Core Insights - Donegal Mutual Insurance Company is advancing its technology transformation by migrating its claims, billing, and policy administration systems to the Guidewire Cloud platform, with completion expected by early 2027 for claims and billing, and 2028 for policy administration [1][2]. Group 1: Migration Strategy - The migration strategy is phased and risk-managed, allowing the company to continue critical business initiatives during the transition [3]. - The transition to Guidewire Cloud is expected to enhance agility, accelerate time-to-market for new products, and reduce operational costs and complexity associated with on-premises systems [4]. Group 2: GenAI Initiatives - In 2025, Donegal advanced its GenAI initiatives through strategic partnerships and internal development, focusing on high-value use cases [5]. - The company has successfully deployed its first GenAI solution and is working on additional pilot projects, which will inform the AI capabilities available within the Guidewire Cloud platform [6]. Group 3: Industry Context - Guidewire is recognized as a leading platform for property and casualty insurers, with over 570 insurers in 43 countries relying on its products [9].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to _________________ Commission file number 0-15341 DONEGAL GROUP INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction o ...

Core Viewpoint - Donegal Group has released its fourth quarter and full year 2025 earnings results, which are available on its Investor Relations website [1]. Group 1: Earnings Release - The earnings release outlines the financial performance of Donegal Group for the fourth quarter and the entire year of 2025 [1]. - A supplemental investor presentation accompanies the earnings release, providing additional insights into the company's performance [1]. Group 2: Management Team - The conference call features key executives including President and CEO Kevin Burke, CFO Jeff Miller, Chief Underwriting Officer Jeff Hay, COO Dan DeLamater, and Chief Investment Officer Tony Viozzi [1]. - The statements made during the call include forward-looking statements that involve risks and uncertainties [1]. Group 3: Regulatory Compliance - Donegal Group disclaims any obligation to update or publicly announce revisions to forward-looking statements after the date of such statements [2].

Core Insights - Donegal Group reported earnings per share (EPS) of $0.50 for the quarter, missing the consensus estimate of $0.52 by $0.02, with revenue of $240.14 million compared to the estimate of $241.10 million [1] - The company announced a quarterly dividend of $0.1825 per share, representing an annualized dividend of $0.73 and a yield of 4.2%, with a dividend payout ratio of 30.17% [2] - Analysts have mixed ratings on Donegal Group, with Keefe, Bruyette & Woods raising the price target from $20.00 to $21.00, while Zacks Research downgraded the stock from "strong-buy" to "hold" [3][4] Financial Performance - Donegal Group has a market capitalization of $643.40 million, a P/E ratio of 7.26, and a beta of 0.04, with a 50-day moving average price of $19.38 and a 200-day moving average price of $19.09 [8] - The company has a return on equity of 14.28% and a net margin of 8.72% [1] Insider Activity - Director Kevin Michael Sr Kraft sold 4,500 shares at an average price of $20.02, resulting in a total transaction of $90,090, representing a 25.09% decrease in ownership [5] - VP Kristi Spencer Altshuler sold 12,000 shares at an average price of $20.25 for a total of $243,000 [5] Institutional Investment - Several institutional investors have increased their positions in Donegal Group, with Smartleaf Asset Management growing its stake by 576.6% in the fourth quarter [6] - Institutional investors now own 27.96% of the company's stock [6] Company Overview - Donegal Group, Inc. is a property and casualty insurance holding company based in Marietta, Pennsylvania, offering a range of personal and commercial insurance products through independent agencies [9] - The company was established in 1925 to serve rural communities in Pennsylvania [10]

