Donegal Group’s Q4 Profit Up 54% to $9.6M

February 21, 2014

Donegal Group Inc., based in Marietta, Penn., today posted $9.56 million in net income for its 2013 fourth quarter, up 54 percent from $6.22 million net income posted during the 2012 fourth quarter. For the full year 2013, the net income was $26.32 million, a 14 percent increase from $23.09 million for the full year 2012.

Total net premiums written for the fourth quarter were $123.77 million, up 7.9 percent compared to $114.70 million during the prior year fourth quarter. (Personal lines net premiums written rose 6.2 percent to $76.41 million. Commercial lines net premiums written rose 10.7 percent to $47.36 million.) The GAAP combined ratio for the fourth quarter was 94.9 percent, improving from 101.7 percent a year ago.

For the full year 2013, the total net premiums were $533.43 million, up 7.4 percent from $496.45 million for 2012. (Personal lines net premiums written rose 3.4 percent to $318.70 million. Commercial lines net premiums written rose 14.1 percent to $214.73 million.) The GAAP combined ratio for 2013 was 98.8 percent, improving from 101.6 percent in 2012.

The net investment income for the fourth quarter was $4.69 million, down 14 percent compared to $5.45 million reported a year ago. For the full year 2013, the net investment income was $18.80 million, down 6.8 percent from $20.17 million in 2012.

“Donegal Group ended 2013 on a positive note, reflecting favorable market conditions that were present in our operating regions throughout the past year as well as our achievement of key milestones marking progress toward our long-term performance objectives,” said President and Chief Executive Officer Donald H. Nikolaus. “Of note, for the second consecutive quarter, our GAAP and statutory combined ratios for the fourth quarter of 2013 were the best we have achieved for any quarter during the past five years.”

“Our commercial lines business performed well against that standard over the past year. We achieved solid new commercial business growth during 2013 and continued to see renewal premium increases in the 5-7 percent range throughout the fourth quarter,” Nikolaus said.

For the full year of 2013, the statutory combined ratio for the commercial business segment was 95.7 percent, Nikolaus noted. “We believe our regional market presence and our proven commitment to the small to mid-size commercial insurance market provide potential for continuing progress in expanding this business segment in 2014 and beyond.”

In the personal lines business, the company’s strategic underwriting initiatives contributed to improved profitability with a full-year statutory combined ratio for this business segment of 98.8 percent, Nikolaus said. “For the year 2013, losses from weather events and large fire losses were below the prior year level. Personal lines net written premium growth primarily reflected rate increases we have implemented over the past year.”

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