Donegal Group Inc. Announces Fourth Quarter and Full Year 2024 Results

Rhea-AI Summary

Donegal Group Inc. (NASDAQ:DGICA) reported strong financial results for Q4 and full year 2024. In Q4, net premiums earned increased 4.6% to $236.6 million, with a combined ratio of 92.9% compared to 106.8% in Q4 2023. Net income reached $24.0 million ($0.70 per diluted Class A share), versus a net loss of $2.0 million in Q4 2023.

For full year 2024, net premiums earned grew 6.2% to $936.7 million, with a combined ratio of 98.6% versus 104.4% in 2023. Annual net income was $50.9 million ($1.53 per diluted Class A share), up from $4.4 million in 2023. Book value per share increased to $15.36 from $14.39 at year-end 2023.

The company's loss ratio improved significantly in Q4 2024 to 59.8% from 72.1% in Q4 2023, while weather-related losses decreased to $7.7 million from $13.4 million year-over-year. Net investment income grew 12.5% to $12.1 million in Q4 2024.

Positive

• Net income increased significantly to $24.0M in Q4 2024 from -$2.0M in Q4 2023
• Combined ratio improved to 92.9% from 106.8% year-over-year in Q4
• Net premiums earned grew 6.2% to $936.7M for full year 2024
• Book value per share increased to $15.36 from $14.39
• Net investment income rose 12.5% to $12.1M in Q4 2024
• Loss ratio improved to 59.8% from 72.1% in Q4 2023
• Weather-related losses decreased to $7.7M from $13.4M in Q4

Negative

• Commercial lines net premiums written decreased in targeted business classes
• Personal lines net premiums written declined 5.0% in Q4 2024
• Overall net premiums written decreased 0.6% in Q4 2024

Insights

Financial Analyst

Donegal Group's Q4 2024 results reveal a remarkable turnaround in profitability, with several key metrics suggesting sustainable operational improvements. The combined ratio of 92.9% represents a dramatic 13.9 percentage point improvement, placing it well within the profitable underwriting territory and significantly better than industry averages.

The core loss ratio improvement to 52.3% from 61.8% is particularly noteworthy as it excludes weather-related losses and prior year development, indicating fundamental improvements in underwriting quality. This enhancement stems from strategic initiatives including:

• Targeted premium rate increases across most lines
• Reduced exposure in underperforming markets
• Enhanced risk selection in commercial middle market
• Disciplined personal lines portfolio management

The expense ratio reduction to 32.8% demonstrates effective cost management despite significant technology investments. The systems modernization project, while currently adding approximately 1.3 percentage points to the expense ratio, positions the company for improved operational efficiency in future years.

The investment portfolio strategy remains conservative with 95.6% allocated to high-quality fixed-maturity securities, while achieving a 12.5% increase in investment income. This balanced approach provides stable income while maintaining strong liquidity.

Book value per share growth to $15.36 from $14.39 reflects both operational improvements and prudent capital management. The company's ability to maintain dividend payments while funding growth initiatives demonstrates financial strength and management's confidence in sustained profitability.

MARIETTA, Pa., Feb. 20, 2025 (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, 2024.

Significant items for fourth quarter of 2024 (all comparisons to fourth quarter of 2023):

• Net premiums earned increased 4.6% to $236.6 million
• Combined ratio of 92.9%, compared to 106.8%
• Net income of $24.0 million, or 70 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 $0.2 million, or 1 cent per diluted Class A share, compared to $1.8 million, or 5 cents per Class A share, are included in net income (loss)

Significant items for full year of 2024 (all comparisons to full year of 2023):

• Net premiums earned increased 6.2% to $936.7 million
• Combined ratio of 98.6%, compared to 104.4%
• Net income of $50.9 million, or $1.53 per diluted Class A share, compared to $4.4 million, or 14 cents per diluted Class A share
• Net investment gains (after tax) of $3.9 million, or 12 cents per diluted Class A share, compared to $2.5 million, or 8 cents per diluted Class A share, are included in net income
• Book value per share of $15.36 at December 31, 2024, compared to $14.39 at year-end 2023
  

