Donegal Group Inc. Announces Third Quarter and First Nine Months of 2026 Results

Personal-lines underwriting improved, but commercial-lines results weakened as workers’ compensation losses increased.

Rhea-AI Summary

Donegal Group (DGICA, DGICB) reported third-quarter 2026 net income of $18.2 million as premium revenue declined and underwriting profitability weakened. Diluted Class A earnings fell to $0.49 from $0.55 a year earlier. Net premiums earned declined 3.0% to $222.9 million, while net premiums written fell 4.5% to $209.7 million.

The combined ratio, measuring claims and expenses against premiums, rose to 96.5% from 95.9%. Higher weather losses and expense ratios offset lower fire losses and favorable prior-year reserve development. Net investment income increased 5.4% to $14.7 million. For the first nine months, net income fell 16.4% to $52.0 million and the combined ratio rose to 97.3% from 95.1%. Book value per share reached $17.70, versus $17.33 at year-end 2025. The company attributed premium pressure to competitive conditions and aims for modest profitable premium growth.

15 points · 0 major

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0 major · 27 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointThird-quarter net investment income increased 5.4% year over year to $14.689 million.
• Minor pointNine-month net investment income increased 13.0% year over year to $43.468 million.
• Minor pointBook value per share reached $17.70 at September 30, up 3.3% year over year.
• Minor pointCommercial earned premiums rose 1.9% to $142.916 million quarterly and 2.0% to $423.395 million year-to-date.
• Minor pointCommercial automobile written premiums rose 1.0% quarterly to $46.089 million and 5.7% year-to-date to $161.477 million.

10 minor points

• Minor pointOther commercial written premiums rose 13.0% quarterly to $13.508 million and 15.3% year-to-date to $46.258 million.
• Minor pointPersonal-lines statutory combined ratio improved to 90.1% from 94.1% quarterly; nine-month ratio improved to 86.0% from 89.6%.
• Minor pointCommercial automobile statutory combined ratio improved to 96.9% from 100.9% quarterly and 93.2% from 96.7% year-to-date.
• Minor pointPersonal automobile statutory combined ratio improved to 89.3% from 91.2% quarterly and 84.4% from 85.1% year-to-date.
• Minor pointHomeowners statutory combined ratio improved to 91.7% from 102.1% quarterly and 89.4% from 100.0% year-to-date.
• Minor pointPersonal-lines core loss ratio, excluding weather, large fires and prior-year reserve changes, improved to 42.2% from 46.6% quarterly.
• Minor pointThird-quarter large fire losses fell to $5.8 million from $10.0 million a year earlier.
• Minor pointThird-quarter favorable reserve development totaled $3.5 million, versus $1.0 million unfavorable development a year earlier.
• Minor pointAverage investment yield increased to 3.9% at September 30, 2026, from 3.6% at December 31, 2025.
• Minor point. Forward-looking: it has not happened yet and may not happen.Profitable premium growth remains the company's goal, at a modest pace given current market conditions.

Negative

• Moderate pointThird-quarter net income fell 9.6% to $18.157 million; diluted Class A earnings declined to $0.49 from $0.55.
• Moderate pointTotal revenue fell 3.4% to $237.658 million quarterly and 3.1% to $714.773 million year-to-date.
• Moderate pointNet premiums earned fell 3.0% to $222.883 million quarterly and 4.0% to $666.814 million year-to-date.
• Moderate pointNet premiums written fell 4.5% to $209.733 million quarterly and 3.6% to $675.434 million year-to-date.
• Moderate pointGAAP combined ratio worsened to 96.5% from 95.9% quarterly and 97.3% from 95.1% year-to-date.
• Moderate pointAnnualized return on average equity fell to 10.9% from 13.0% quarterly and 10.6% from 14.1% year-to-date.
• Moderate pointAfter-tax unrealized fixed-maturity losses of $24.1 million during 2026 reduced book value by $0.65 per share. 3.5% of market cap

