Earnings

Donegal Commercial Written Premiums Fall After First-Quarter Gain

The Tip Desk · November 10, 2026 · 4 min read

Net premiums written fell 4.5% to $209.7 million as personal lines continued to shrink.

Donegal Group Inc. (DGICA), a property-and-casualty insurer, reported net premiums written of $209.7 million for the three months ended September 30, 2026, down 4.5% from a year earlier. Commercial lines written premiums fell 3.7% and personal lines written premiums fell 5.6%, after commercial written premiums had grown 2.2% year over year in the first quarter.

Net premiums earned were $222.9 million, down 3.0% from a year earlier. Commercial lines net premiums earned rose 1.9% to $142.9 million. Personal lines net premiums earned fell 10.7% to $80.0 million.

President and Chief Executive Officer Kevin G. Burke said the company continued to experience soft market conditions throughout its operating regions and that those conditions impeded its ability to achieve its premium growth plan. He said the company delivered solid profitability, as demonstrated by earnings of 49 cents per diluted Class A share and an annualized return on average equity of 10.9%.

The company said it primarily attributed the declines in net premiums written to higher-than-planned attrition resulting from a commitment to pricing discipline on policy renewals amid increased rate competition, offset partially by incrementally higher new business writings as it selectively enhanced its competitive posture for desired accounts. Within personal lines, automobile new business growth benefited from the reintroduction of a 12-month policy term that customers selected for the vast majority of new automobile policies written during the quarter. The increase from six-month terms to 12-month terms effectively doubled the net premiums written related to those new policies.

Net income was $18.2 million, or 49 cents a share, compared with $20.1 million, or 55 cents a share, a year earlier. Net income included after-tax net investment losses of $0.6 million, or 1 cent a share, compared with after-tax net investment gains of $1.0 million, or 3 cents a share. Non-GAAP operating income was $18.6 million, or 50 cents a share, compared with $19.1 million, or 52 cents a share.

The GAAP combined ratio was 96.5%, compared with 95.9% a year earlier. The loss ratio was 61.5%. Weather-related losses were $19.1 million, or 8.6 percentage points of the loss ratio, compared with $14.3 million, or 6.2 points, a year earlier. The company said that weather-related loss activity was lower than its previous five-year average of $20.4 million, or 9.3 points. It incurred $4.2 million in losses from a July severe convective storm. Large fire losses were $5.8 million, or 2.6 points. Net favorable development of reserves for losses incurred in prior accident years of $3.5 million decreased the loss ratio by 1.5 percentage points. The company attributed the net favorable development primarily to lower-than-expected emergence in workers’ compensation and commercial automobile. The expense ratio was 34.8%.

Commercial core loss ratio was 57.2%. Personal core loss ratio was 42.2%. Burke said underwriting results were generally favorable despite an increase in weather-related losses and a handful of unusually severe workers’ compensation claims, and that the company was pleased with the relative consistency of its core loss ratio compared with the prior-year quarter.

Net investment income was $14.7 million, up 5.4% from $13.9 million a year earlier. The company said the increase primarily reflected an increase in average investment yield. Average investment yield was 3.9% at September 30, 2026, compared with 3.6% at December 31, 2025. Net investment results were a $0.7 million loss, primarily related to net realized investment losses on the strategic sales of available-for-sale fixed-maturity securities. Book value per share was $17.70 at September 30, 2026.

As it closes out 2026 and finalizes its business plan for 2027, the company said it continues to engage with independent agency partners in developing and deploying specific action plans with a goal of achieving profitable premium growth, albeit at a modest pace in recognition of current market conditions. On October 15, 2026, it declared a regular quarterly cash dividend of $0.1925 per Class A share and $0.175 per Class B share, payable November 16, 2026.

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