Financial Summary

	Three Months Ended December 31,									Year Ended December 31,
	2024			2023			% Change			2024			2023			% Change
	(dollars in thousands, except per share amounts)
Income Statement Data
Net premiums earned	$	236,635		$	226,185		4.6	%		$	936,651		$	882,071		6.2	%
Investment income, net	12,050			10,710			12.5			44,918			40,853			10.0
Net investment gains	256			2,243			-88.6			4,981			3,173			57.0
Total revenues	249,954			239,468			4.4			989,605			927,338			6.7
Net income (loss)	24,003			(1,970)			NM2			50,862			4,426			NM
Non-GAAP operating income (loss)1	23,801			(3,742)			NM			46,927			1,919			NM
Annualized return on average equity	18.1%			-1.7%			19.8 pts			9.9%			0.9%			9.0 pts
Per Share Data
Net income (loss) – Class A (diluted)	$	0.70		$	(0.06)		NM			$	1.53		$	0.14		NM
Net income (loss) – Class B	0.64			(0.06)			NM			1.38			0.11			NM
Non-GAAP operating income (loss) – Class A (diluted)	0.69			(0.11)			NM			1.41			0.06			NM
Non-GAAP operating income (loss) – Class B	0.63			(0.11)			NM			1.27			0.04			NM
Book value	15.36			14.39			6.7	%		15.36			14.39			6.7	%

^¹_{The “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”).}
^²_{Not meaningful.}

Management Commentary

Kevin G. Burke, President and Chief Executive Officer of Donegal Group Inc., stated, “We concluded 2024 with strong performance in the fourth quarter that we believe reflected our unrelenting focus in recent years on execution, whether on strategic initiatives to broaden our market capabilities or on profit-improvement measures to enhance our operating performance. As we move into 2025, we are striving to further enhance our performance while also pursuing intentional, strategic premium growth.

“For the fourth quarter of 2024, our loss ratio improved substantially compared to the prior-year quarter, as premium rate increases contributed to higher net premiums earned and numerous underwriting initiatives we implemented in recent years resulted in lower claim activity. Our weather-related loss ratio compared favorably to both the prior-year quarter and our previous five-year average for the fourth quarter of the year. Net development of reserves for claims incurred in prior years had virtually no effect on the loss ratio for the fourth quarter of 2024 or 2023.

“We effectively mitigated the higher costs associated with our major systems modernization project and higher underwriting-based incentive costs by implementing targeted expense-reduction strategies across our operations. We remain committed to refining the efficiency of our insurance operations, leveraging our substantial investments in technology, data and analytics, to maintain a sustainable expense ratio.”

Mr. Burke concluded, “As the insurance industry landscape continues to evolve, our dedicated team will maintain focus on the effective execution of the strategies we believe will lead to successful achievement of our long-term objectives. We will continue to implement premium rate increases as needed to maintain rate adequacy and achieve targeted risk-adjusted returns. We are also actively pursuing new business opportunities across our regional footprint, concentrating primarily on high quality new commercial middle market and small business accounts, while also seeking strategic new business growth within our personal lines segment. We have refined our state-specific strategies and action plans to meet current market challenges and opportunities. We believe that the successful execution of those actions will allow us to further enhance underwriting performance, drive sustainable measured growth and strengthen our competitive position with our independent agents, ultimately increasing the value of our stockholders’ investment in Donegal Group Inc.”

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.

	Three Months Ended December 31,									Year Ended December 31,
	2024			2023			% Change			2024			2023			% Change
	(dollars in thousands)
Net Premiums Earned
Commercial lines	$	136,701		$	133,602		2.3	%		$	539,683		$	533,029		1.2	%
Personal lines	99,934			92,583			7.9			396,968			349,042			13.7
Total net premiums earned	$	236,635		$	226,185		4.6	%		$	936,651		$	882,071		6.2	%
Net Premiums Written
Commercial lines:
Automobile	$	42,922		$	39,888		7.6	%		$	184,989		$	174,741		5.9	%
Workers' compensation	20,934			22,283			-6.1			103,533			107,598			-3.8
Commercial multi-peril	50,431			48,010			5.0			213,959			195,632			9.4
Other	9,790			10,544			-7.2			45,439			50,458			-9.9
Total commercial lines	124,077			120,725			2.8			547,920			528,429			3.7
Personal lines:
Automobile	54,078			54,609			-1.0			243,036			215,957			12.5
Homeowners	30,958			34,653			-10.7			140,613			139,688			0.7
Other	2,329			2,706			-13.9			10,712			11,623			-7.8
Total personal lines	87,365			91,968			-5.0			394,361			367,268			7.4
Total net premiums written	$	211,442		$	212,693		-0.6%			$	942,281		$	895,697		5.2	%

