Donegal Group Inc. (NASDAQ:DGICA), a $552 million insurance company trading near its 52-week high of $16.70, recently witnessed notable stock activity by Donegal Mutual Insurance Co., a significant stakeholder in the company. According to a recent SEC filing, Donegal Mutual Insurance Co. acquired a total of 16,800 shares of Donegal Group's Class A Common Stock over two transactions. InvestingPro analysis suggests the stock is currently undervalued.
The purchases were made on November 27 and November 29, with the stock prices ranging from $16.4729 to $16.5949 per share. The total value of these transactions amounted to $277,757. Following these acquisitions, Donegal Mutual Insurance Co. holds 12,738,250 shares of Class A Common Stock in Donegal Group Inc. Additionally, they maintain a holding of 4,708,570 shares of Class B Common Stock.
This activity reflects continued interest and investment in Donegal Group by one of its major shareholders.
In other recent news, Donegal Group reported a net income of $16.8 million, or $0.51 per Class A share, in its Third Quarter 2024 Earnings Call. Despite facing $6 million in pre-tax catastrophe losses due to Hurricane Helene, the company's net premiums earned rose to $238 million, marking a 6% increase. Alongside, the combined ratio improved to 96.4%, showcasing resilience amid industry challenges and severe weather impacts.
The company has also completed strategic exits from commercial policies in Georgia and Alabama, and plans for software enhancements to improve policy management in January 2025. Donegal Group's growth in net premiums written in both commercial and personal lines is noteworthy, with a 6.4% and 5.4% increase respectively.
However, the company did face some challenges with a decline in policies-in-force in personal lines by 7.3% due to targeted non-renewals. Looking ahead, Donegal Group is aligning strategies for growth across regions with a cohesive business plan for 2025, and is working on securing rate increases to mitigate inflation and claims costs. It aims to improve the expense ratio by two points by the end of 2025 through disciplined expense reduction.
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