20 minor points

• Minor pointNine-month net income fell 16.4% to $51.973 million; diluted Class A earnings declined to $1.40 from $1.72.
• Minor pointClass B earnings declined to $0.45 from $0.51 quarterly and $1.29 from $1.58 year-to-date.
• Minor pointPersonal earned premiums fell 10.7% to $79.967 million quarterly and 12.8% to $243.419 million year-to-date.
• Minor pointCommercial written premiums fell 3.7% quarterly to $125.528 million; nine-month premiums were $435.739 million versus $435.916 million.
• Minor pointPersonal written premiums fell 5.6% quarterly to $84.205 million and 9.4% year-to-date to $239.695 million.
• Minor pointWorkers’ compensation written premiums fell 11.8% quarterly to $18.540 million and 10.8% year-to-date to $66.007 million.
• Minor pointCommercial multi-peril written premiums fell 8.5% quarterly to $47.391 million and 4.2% year-to-date to $161.997 million.
• Minor pointPersonal automobile written premiums fell 9.0% quarterly to $49.044 million and 13.2% year-to-date to $140.480 million.
• Minor pointHomeowners written premiums fell 0.5% quarterly to $32.728 million and 3.4% year-to-date to $92.000 million.
• Minor pointOther personal written premiums fell 0.8% quarterly to $2.433 million and 4.0% year-to-date to $7.215 million.
• Minor pointCommercial statutory combined ratio worsened to 100.7% from 96.6% quarterly and 101.9% from 97.3% year-to-date.
• Minor pointWorkers’ compensation statutory combined ratio worsened to 128.1% from 103.9% quarterly and 115.1% from 108.7% year-to-date.
• Minor pointCommercial multi-peril statutory combined ratio worsened to 95.6% from 91.6% quarterly and 106.0% from 93.1% year-to-date.
• Minor pointOther commercial statutory combined ratio worsened to 93.3% from 87.5% quarterly and 97.8% from 96.2% year-to-date.
• Minor pointOther personal statutory combined ratio worsened to 85.5% from 52.8% quarterly and 75.8% from 54.9% year-to-date.
• Minor pointCommercial core loss ratio rose to 57.2% from 54.0% quarterly, largely reflecting workers’ compensation and casualty severity.
• Minor pointThird-quarter weather losses rose to $19.1 million from $14.3 million, but remained below the five-year third-quarter average of $20.4 million.
• Minor pointExpense ratio rose to 34.8% from 33.5% quarterly and 35.3% from 33.4% year-to-date.
• Minor pointThird-quarter net investment losses were $701,000, versus $1.272 million in gains a year earlier.
• Minor pointNine-month net investment gains declined 11.0% to $2.087 million.

News Explained

Donegal reported third-quarter net income down 9.6% year over year, versus a 2.3% decline in non-GAAP operating income, which excludes after-tax investment gains and losses; the quarter included a $0.6 million after-tax investment loss, compared with a $1.0 million gain a year earlier.

Argus Oct 29 session 1 alert

+1.07% close to close 2.1x rel. volume Open Argus

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News Market Reaction – DGICA

$722.34M Mkt Cap at Peak Alert

On Oct 29, the day this news came out, DGICA closed 1.07% above the previous close. Relative volume reached 2.1x the daily average during tracking.

Data tracked by StockTitan Argus for the Oct 29 session.

Key Figures

Net premiums earned: $222.9 million, down 3.0% Net income: $18.2 million, down 9.6% Diluted Class A EPS: $0.49, down 10.9% +5 more

Net premiums earned

$222.9 million, down 3.0%

Third quarter 2026 vs. third quarter 2025

Net income

$18.2 million, down 9.6%

Third quarter 2026 vs. third quarter 2025

Diluted Class A EPS

$0.49, down 10.9%

Third quarter 2026 vs. third quarter 2025

Net premiums written

$209.733 million, down 4.5%

Third quarter 2026 vs. third quarter 2025

Combined ratio

96.5%, compared to 95.9%

GAAP, third quarter 2026 vs. third quarter 2025

Annualized return on average equity

10.9%, compared to 13.0%

Third quarter 2026 vs. third quarter 2025

Nine-month net income

$51.973 million, down 16.4%

Nine months ended September 30, 2026 vs. 2025

Book value per share

$17.70, up 3.3%

At September 30, 2026 vs. September 30, 2025

Historical Context

1 past event · Latest: Jul 30

1 event

1. Jul 30

   Quarterly earnings

   24h Move

   +2.3%

   Second-quarter premiums fell, while net income rose and the GAAP combined ratio improved year over year.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

gaap, non-gaap, statutory accounting principles, available-for-sale

4 terms

gaap financial

"We prepare our consolidated financial statements on the basis of GAAP."

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

non-gaap financial

"These non-GAAP measures are net premiums written, operating income or loss and statutory combined ratio."

