Donegal Group (DGICA) investor relations material

Executive summary

• Net premiums earned decreased 4.9% year-over-year to $221.4 million, with net premiums written down 3.2% to $239.3 million; commercial lines grew 2.2% while personal lines declined 13.1%.

• Net income dropped 54.3% to $11.5 million, with diluted EPS at $0.31, driven by higher weather-related and large fire losses that raised the combined ratio to 99.8% from 91.6%.

• Net investment income rose 19.2% to $14.3 million, supported by higher yields and a conservative fixed-income portfolio.

• Book value per share increased 8.0% year-over-year to $17.54 as of March 31, 2026.

• Management is maintaining underwriting and pricing discipline amid softening insurance market conditions and competitive pressures.

Financial highlights

• Net premiums earned: $221.4 million, down 4.9% year-over-year; net premiums written: $239.3 million, down 3.2%.

• Net income: $11.5 million, or $0.31 per diluted Class A share, down from $25.2 million, or $0.71 per share.

• Net investment income increased 19.2% to $14.3 million.

• Book value per share rose 8.0% to $17.54.

• Expense ratio increased to 35.4% from 34.6%, impacted by lower earned premiums and systems modernization costs.

Outlook and guidance

• Management expects personal lines premium declines to taper as corrective actions take effect in 2026.

• Continued focus on premium growth, expense targets, and profitability through collaborative planning and enhanced pricing sophistication.

• Ongoing investments in technology and operational efficiency are expected to drive future growth and profitability.

• Expense ratio impact from modernization project expected to subside gradually over several years.

• Projected $135 million in bond cash flow over the next 12 months at a 4.45% yield.