Donegal Group Inc. Announces First Quarter 2026 Results
Rhea-AI Summary
Donegal Group (NASDAQ: DGICA / DGICB) reported Q1 2026 results: net premiums earned $221.4M (down 4.9%), net income $11.5M (down 54.3%), and combined ratio 99.8% (vs 91.6%). ROAE was 7.1% (vs 17.8%) and book value per share $17.54 at March 31, 2026. Investment income rose 19.2% to $14.3M. Weather-related losses and several large losses weighed on underwriting results; commercial net premiums written grew 2.2% while personal lines declined 13.1%.
Positive
- Book value per share increased to $17.54 (+8.0%)
- Net investment income rose to $14.3M (+19.2%)
- Commercial net premiums written grew by 2.2%
Negative
- Net income declined 54.3% to $11.5M
- Combined ratio widened to 99.8% from 91.6%
- Personal lines net premiums written fell 13.1%
- Annualized ROAE dropped to 7.1% from 17.8%
- Weather-related losses increased to $17.2M (7.8 pts)
Key Figures
Market Reality Check
Peers on Argus
DGICA was down 2.06% pre-release. Several property & casualty peers also traded lower (e.g., HRTG -2.0%, UVE -4.44%, UFCS -3.49%, ACIC -2.71%), while closely linked DGICB was slightly positive. Mixed moves suggest a company-specific tone against a generally weaker group.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Apr 06 | Earnings date notice | Neutral | -0.1% | Announced timing and webcast details for upcoming Q1 2026 results. |
| Feb 19 | Quarterly earnings | Positive | -5.6% | Reported Q4 and full-year 2025 results with higher net income and ROE. |
| Oct 30 | Quarterly earnings | Positive | -1.1% | Q3 2025 showed higher net income and better combined ratio versus prior year. |
| Oct 06 | Earnings date notice | Neutral | +0.8% | Set release date and webcast plan for Q3 2025 financial results. |
| Jul 24 | Quarterly earnings | Positive | -6.2% | Q2 2025 delivered sharply higher net income and improved combined ratio. |
Earnings-related headlines have often been followed by modest share price declines, even when the reported fundamentals were strong.
Over the past few quarters, Donegal has reported generally solid underwriting and investment results, with several earnings releases highlighting improved profitability and rising book value per share. Despite this, the stock frequently traded lower after earnings, including reactions of -5.64% and -6.16% following strong 2025 reports. Today’s Q1 2026 release, marked by lower net income and a higher combined ratio, fits into this pattern of cautious market responses to the company’s financial updates.
Historical Comparison
In the past year, earnings-tagged headlines for DGICA led to an average move of -2.45%, showing a tendency toward cautious or negative price reactions around financial updates.
Recent earnings history shows 2025 marked by improving profitability and rising book value, followed by Q1 2026 results with lower net income and a higher combined ratio despite stronger investment income.
Market Pulse Summary
This announcement details softer Q1 2026 profitability, with net income down 54.3% and a combined ratio rising to 99.8%, driven partly by higher weather and large fire losses. Offsetting this, net investment income grew 19.2% and book value per share increased to $17.54. Historically, earnings updates have often coincided with modest share declines, so investors may focus on underwriting trends, weather exposure, and continued investment income strength in upcoming quarters.
Key Terms
combined ratio financial
non-gaap operating income financial
statutory combined ratio financial
loss ratio financial
mortgage-backed securities financial
statutory accounting principles regulatory
AI-generated analysis. Not financial advice.
MARIETTA, Pa., April 30, 2026 (GLOBE NEWSWIRE) -- Donegal Group Inc. (NASDAQ: DGICA) and (NASDAQ: DGICB) today reported its financial results for the first quarter of 2026.
