Financial Performance - Net premiums written for the three months ended March 31, 2025, totaled $247,092,000, compared to $251,442,000 for the same period in 2024, reflecting a decrease of approximately 1.4%[104][105] - Net premiums earned for Q1 2025 were $232.7 million, an increase of $5.0 million, or 2.2%, compared to Q1 2024[110] - Net premiums written for Q1 2025 were $247.1 million, a decrease of $4.4 million, or 1.7%, from $251.4 million in Q1 2024[111] - Net investment income increased to $12.0 million in Q1 2025, up $1.0 million, or 9.2%, from $11.0 million in Q1 2024[112] - Net income for Q1 2025 was $25.2 million, or $0.71 per share, compared to $6.0 million, or $0.18 per share, in Q1 2024[119] - Net cash flows provided by operating activities were $25.7 million in Q1 2025, compared to $4.8 million in Q1 2024[121] Loss and Expense Management - Total liabilities for losses and loss expenses as of March 31, 2025, amounted to $1,092,624,000, a decrease from $1,120,985,000 as of December 31, 2024[98] - The total commercial lines liabilities as of March 31, 2025, were $556,596,000, slightly down from $558,175,000 as of December 31, 2024[98] - The total personal lines liabilities decreased from $146,189,000 as of December 31, 2024, to $139,601,000 as of March 31, 2025[98] - The company has experienced a general slowing of settlement rates in litigated claims, indicating potential future adjustments to estimates[95] - The establishment of appropriate liabilities is inherently uncertain, and the company cannot assure that ultimate liabilities will not exceed reserves[94] - For every 1% change in loss and loss expense reserves, the effect on pre-tax results of operations would be approximately $7,000,000[93] - The pooling agreement with Donegal Mutual represents a substantial portion of Atlantic States' insurance subsidiaries' gross liabilities for losses and loss expenses[123] Ratios and Profitability - The statutory combined ratio for the three months ended March 31, 2025, is a key indicator of underwriting profitability, with a ratio of less than 100% indicating profitability[106] - The loss ratio for Q1 2025 was 56.7%, down from 66.3% in Q1 2024, attributed to decreased core losses and large fire losses[114] - The core loss ratio for Q1 2025 was 54.2%, compared to 58.7% in Q1 2024, reflecting ongoing premium rate increases[114] - The expense ratio for Q1 2025 was 34.6%, a decrease from 35.7% in Q1 2024, due to effective expense management initiatives[116] - The combined ratio improved to 91.6% in Q1 2025 from 102.4% in Q1 2024, primarily due to the decrease in the loss ratio[117] Capital and Dividends - The total amount available for distribution as dividends from insurance subsidiaries without prior approval in 2025 is approximately $53.3 million, comprising $40.7 million from Atlantic States, $7.8 million from MICO, and $4.7 million from Peninsula[125] - Atlantic States' insurance subsidiaries did not pay any dividends to the company during the first three months of 2025[125] - No shares of Class A common stock were purchased under the share repurchase program during the three months ended March 31, 2025, with a total of 57,658 shares repurchased since the program's inception[124] Risk Management - The company manages equity price risk by conducting analyses of prospective investments and regular portfolio reviews[127] - Credit risk is managed by limiting the percentage and amount of total investments in any one issuer and performing regular reviews of fixed-maturity securities[128] - There have been no material changes to the company's quantitative or qualitative market risk exposure from December 31, 2024, through March 31, 2025[133] Borrowings and Commitments - As of March 31, 2025, Atlantic States had no outstanding borrowings under its line of credit with M&T, with the ability to borrow up to $20.0 million at interest rates equal to the current Term SOFR rate plus 2.11%[122] - Atlantic States had a $35.0 million outstanding advance with the FHLB of Pittsburgh at a fixed interest rate of 3.806%, due in September 2026[122] - There were no material commitments for capital expenditures as of March 31, 2025[126]
Donegal (DGICB) - 2025 Q1 - Quarterly Report