MARIETTA, PA — Donegal Group Inc. (NASDAQ: DGICA) and (NASDAQ: DGICB) announced strong financial results for the first quarter of 2025, driven by record net income and improved operational performance.
Net income soared to $25.2 million, or $0.71 per diluted Class A share, compared to $6.0 million, or $0.18 per diluted share, in Q1 2024. The company achieved a combined ratio of 91.6%, a notable improvement from 102.4% in the comparable quarter, reflecting reduced loss ratios and operational efficiencies.
Net premiums earned reached $232.7 million, a 2.2% increase year-over-year, supported by sustained retention and premium rate increases in commercial lines. While net premiums written declined 1.7% overall due to strategic reductions in personal lines, commercial lines premiums rose 3.3%, attributed to solid retention and targeted growth in middle-market business.
President and CEO Kevin G. Burke highlighted the company’s operational progress, stating, “We are pleased that positive momentum, which began to emerge in the second half of 2024, continued into the first quarter of 2025 with our achievement of record earnings for the second straight quarter. This accomplishment reflects the deliberate actions and strong operational discipline of our team in prioritizing sustained profitability while pursuing targeted premium growth.”
Underwriting Performance and Expense Management
The loss ratio declined to 56.7% from 66.3% in Q1 2024, primarily due to fewer weather-related and large fire losses, as well as favorable reserve developments. Weather-related losses accounted for $8.6 million compared to $10.8 million in the prior year, while large fire losses fell significantly to $7.7 million from $15.0 million.
The expense ratio improved to 34.6% from 35.7%, benefiting from cost management initiatives despite higher underwriting expenses related to incentives and ongoing system modernization projects.
Investment Portfolio Highlights
Net investment income rose 9.2% to $12.0 million, reflecting higher yields and increased invested assets. However, the company reported net investment losses of $0.5 million, contrasting with gains of $2.1 million in Q1 2024, due to declines in the market value of equity investments.
Book value per share rose to $16.24 as of March 31, 2025, up from $14.53 a year earlier, reflecting earnings growth and unrealized investment gains.
Outlook
Donegal Group’s strategic focus on commercial lines growth and operational efficiency positions the company for sustained success in a competitive insurance landscape. “We are confident in our ability to achieve sustainable excellent financial performance and capitalize on future growth opportunities that will further enhance shareholder value over time,” Burke concluded.
The company remains well-positioned to leverage its disciplined approach in driving profitability and weathering future challenges while delivering value for stakeholders.
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