Donegal Group Inc. Announces Fourth Quarter and Full Year 2024 Results
MARIETTA, Pa., Feb. 20, 2025 (GLOBE NEWSWIRE) -- Donegal Group Inc. $(DGICA)$ and $(DGICB)$ 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) NM(2) 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
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