Donegal Group Inc. Announces Fourth Quarter and Full Year 2025 Results

MARIETTA, Pa., Feb. 19, 2026 (GLOBE NEWSWIRE) -- Donegal Group Inc. (NASDAQ:DGICA) and (NASDAQ:DGICB) today reported its financial results for the fourth quarter and full year ended December 31, 2025.

Significant items for fourth quarter of 2025 (all comparisons to fourth quarter of 2024):

• Net premiums earned decreased 4.1% to $226.9 million

• Combined ratio of 96.3%, compared to 92.9%

• Net income of $17.2 million, or 47 cents per diluted Class A share, compared to $24.0 million, or 70 cents per diluted Class A share

• Net income included net investment losses (after tax) of $1.4 million, or 3 cents per diluted Class A share, compared to net investment gains of $0.2 million, or 1 cent per diluted Class A share

Significant items for full year of 2025 (all comparisons to full year of 2024):

• Net premiums earned decreased 1.7% to $921.2 million

• Combined ratio of 95.4%, compared to 98.6%

• Net income of $79.3 million, or $2.18 per diluted Class A share, compared to $50.9 million, or $1.53 per diluted Class A share

• Net income included net investment gains (after tax) of $0.5 million, or 1 cent per diluted Class A share, compared to $3.9 million, or 12 cents per diluted Class A share

• Return on average equity of 13.4%, compared to 9.9%

• Book value per share of $17.33 at December 31, 2025, compared to $15.36 at year-end 2024

Financial Summary

¹The “Definitions of Non-GAAP Financial Measures” section of this release defines and reconciles data that we prepare on an accounting basis other than U.S. generally accepted accounting principles (“GAAP”).

²Not meaningful.

Management Commentary

Kevin G. Burke, President and Chief Executive Officer of Donegal Group Inc., stated, “We are pleased with our solid operating performance in the fourth quarter and full year of 2025 that reflected the favorable impact of numerous strategic decisions and intentional actions over the past several years. Our focus for 2026 is the pursuit of modest premium growth through our independent agency partners in geographies and classes of business we have identified as attractive. We remain committed to our strategic plan that includes capitalizing on opportunities for profitable growth as a contributor to sustained excellent financial performance.

“In our commercial lines business segment, we achieved solid underlying results for the fourth quarter of 2025, which were masked somewhat by the impact of a few large fires and a late-reported prior-year casualty loss. Due in large part to a refinement in our commercial underwriting appetite, we missed our 2025 business plan target for new business writings. For 2026, we have actively engaged our agents in the development of detailed growth plans and the introduction of new compensation incentives to encourage increased submissions of new quality accounts.

“In our personal lines business segment, we achieved continued excellent profitability and are making good progress on the incremental conversion of remaining legacy policies to our new platform that will be completed in June 2027. We expect the decline in personal lines premiums we experienced during 2025 will subside gradually throughout 2026 as we take measured steps to increase our new business success rate, while striving to maintain a targeted level of profitability in this segment in line with our long-term strategic and financial objectives.

“We believe that we are well positioned as a regional insurance group to provide excellent service to our independent agents and policyholders, as we continue to make prudent investments in talent, systems and capabilities. Building upon the strong foundation laid over the past several years, we are executing strategies that we believe will enhance the value of our stockholders’ investment over time.”

Insurance Operations

Donegal Group is an insurance holding company whose insurance subsidiaries and affiliates offer property and casualty lines of insurance in three Mid-Atlantic states (Delaware, Maryland and Pennsylvania), five Southern states (Georgia, North Carolina, South Carolina, Tennessee and Virginia), eight Midwestern states (Illinois, Indiana, Iowa, Michigan, Nebraska, Ohio, South Dakota and Wisconsin) and five Southwestern states (Arizona, Colorado, New Mexico, Texas and Utah). Donegal Mutual Insurance Company and the insurance subsidiaries of Donegal Group conduct business together as the Donegal Insurance Group.

Net Premiums Written 

The 3.4% decrease in net premiums written¹ for the fourth quarter of 2025 compared to the fourth quarter of 2024, as shown in the table above, represents the combination of 3.2% growth in commercial lines net premiums written and a 12.7% decrease in personal lines net premiums written. The $7.1 million decrease in net premiums written for the fourth quarter of 2025 compared to the fourth quarter of 2024 included:

• Commercial Lines: $4.0 million increase that we attribute primarily to solid premium retention and a continuation of renewal premium increases in lines other than workers’ compensation, offset partially by lower new business writings.