Net Premiums Written

The 0.6% decrease in net premiums written¹ for the fourth quarter of 2024 compared to the fourth quarter of 2023, as shown in the table above, represents the combination of 2.8% growth in commercial lines net premiums written and a 5.0% decrease in personal lines net premiums written. The $1.3 million decrease in net premiums written for the fourth quarter of 2024 compared to the fourth quarter of 2023 included:

• Commercial Lines: $3.3 million increase that we attribute primarily to solid premium retention and a continuation of renewal premium increases in lines other than workers’ compensation, offset partially by planned attrition in classes of business we have targeted for profit improvement.
• Personal Lines: $4.6 million decrease that we attribute primarily to planned attrition due to non-renewal actions and lower new business writings, offset partially by a continuation of renewal premium rate increases and solid policy retention.

The $46.6 million increase in net premiums written for the full year of 2024 compared to the full year of 2023 included:

• Commercial Lines: $19.5 million increase that we attribute primarily to strong premium retention and a continuation of renewal premium increases in lines other than workers’ compensation, offset partially by planned attrition in states we exited or classes of business we have targeted for profit improvement.
• Personal Lines: $27.1 million increase that we attribute primarily to a continuation of renewal premium rate increases and solid policy retention, offset partially by planned attrition due to non-renewal actions and lower new business writings.

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, 2024 and 2023:

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
GAAP Combined Ratios (Total Lines)
Loss ratio - core losses	52.3	%		61.8	%		54.0	%		57.5	%
Loss ratio - weather-related losses	3.3			5.9			7.2			8.3
Loss ratio - large fire losses	4.0			4.8			4.9			5.2
Loss ratio - net prior-year reserve development	-0.2			-0.4			-1.6			-1.9
Loss ratio	59.8			72.1			64.5			69.1
Expense ratio	32.8			34.1			33.7			34.7
Dividend ratio	0.3			0.6			0.4			0.6
Combined ratio	92.9	%		106.8	%		98.6	%		104.4	%
Statutory Combined Ratios
Commercial lines:
Automobile	115.7	%		104.8	%		102.6	%		97.3	%
Workers' compensation	105.6			107.9			104.4			96.6
Commercial multi-peril	79.4			107.8			95.0			112.3
Other	84.7			95.0			80.0			85.5
Total commercial lines	97.3			105.8			98.2			101.6
Personal lines:
Automobile	96.5			119.7			97.4			109.7
Homeowners	76.2			101.3			99.6			108.6
Other	106.3			59.2			99.5			75.8
Total personal lines	89.5			111.1			98.3			108.2
Total lines	94.0	%		107.8	%		98.3	%		104.2	%

 
Loss Ratio – Fourth Quarter

For the fourth quarter of 2024, the loss ratio decreased to 59.8%, compared to 72.1% for the fourth quarter of 2023. The core loss ratio, which excludes weather-related losses, large fire losses and net development of reserves for losses incurred in prior accident years, was 52.3% for the fourth quarter of 2024, which improved significantly compared to 61.8% for the fourth quarter of 2023. For the commercial lines segment, the core loss ratio of 55.2% for the fourth quarter of 2024 improved from 59.6% for the fourth quarter of 2023, primarily as the result of ongoing premium rate increases in all lines except workers’ compensation and reduced exposures in underperforming states and classes of business. For the personal lines segment, the core loss ratio of 48.4% for the fourth quarter of 2024 decreased significantly from 65.1% for the fourth quarter of 2023, due largely to the favorable impact of premium rate increases on net premiums earned for that segment.

Weather-related losses of $7.7 million, or 3.3 percentage points of the loss ratio, for the fourth quarter of 2024 decreased from $13.4 million, or 5.9 percentage points of the loss ratio, for the fourth quarter of 2023. Our insurance subsidiaries did not incur significant losses from any single weather event during the fourth quarters of 2024 or 2023. The impact of weather-related loss activity to the loss ratio for the fourth quarter of 2024 was lower than our previous five-year average of 5.2 percentage points for fourth quarter weather-related losses.

Large fire losses, which we define as individual fire losses in excess of $50,000, were $9.5 million, or 4.0 percentage points of the loss ratio, for the fourth quarter of 2024, compared to $10.8 million, or 4.8 percentage points of the loss ratio, for the fourth quarter of 2023. The modest decrease primarily reflected lower average severity in homeowner fire losses.

