US primary holding company Donegal Group has posted a net income of $11.8 million for the third quarter of 2020, driven by better underwriting performance and investment gains.
The result represented a 128.2% increase from the $5.2 million that Donegal reported for the same period last year.
President and CEO Kevin Burke explained that the company benefitted from lower incurred losses in its personal lines segment last quarter.
This was partially due to pandemic lockdown measures resulting in a lower-than-average frequency of automobile and homeowners claims.
These beneficial trends in personal automobile and homeowners also helped Donegal to improve its combined ratio from 100.6% to 98.3%.
Net premiums did, however, decrease 1.7% due to a reduction in personal lines premium writings, although the decline was mostly offset by growth in commercial lines.
Reported claims related to COVID-19 also decreased significantly during Q3 compared to Q2.
“While much uncertainty remains with respect to business interruption litigation activity throughout our operating regions, we have not incurred, and do not currently anticipate, significant insured losses directly related to COVID-19,” Burke noted.
In addition, Donegal’s workers’ compensation line of business continued to perform well despite mandated rate reductions over the past year.
“We, like so many others, have adapted to a shift in operating procedures as the vast majority of our personnel are continuing to work from their homes as a result of the COVID-19 pandemic,” Burke continued.”
“We have seen no substantial declines in operating performance throughout our organization as a result of this transition. We have been able to maintain excellent service levels and to make consistent progress on key strategic initiatives, which reflect both the resilience and dedication of our employees.”
“Our ability to continue to grow our commercial lines premiums speaks to our solid relationships and the reputation we have built with our independent agents. We are working diligently to further enhance our relationships with independent agents, including national agency aggregators and agency groups, across our operating regions.”
“We believe this ongoing relationship emphasis and our commitment to providing quality service to our agents and policyholders will allow us to continue to increase our market share and grow our business profitably in 2021 and beyond.”
