Donegal Group Inc. of Marietta, Penn., today reported net income of $2.6 million for the second quarter of 2013, compared to $2.0 million net income for second quarter of 2012.
The company said the profit increase is primarily attributable to improved underwriting results, higher premium rates and less severe weather in its marketing regions.
Operating income for the second quarter was $1.8 million, up from $1.0 million a year ago.
The net premiums written for the second quarter were $140.6 million, up 7.2 percent compared to a year ago. The increase reflects continuing organic growth in commercial lines and the impact of premium rate increases, the insurer said.
The GAAP combined ratio for the latest quarter was 103.1 percent, improving from 105.4 percent a year ago.
Net investment income for the second quarter was $4.67 million, down 5 percent from $4.92 million a year ago.
“”Compared to the prior-year quarter, we benefited from less severe weather in our marketing regions during the second quarter of 2013. In addition, the higher premium rates we have been able to implement continue to contribute to our improved results in selected lines of business, particularly personal automobile and homeowners,” CEO Donald Nikolaus said.
Nikolaus added, “Our achievement of overall growth and improved profitability for our insurance operations in 2013 illustrates the success of several of our key initiatives.”
“In particular, we continue to see strong commercial lines premium growth, with commercial lines writings rising to 42.3 percent of our total writings for the first half of this year,” he said.
Nikolaus said commercial lines renewal premium increases remain in the 5-10 percent range on average, while new business growth within this sector continues to be strong.
“We remain focused on increasing our share of business within our existing independent agencies and expanding the reach of our commercial products in regions where we have acquired companies that historically offered primarily personal lines of insurance,” he said.
And because the risk characteristics of the commercial lines business the insurer is adding through these initiatives remain similar to its historic writings, the company believes the expanded commercial book of business will be similarly profitable in the long run, Nikolaus said.
The company is also seeing measurable progress toward targeted profitability levels in its personal lines insurance, Nikolaus said. “Our results have benefited from rate increases and our continuing underwriting initiatives,” he said.
Topics Profit Loss
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