Significant Items for First Quarter of 2026 (all comparisons to first quarter of 2025):
- Net premiums earned decreased
4.9% to$221.4 million - Combined ratio of
99.8% , compared to91.6% - Net income of
$11.5 million , or$0.31 per diluted Class A share, compared to$25.2 million , or$0.71 per diluted Class A share - Annualized return on average equity of
7.1% , compared to17.8% - Book value per share of
$17.54 at March 31, 2026, compared to$16.24 at March 31, 2025
Financial Summary
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | % Change | |||||||||
| (dollars in thousands, except per share amounts) | |||||||||||
| Income Statement Data | |||||||||||
| Net premiums earned | $ | 221,357 | $ | 232,702 | -4.9 | % | |||||
| Investment income, net | 14,287 | 11,984 | 19.2 | ||||||||
| Net investment losses | (479 | ) | (471 | ) | 1.7 | ||||||
| Total revenues | 235,996 | 245,174 | -3.7 | ||||||||
| Net income | 11,511 | 25,205 | -54.3 | ||||||||
| Non-GAAP operating income1 | 11,889 | 25,577 | -53.5 | ||||||||
| Annualized return on average equity | 7.1 | % | 17.8 | % | -10.7 pts | ||||||
| Per Share Data | |||||||||||
| Net income – Class A (diluted) | $ | 0.31 | $ | 0.71 | -56.3 | % | |||||
| Net income – Class B | 0.29 | 0.65 | -55.4 | ||||||||
| Non-GAAP operating income – Class A (diluted) | 0.32 | 0.72 | -55.6 | ||||||||
| Non-GAAP operating income – Class B | 0.30 | 0.66 | -54.5 | ||||||||
| Book value | 17.54 | 16.24 | 8.0 | ||||||||
1 The “Definitions of Non-GAAP Financial Measures” section of this release defines and reconciles data that we prepare on an accounting basis other than U.S. generally accepted accounting principles (“GAAP”).
Management Commentary
Kevin G. Burke, President and Chief Executive Officer of Donegal Group Inc., stated, “Our first quarter of 2026 results reflected solid underlying operating performance despite softening conditions in the insurance markets we serve. At a high level, the past few years have been characterized by generally favorable conditions for our industry, and, as is often the case, a softening market has emerged as the availability of capital has led industry participants to reduce rates to win and retain accounts. Against this challenging backdrop, we remain committed to maintaining underwriting and pricing discipline as we pursue new, high-quality accounts and seek to retain existing accounts at adequate pricing levels.
“Net premiums written1 for our commercial lines business segment grew by
“While our underwriting results for the first quarter of 2026 lagged the unusually favorable results we achieved for the prior-year quarter, we primarily attribute the lower profitability to higher-than-average weather-related losses and the impact of several large current-year and prior-year losses. We are pleased that our core loss ratios for both the commercial and personal lines segments improved modestly compared to the first quarter of 2025, reflecting solid underlying performance within our book of business.
“We believe we are well positioned to build value for all of our constituents as we navigate the current market cycle. Coupling excellent service to our independent agents and policyholders with prudent underwriting and advancing operational capabilities, we expect to build upon the strong foundation we have established over the past several years. We believe that the effective ongoing execution of our strategies will enhance stockholder value over time.”
Insurance Operations
Donegal Group is an insurance holding company whose insurance subsidiaries and affiliates offer property and casualty lines of insurance in three Mid-Atlantic states (Delaware, Maryland and Pennsylvania), five Southern states (Georgia, North Carolina, South Carolina, Tennessee and Virginia), eight Midwestern states (Illinois, Indiana, Iowa, Michigan, Nebraska, Ohio, South Dakota and Wisconsin) and five Southwestern states (Arizona, Colorado, New Mexico, Texas and Utah). Donegal Mutual Insurance Company and the insurance subsidiaries of Donegal Group conduct business together as the Donegal Insurance Group.
