Donegal Group Inc. (NASDAQ:DGICA), a $551 million market cap insurance company, recently saw a significant stock acquisition by its major shareholder, Donegal Mutual Insurance Co. According to a recent SEC filing, Donegal Mutual Insurance Co. purchased a total of 18,354 shares of Donegal Group's Class A Common Stock over two days. The timing is notable as InvestingPro data shows the stock trading near its 52-week high of $17.00, having gained over 29% in the past six months. The transactions, which took place on December 2 and December 3, 2024, were executed at prices ranging from $16.7288 to $16.7628 per share, amounting to a total value of $307,380.
These purchases have increased Donegal Mutual Insurance Co.'s holdings to 12,756,604 shares of Class A Common Stock. Additionally, the company holds 4,708,570 shares of Class B Common Stock, maintaining its status as a significant stakeholder in Donegal Group Inc.
In other recent news, Donegal Group reported a Q3 net income of $16.8 million, or $0.51 per Class A share, despite enduring $6 million in pre-tax catastrophe losses due to Hurricane Helene. The company's net premiums earned rose by 6% to reach $238 million, and the combined ratio showed significant improvement, settling at 96.4%. These recent developments highlight Donegal Group's resilience amid industry challenges and severe weather impacts.
The company has also reported a growth in its commercial lines by 6.4% and personal lines by 5.4%. Despite facing a negative frequency trend in the workers' compensation line due to wage inflation, Donegal Group's strategic focus on small business growth and software enhancements, coupled with geographic diversification, has been instrumental in navigating through these challenges.
In addition to these developments, Donegal Group has successfully completed strategic exits from commercial policies in Georgia and Alabama. The company is also planning software enhancements to improve policy management by January 2025. As a part of its future strategy, Donegal Group is working on securing rate increases to mitigate inflation and claims costs, and aims to improve the expense ratio by two points by the end of 2025.
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