MARIETTA, PA — Donegal Group Inc. (NASDAQ: DGICA) (NASDAQ: DGICB) reported higher second-quarter profit as improved underwriting results, lower weather-related claims and stronger investment income offset a decline in earned premiums, while the property and casualty insurer said challenging market conditions continued to weigh on premium growth.
The insurer reported second-quarter net income of $22.3 million, or $0.60 per diluted Class A share, up from $16.9 million, or $0.46 per share, a year earlier. The combined ratio improved to 95.6% from 97.7%, while annualized return on average equity increased to 13.6% from 11.3%.
Net premiums earned fell 4.0% to $222.6 million, reflecting continued weakness in personal lines that more than offset modest commercial lines growth. Net investment income rose 15.6% to $14.5 million, benefiting from higher investment yields and a larger invested asset base.
Chief Executive Officer Kevin G. Burke said the company continued to face “challenging trends and market conditions” but produced solid underwriting performance that contributed to higher book value.
“On the whole, our underwriting results for the second quarter of 2026 were solid,” Burke said, citing favorable core loss ratios, below-average weather-related losses and favorable prior-year reserve development.
Commercial lines net premiums written increased 0.8% from a year earlier, driven primarily by new business production, though lower renewal premium increases and retention tempered growth. Personal lines net premiums written declined 9.7%, which the company attributed primarily to higher policyholder attrition, partially offset by modest rate increases and new business growth.
Weather-related losses totaled $11.9 million during the quarter, down from $25.8 million a year earlier and below the company’s five-year average for the period. That improvement was partially offset by higher large commercial property fire losses, which increased to $15.0 million from $12.1 million.
Book value per share increased to $17.98 at June 30 from $17.33 at the end of 2025, supported by quarterly earnings despite unrealized losses within the company’s fixed-income investment portfolio.
For the first six months of 2026, Donegal reported net income of $33.8 million, down 19.6% from the prior-year period, while net premiums earned declined 4.4% to $443.9 million. Operating income, a non-GAAP measure, fell 23.4% to $31.6 million.
Donegal also declared quarterly cash dividends of $0.1925 per Class A share and $0.175 per Class B share, payable Aug. 14, 2026, to shareholders of record as of July 31.
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