Donegal Group Inc. (NASDAQ:DGICA) reported a notable improvement in third-quarter profitability on Thursday, with earnings surpassing Wall Street expectations even as premium revenue edged lower.
The property and casualty insurer posted adjusted earnings of $0.52 per Class A share, ahead of analyst estimates, while total revenue reached $245.92 million.
Net premiums earned slipped 3.4% year-over-year to $229.8 million, but the company’s combined ratio improved to 95.9%, compared with 96.4% a year earlier — signaling stronger underwriting performance.
Net income rose 19.9% to $20.1 million, or $0.55 per diluted Class A share, up from $16.8 million, or $0.51 per share, in the third quarter of 2024. The annualized return on average equity came in at 13.0%, slightly below last year’s 13.4%.
President and CEO Kevin G. Burke credited strategic discipline and improved execution for the results:
“We are encouraged to see a continuation of favorable results in the third quarter, which reflects the benefits of our strategic and tactical efforts over the past several years,” he said.
“While benign weather conditions contributed meaningfully to our quarterly performance, we were also pleased with the overall core loss ratio for the third quarter.”
Improved Weather Impact and Segment Trends
Weather-related losses totaled $14.3 million, accounting for 6.2 percentage points of the loss ratio, a sharp drop from $24.4 million or 10.3 percentage points a year earlier — marking the lowest third-quarter weather loss ratio in two decades.
By business line, commercial net premiums written grew 3.4% year-over-year, while personal lines declined 15.9%, resulting in an overall 5.4% decrease in total net premiums written during the period.
Dividend Declaration
Donegal’s board approved a regular quarterly cash dividend of $0.1825 per share for Class A common stock and $0.165 per share for Class B common stock, payable on November 17, 2025.
The insurer continues to emphasize disciplined underwriting and expense management as key drivers of long-term value creation.