Reinsurance News

Donegal Group reports Q2 $8.2mn net loss

28th July 2022 - Author: Jack Willard

US primary holding company Donegal Group posted a net loss of $8.2 million, compared to a net income of $16.2 million in the prior year quarter.

donegal-group-logoNet premiums earned increased 6.0% to $204.1 million, compared to $192.4 million from Q2 21.

At the same time, net premiums written were $218.4 million, a 4.2% increase compared to $209.6 million from the same period last year.

The company also reported a combined ratio of 105.0%, compared to 96.1% from Q2 21.

Moreover, Donegal Groups net investment income of $8.2 million for the quarter was a 7.2% increase compared to $7.7 million from the second quarter of 2021.

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Kevin G. Burke, President and Chief Executive Officer, commented: “Our second quarter of 2022 results reflected a number of factors, including after-tax investment losses of $6.6 million related to the market-driven decline in the value of our equity investment holdings as well as elevated weather-related and large fire losses during the quarter.

“The above-average weather-related losses for the second quarter of 2022 resulted primarily from multiple localized wind and hail events, with only one event generating claims that exceeded our insurance subsidiaries’ reinsurance retention amount.

“While claim frequency levels generally remained consistent with historical trends, inflationary pressures contributed to higher loss costs in our homeowners, commercial multi-peril and automobile lines of business.”

He continues: “We expect the premium rate increases we have implemented to date, and plan to implement during the remainder of 2022 and 2023 will lead to improved results as those increases are earned over the terms of the underlying policies. In spite of the elevated loss activity in the second quarter, our underwriting results for the first half of 2022 largely met our expectations.

“We are making excellent progress on our ongoing strategic and business transformation initiatives. Maintaining a long-term view, we believe that we are well-positioned to enhance our profitability and achieve our operational and financial objectives over time.”

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