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MARIETTA, PA - On Thursday, Donegal Group Inc. (NASDAQ:DGICA) reported third-quarter earnings that exceeded analyst expectations, with net income rising 19.9% despite a slight decline in premium revenue.
The property and casualty insurer posted adjusted earnings of $0.52 per Class A share for the third quarter, beating the analyst estimate while revenue came in at $245.92 million. Net premiums earned decreased 3.4% to $229.8 million compared to the same period last year, while the company’s combined ratio improved to 95.9% from 96.4% a year earlier.
Net income rose to $20.1 million, or $0.55 per diluted Class A share, compared to $16.8 million, or $0.51 per diluted Class A share in the third quarter of 2024. The company’s annualized return on average equity was 13.0%, slightly down from 13.4% in the prior-year period.
"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."
Weather-related losses were $14.3 million, or 6.2 percentage points of the loss ratio, significantly lower than the $24.4 million, or 10.3 percentage points, recorded in the third quarter of 2024. The company noted this was the lowest third-quarter weather loss ratio in 20 years.
Commercial lines net premiums written increased 3.4% YoY, while personal lines net premiums written decreased 15.9%, resulting in an overall 5.4% decrease in total net premiums written for the quarter.
The company declared a regular quarterly cash dividend of $0.1825 per share for Class A common stock and $0.165 per share for Class B common stock, payable on November 17, 2025.
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