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

statutory accounting principles financial

"financial statements based on statutory accounting principles state insurance regulators prescribe or permit"

Statutory accounting principles are the legal rules insurers and some regulated financial firms must follow when preparing reports for regulators. They are designed to show a conservative view of a company’s ability to pay claims and meet capital requirements, like using stricter safety margins than regular financial reports. Investors care because these reports determine a firm’s regulatory health, dividend ability and potential supervisory actions, similar to how a safety inspection affects whether a bridge is allowed to carry heavy loads.

available-for-sale financial

"after-tax net unrealized losses within our available-for-sale fixed-maturity portfolio"

A classification for bonds, stocks or other investments that a company plans to keep but might sell before they reach full term. Think of it like items a shop keeps on a shelf for potential sale: their market value can go up or down while the company holds them, and those unrealized gains or losses are shown separately from operating profit until they are sold. Investors watch this because large swings can change a company’s reported net worth and signal how much flexibility it has to raise cash quickly.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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MARIETTA, Pa., Oct. 29, 2026 (GLOBE NEWSWIRE) -- Donegal Group Inc. (NASDAQ: DGICA) and (NASDAQ: DGICB) today reported its financial results for the third quarter and first nine months of 2026.

Significant Items for third quarter of 2026 (all comparisons to third quarter of 2025):

• Net premiums earned decreased 3.0% to $222.9 million
• Combined ratio of 96.5%, compared to 95.9%
• Net income of $18.2 million, or 49 cents per diluted Class A share, compared to $20.1 million, or 55 cents per diluted Class A share
• Net income included after-tax net investment losses of $0.6 million, or 1 cent per diluted Class A share, compared to after-tax net investment gains of $1.0 million, or 3 cents per diluted Class A share
• Annualized return on average equity of 10.9%, compared to 13.0%
• Book value per share of $17.70 at September 30, 2026, compared to $17.14 at September 30, 2025

Financial Summary

	Three Months Ended September 30,											Nine Months Ended September 30,
		2026				2025			% Change				2026				2025			% Change
	(dollars in thousands, except per share amounts)
Income Statement Data
Net premiums earned	$	222,883			$	229,822			-3.0	%		$	666,814			$	694,299			-4.0	%
Investment income, net		14,689				13,943			5.4				43,468				38,466			13.0
Net investment (losses) gains		(701	)			1,272			NM2				2,087				2,345			-11.0
Total revenues		237,658				245,919			-3.4				714,773				737,872			-3.1
Net income		18,157				20,080			-9.6				51,973				62,152			-16.4
Non-GAAP operating income1		18,639				19,075			-2.3				50,225				60,299			-16.7
Annualized return on average equity		10.9	%			13.0	%		-2.1 pts				10.6	%			14.1	%		-3.5 pts
Per Share Data
Net income – Class A (diluted)	$	0.49			$	0.55			-10.9	%		$	1.40			$	1.72			-18.6	%
Net income – Class B		0.45				0.51			-11.8				1.29				1.58			-18.4
Non-GAAP operating income – Class A (diluted)		0.50				0.52			-3.8				1.35				1.67			-19.2
Non-GAAP operating income – Class B		0.46				0.48			-4.2				1.25				1.53			-18.3
Book value		17.70				17.14			3.3				17.70				17.14			3.3

¹The “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”).

²Not meaningful.

Management Commentary

Kevin G. Burke, President and Chief Executive Officer of Donegal Group Inc., stated, “As expected, we continued to experience soft market conditions throughout our operating regions in the third quarter of 2026. Although those conditions continued to impede our ability to achieve our premium growth plan, we were able to deliver solid profitability, as demonstrated by earnings per diluted Class A share of $0.49 and an annualized return on equity of 10.9%.”

“Net premiums written¹ declined modestly for both commercial and personal lines. We primarily attribute the declines to higher-than-planned attrition that we believe resulted from our commitment to pricing discipline on policy renewals amid increased rate competition, offset partially by incrementally higher new business writings as we have selectively enhanced our competitive posture for desired accounts. Within our personal lines, our 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.”

“Our underwriting results for the third quarter were generally favorable despite an increase in weather-related losses compared to the prior-year quarter and a handful of unusually severe workers’ compensation claims during the quarter. We were pleased with the relative consistency of our core loss ratio compared to the prior-year quarter.”