• Personal Lines: $11.1 million decrease that we attribute primarily to planned attrition due to lower new business writings, offset partially by a continuation of renewal premium rate increases and solid retention.

The $37.5 million decrease in net premiums written for the full year of 2025 compared to the full year of 2024 included:

• Commercial Lines: $16.0 million increase that we attribute primarily to solid premium retention and a continuation of renewal premium increases in lines other than workers’ compensation, offset partially by lower new business writings.

• Personal Lines: $53.5 million decrease that we attribute primarily to planned attrition due to lower new business writings and strategic non-renewal actions, offset partially by a continuation of renewal premium rate increases and solid retention.

Underwriting Performance

We evaluate the performance of our commercial lines and personal lines segments primarily based upon the underwriting results of our insurance subsidiaries as determined under statutory accounting practices. The following table presents comparative details with respect to the GAAP and statutory combined ratios¹ for the three months and full years ended December 31, 2025 and 2024:

Loss Ratio – Fourth Quarter

For the fourth quarter of 2025, the loss ratio increased to 61.1%, compared to 59.8% for the fourth quarter of 2024. The core loss ratio, which excludes weather-related losses, large fire losses and net development of reserves for losses incurred in prior accident years, was 50.3% for the fourth quarter of 2025, which compared favorably to 52.3% for the fourth quarter of 2024. For the commercial lines segment, the core loss ratio of 52.5% for the fourth quarter of 2025 decreased from 55.2% for the fourth quarter of 2024, due largely to lower casualty loss severity. For the personal lines segment, the core loss ratio of 46.8% for the fourth quarter of 2025 compared to 48.4% for the fourth quarter of 2024, due largely to lower claim frequency and severity in the personal automobile line of business.

Weather-related losses of $8.2 million, or 3.6 percentage points of the loss ratio, for the fourth quarter of 2025 increased from $7.7 million, or 3.3 percentage points of the loss ratio, for the fourth quarter of 2024. Our insurance subsidiaries did not incur significant losses from any single weather event during the fourth quarters of 2025 or 2024. The impact of weather-related loss activity to the loss ratio for the fourth quarter of 2025 was lower than our previous five-year average of 5.2 percentage points for fourth quarter weather-related losses.

Large fire losses, which we define as individual fire losses in excess of $50,000, were $14.1 million, or 6.2 percentage points of the loss ratio, for the fourth quarter of 2025, compared to $9.5 million, or 4.0 percentage points of the loss ratio, for the fourth quarter of 2024. The increase primarily reflected higher average severity in both commercial property and homeowner fire losses.

Net development of reserves for losses incurred in prior accident years of $2.2 million increased the loss ratio for the fourth quarter of 2025 by 1.0 percentage point, compared to virtually no impact for the fourth quarter of 2024. For the fourth quarter of 2025, our insurance subsidiaries experienced unfavorable development due primarily to higher-than-expected emergence of umbrella liability and commercial automobile losses that was largely offset by favorable development in the personal automobile, commercial multi-peril and worker’s compensation lines of business. For the fourth quarter of 2024, our insurance subsidiaries experienced unfavorable development primarily in personal automobile and commercial automobile losses that was offset by favorable development in commercial multi-peril losses and other lines of business.

Loss Ratio – Full Year

For the full year of 2025, the loss ratio decreased to 61.3%, compared to 64.5% for the full year of 2024. The 2025 core loss ratio decreased by 2.6 percentage points to 51.4% from 54.0% for 2024. For the commercial lines segment, the core loss ratio of 54.8% for 2025 was in line with 54.4% for 2024. For the personal lines segment, the core loss ratio of 46.3% for 2025 decreased from 53.5% in 2024, due largely to the favorable impact of premium rate increases on net premiums earned for that segment.

Weather-related losses for the full year of 2025 were $56.9 million, or 6.2 percentage points of the loss ratio, compared $67.7 million, or 7.2 percentage points of the loss ratio, for the full year of 2024. The loss ratio impact of weather-related losses for the full year of 2025 was modestly lower than the previous five-year average of 7.2 percentage points of the loss ratio.

