Donegal (DGICA) - 2024 Q4 - Annual Results

Financial Performance - Net premiums earned increased by 4.6% to $236.6 million in Q4 2024, and by 6.2% to $936.7 million for the full year 2024[1][2] - Net income for Q4 2024 was $24.0 million, or $0.70 per diluted Class A share, compared to a net loss of $2.0 million, or $0.06 per Class A share in Q4 2023[1][2] - Net income for the year 2024 was $50,862,000, significantly higher than $4,426,000 in 2023, marking an increase of 1,149%[42] - Total revenues for the year ended December 31, 2024, reached $989,605,000, up from $927,338,000 in 2023, reflecting a growth of 6.7%[42] Underwriting Performance - The combined ratio improved to 92.9% in Q4 2024 from 106.8% in Q4 2023, and to 98.6% for the full year 2024 from 104.4% in 2023[1][12] - The core loss ratio for Q4 2024 decreased to 52.3% from 61.8% in Q4 2023, indicating improved underwriting performance[1][13] - The full year 2024 loss ratio decreased to 64.5%, compared to 69.1% for 2023, with the core loss ratio improving to 54.0% from 57.5%[18] - The statutory loss ratio improved to 60.5% in 2024 from 61.2% in 2023, indicating better loss management[38] Investment Performance - Net investment income increased by 12.5% to $12.1 million in Q4 2024, and by 10.0% to $44.9 million for the full year 2024[1][2] - Net investment gains for 2024 were $4,981,000, compared to $3,173,000 in 2023, representing a growth of 56.8%[42] Expense Management - The expense ratio for Q4 2024 was 32.8%, down from 34.1% in Q4 2023, reflecting various expense reduction initiatives[22] - The company effectively mitigated higher costs associated with major systems modernization through targeted expense-reduction strategies[6] - Total expenses for the year 2024 were $927,266,000, slightly higher than $922,274,000 in 2023, reflecting a marginal increase of 0.5%[42] Shareholder Value - Book value per share rose to $15.36 at December 31, 2024, compared to $14.39 at year-end 2023, reflecting a 6.7% increase[1][2] - Regular quarterly cash dividends of $0.1725 per share for Class A and $0.155 per share for Class B were declared on December 19, 2024[33] - The weighted-average number of Class A shares outstanding increased to 28,155,276 in 2024 from 27,469,250 in 2023[42] Strategic Focus - The company plans to pursue strategic premium growth and enhance underwriting performance through targeted initiatives and premium rate increases[4][6] - The company is focusing on high-quality new commercial middle market and small business accounts, as well as personal lines segment growth[6] Losses - Weather-related losses for Q4 2024 were $7.7 million, or 3.3 percentage points of the loss ratio, down from $13.4 million, or 5.9 percentage points in Q4 2023[14] - Large fire losses in Q4 2024 were $9.5 million, or 4.0 percentage points of the loss ratio, compared to $10.8 million, or 4.8 percentage points in Q4 2023[15] - For the full year 2024, weather-related losses totaled $67.7 million, or 7.2 percentage points of the loss ratio, down from $72.9 million, or 8.3 percentage points in 2023[19] Assets - Total assets as of December 31, 2024, were $2,336,032,000, an increase from $2,266,294,000 in 2023, reflecting a growth of 3.1%[44]