“As we close out 2026 and finalize our business plan for 2027, we continue to engage with our 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. We remain confident in our team’s ability to successfully achieve our strategic objectives that we believe 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 September 30,									Nine Months Ended September 30,
	2026			2025			% Change			2026			2025			% Change
	(dollars in thousands)
Net Premiums Earned
Commercial lines	$	142,916		$	140,289		1.9	%		$	423,395		$	415,032		2.0	%
Personal lines		79,967			89,533		-10.7				243,419			279,267		-12.8
Total net premiums earned	$	222,883		$	229,822		-3.0	%		$	666,814		$	694,299		-4.0	%
Net Premiums Written
Commercial lines:
Automobile	$	46,089		$	45,621		1.0	%		$	161,477		$	152,730		5.7	%
Workers' compensation		18,540			21,013		-11.8				66,007			74,010		-10.8
Commercial multi-peril		47,391			51,800		-8.5				161,997			169,068		-4.2
Other		13,508			11,950		13.0				46,258			40,108		15.3
Total commercial lines		125,528			130,384		-3.7				435,739			435,916		-0.0
Personal lines:
Automobile		49,044			53,870		-9.0				140,480			161,803		-13.2
Homeowners		32,728			32,908		-0.5				92,000			95,286		-3.4
Other		2,433			2,453		-0.8				7,215			7,516		-4.0
Total personal lines		84,205			89,231		-5.6				239,695			264,605		-9.4
Total net premiums written	$	209,733		$	219,615		-4.5	%		$	675,434		$	700,521		-3.6	%

Net Premiums Written

The 4.5% decrease in net premiums written for the third quarter of 2026 compared to the third quarter of 2025, as shown in the table above, represents the net combination of a 3.7% decrease in commercial lines net premiums written and a 5.6% decrease in personal lines net premiums written. The $9.9 million decrease in net premiums written for the third quarter of 2026 compared to the third quarter of 2025 reflected competitive market conditions and included:

• Commercial Lines: $4.9 million decrease that we attribute primarily to modestly higher attrition and a lower level of renewal premium increases, offset partially by incremental growth in new business writings.
• Personal Lines: $5.0 million decrease that we attribute primarily to a lower level of renewal premium increases, offset partially by incremental growth in new business writings that included the impact of our insurance subsidiaries’ introduction during the third quarter of 2026 of a 12-month automobile policy term option for new business policies.

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 and nine months ended September 30, 2026 and 2025:

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2026			2025			2026			2025
GAAP Combined Ratios (Total Lines)
Loss ratio - core losses	51.8	%		51.1	%		52.1	%		51.8	%
Loss ratio - weather-related losses	8.6			6.2			7.2			7.0
Loss ratio - large fire losses	2.6			4.4			5.0			4.3
Loss ratio - net prior-year reserve development	-1.5			0.4			-2.6			-1.8
Loss ratio	61.5			62.1			61.7			61.3
Expense ratio	34.8			33.5			35.3			33.4
Dividend ratio	0.2			0.3			0.3			0.4
Combined ratio	96.5	%		95.9	%		97.3	%		95.1	%
Statutory Combined Ratios
Commercial lines:
Automobile	96.9	%		100.9	%		93.2	%		96.7	%
Workers' compensation	128.1			103.9			115.1			108.7
Commercial multi-peril	95.6			91.6			106.0			93.1
Other	93.3			87.5			97.8			96.2
Total commercial lines	100.7			96.6			101.9			97.3
Personal lines:
Automobile	89.3			91.2			84.4			85.1
Homeowners	91.7			102.1			89.4			100.0
Other	85.5			52.8			75.8			54.9
Total personal lines	90.1			94.1			86.0			89.6
Total lines	96.5	%		95.5	%		96.2	%		94.4	%

Loss Ratio

For the third quarter of 2026, the loss ratio decreased slightly to 61.5%, compared to 62.1% for the third quarter of 2025. For the commercial lines segment, the core loss ratio, which excludes weather-related losses, large fire losses and net development of reserves for losses incurred in prior accident years, of 57.2% for the third quarter of 2026 increased from 54.0% for the third quarter of 2025, due largely to higher workers’ compensation and casualty loss severity. For the personal lines segment, the core loss ratio of 42.2% for the third quarter of 2026 decreased from 46.6% for the third quarter of 2025, with the improvement primarily attributable to the homeowners line of business.

Weather-related losses were $19.1 million, or 8.6 percentage points of the loss ratio, for the third quarter of 2026, compared to $14.3 million, or 6.2 percentage points of the loss ratio, for the third quarter of 2025. Weather-related loss activity for the third quarter of 2026 was lower than our previous five-year average of $20.4 million, or 9.3 percentage points of the loss ratio, for third-quarter weather-related losses. Our insurance subsidiaries incurred $4.2 million in losses from a July severe convective storm in the third quarter of 2026.

