Donegal Group Inc. Announces Third Quarter and First Nine Months of 2024 Results
MARIETTA, Pa., Oct. 24, 2024 (GLOBE NEWSWIRE) -- Donegal Group Inc. (NASDAQ:DGICA) and (NASDAQ:DGICB) today reported its financial results for the third quarter and first nine months of 2024.
Significant Items for third quarter of 2024 (all comparisons to third quarter of 2023):
Net income of $16.8 million, or 51 cents per diluted Class A share, compared to net loss of $0.8 million, or 2 cents per Class A share
Net premiums earned increased 6.0% to $238.0 million
Net premiums written1 increased 5.9% to $232.2 million
Combined ratio of 96.4%, compared to 104.5%
Net income included after-tax net investment gains of $1.5 million, or 5 cents per diluted Class A share, compared to after-tax net investment losses of $1.0 million, or 3 cents per Class A share
Book value per share of $15.22 at September 30, 2024, compared to $14.26
Financial Summary
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
% Change
2024
2023
% Change
(dollars in thousands, except per share amounts)
Income Statement Data
Net premiums earned
$
237,957
$
224,393
6.0
%
$
700,017
$
655,886
6.7
%
Investment income, net
10,827
10,536
2.8
32,868
30,143
9.0
Net investment gains (losses)
1,876
(1,243
)
NM2
4,725
930
408.1
Total revenues
251,738
233,928
7.6
739,651
687,870
7.5
Net income (loss)
16,752
(805
)
NM
26,860
6,396
319.9
Non-GAAP operating income1
15,270
176
NM
23,127
5,661
308.5
Annualized return on average equity
13.4
%
-0.7
%
14.1 pts
7.2
%
1.8
%
5.4 pts
Per Share Data
Net income (loss), Class A (diluted)
$
0.51
$
(0.02
)
NM
$
0.81
$
0.20
305.0
%
Net income (loss), Class B
0.46
(0.02
)
NM
0.74
0.17
335.3
Non-GAAP operating income, Class A (diluted)
0.46
0.01
NM
0.70
0.17
311.8
Non-GAAP operating income, Class B
0.42
-
NM
0.63
0.15
320.0
Book value
15.22
14.26
6.7
%
15.22
14.26
6.7
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
"We are pleased that many of the strategic initiatives we implemented in recent years contributed to significant improvement in our financial results for the third quarter of 2024," said Kevin G. Burke, President and Chief Executive Officer of Donegal Group Inc.
"With the exit from commercial lines markets in Georgia and Alabama essentially completed at the end of the second quarter of 2024, solid new business writings, rate achievement and retention levels led to a 6.4% increase in commercial lines net premiums written for the third quarter of 2024. Our personal lines net premiums written growth rate for the third quarter was 5.4%, primarily attributable to strong rate increases and policy retention that were partially offset by intentional strategic actions to slow growth and further improve profitability.
"Despite higher-than-average weather-related losses during the quarter, primarily attributable to Hurricane Helene in late September, our combined ratio improved significantly to 96.4%, compared to 104.5% for the prior-year quarter. Our core loss ratios improved across all of our major lines of business. We attribute that improvement to the favorable impact of numerous ongoing underwriting initiatives and higher net premiums earned from renewal rate increases that we implemented over the past two years."
Mr, Burke concluded, "We have growing confidence that the continuing execution of our strategies will deliver sustained excellent financial performance."
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 September 30,
Nine Months Ended September 30,
2024
2023
% Change
2024
2023
% Change
(dollars in thousands)
Net Premiums Earned
Commercial lines
$
136,401
$
135,432
0.7
%
$
402,982
$
399,427
0.9
%
Personal lines
101,556
88,961
14.2
297,035
256,460
15.8
Total net premiums earned
$
237,957
$
224,393
6.0
%
$
700,017
$
655,887
6.7
%
Net Premiums Written
Commercial lines:
Automobile
$
41,464
$
37,535
10.5
%
$
142,067
$
134,853
5.3
%
Workers' compensation
23,934
24,371
-1.8
82,599
85,315
-3.2
Commercial multi-peril
50,155
44,949
11.6
163,528
147,622
10.8
Other
10,548
11,639
-9.4
35,649
39,913
-10.7
Total commercial lines
126,101
118,494
6.4
423,843
407,703
4.0
Personal lines:
Automobile
65,150
58,038
12.3
188,958
161,348
17.1
Homeowners
38,288
39,633
-3.4
109,655
105,035
4.4
Other
2,669
3,021
-11.7
8,383
8,917
-6.0
Total personal lines
106,107
100,692
5.4
306,996
275,300
11.5
Total net premiums written
$
232,208
$
219,186
5.9
%
$
730,839
$
683,003
7.0
%
Net Premiums Written
The 5.9% increase in net premiums written for the third quarter of 2024 compared to the third quarter of 2023, as shown in the table above, represents the combination of 6.4% growth in commercial lines net premiums written and 5.4% growth in personal lines net premiums written. The $13.0 million increase in net premiums written for the third quarter of 2024 compared to the third quarter of 2023 included:
Commercial Lines: $7.6 million increase that we attribute primarily to new business writings, strong premium retention, and a continuation of renewal premium increases in lines other than workers' compensation, offset partially by planned attrition in states in which we are executing ongoing profit improvement initiatives as part of our state-specific strategies.
Personal Lines: $5.4 million increase that we attribute primarily to a continuation of renewal premium rate increases and strong policy retention, offset partially by planned attrition due to non-renewal actions.
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 and nine months ended September 30, 2024 and 2023:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
GAAP Combined Ratios (Total Lines)