Large fire losses were $43.9 million, or 4.8 percentage points of the loss ratio, for the full year of 2025, a slight reduction compared to $45.8 million, or 4.9 percentage points of the loss ratio, for the full year of 2024.

Net favorable development of reserves for losses incurred in prior accident years of $10.3 million reduced the loss ratio for the full year of 2025 by 1.1 percentage points. For the full year of 2025, our insurance subsidiaries experienced favorable development in losses primarily in the commercial multi-peril, personal automobile, commercial automobile, homeowners, other personal lines and workers’ compensation lines of business, offset partially by unfavorable development in the other commercial lines of business (which is primarily umbrella liability). Net favorable development of reserves for losses incurred in prior accident years of $15.0 million reduced the loss ratio for the full year of 2024 by 1.6 percentage points. For the full year of 2024, our insurance subsidiaries experienced favorable development in losses primarily in the commercial multi-peril, personal automobile and homeowners lines of business, offset partially by unfavorable development in the workers’ compensation and commercial automobile lines of business.

Expense Ratio

The expense ratio was 34.9% for the fourth quarter of 2025, compared to 32.8% for the fourth quarter of 2024. The expense ratio was 33.8% for the full year of 2025, compared to 33.7% for the full year of 2024. The increase in the expense ratio for the fourth quarter of 2025 primarily reflected higher underwriting-based agency incentive costs and lower net earned premiums. The impact from costs that Donegal Mutual Insurance Company allocated to our insurance subsidiaries related to its systems modernization project represented approximately 1.5 percentage points of the expense ratio for the fourth quarter of 2025, with the modest increase compared to recent quarterly periods due to costs related to the final two software releases that were placed into service during the third quarter of 2025. Allocated costs related to the project represented approximately 1.2 percentage points of the expense ratio for the full year of 2025. We expect that the expense ratio impact of allocated costs related to the project will be 1.3 percentage points for the full year of 2026, subsiding gradually over the next several years.

Investment Operations

Donegal Group’s investment strategy is to generate an appropriate amount of after-tax income on its invested assets while minimizing credit risk through investment in high-quality securities. As a result, we had invested 94.5% of our consolidated investment portfolio in diversified, highly rated and marketable fixed-maturity securities at December 31, 2025.

Net investment income of $14.2 million for the fourth quarter of 2025 increased 17.5% compared to $12.1 million in net investment income for the fourth quarter of 2024, due primarily to higher average invested assets and an increase in the average investment yield compared to the prior-year fourth quarter. Net investment income of $52.6 million for the full year of 2025 increased 17.2% compared to $44.9 million for the full year of 2024, due primarily to higher average invested assets and an increase in the average investment yield compared to the prior year.

Net investment losses were $1.7 million for the fourth quarter of 2025, compared to minimal net investment gains for the fourth quarter of 2024. We attribute the net investment losses for the fourth quarter of 2025 to net realized investment losses on the strategic sales of available-for-sale fixed-maturity securities, offset partially by the quarterly increase in the market value of the equity securities held at December 31, 2025. We attribute the minimal gains in the fourth quarter of 2024 to the quarterly increase in the market value of the equity securities held at December 31, 2024.

Net investment gains were $0.6 million for the full year of 2025, compared to $5.0 million for the full year of 2024. We attribute the gains to the increase in the market value of the equity securities held at the end of the respective periods, with the increase in 2025 offset largely by net realized investment losses on the strategic sales of available-for-sale fixed-maturity securities.

Our book value per share was $17.33 at December 31, 2025, compared to $15.36 at December 31, 2024, with the increase attributable to net income as well as $19.8 million of after-tax unrealized gains within our available-for-sale fixed-maturity portfolio during 2025 that increased our book value by $0.56 per share, offset partially by the cash dividends we declared during the year.

Definitions of Non-GAAP Financial Measures

We prepare our consolidated financial statements on the basis of GAAP. Our insurance subsidiaries also prepare financial statements based on statutory accounting principles state insurance regulators prescribe or permit (“SAP”). In addition to using GAAP-based performance measurements, we also utilize certain non-GAAP financial measures that we believe provide value in managing our business and for comparison to the financial results of our peers. These non-GAAP measures are net premiums written, operating income or loss and statutory combined ratio.

