MARIETTA, PA — Donegal Group Inc. (NASDAQ: DGICA, DGICB) reported higher third-quarter earnings for 2025 despite lower premium volume, as favorable weather conditions, disciplined underwriting, and improved investment income supported results.
The property and casualty insurer posted net income of $20.1 million, or $0.55 per diluted Class A share, up 19.9% from $16.8 million, or $0.51 per share, in the same period last year. Non-GAAP operating income rose 24.9% to $19.1 million. Net premiums earned declined 3.4% to $229.8 million, while total revenues fell 2.3% to $245.9 million. The combined ratio improved slightly to 95.9% from 96.4% a year earlier, and investment income increased 28.8% to $13.9 million.
“We are encouraged to see a continuation of favorable results in the third quarter, which reflects the benefits of our strategic and tactical efforts over the past several years,” said Kevin G. Burke, President and Chief Executive Officer of Donegal Group. “While benign weather conditions contributed meaningfully to our quarterly performance, we were also pleased with the overall core loss ratio for the third quarter. We remain confident that our disciplined underwriting and ongoing strategic execution will provide sustained excellent financial performance over time.”
Commercial lines performance remained strong, with net premiums written rising 3.4% from the prior year, supported by renewal price increases and stable retention. The company reported a statutory combined ratio of 96.6% for the segment. In contrast, personal lines premiums fell 15.9% as Donegal continued to limit new business to protect margins.
“In our commercial lines business segment, we achieved strong renewal price increases coupled with solid retention,” Burke said. “We recently fully deployed the final major commercial lines release of our multi-year systems transformation project, providing enhanced products and service capabilities we expect will enhance our ability to target and win profitable middle market accounts.”
The company’s systems transformation initiative also advanced in personal lines, with full conversion of legacy policies expected by mid-2027. Management noted that modest declines in personal lines premiums are expected into 2026 as Donegal gradually resumes selective new business growth.
Book value per share increased to $17.14 as of September 30, 2025, compared with $15.22 a year earlier. The annualized return on average equity stood at 13% for the quarter.
“We believe that we are now operating from a position of strength and that we are well positioned to navigate the evolving insurance landscape in the years ahead,” Burke said. “We will continue to engage with our independent agency partners to identify growth opportunities, further enhance and refine the efficiency of our operations, and execute on our strategic priorities.”
The board declared a quarterly dividend of $0.1825 per share for Class A common stock and $0.165 per share for Class B common stock, payable November 17 to shareholders of record as of November 3, 2025.
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