| Three Months Ended March 31, | |||||||||
| 2026 | 2025 | % Change | |||||||
| (dollars in thousands) | |||||||||
| Net Premiums Earned | |||||||||
| Commercial lines | $ | 138,963 | $ | 136,216 | 2.0 | % | |||
| Personal lines | 82,394 | 96,486 | -14.6 | ||||||
| Total net premiums earned | $ | 221,357 | $ | 232,702 | -4.9 | % | |||
| Net Premiums Written | |||||||||
| Commercial lines: | |||||||||
| Automobile | $ | 60,780 | $ | 56,525 | 7.5 | % | |||
| Workers' compensation | 26,894 | 28,754 | -6.5 | ||||||
| Commercial multi-peril | 60,626 | 60,790 | -0.3 | ||||||
| Other | 15,807 | 14,549 | 8.6 | ||||||
| Total commercial lines | 164,107 | 160,618 | 2.2 | ||||||
| Personal lines: | |||||||||
| Automobile | 45,917 | 55,192 | -16.8 | ||||||
| Homeowners | 26,939 | 28,788 | -6.4 | ||||||
| Other | 2,327 | 2,494 | -6.7 | ||||||
| Total personal lines | 75,183 | 86,474 | -13.1 | ||||||
| Total net premiums written | $ | 239,290 | $ | 247,092 | -3.2 | % | |||
Net Premiums Written
The
- Commercial Lines:
$3.5 million increase that we attribute primarily to new business writings, solid retention and a continuation of renewal premium increases in lines other than workers’ compensation. - Personal Lines:
$11.3 million decrease that we attribute primarily to lower new business writings, offset partially by modest renewal premium rate increases and solid retention.
Underwriting Performance
We evaluate the performance of our commercial lines and personal lines segments primarily based upon the underwriting results of our insurance subsidiaries as determined under statutory accounting practices. The following table presents comparative details with respect to the GAAP and statutory combined ratios1 for the three months ended March 31, 2026 and 2025:
| Three Months Ended | ||||||
| March 31, | ||||||
| 2026 | 2025 | |||||
| GAAP Combined Ratios (Total Lines) | ||||||
| Loss ratio - core losses | 53.4 | % | 54.2 | % | ||
| Loss ratio - weather-related losses | 7.8 | 3.7 | ||||
| Loss ratio - large fire losses | 5.5 | 3.3 | ||||
| Loss ratio - net prior-year reserve development | -2.6 | -4.5 | ||||
| Loss ratio | 64.1 | 56.7 | ||||
| Expense ratio | 35.4 | 34.6 | ||||
| Dividend ratio | 0.3 | 0.3 | ||||
| Combined ratio | 99.8 | % | 91.6 | % | ||
| Statutory Combined Ratios | ||||||
| Commercial lines: | ||||||
| Automobile | 92.0 | % | 91.4 | % | ||
| Workers' compensation | 112.9 | 117.6 | ||||
| Commercial multi-peril | 113.9 | 90.3 | ||||
| Other | 100.6 | 80.8 | ||||
| Total commercial lines | 104.6 | 94.7 | ||||
| Personal lines: | ||||||
| Automobile | 80.5 | 85.0 | ||||
| Homeowners | 94.6 | 83.8 | ||||
| Other | 78.4 | 56.6 | ||||
| Total personal lines | 85.7 | 83.6 | ||||
| Total lines | 97.9 | % | 90.3 | % | ||
Loss Ratio
For the first quarter of 2026, the loss ratio increased to
Weather-related losses were
Large fire losses, which we define as individual fire losses in excess of
Net favorable development of reserves for losses incurred in prior accident years of
Expense Ratio
The expense ratio was
Investment Operations
Donegal Group’s investment strategy is to generate an appropriate amount of after-tax income on its invested assets while minimizing credit risk through investment in high-quality securities. As a result, we had invested
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Amount | % | Amount | % | |||||||||||
| (dollars in thousands) | ||||||||||||||
| Fixed maturities, at carrying value: | ||||||||||||||
| U.S. Treasury securities and obligations of U.S. | ||||||||||||||
| government corporations and agencies | $ | 97,326 | 6.5 | % | $ | 103,619 | 6.9 | % | ||||||
| Obligations of states and political subdivisions | 498,288 | 33.1 | 485,710 | 32.4 | ||||||||||
| Corporate securities | 395,057 | 26.3 | 383,927 | 25.6 | ||||||||||
| Mortgage-backed securities | 443,665 | 29.5 | 445,227 | 29.7 | ||||||||||
| Allowance for expected credit losses | (1,274 | ) | -0.1 | (1,313 | ) | -0.1 | ||||||||
| Total fixed maturities | 1,433,062 | 95.3 | 1,417,170 | 94.5 | ||||||||||
| Equity securities, at fair value | 45,106 | 3.0 | 44,370 | 3.0 | ||||||||||
| Short-term investments, at cost | 26,017 | 1.7 | 38,713 | 2.5 | ||||||||||
| Total investments | $ | 1,504,185 | 100.0 | % | $ | 1,500,253 | 100.0 | % | ||||||
| Average investment yield | 3.8 | % | 3.6 | % | ||||||||||
| Average tax-equivalent investment yield | 3.9 | % | 3.7 | % | ||||||||||
| Average fixed-maturity duration (years) | 5.7 | 5.5 | ||||||||||||
Net investment income of
Net investment losses were minimal for the first quarters of 2026 and 2025. We attribute the losses to a decrease in the market value of the equity securities we held at the end of the respective periods.
