The Donegal Group Inc., based in Marietta Pa., announced that its operating results for the quarter ended March 31, 2002 showed net income of $2,180,716, or $.24 per share on a diluted basis, a decline of around 26 percent from the $2,954,595, or $.33 per share, in the same period last year.
Although the results were down compared to last year’s, Donegal has significantly strengthened its operations in comparison to more recent accounting periods. Operating income for the first quarter was $2,097,043, or $.23 per share on a diluted basis, compared to an operating loss of $572,172 for the fourth quarter of 2001.
“The improvement in operating results in the first quarter of 2002, compared to the end of 2001, is an enormous step towards our goal of returning the Company to the levels of profitability we expect,” stated Donald H. Nikolaus, Donegal’s President and CEO. “Rates and premium increases are continuing to hold in the marketplace and coupling those with our expense reduction efforts, which will begin to kick in during the second quarter, the outlook for improved profitability is good.”
The announcement indicated that “revenues for the first quarter of 2002 were $50,034,046 an increase of 11.7% over a year earlier, with premiums earned for the first quarter of $45,452,260, a 13.5% increase over the first quarter of 2001.”
It also improved its combined ratio which dropped to 101.8% during the quarter, compared to 111.4% in the fourth quarter of 2001, and indicated that this was primarily due to a reduction in its loss ratio from 78.3% in the last quarter of 2001 to 68.9% in the first quarter of the current year, as well as an improvement in its expense ratio.
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