Net premiums written and operating income or loss are non-GAAP financial measures investors in insurance companies commonly use. We define net premiums written as the amount of full-term premiums our insurance subsidiaries record for policies effective within a given period less premiums our insurance subsidiaries cede to reinsurers. We define operating income or loss as net income or loss excluding after-tax net investment gains or losses, after-tax restructuring charges and other significant non-recurring items. Because our calculation of operating income or loss may differ from similar measures other companies use, investors should exercise caution when comparing our measure of operating income or loss to the measure of other companies.

The following table provides a reconciliation of net premiums earned to net premiums written for the periods indicated:

The following table provides a reconciliation of net income to operating income for the periods indicated:

The statutory combined ratio is a standard non-GAAP measurement of underwriting profitability that is based upon amounts determined under SAP. The statutory combined ratio is the sum of:

• the statutory loss ratio, which is the ratio of calendar-year incurred losses and loss expenses, excluding anticipated salvage and subrogation recoveries, to premiums earned;

• the statutory expense ratio, which is the ratio of expenses incurred for net commissions, premium taxes and underwriting expenses to premiums written; and

• the statutory dividend ratio, which is the ratio of dividends to holders of workers’ compensation policies to premiums earned.
  

The statutory combined ratio does not reflect investment income, federal income taxes or other non-operating income or expense. A statutory combined ratio of less than 100% generally indicates underwriting profitability.

Dividend Information

On December 18, 2025, we declared regular quarterly cash dividends of $0.1825 per share for our Class A common stock and $0.165 per share for our Class B common stock, which we paid on February 17, 2026 to stockholders of record as of the close of business on February 3, 2026.

Pre-Recorded Webcast

At approximately 8:30 am EST on Thursday, February 19, 2026, we will make available in the Investors section of our website a pre-recorded audio webcast featuring management commentary on our quarterly and annual results and general business updates. You may listen to the pre-recorded webcast by accessing the link on our website at http://investors.donegalgroup.com. A supplemental investor presentation is also available via our website.

About the Company

Donegal Group Inc. is an insurance holding company whose insurance subsidiaries and affiliates offer property and casualty lines of insurance in certain Mid-Atlantic, Midwestern, Southern and Southwestern states. Donegal Mutual Insurance Company and the insurance subsidiaries of Donegal Group Inc. conduct business together as the Donegal Insurance Group. The Donegal Insurance Group has an A.M. Best rating of A (Excellent).

The Class A common stock and Class B common stock of Donegal Group Inc. trade on the NASDAQ Global Select Market under the symbols DGICA and DGICB, respectively. We are focused on several primary strategies, including achieving sustained excellent financial performance, advancing our operational and digital capabilities, capitalizing on opportunities to grow profitably and providing superior experiences to our agents, policyholders and employees.

Safe Harbor

We base all statements contained in this release that are not historic facts on our current expectations. Such statements are forward-looking in nature (as defined in the Private Securities Litigation Reform Act of 1995) and necessarily involve risks and uncertainties. Forward-looking statements we make may be identified by our use of words such as “will,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “seek,” “estimate” and similar expressions. Our actual results could vary materially from our forward-looking statements. The factors that could cause our actual results to vary materially from the forward-looking statements we have previously made include, but are not limited to, adverse litigation and other trends that could increase our loss costs (including social inflation, labor shortages and escalating medical, automobile and property repair costs, including due to tariffs), adverse and catastrophic weather events (including from changing climate conditions), our ability to maintain profitable operations (including our ability to underwrite risks effectively and charge adequate premium rates), the adequacy of the loss and loss expense reserves of our insurance subsidiaries, the availability and successful operation of the information technology systems our insurance subsidiaries utilize, the successful development of new information technology systems to allow our insurance subsidiaries to compete effectively, business and economic conditions in the areas in which we and our insurance subsidiaries operate, interest rates, competition from various insurance and other financial businesses, terrorism, the availability and cost of reinsurance, legal and judicial developments, changes in regulatory requirements, our ability to attract and retain independent insurance agents, changes in our A.M. Best rating and the other risks that we describe from time to time in our filings with the Securities and Exchange Commission. We disclaim any obligation to update such statements or to announce publicly the results of any revisions that we may make to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Investor Relations Contacts

Jeremy Hellman, Vice President, The Equity Group Inc. 
Phone: (212) 836-9626
E-mail: [email protected]

Jeffrey D. Miller, Executive Vice President & Chief Financial Officer
Phone: (717) 426-1931
E-mail: [email protected]

Financial Supplement