Our book value per share was
Definitions of Non-GAAP Financial Measures
We prepare our consolidated financial statements on the basis of GAAP. Our insurance subsidiaries also prepare financial statements based on statutory accounting principles state insurance regulators prescribe or permit (“SAP”). In addition to using GAAP-based performance measurements, we also utilize certain non-GAAP financial measures that we believe provide value in managing our business and for comparison to the financial results of our peers. These non-GAAP measures are net premiums written, operating income or loss and statutory combined ratio.
Net premiums written and operating income or loss are non-GAAP financial measures investors in insurance companies commonly use. We define net premiums written as the amount of full-term premiums our insurance subsidiaries record for policies effective within a given period less premiums our insurance subsidiaries cede to reinsurers. We define operating income or loss as net income or loss excluding after-tax net investment gains or losses, after-tax restructuring charges and other significant non-recurring items. Because our calculation of operating income or loss may differ from similar measures other companies use, investors should exercise caution when comparing our measure of operating income or loss to the measure of other companies.
The following table provides a reconciliation of net premiums earned to net premiums written for the periods indicated:
| Three Months Ended March 31, | |||||||||
| 2026 | 2025 | % Change | |||||||
| (dollars in thousands) | |||||||||
| Reconciliation of Net Premiums | |||||||||
| Earned to Net Premiums Written | |||||||||
| Net premiums earned | $ | 221,357 | $ | 232,702 | -4.9 | % | |||
| Change in net unearned premiums | 17,933 | 14,390 | 24.6 | ||||||
| Net premiums written | $ | 239,290 | $ | 247,092 | -3.2 | % | |||
The following table provides a reconciliation of net income to operating income for the periods indicated:
| Three Months Ended March 31, | |||||||||
| 2026 | 2025 | % Change | |||||||
| (dollars in thousands, except per share amounts) | |||||||||
| Reconciliation of Net Income | |||||||||
| to Non-GAAP Operating Income | |||||||||
| Net income | $ | 11,511 | $ | 25,205 | -54.3 | % | |||
| Investment losses (after tax) | 378 | 372 | 1.6 | ||||||
| Non-GAAP operating income | $ | 11,889 | $ | 25,577 | -53.5 | % | |||
| Per Share Reconciliation of Net Income | |||||||||
| to Non-GAAP Operating Income | |||||||||
| Net income – Class A (diluted) | $ | 0.31 | $ | 0.71 | -56.3 | % | |||
| Investment losses (after tax) | 0.01 | 0.01 | 0.0 | ||||||
| Non-GAAP operating income – Class A | $ | 0.32 | $ | 0.72 | -55.6 | % | |||
| Net income – Class B | $ | 0.29 | $ | 0.65 | -55.4 | % | |||
| Investment losses (after tax) | 0.01 | 0.01 | 0.0 | ||||||
| Non-GAAP operating income – Class B | $ | 0.30 | $ | 0.66 | -54.5 | % | |||
The statutory combined ratio is a non-GAAP standard measurement of underwriting profitability that is based upon amounts determined under SAP. The statutory combined ratio is the sum of:
- the statutory loss ratio, which is the ratio of calendar-year incurred losses and loss expenses, excluding anticipated salvage and subrogation recoveries, to premiums earned;
- the statutory expense ratio, which is the ratio of expenses incurred for net commissions, premium taxes and underwriting expenses to premiums written; and
- the statutory dividend ratio, which is the ratio of dividends to holders of workers’ compensation policies to premiums earned.