Net development of reserves for losses incurred in prior accident years had virtually no impact to the loss ratio for the fourth quarter of 2024 or 2023. For the fourth quarter of 2024, our insurance subsidiaries experienced unfavorable development primarily in personal automobile and commercial automobile losses that was offset by favorable development in commercial multi-peril losses and other lines of business. For the fourth quarter of 2023, our insurance subsidiaries experienced favorable development in personal automobile, workers’ compensation, homeowners and commercial automobile losses, offset partially by unfavorable development in commercial multi-peril and other commercial losses.

Loss Ratio – Full Year

For the full year of 2024, the loss ratio decreased to 64.5%, compared to 69.1% for the full year of 2023. The 2024 core loss ratio decreased by 3.5 percentage points to 54.0% from 57.5% for 2023. For the commercial lines segment, the core loss ratio of 54.4% for 2024 improved from 56.5% for 2023, primarily as the result of ongoing premium rate increases in all lines except workers’ compensation and reduced exposures in underperforming states and classes of business. For the personal lines segment, the core loss ratio of 53.5% for 2024 decreased from 59.1% in 2023, due largely to the favorable impact of premium rate increases on net premiums earned for that segment.

Weather-related losses for the full year of 2024 were $67.7 million, or 7.2 percentage points of the loss ratio, compared to $72.9 million, or 8.3 percentage points of the loss ratio, for the full year of 2023. The loss ratio impact of weather-related losses for the full year of 2024 was in line with the previous five-year average of 7.0 percentage points of the loss ratio.

Large fire losses were $45.8 million, or 4.9 percentage points of the loss ratio, for the full year of 2024, relatively in line with $45.4 million, or 5.2 percentage points of the loss ratio, for the full year of 2023.

Net favorable development of reserves for losses incurred in prior accident years of $15.0 million reduced the loss ratio for the full year of 2024 by 1.6 percentage points. For the full year of 2024, our insurance subsidiaries experienced favorable development in losses primarily in the commercial multi-peril, personal automobile and homeowners lines of business, offset partially by unfavorable development in the workers’ compensation and commercial automobile lines of business. Net favorable development of reserves for losses incurred in prior accident years of $16.7 million reduced the loss ratio for the full year of 2023 by 1.9 percentage points. For the full year of 2023, our insurance subsidiaries experienced favorable development in losses primarily in the commercial automobile, personal automobile, workers’ compensation and homeowners lines of business.

Expense Ratio

The expense ratio was 32.8% for the fourth quarter of 2024, compared to 34.1% for the fourth quarter of 2023. The expense ratio was 33.7% for the full year of 2024, compared to 34.7% for the full year of 2023. The decrease in the expense ratios for the fourth quarter and full year of 2024 primarily reflected the impacts of various expense reduction initiatives, including agency incentive program revisions, commission schedule adjustments, targeted staffing reductions, and hiring restrictions for open employment positions, among others. These impacts were offset partially by an increase in underwriting-based incentive costs as well as higher technology systems-related expenses that were primarily due to increased costs related to our ongoing systems modernization project, a portion of which Donegal Mutual Insurance Company allocates to our insurance subsidiaries. We expect the impact from allocated costs from Donegal Mutual Insurance Company to our insurance subsidiaries related to the ongoing systems modernization project peaked at approximately 1.3 percentage points of the expense ratio for the full year of 2024 and will subside gradually in 2025 and subsequent years.

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 95.6% of our consolidated investment portfolio in diversified, highly rated and marketable fixed-maturity securities at December 31, 2024.

	December 31, 2024						December 31, 2023
	Amount			%			Amount			%
	(dollars in thousands)
Fixed maturities, at carrying value:
U.S. Treasury securities and obligations of U.S.
government corporations and agencies	$	170,423		12.3	%		$	176,991		13.3	%
Obligations of states and political subdivisions	409,560			29.5			415,280			31.3
Corporate securities	440,552			31.8			399,640			30.1
Mortgage-backed securities	304,459			22.0			278,260			21.0
Allowance for expected credit losses	(1,388		)	-0.1			(1,326		)	-0.1
Total fixed maturities	1,323,606			95.5			1,268,845			95.6
Equity securities, at fair value	36,808			2.7			25,903			2.0
Short-term investments, at cost	24,558			1.8			32,306			2.4
Total investments	$	1,384,972		100.0	%		$	1,327,054		100.0	%
Average investment yield	3.3%						3.1%
Average tax-equivalent investment yield	3.4%						3.2%
Average fixed-maturity duration (years)	5.2						4.3

