Financial Performance - Net premiums written for the three months ended March 31, 2024, were $251,442,000, compared to $237,304,000 for the same period in 2023, reflecting an increase of approximately 5.0%[106] - Net premiums earned for Q1 2024 were $227.7 million, a 5.8% increase from $215.2 million in Q1 2023[113] - Net premiums written for Q1 2024 were $251.4 million, up 6.0% from $237.3 million in Q1 2023, with personal lines increasing by 18.5%[114] - Net investment income rose to $11.0 million in Q1 2024, a 16.1% increase from $9.4 million in Q1 2023[115] - Net income for Q1 2024 was $6.0 million, or $0.18 per share, compared to $5.2 million, or $0.16 per share, in Q1 2023[122] Loss Ratios and Underwriting Profitability - The GAAP combined ratio for the three months ended March 31, 2024, was 102.4%, up from 101.2% in 2023, indicating a decline in underwriting profitability[111] - The statutory combined ratio for commercial lines was 101.6% for the three months ended March 31, 2024, compared to 99.8% in 2023, showing a deterioration in performance[111] - The loss ratio for core losses increased to 58.7% in Q1 2024 from 56.5% in Q1 2023, indicating rising claims costs[111] - The loss ratio increased to 66.3% in Q1 2024 from 64.2% in Q1 2023, attributed to higher core losses and large fire losses[117] - The combined ratio for Q1 2024 was 102.4%, up from 101.2% in Q1 2023, primarily due to the increase in the loss ratio[120] Expense Management - The statutory expense ratio for the three months ended March 31, 2024, was 35.7%, slightly improved from 36.4% in 2023, indicating better expense management[111] - The expense ratio decreased to 35.7% in Q1 2024 from 36.4% in Q1 2023, reflecting early impacts of expense reduction initiatives[118] Liabilities and Reserves - Total liabilities for losses and loss expenses as of March 31, 2024, amounted to $1,124,452,000, a slight decrease from $1,126,157,000 on December 31, 2023[99] - The total commercial lines liabilities as of March 31, 2024, were $543,323,000, an increase from $535,681,000 at the end of 2023[99] - For every 1% change in loss and loss expense reserves, the effect on pre-tax results of operations would be approximately $6.9 million[94] Claims and Litigation Trends - The average claim outstanding has gradually increased over the past several years due to inflation and increased litigation trends, contributing to greater uncertainty in future loss settlements[96] - The company has noted stable amounts in the number of claims incurred relative to their premium base across most lines of business, excluding severe weather events and the COVID-19 pandemic[96] Liquidity and Dividends - Liquidity remains strong with net cash flows from operations of $4.8 million in Q1 2024, compared to a negative cash flow of $680,734 in Q1 2023[124] - The company declared quarterly cash dividends of $0.1725 per share for Class A and $0.155 per share for Class B, payable on May 22, 2024[130] - At March 31, 2024, the company had no outstanding borrowings under its line of credit and the ability to borrow up to $20.0 million[125]
Donegal (DGICB) - 2024 Q1 - Quarterly Report