The statutory combined ratio does not reflect investment income, federal income taxes or other non-operating income or expense. A statutory combined ratio of less than
Dividend Information
On April 16, 2026, we declared regular quarterly cash dividends of
Pre-Recorded Webcast
At approximately 8:30 am EDT on Thursday, April 30, 2026, we will make available in the Investors section of our website a pre-recorded audio webcast featuring management commentary on our quarterly results and general business updates. You may listen to the pre-recorded webcast by accessing the link on our website at http://investors.donegalgroup.com. A supplemental investor presentation is also available via our website.
About the Company
Donegal Group Inc. is an insurance holding company whose insurance subsidiaries and affiliates offer property and casualty lines of insurance in certain Mid-Atlantic, Midwestern, Southern and Southwestern states. Donegal Mutual Insurance Company and the insurance subsidiaries of Donegal Group Inc. conduct business together as the Donegal Insurance Group. The Donegal Insurance Group has an A.M. Best rating of A (Excellent).
The Class A common stock and Class B common stock of Donegal Group Inc. trade on the NASDAQ Global Select Market under the symbols DGICA and DGICB, respectively. We are focused on several primary strategies, including achieving sustained excellent financial performance, advancing our operational and digital capabilities, capitalizing on opportunities to grow profitably and providing superior experiences to our agents, policyholders and employees.
Safe Harbor
We base all statements contained in this release that are not historic facts on our current expectations. Such statements are forward-looking in nature (as defined in the Private Securities Litigation Reform Act of 1995) and necessarily involve risks and uncertainties. Forward-looking statements we make may be identified by our use of words such as “will,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “seek,” “estimate” and similar expressions. Our actual results could vary materially from our forward-looking statements. The factors that could cause our actual results to vary materially from the forward-looking statements we have previously made include, but are not limited to, adverse litigation and other industry trends that could increase our loss costs (including distracted driving, higher rates of litigation, higher judicial awards and escalating medical, automobile and property repair costs, including due to tariffs), adverse and catastrophic weather events and other natural disasters (including from changing climate conditions), man-made disasters (such as terrorism), our ability to maintain profitable operations (including our ability to underwrite risks effectively and charge adequate premium rates), the adequacy of the loss and loss expense reserves of our insurance subsidiaries, the successful operation (including cost, security and availability) of the information technology systems our insurance subsidiaries utilize, the successful development and deployment of new technologies (including artificial intelligence, data modernization and cloud migration) to allow our insurance subsidiaries to compete effectively, the loss or significant restriction of the use of specific rating attributes, analytical models or technologies our insurance subsidiaries use in their pricing and underwriting, increases in assessments pursuant to guaranty fund laws, business and economic conditions in the areas in which we and our insurance subsidiaries operate (including from pandemics), interest rates and other factors impacting the investment portfolios of our insurance subsidiaries, competition from various insurance and other financial businesses (including changes in consumer preferences for insurance distribution channels), the availability and cost of reinsurance, legal and judicial developments, changes in regulatory requirements, our ability to attract and retain independent insurance agents (and their ability to maintain adequate levels of premium volume and quality), changes in our A.M. Best rating and the other risks that we describe from time to time in our filings with the Securities and Exchange Commission. We disclaim any obligation to update such statements or to announce publicly the results of any revisions that we may make to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
Investor Relations Contacts
Jeremy Hellman, Vice President, The Equity Group Inc.
