Donegal Group Q2 net income up 300% YoY, premiums down 1.1%.

• Donegal Group Inc. reports Q2 2025 net income of $16.9 million. • Net premiums earned decreased 1.1% to $231.8 million. • Combined ratio of 97.7%, compared to 103.0%. • Annualized return on average equity of 11.3%, compared to 3.4%. • Book value per share of $16.62 at June 30, 2025. • Net investment gains after tax of $1.2 million. • Digital data not mentioned in the article.

Donegal Group Inc. (NASDAQ: DGICA) has announced its second-quarter and first-half 2025 financial results, highlighting significant improvements in profitability and strategic underwriting discipline. The company reported a net income of $16.9 million, a 306.1% increase from the same period last year, driven by a combined ratio of 97.7% compared to 103.0% in Q2 2024. Net premiums earned decreased by 1.1% to $231.8 million, with commercial lines growing by 3.0% while personal lines declined by 6.6%.

The company's strategic focus on underwriting discipline led to improved core loss ratios, particularly in personal lines. The core loss ratio for personal lines decreased to 43.3% from 55.3%, reflecting the effectiveness of premium rate increases. Weather-related losses of $25.8 million, or 11.1% of the loss ratio, were higher than the company's five-year average but did not significantly impact overall results. The expense ratio edged slightly higher to 32.2%, primarily due to higher underwriting-based incentive costs.

Investment income increased by 13.3% to $12.5 million, benefiting from higher yields. Book value per share grew to $16.62, up 14.8% from June 2024. The company's annualized return on average equity improved significantly to 11.3% from 3.4% in Q2 2024.

Donegal Group also reached a milestone in its systems modernization project with the final major commercial lines systems release, planning full implementation by the first half of 2026. This enhanced platform should strengthen the company's ability to target middle market accounts effectively once fully implemented.

The company remains focused on disciplined execution, organizational alignment, and operational excellence to further strengthen its long-term competitive position and enhance value for its stockholders.

References:
[1] https://www.stocktitan.net/news/DGICA/donegal-group-inc-announces-second-quarter-and-first-half-2025-2l3bz3v3ol4i.html