Donegal Group Inc. reported its results of operations for the quarter and nine months ended Sept. 30.
The company reported net income of $4,001,385, or $.40 per share on a diluted basis, compared to $3,015,676, or $.33 per share on a diluted basis, in the third quarter of 2002. These results were achieved despite property claims from Hurricane Isabel that totaled $1 million, net of reinsurance, and reduced net income by $650,000, or $.07 per share on a diluted basis, for the quarter ended Sept. 30.
The company’s strong underwriting results continued through the third quarter of this year with a combined ratio for the third quarter of 96.8 percent, compared to 99.5 percent for the third quarter of 2002. The company’s loss ratio showed improvement from a year earlier to 65.9 percent for the third quarter of 2003 compared to 69.3 percent for the third quarter of 2002 despite the hurricane-related losses that added approximately 2 percentage points to the third quarter 2003 loss ratio.
The strong results helped the company increase its book value per common share to $15.69 as of Sept. 30.
“Our third quarter underwriting results were solid despite Hurricane Isabel hitting our primary operating area,” stated Donald Nikolaus, president and CEO of Donegal Group. Nikolaus further stated that “The underwriting discipline to restrict catastrophe exposures, combined with our reinsurance programs, have limited the financial impact of a major weather event just as they were designed to do.”
Net income was $13,114,770, or $1.37 per share on a diluted basis, for the first nine months of 2003, compared to $8,375,226, or $.91 per share on a diluted basis for the first nine months of 2002. The company’s net income for the first three quarters of 2003 exceeded its net income for all of 2002. The company’s combined ratio for the nine months ended Sept. 30, 2003 was 95.4 percent, compared to 100.2 percent for the nine months ended Sept. 30, 2002, with all major lines of business showing improvement over the prior year.
Revenues for the third quarter of 2003 were $54,285,753, an increase of 6.3 percent over a year earlier, with net premiums earned for the third quarter of $49,719,584, also a 6.3 percent increase over the third quarter of 2002. The lower interest rate environment impacted investment income which decreased 8.2 percent to $3,326,603 compared to $3,623,262 for the third quarter of 2002 despite an increase in average invested assets.
Donegal Group Inc. is a regional property/casualty insurance holding company doing business in 14 Mid-Atlantic and Southern states through its insurance subsidiaries, Atlantic States Insurance Company and Southern Insurance Company of Virginia.
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