MARIETTA, PA — Donegal Group Inc. (NASDAQ: DGICA) and (NASDAQ: DGICB) has reported a significant improvement in its financial results for the third quarter of 2024, showcasing a robust rebound from the challenges faced in the previous year. The company announced a net income of $16.8 million, equivalent to 51 cents per diluted Class A share, a substantial recovery from a net loss of $0.8 million, or 2 cents per share, in the same quarter last year.
Premium Growth and Underwriting Success
The third quarter demonstrated a strong performance in premium growth, with net premiums earned increasing by 6.0% to $238.0 million. Net premiums written rose by 5.9% to $232.2 million, driven by a solid 6.4% increase in commercial lines and a 5.4% rise in personal lines. This growth, despite strategic efforts to control it for better profitability, underscores the effectiveness of Donegal’s business strategies.
Kevin G. Burke, President and CEO of Donegal Group Inc., expressed satisfaction with the results, stating, “We are pleased that many of the strategic initiatives we implemented in recent years contributed to significant improvement in our financial results for the third quarter of 2024.” He noted the company’s successful exit from certain markets and the solid new business writings that contributed to these gains.
The combined ratio, an indicator of underwriting efficiency, improved significantly to 96.4% from 104.5% in the previous year, reflecting the impact of strategic underwriting initiatives and renewal rate hikes. Despite higher-than-average weather-related losses, notably from Hurricane Helene, core loss ratios improved across major business lines.
Investment Operations and Shareholder Returns
Donegal’s prudent investment strategy, focusing on high-quality securities, led to a net investment income of $10.8 million, benefiting from a favorable average yield. The company also achieved net investment gains of $1.9 million, primarily due to unrealized gains in equity securities, a stark contrast to last year’s losses.
Reaffirming its commitment to shareholder value, Donegal declared a quarterly cash dividend of $0.1725 per share for Class A common stock and $0.155 for Class B, payable on November 15, 2024. The company’s book value per share increased to $15.22, reflecting both net income and unrealized portfolio gains.
Kevin G. Burke concluded with optimism, stating, “We have growing confidence that the continuing execution of our strategies will deliver sustained excellent financial performance.” As Donegal Group Inc. moves forward, these results highlight its resilience and strategic foresight in navigating the complex insurance landscape.
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