Net investment income of $12.1 million for the fourth quarter of 2024 increased 12.5% compared to $10.7 million in net investment income for the fourth quarter of 2023, due primarily to higher average invested assets and an increase in the average investment yield compared to the prior-year fourth quarter. Net investment income of $44.9 million for the full year of 2024 increased 10.0% compared to the full year of 2023, due primarily to higher average invested assets and an increase in the average investment yield compared to the prior year.

Net investment gains were minimal for the fourth quarter of 2024, compared to $2.2 million for the fourth quarter of 2023. We attribute the gains to the quarterly increases in the market value of the equity securities held at the end of the respective periods.

Net investment gains were $5.0 million for the full year of 2024, compared to $3.2 million for the full year of 2023. We attribute the gains to the change in the market value of the equity securities held at the end of the respective periods.

Our book value per share was $15.36 at December 31, 2024, compared to $14.39 at December 31, 2023, as increases from net income and unrealized gains within our available-for-sale fixed-maturity portfolio during 2024 were partially offset by the dividends we declared during the year.

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,
	2024			2023			% Change			2024			2023			% Change
	(dollars in thousands)
Reconciliation of Net Premiums
Earned to Net Premiums Written
Net premiums earned	$	236,635		$	226,185		4.6	%		$	936,651		$	882,071		6.2	%
Change in net unearned premiums	(25,193		)	(13,492		)	86.7			5,630			13,626			-58.7
Net premiums written	$	211,442		$	212,693		-0.6	%		$	942,281		$	895,697		5.2	%

The following table provides a reconciliation of net income (loss) to operating income (loss) for the periods indicated:

	Three Months Ended December 31,										Year Ended December 31,
	2024			2023				% Change			2024			2023			% Change
	(dollars in thousands, except per share amounts)
Reconciliation of Net Income (Loss)
to Non-GAAP Operating Income (Loss)
Net income (loss)	$	24,003		$	(1,970	)		NM			$	50,862		$	4,426		NM
Investment gains (after tax)		(202	)		(1,772	)		-88.6	%			(3,935	)		(2,507	)	57.0	%
Non-GAAP operating income (loss)	$	23,801		$	(3,742	)		NM			$	46,927		$	1,919		NM
Per Share Reconciliation of Net Income (Loss)
to Non-GAAP Operating Income (Loss)
Net income (loss) – Class A (diluted)	$	0.70		$	(0.06	)		NM			$	1.53		$	0.14		NM
Investment gains (after tax)		(0.01	)		(0.05	)		-80.0	%			(0.12	)		(0.08	)	50.0	%
Non-GAAP operating income (loss) – Class A	$	0.69		$	(0.11	)		NM			$	1.41		$	0.06		NM
Net income (loss) – Class B	$	0.64		$	(0.06	)		NM			$	1.38		$	0.11		NM
Investment gains (after tax)		(0.01	)		(0.05	)		-80.0	%			(0.11	)		(0.07	)	57.1	%
Non-GAAP operating income (loss) – Class B	$	0.63		$	(0.11	)		NM			$	1.27		$	0.04		NM

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 100% generally indicates underwriting profitability.

Dividend Information

On December 19, 2024, we declared regular quarterly cash dividends of $0.1725 per share for our Class A common stock and $0.155 per share for our Class B common stock, which we paid on February 18, 2025 to stockholders of record as of the close of business on February 4, 2025.

Pre-Recorded Webcast

At approximately 8:30 am EDT on Thursday, February 20, 2025, 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, 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 providing superior experiences to our agents, policyholders and employees.

