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Donegal (DGICB) - 2024 Q2 - Quarterly Results
DGICBDonegal (DGICB)2024-07-25 10:30

Financial Performance - Net premiums earned for Q2 2024 were 234.3million,anincreaseof8.3234.3 million, an increase of 8.3% compared to 216.3 million in Q2 2023[2] - Net income for Q2 2024 reached 4.2million,representinga108.04.2 million, representing a 108.0% increase from 2.0 million in Q2 2023[2] - Total revenues for the first half of 2024 were 487.9million,up7.5487.9 million, up 7.5% from 453.9 million in the first half of 2023[2] - Net income for Q2 2024 was 4.2million,or13centsperdilutedClassAshare,comparedto4.2 million, or 13 cents per diluted Class A share, compared to 2.0 million, or 6 cents per diluted Class A share in Q2 2023[36] - Total revenues for Q2 2024 reached 246,773,000,upfrom246,773,000, up from 229,196,000 in Q2 2023, marking a growth of 7.7%[59] Premiums and Underwriting - The company reported a 9.1% growth in net premiums written for Q2 2024, driven by a 7.1% increase in commercial lines and a 12.1% increase in personal lines[4] - Net premiums written for Q2 2024 were 247,189,000,a9.1247,189,000, a 9.1% increase from 226,512,000 in Q2 2023[60] - The company attributed a 9.4millionincreaseincommerciallinespremiumstonewbusinesswritingsandstrongpremiumretention[41]InvestmentPerformanceTotalinvestmentsreached9.4 million increase in commercial lines premiums to new business writings and strong premium retention[41] Investment Performance - Total investments reached 1,343.8 million as of June 30, 2024, with an average investment yield of 3.3%[47] - The company experienced a net investment gain of 0.7millioninQ22024,comparedto0.7 million in Q2 2024, compared to 2.5 million in Q2 2023[47] - Investment income, net of expenses, for Q2 2024 was 11,068,000,comparedto11,068,000, compared to 10,157,000 in Q2 2023, reflecting a positive trend[59] - The company reported a significant decrease in investment gains (after tax) for Q2 2024, totaling (582,000)comparedto(582,000) compared to (1,978,000) in Q2 2023, a decline of 70.6%[51] Operational Efficiency - Non-GAAP operating income for Q2 2024 was 3.6million,asignificantincreasefrom3.6 million, a significant increase from 19, indicating a notable improvement in operational efficiency[2] - Non-GAAP operating income for Q2 2024 was 3,571,000,significantlyupfrom3,571,000, significantly up from 19,000 in Q2 2023, indicating a substantial improvement[51] - The combined ratio improved to 103.0% in Q2 2024 from 104.7% in Q2 2023, reflecting a decrease in the expense ratio to 31.9% from 34.2%[42][45] Loss Ratios - Weather-related losses amounted to 24.7millioninQ22024,contributing10.6percentagepointstothelossratio,comparedto24.7 million in Q2 2024, contributing 10.6 percentage points to the loss ratio, compared to 19.7 million and 9.1 percentage points in Q2 2023[7] - The core loss ratio for commercial lines was 54.8% in Q2 2024, slightly up from 54.0% in Q2 2023, while the personal lines core loss ratio decreased to 55.3% from 56.5%[43] Shareholder Returns - The company declared a quarterly cash dividend of 0.1725pershareforClassAcommonstockand0.1725 per share for Class A common stock and 0.155 per share for Class B common stock, payable on August 15, 2024[25] - The book value per share was 14.48asofJune30,2024,comparedto14.48 as of June 30, 2024, compared to 14.39 at the end of 2023, reflecting a slight increase[21] - Book value per common share at the end of Q2 2024 was 14.48,slightlydownfrom14.48, slightly down from 14.68 at the end of Q2 2023[60] Future Outlook - The company is focusing on enhancing small commercial underwriting capabilities to drive growth in the commercial lines segment[4] - Future outlook includes continued focus on market expansion and potential new product development strategies[51] - The expense ratio is expected to peak at approximately 1.3 percentage points due to ongoing systems modernization costs in 2024[45]