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)
- 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
| 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 | % | |||||||||
²Not 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.
- 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.
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 |
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