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 social inflation, 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), 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 Income (Loss)
(unaudited; in thousands, except share data)
	Quarter Ended December 31,
	2024			2023
Net premiums earned	$	236,635		$	226,185
Investment income, net of expenses	12,050			10,710
Net investment gains	256			2,243
Lease income	77			85
Installment payment fees	936			245
Total revenues	249,954			239,468
Net losses and loss expenses	141,435			163,154
Amortization of deferred acquisition costs	39,853			39,149
Other underwriting expenses	37,649			38,032
Policyholder dividends	826			1,225
Interest	269			156
Other expenses, net	255			233
Total expenses	220,287			241,949
Income (loss) before income tax expense (benefit)	29,667			(2,481		)
Income tax expense (benefit)	5,664			(511		)
Net income (loss)	$	24,003		$	(1,970	)
Net income (loss) per common share:
Class A - basic	$	0.71		$	(0.06	)
Class A - diluted	$	0.70		$	(0.24	)
Class B - basic and diluted	$	0.64		$	(0.06	)
Supplementary Financial Analysts' Data
Weighted-average number of shares
outstanding:
Class A - basic	28,979,432			27,702,646
Class A - diluted	29,224,696			27,726,318
Class B - basic and diluted	5,576,775			5,576,775
Net premiums written	$	211,442		$	212,693
Book value per common share
at end of period	$	15.36		$	14.39

Donegal Group Inc.
Consolidated Statements of Income
(unaudited; in thousands, except share data)
	Year Ended December 31,
	2024			2023
Net premiums earned	$	936,651		$	882,071
Investment income, net of expenses	44,918			40,853
Net investment gains	4,981			3,173
Lease income	314			347
Installment payment fees	2,741			894
Total revenues	989,605			927,338
Net losses and loss expenses	604,118			609,178
Amortization of deferred acquisition costs	160,311			154,214
Other underwriting expenses	155,254			151,748
Policyholder dividends	4,073			5,313
Interest	946			620
Other expenses, net	2,564			1,201
Total expenses	927,266			922,274
Income before income tax expense	62,339			5,064
Income tax expense	11,477			638
Net income	$	50,862		$	4,426
Net income per common share:
Class A - basic and diluted	$	1.53		$	0.14
Class B - basic and diluted	$	1.38		$	0.11
Supplementary Financial Analysts' Data
Weighted-average number of shares
outstanding:
Class A - basic	28,155,276			27,469,250
Class A - diluted	28,245,356			27,562,785
Class B - basic and diluted	5,576,775			5,576,775
Net premiums written	$	942,281		$	895,697
Book value per common share
at end of period	$	15.36		$	14.39

Donegal Group Inc.
Consolidated Balance Sheets
(in thousands)
			December 31,			December 31,
			2024			2023
			(unaudited)
ASSETS
Investments:
	Fixed maturities:
		Held to maturity, at amortized cost	$	705,714		$	679,497
		Available for sale, at fair value	617,892			589,348
	Equity securities, at fair value		36,808			25,903
	Short-term investments, at cost		24,558			32,306
		Total investments	1,384,972			1,327,054
Cash			52,926			23,792
Premiums receivable			181,107			179,592
Reinsurance receivable			420,742			441,431
Deferred policy acquisition costs			73,347			75,043
Prepaid reinsurance premiums			176,162			168,724
Other assets			46,776			50,658
		Total assets	$	2,336,032		$	2,266,294
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
	Losses and loss expenses		$	1,120,985		$	1,126,157
	Unearned premiums		612,476			599,411
	Accrued expenses		2,917			3,947
	Borrowings under lines of credit		35,000			35,000
	Other liabilities		18,878			22,034
		Total liabilities	1,790,256			1,786,549
Stockholders' equity:
	Class A common stock		329			308
	Class B common stock		56			56
	Additional paid-in capital		369,680			335,694
	Accumulated other comprehensive loss		(28,200)			(32,882)
	Retained earnings		245,137			217,795
	Treasury stock		(41,226)			(41,226)
		Total stockholders' equity	545,776			479,745
		Total liabilities and stockholders' equity	$	2,336,032		$	2,266,294

 

FAQ

What was DGICA's net income for Q4 2024?

Donegal Group Inc. reported net income of $24.0 million, or $0.70 per diluted Class A share, in Q4 2024, compared to a net loss of $2.0 million in Q4 2023.

How much did DGICA's net premiums earned increase in 2024?

Net premiums earned increased 6.2% to $936.7 million for the full year 2024 compared to 2023.

What was DGICA's combined ratio in Q4 2024?

The combined ratio improved to 92.9% in Q4 2024, compared to 106.8% in Q4 2023.

How did DGICA's weather-related losses change in Q4 2024?

Weather-related losses decreased to $7.7 million in Q4 2024 from $13.4 million in Q4 2023.

What was DGICA's book value per share at the end of 2024?

Book value per share was $15.36 at December 31, 2024, compared to $14.39 at year-end 2023.