Slide 1: Third Quarter 2024 Investor Presentation
Third Quarter 2024 Investor Presentation October 24, 2024 Kevin G. Burke President and Chief Executive Officer Jeffrey D. Miller Executive Vice President and Chief Financial Officer www.donegalgroup.com
Slide 2: Safe Harbor
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 st
Slide 3: Company Overview
Company Overview Donegal Group Inc. is an insurance holding company whose insurance subsidiaries and affiliates offer commercial and personal lines of property and casualty insurance to businesses and individuals in 21 Mid-Atlantic, Midwestern, Southern and Southwestern states through approximately
Slide 4: Strategies to Provide Value to Stakeholders
Strategies to Provide Value to Stakeholders Strategically modernizing Achieving sustained Capitalizing on Delivering a superior our operations and excellent financial opportunities to grow experience to our agents processes to transform our performance profitably and policyholders business Implement
Slide 5: Significant Benefits to Shareholders from Mutual Relationship
Significant Benefits to Shareholders from Mutual Relationship • Pooling agreement fosters an environment of continuity and maintains superior employee relations in which the business can grow. • Shared combined business plan to enhance market penetration and underwriting profitability. Rated A (Exce
Slide 6: Valuation vs. Multi-Line Insurers
Valuation vs. Multi-Line Insurers Price-to-Book Multiple 3.64 3.02 2.78 2.58 Peer Average 2.06x 2.25 2.09 2.15 1.91 1.66 1.48 0.97 0.73 0.44 DGICA: Price and Book Value as of 09/30/2024 Peer Data Source: FactSet; Price as of 09/30/2024 and Book Value as of latest reported quarter as of 10/21/2024. w
Slide 7: Mix of Commercial and Personal Lines
Mix of Commercial and Personal Lines Net Premiums Written by Line of Business Year Ended December 31, 2023 Commercial Lines Other Personal Commercial Auto 1.3% Commercial Multi-Peril 59% of NPW Commercial Auto 19.5% Workers’ Comp Homeowners Other Commercial 15.6% Workers' Comp 12.0% Personal Auto Co
Slide 8: Continued Emphasis on Growth in Commercial Lines
Continued Emphasis on Growth in Commercial Lines 100.0% 115,000 95.0% 91.0% 89.7% 86.6% 86.8% 87.2% 90.0% 86.4% 85.5% 86.2% 85.4% 85.4% 106,686 84.4% 105,549 85.0% 105,000 100,075 80.0% 99,210 99,325 97,878 96,316 96,562 75.0% 95,000 91,254 70.0% 89,971 87,051 65.0% 85,000 60.0% 55.0% 75,000 50.0% 2
Slide 9: Third Quarter 2024 – Overview
Third Quarter 2024 – Overview Solid Premium High-Quality Investment Underwriting Results Growth Portfolio Avg. Net Premiums Net Investment Loss Ratio Expense Ratio Investment Earned Income Yield $238.0M 61.5% 34.5% $10.8M 3.3% 6.0% 8.3 pts (0.4 pts) 2.8% 20 bps vs. Q3’23 vs. Q3’23 vs. Q3’23 vs. Q3’2
Slide 10: Financial Results – Third Quarter 2024
Financial Results – Third Quarter 2024 (dollars in thousands, except per share data) Q3’24 Q3’23 Change Net Premiums Written $232,208 $219,186 5.9% Net Premiums Earned $237,957 $224,393 6.0% Better/(Worse) Loss Ratio 61.5% 69.8% 8.3 pts Core 50.1% 56.7% 6.6 pts Weather 10.3% 11.5% 1.2 pts Large Fire
Slide 11: Third Quarter 2024 - Results by Line of Business
Third Quarter 2024 - Results by Line of Business • Continued renewal premium increases averaging ~12.6% (13.6% excl. workers’ compensation). • Commercial lines net premiums written increased $7.6 million, or +6.4%, primarily attributable to new business writings, strong premium retention, and a cont
Slide 12: Conservative Investment Strategy
Conservative Investment Strategy $1.4 Billion in Invested Assets As of September 30, 2024 • Quarterly net investment income increased 2.8% to $10.8 million. Corporate 31.2% Mortgage Backed • Investment portfolio emphasizes on high- Securities (MBS) 22.3% quality fixed-income securities. Treasury and
Slide 13: Investment Thesis
Investment Thesis • Well-established regional insurance group with a diverse book of business including both commercial and personal lines • Continuing the optimization of our mix of business with emphasis on commercial lines while strategically stabilizing personal lines to maintain a profitable bo
Slide 14: Contact Information
Contact Information Transfer Agent Investor Relations Contact Computershare Trust Company, N.A. Karin Daly P.O. Box 43006 Vice President, The Equity Group Providence, RI 02940 Phone: (212) 836-9623 Phone: 800-317-4445 kdaly@equityny.com www.computershare.com www.donegalgroup.com 14
Slide 15: Definitions of Non-GAAP Financial Measures
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-ba
Slide 16: Supplemental Information: Reconciliations
Supplemental Information: Reconciliations Reconciliation of net premiums earned to net premiums written: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 % Change 2024 2023 % Change (dollars in thousands) Reconciliation of Net Premiums Earned to Net Premiums Written Net pre
Slide 17: Supplemental Information: GAAP Loss Ratio Components
Supplemental Information: GAAP Loss Ratio Components Commercial Lines Personal Lines Workers' Commercial Automobile Compensation Multi-peril Other Total Automobile Homeowners Other Total Third Quarter 2024 Loss ratio - core losses 60.3% 50.3% 40.0% 36.4% 48.5% 67.3% 26.6% 50.8% 52.5% Loss ratio - we
Slide 18: Supplemental Information: GAAP Loss Ratio Components
Supplemental Information: GAAP Loss Ratio Components Commercial Lines Personal Lines Workers' Commercial Automobile Compensation Multi-peril Other Total Automobile Homeowners Other Total First Nine Months 2024 Loss ratio - core losses 64.5% 59.9% 45.4% 37.3% 54.1% 68.5% 30.8% 73.8% 55.2% Loss ratio