Donegal Group Inc. Announces First Quarter 2025 Results

Financial Performance - Donegal Group Inc. reported net premiums earned of $232.7 million for Q1 2025, a 2.2% increase from $227.7 million in Q1 2024 [1][3] - Total revenues for Q1 2025 were $245.2 million, up 1.7% from $241.1 million in Q1 2024 [1][34] - Net income surged to $25.2 million, or $0.71 per diluted Class A share, compared to $6.0 million, or $0.18 per diluted Class A share in the prior year, reflecting a 323.2% increase [1][34] - Non-GAAP operating income reached $25.6 million, a 496.8% increase from $4.3 million in Q1 2024 [1][34] Underwriting Performance - The combined ratio improved significantly to 91.6% in Q1 2025 from 102.4% in Q1 2024, indicating better underwriting profitability [3][9] - The core loss ratio decreased to 54.2% in Q1 2025 from 58.7% in Q1 2024, reflecting effective loss management strategies [10][12] - Weather-related losses were $8.6 million, contributing 3.7 percentage points to the loss ratio, down from $10.8 million and 4.7 percentage points in the previous year [13] Investment Operations - Net investment income for Q1 2025 was $12.0 million, a 9.2% increase from $11.0 million in Q1 2024, driven by higher average investment yield [19] - The company reported net investment losses of $0.5 million in Q1 2025, compared to net investment gains of $2.1 million in Q1 2024, attributed to a decrease in the market value of equity securities [20] Strategic Focus - The company is prioritizing sustained profitability while pursuing targeted premium growth, particularly in commercial lines [2][5] - In personal lines, growth was constrained by intentional strategies, including limiting new business volume and non-renewal of a legacy book of business [5][8] - Donegal Group aims to enhance operational capabilities and capitalize on future growth opportunities to increase shareholder value [5][31] Book Value and Equity - Book value per share increased to $16.24 at March 31, 2025, from $14.53 at March 31, 2024, reflecting strong financial performance [1][21] - The annualized return on average equity was 17.8% for Q1 2025, significantly higher than 4.9% in Q1 2024 [1][34]