US insurance holding company Donegal Group Inc. has announced its financial results for the first quarter of 2025, reporting an increase in net income to $25.2 million and in net premiums earned, $232.7 million, as well as an improved combined ratio of 91.6%.
In Q1 2024, the firm’s net income stood at $6.0 million, approximately 76.19% less than Q1 2025’s, net premiums were $232.7 million, 2.2% lower than in this year’s first quarter, which also saw a higher combined ratio of 102.4%.
Kevin G. Burke, President and Chief Executive Officer of Donegal Group Inc., commented: “We are pleased that positive momentum, which began to emerge in the second half of 2024, continued into the first quarter of 2025 with our achievement of record earnings for the second straight quarter.
“We believe this accomplishment reflects the deliberate actions and strong operational discipline of our team in prioritizing sustained profitability while pursuing targeted premium growth.”
According to Burke, Donegal attributed the improvement in Q1 0225’s combined ratio “to core loss ratio decreases that resulted from the strategic initiatives and profit improvement plans we implemented over the past several years, coupled with lower-than-average weather-related and large fire losses and a higher level of favourable development of reserves related to prior accident years.”
Q1 2025’s net income also included net investment losses (after tax) of $0.4 million, or 1 cent per diluted Class A share, compared to net investment gains (after tax) of $1.7 million, or 5 cents per diluted Class A share.
Donegal reported net premiums written for Q1 2025 of $247.09 million, 1.7% lower than the $251.44 million seen in Q1 2024. According to Donegal, this decrease represents the net combination of a 3.3% increase in commercial lines net premiums written and a 9.9% decrease in personal lines net premiums written.
The $4.4 million decrease in net premiums written for the first quarter of 2025 compared to the first quarter of 2024 resulted from contrasting trends in the firm’s Commercial and Personal Lines.
Commercial Lines experienced a $5.1 million increase, primarily due to strong customer retention and continued renewal premium increases (excluding workers’ compensation), which was partially offset by lower new business.
Conversely, Personal Lines saw a $9.5 million decrease, mainly driven by planned attrition through lower new business and non-renewals. This decrease was partially mitigated by ongoing renewal premium rate increases and solid retention.
Burke noted: ““In our commercial lines business, we are actively promoting our small commercial products and capabilities while actively seeking to grow our middle market business segment. In our personal lines business, our strategic focus remains on maintaining profitability through rate adequacy. Our personal lines growth in the first quarter of 2025 was constrained by two intentional strategies.
“We limited new business volume and continued the non-renewal of a legacy Maryland book of business. We are taking proactive steps to stabilize personal lines premium level as the year progresses, and we will continue to emphasize higher levels of profitable growth in commercial lines that we believe will lead to long-term success.”
He concluded: “We believe we are well positioned to navigate the evolving insurance landscape, as we continue to enhance and refine our systems and operational capabilities. We are confident in our ability to achieve sustainable excellent financial performance and capitalize on future growth opportunities that will further enhance shareholder value over time.”