Phone: (212) 836-9626
E-mail: jhellman@theequitygroup.com
Jeffrey D. Miller, Executive Vice President & Chief Financial Officer
Phone: (717) 426-1931
E-mail: investors@donegalgroup.com
Financial Supplement
| Donegal Group Inc. | |||||||||
| Consolidated Statements of Income | |||||||||
| (unaudited; in thousands, except share data) | |||||||||
| Quarter Ended March 31, | |||||||||
| 2026 | 2025 | ||||||||
| Net premiums earned | $ | 221,357 | $ | 232,702 | |||||
| Investment income, net of expenses | 14,287 | 11,984 | |||||||
| Net investment losses | (479 | ) | (471 | ) | |||||
| Lease income | 74 | 77 | |||||||
| Installment payment fees | 757 | 882 | |||||||
| Total revenues | 235,996 | 245,174 | |||||||
| Net losses and loss expenses | 142,000 | 132,033 | |||||||
| Amortization of deferred acquisition costs | 36,297 | 39,231 | |||||||
| Other underwriting expenses | 42,014 | 41,195 | |||||||
| Policyholder dividends | 652 | 760 | |||||||
| Interest | 333 | 333 | |||||||
| Other expenses, net | 577 | 461 | |||||||
| Total expenses | 221,873 | 214,013 | |||||||
| Income before income tax expense | 14,123 | 31,161 | |||||||
| Income tax expense | 2,612 | 5,956 | |||||||
| Net income | $ | 11,511 | $ | 25,205 | |||||
| Net income per common share: | |||||||||
| Class A - basic | $ | 0.32 | $ | 0.72 | |||||
| Class A - diluted | $ | 0.31 | $ | 0.71 | |||||
| Class B - basic and diluted | $ | 0.29 | $ | 0.65 | |||||
| Supplementary Financial Analysts' Data | |||||||||
| Weighted-average number of shares | |||||||||
| outstanding: | |||||||||
| Class A - basic | 31,428,313 | 30,120,649 | |||||||
| Class A - diluted | 31,928,219 | 30,430,042 | |||||||
| Class B - basic and diluted | 5,576,775 | 5,576,775 | |||||||
| Net premiums written | $ | 239,290 | $ | 247,092 | |||||
| Book value per common share | |||||||||
| at end of period | $ | 17.54 | $ | 16.24 | |||||
| Annualized return on average equity | 7.1 | % | 17.8 | % | |||||
| Donegal Group Inc. | |||||||||
| Consolidated Balance Sheets | |||||||||
| (in thousands) | |||||||||
| March 31, | December 31, | ||||||||
| 2026 | 2025 | ||||||||
| (unaudited) | |||||||||
| ASSETS | |||||||||
| Investments: | |||||||||
| Fixed maturities: | |||||||||
| Held to maturity, at amortized cost | $ | 783,952 | $ | 776,447 | |||||
| Available for sale, at fair value | 649,110 | 640,723 | |||||||
| Equity securities, at fair value | 45,106 | 44,370 | |||||||
| Short-term investments, at cost | 26,017 | 38,713 | |||||||
| Total investments | 1,504,185 | 1,500,253 | |||||||
| Cash | 35,501 | 26,786 | |||||||
| Premiums receivable | 197,327 | 180,804 | |||||||
| Reinsurance receivable | 418,091 | 398,582 | |||||||
| Deferred policy acquisition costs | 71,996 | 68,670 | |||||||
| Prepaid reinsurance premiums | 179,320 | 171,083 | |||||||
| Other assets | 42,361 | 40,451 | |||||||
| Total assets | $ | 2,448,781 | $ | 2,386,629 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Liabilities: | |||||||||
| Losses and loss expenses | $ | 1,129,815 | $ | 1,100,050 | |||||
| Unearned premiums | 617,210 | 591,040 | |||||||
| Borrowings under lines of credit | 35,000 | 35,000 | |||||||
| Other liabilities | 17,663 | 20,121 | |||||||
| Total liabilities | 1,799,688 | 1,746,211 | |||||||
| Stockholders' equity: | |||||||||
| Class A common stock | 345 | 344 | |||||||
| Class B common stock | 56 | 56 | |||||||
| Additional paid-in capital | 393,244 | 391,811 | |||||||
| Accumulated other comprehensive loss | (12,407 | ) | (8,296 | ) | |||||
| Retained earnings | 309,081 | 297,729 | |||||||
| Treasury stock | (41,226 | ) | (41,226 | ) | |||||
| Total stockholders' equity | 649,093 | 640,418 | |||||||
| Total liabilities and stockholders' equity | $ | 2,448,781 | $ | 2,386,629 | |||||