Core Viewpoint - Donegal Group Inc. demonstrated strong financial performance in 2025, with significant increases in net income and improvements in combined ratio, despite some declines in net premiums written and total revenues [1][3]. Financial Performance - Net income for 2025 reached $79.3 million, a 56% increase from $50.9 million in 2024 [1]. - The combined ratio improved to 95.4% in 2025 from 98.6% in 2024, driven by a lower loss ratio of 61.3%, down from 64.5% [1][2]. - Total revenues for 2025 were $978 million, a decrease of 1.2% from $989.6 million in 2024 [3]. Premiums and Underwriting - Net premiums earned totaled $921.2 million, down 1.7% from $936.7 million in 2024 [2]. - Net premiums written declined 4% to $904.8 million from $942.3 million, with a 2.9% growth in commercial lines and a 13.6% decrease in personal lines [2]. - In Q4 2025, net premiums earned were $226.9 million, down 4.1% compared to $236.6 million [4]. Investment Income - Net investment income increased by 17.2% to $52.6 million from $44.9 million, attributed to higher average invested assets and increased investment yield [3]. - For Q4 2025, net investment income rose 17.5% to $14.2 million from $12.1 million, despite net investment losses of $1.7 million [5]. Strategic Outlook - The company aims for modest premium growth in 2026 through independent agency partners in targeted geographies and business classes [6]. - There is a focus on refining commercial underwriting and enhancing new business writings, with plans to engage agents in growth strategies [7]. - In personal lines, the company is transitioning legacy policies to a new platform, expecting a gradual recovery in premiums throughout 2026 [9]. Operational Insights - The Q4 2025 combined ratio was 96.3%, an increase from 92.9% in the prior year, with a rise in both loss and expense ratios [4]. - The company is committed to investing in talent, systems, and capabilities to enhance service to agents and policyholders [10].

Financial Performance - Net premiums earned decreased by 4.1% to $226.9 million in Q4 2025, and by 1.7% to $921.2 million for the full year 2025[1][2] - Net income for Q4 2025 was $17.2 million, or $0.47 per diluted Class A share, down 28.4% from $24.0 million, or $0.70 per diluted Class A share in Q4 2024[1][2] - Total revenues for Q4 2025 were $240,142,000, down 3.9% from $249,954,000 in Q4 2024[42] - Net income for the year 2025 was $79,341,000, an increase of 56.2% from $50,862,000 in 2024[45] - Total revenues for the year 2025 were $978,014,000, down 1.2% from $989,605,000 in 2024[45] Underwriting and Loss Ratios - The combined ratio for Q4 2025 increased to 96.3%, compared to 92.9% in Q4 2024, while the full year combined ratio improved to 95.4% from 98.6%[1][2][13] - The core loss ratio for Q4 2025 was 50.3%, an improvement from 52.3% in Q4 2024, indicating better underwriting performance[11][14] - The full year 2025 loss ratio decreased to 61.3% from 64.5% in 2024, with the core loss ratio dropping by 2.6 percentage points to 51.4%[18] - Large fire losses for Q4 2025 were $14.1 million, representing 6.2 percentage points of the loss ratio, up from $9.5 million or 4.0 percentage points in Q4 2024[16] - Weather-related losses for the full year 2025 were $56.9 million, accounting for 6.2 percentage points of the loss ratio, down from $67.7 million or 7.2 percentage points in 2024[19] Investment Performance - Investment income increased by 17.5% to $14.2 million in Q4 2025, and by 17.2% to $52.6 million for the full year 2025[1][2] - Net investment income for Q4 2025 was $14.2 million, a 17.5% increase from $12.1 million in Q4 2024, driven by higher average invested assets[25] - The company reported a net investment loss of $1,726,000 in Q4 2025 compared to a gain of $256,000 in Q4 2024[42] Shareholder Value - The book value per share increased to $17.33 at December 31, 2025, compared to $15.36 at year-end 2024, reflecting improved financial health[2][8] - The book value per common share at the end of 2025 was $17.33, up from $15.36 in 2024[44] - Regular quarterly cash dividends of $0.1825 per share for Class A and $0.165 per share for Class B were declared on December 18, 2025[34] Operational Strategy - The company plans to pursue modest premium growth through independent agency partners in attractive geographies and business classes in 2026[4] - The company is focused on enhancing service to independent agents and policyholders while making investments in talent and systems to support growth[7] Expense Management - The expense ratio for Q4 2025 was 34.9%, up from 32.8% in Q4 2024, primarily due to higher agency incentive costs and lower net earned premiums[22] - Net premiums written for the full year 2025 decreased by 4.0% to $904.8 million from $942.3 million in 2024[32] - Non-GAAP operating income for the full year 2025 was $78.9 million, a 68.0% increase from $46.9 million in 2024[32] Balance Sheet Strength - Total assets as of December 31, 2025, were $2,386,629,000, an increase from $2,336,032,000 in 2024[48] - Total liabilities decreased to $1,746,211,000 in 2025 from $1,790,256,000 in 2024[50]

