| Other underwriting expenses | 38,032 | 31,171 | ||||||
| Policyholder dividends | 1,225 | 1,384 | ||||||
| Interest | 156 | 156 | ||||||
| Other expenses, net | 233 | 253 | ||||||
| Total expenses | 241,949 | 219,360 | ||||||
| (Loss) income before income tax (benefit) expense | (2,481 | ) | 4,084 | |||||
| Income tax (benefit) expense | (511 | ) | 605 | |||||
| Net (loss) income | $ | (1,970 | ) | $ | 3,479 | |||
| Net (loss) income per common share: | ||||||||
| Class A - basic and diluted | $ | (0.06 | ) | $ | 0.11 | |||
| Class B - basic and diluted | $ | (0.06 | ) | $ | 0.09 | |||
| Supplementary Financial Analysts' Data | ||||||||
| Weighted-average number of shares | ||||||||
| outstanding: | ||||||||
| Class A - basic | 27,702,646 | 26,982,221 | ||||||
| Class A - diluted | 27,726,318 | 27,052,204 | ||||||
| Class B - basic and diluted | 5,576,775 | 5,576,775 | ||||||
| Net premiums written | $ | 212,693 | $ | 200,413 | ||||
| Book value per common share | ||||||||
| at end of period | $ | 14.39 | $ | 14.79 | ||||
| Donegal Group Inc. | ||||||||
| Consolidated Statements of Income (Loss) | ||||||||
| (unaudited; in thousands, except share data) | ||||||||
| Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Net premiums earned | $ | 882,071 | $ | 822,490 | ||||
| Investment income, net of expenses | 40,853 | 34,016 | ||||||
| Net investment gains (losses) | 3,173 | (10,185 | ) | |||||
| Lease income | 347 | 384 | ||||||
| Installment payment fees | 894 | 1,516 | ||||||
| Total revenues | 927,338 | 848,221 | ||||||
| Net losses and loss expenses | 609,178 | 564,079 | ||||||
| Amortization of deferred acquisition costs | 154,214 | 142,430 | ||||||
| Other underwriting expenses | 151,748 | 137,924 | ||||||
| Policyholder dividends | 5,313 | 5,560 | ||||||
| Interest | 620 | 621 | ||||||
| Other expenses, net | 1,201 | 1,245 | ||||||
| Total expenses | 922,274 | 851,859 | ||||||
| Income (loss) before income tax expense (benefit) | 5,064 | (3,638 | ) | |||||
| Income tax expense (benefit) | 638 | (1,679 | ) | |||||
| Net income (loss) | $ | 4,426 | $ | (1,959 | ) | |||
| Net income (loss) per common share: | ||||||||
| Class A - basic and diluted | $ | 0.14 | $ | (0.06 | ) | |||
| Class B - basic and diluted | $ | 0.11 | $ | (0.07 | ) | |||
| Supplementary Financial Analysts' Data | ||||||||
| Weighted-average number of shares | ||||||||
| outstanding: | ||||||||
| Class A - basic | 27,469,250 | 26,409,290 | ||||||
| Class A - diluted | 27,562,785 | 26,536,668 | ||||||
| Class B - basic and diluted | 5,576,775 | 5,576,775 | ||||||
| Net premiums written | $ | 895,697 | $ | 843,530 | ||||
| Book value per common share | ||||||||
| at end of period | $ | 14.39 | $ | 14.79 | ||||
| Donegal Group Inc. | |||||||||
| Consolidated Balance Sheets | |||||||||
| (in thousands) | |||||||||
| December 31, | December 31, | ||||||||
| 2023 | 2022 | ||||||||
| (unaudited) | |||||||||
| ASSETS | |||||||||
| Investments: | |||||||||
| Fixed maturities: | |||||||||
| Held to maturity, at amortized cost | $ | 679,497 | $ | 688,439 | |||||
| Available for sale, at fair value | 589,348 | 523,792 | |||||||
| Equity securities, at fair value | 25,903 | 35,105 | |||||||
| Short-term investments, at cost | 32,306 | 57,321 | |||||||
| Total investments | 1,327,054 | 1,304,657 | |||||||
| Cash | 23,792 | 25,123 | |||||||
| Premiums receivable | 179,592 | 173,846 | |||||||
| Reinsurance receivable | 441,431 | 456,522 | |||||||
| Deferred policy acquisition costs | 75,043 | 73,170 | |||||||
| Prepaid reinsurance premiums | 168,724 | 160,591 | |||||||
| Other assets | 50,658 | 49,440 | |||||||
| Total assets | $ | 2,266,294 | $ | 2,243,349 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Liabilities: | |||||||||
| Losses and loss expenses | $ | 1,126,157 | $ | 1,121,046 | |||||
| Unearned premiums | 599,411 | 577,653 | |||||||
| Accrued expenses | 3,947 | 4,226 | |||||||
| Borrowings under lines of credit | 35,000 | 35,000 | |||||||
| Other liabilities | 22,034 | 21,831 | |||||||
| Total liabilities | 1,786,549 | 1,759,756 | |||||||
| Stockholders' equity: | |||||||||
| Class A common stock | 308 | 301 | |||||||
| Class B common stock | 56 | 56 | |||||||
| Additional paid-in capital | 335,694 | 325,602 | |||||||
| Accumulated other comprehensive loss | (32,882 | ) | (41,704 | ) | |||||
| Retained earnings | 217,795 | 240,564 | |||||||
| Treasury stock | (41,226 | ) | (41,226 | ) | |||||
| Total stockholders' equity | 479,745 | 483,593 | |||||||
| Total liabilities and stockholders' equity | $ | 2,266,294 | $ | 2,243,349 | |||||
FAQ
What was the net loss reported for Q4 2023 for Donegal Group Inc. (DGICA)?
How did the book value per share change from 2022 to 2023 for Donegal Group Inc. (DGICA)?
What was the expense ratio for Donegal Group Inc. (DGICA) in Q4 2023?