Financial Performance Summary - Donegal Group Inc. reported a net income of $17.2 million for Q4 2025, a decrease of 28.4% compared to $24.0 million in Q4 2024, with diluted Class A earnings per share falling to $0.47 from $0.70 [2][3][43] - For the full year 2025, net income increased to $79.3 million, up 56.0% from $50.9 million in 2024, with diluted Class A earnings per share rising to $2.18 from $1.53 [2][3][45] - Total revenues for Q4 2025 were $240.1 million, down 3.9% from $250.0 million in Q4 2024, while full-year revenues decreased by 1.2% to $978.0 million from $989.6 million [2][3][45] Premiums and Underwriting - Net premiums earned decreased by 4.1% to $226.9 million in Q4 2025, and by 1.7% to $921.2 million for the full year [2][3][45] - The combined ratio for Q4 2025 was 96.3%, up from 92.9% in Q4 2024, while the full-year combined ratio improved to 95.4% from 98.6% [3][12] - The loss ratio for Q4 2025 increased to 61.1% from 59.8% in Q4 2024, while the full-year loss ratio decreased to 61.3% from 64.5% [15][19] Investment Performance - Investment income for Q4 2025 was $14.2 million, a 17.5% increase from $12.1 million in Q4 2024, and for the full year, it rose to $52.6 million from $44.9 million [2][26] - Net investment losses for Q4 2025 were $1.7 million, compared to minimal gains in Q4 2024, attributed to realized losses on strategic sales of fixed-maturity securities [27][28] Strategic Focus and Outlook - The company aims for modest premium growth in 2026 through independent agency partners in identified attractive geographies and business classes [5] - Management emphasized the importance of strategic decisions made over the past years that contributed to solid operating performance [5][6] Book Value and Shareholder Returns - Book value per share increased to $17.33 at the end of 2025, up from $15.36 at the end of 2024, driven by net income and unrealized gains in the investment portfolio [29][45] - The company declared quarterly cash dividends of $0.1825 per share for Class A and $0.165 per share for Class B, paid on February 17, 2026 [35]

Group 1 - Donegal Group Inc. plans to release its fourth quarter and full year results for 2025 on February 19, 2026, before the NASDAQ market opens [1] - A supplemental investor presentation will be available on the company's website at the same time as the earnings press release [1] - The company will host a pre-recorded audio webcast featuring management commentary and a Q&A session on February 19, 2026 [2] Group 2 - Donegal Group Inc. is an insurance holding company offering property and casualty insurance in 21 states across the Mid-Atlantic, Midwest, South, and Southwest regions [3] - The company operates under the Donegal Insurance Group, which has an A.M. Best rating of A (Excellent) [3] - The Class A and Class B common stocks of Donegal Group Inc. trade on the NASDAQ under the symbols DGICA and DGICB, respectively [4] Group 3 - The company focuses on achieving sustained excellent financial performance, modernizing operations, growing profitably, and providing superior experiences to agents, customers, and employees [4]

Core Viewpoint - Donegal Group (DGICA) has underperformed with a return of -1.20% compared to the S&P 500's return of 11% since the last coverage, indicating potential investment opportunities due to its lower trading multiples [1]. Group 1: Company Performance - The company continues to trade at lower multiples relative to its peers, suggesting it may be undervalued [1]. - The performance over the past five years has been analyzed, highlighting the company's position in the market [1]. Group 2: Analyst Perspective - The analyst expresses a strong buy rating for Donegal Group, indicating confidence in its future performance despite recent underperformance [1]. - The analyst's background includes a focus on high-quality stocks that are trading at discounted prices, reflecting a strategic investment approach [1].

Group 1 - The core viewpoint is that Donegal Group (DGICA) has underperformed, returning -1.20% compared to the S&P's 11% return [1] - The company continues to trade at lower multiples relative to its peers, which may present a buying opportunity [1] Group 2 - The analyst has a background in equity analysis and retail investing, focusing on high-quality stocks at discounted prices [1] - The article emphasizes the importance of analytical insights into global market performance [1]