Large fire losses, which we define as individual fire losses in excess of $50,000, for the third quarter of 2026 were $5.8 million, or 2.6 percentage points of the loss ratio. That amount compared to large fire losses of $10.0 million, or 4.4 percentage points of the loss ratio, for the third quarter of 2025. We experienced decreases in both commercial property and homeowners fire losses compared to the prior-year quarter.

Net favorable development of reserves for losses incurred in prior accident years of $3.5 million decreased the loss ratio for the third quarter of 2026 by 1.5 percentage points, compared to net unfavorable development of $1.0 million that increased the loss ratio for the third quarter of 2025 by 0.4 percentage points. For the third quarter of 2026, we attribute the net favorable development primarily to lower-than-expected emergence that our insurance subsidiaries experienced for the workers’ compensation and commercial automobile lines of business.

Expense Ratio

The expense ratio was 34.8% for the third quarter of 2026, compared to 33.5% for the third quarter of 2025. The increase in the expense ratio primarily reflected the impact of a lower base of net premiums earned compared to the prior-year quarter.

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 95% of our consolidated investment portfolio in diversified, highly rated and marketable fixed-maturity securities at September 30, 2026.

	September 30, 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	$	97,279			6.5	%		$	103,619			6.9	%
Obligations of states and political subdivisions		516,109			34.6				485,710			32.4
Corporate securities		381,926			25.6				383,927			25.6
Mortgage-backed securities		424,471			28.4				445,227			29.7
Allowance for expected credit losses		(1,203	)		-0.1				(1,313	)		-0.1
Total fixed maturities		1,418,582			95.0				1,417,170			94.5
Equity securities, at fair value		51,055			3.4				44,370			3.0
Short-term investments, at cost		23,235			1.6				38,713			2.5
Total investments	$	1,492,872			100.0	%		$	1,500,253			100.0	%
Average investment yield		3.9	%						3.6	%
Average tax-equivalent investment yield		4.0	%						3.7	%
Average fixed-maturity duration (years)		6.1							5.5

Net investment income of $14.7 million for the third quarter of 2026 increased 5.4% compared to $13.9 million for the third quarter of 2025. The increase in net investment income primarily reflected an increase in average investment yield relative to the prior-year third quarter.

Net investment losses of $0.7 million for the third quarter of 2026 were primarily related to net realized investment losses on the strategic sales of available-for-sale fixed-maturity securities, offset partially by net unrealized gains in the fair value of equity securities held at September 30, 2026. Net investment gains of $1.3 million for the third quarter of 2025 were primarily related to net unrealized gains in the fair value of equity securities held at September 30, 2025, offset partially by net realized investment losses on the strategic sales of available-for-sale fixed-maturity securities.

Our book value per share was $17.70 at September 30, 2026, compared to $17.33 at December 31, 2025, with the increase related to net income, offset partially by cash dividends declared as well as $24.1 million of after-tax net unrealized losses within our available-for-sale fixed-maturity portfolio during 2026 that decreased our book value by $0.65 per share.

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 September 30,											Nine Months Ended September 30,
	2026				2025				% Change			2026			2025			% Change
	(dollars in thousands)
Reconciliation of Net Premiums
Earned to Net Premiums Written
Net premiums earned	$	222,883			$	229,822			-3.0	%		$	666,814		$	694,299		-4.0	%
Change in net unearned premiums		(13,150	)			(10,207	)		28.8				8,620			6,222		38.5
Net premiums written	$	209,733			$	219,615			-4.5	%		$	675,434		$	700,521		-3.6	%

The following table provides a reconciliation of net income to operating income for the periods indicated:

	Three Months Ended September 30,											Nine Months Ended September 30,
		2026				2025			% Change				2026				2025			% Change
	(dollars in thousands, except per share amounts)
Reconciliation of Net Income
to Non-GAAP Operating Income
Net income	$	18,157			$	20,080			-9.6	%		$	51,973			$	62,152			-16.4	%
Investment losses (gains) (after tax)		554				(1,005	)		NM				(1,649	)			(1,853	)		-11.0
Other, net		(72	)			-			NM				(99	)			-			NM
Non-GAAP operating income	$	18,639			$	19,075			-2.3	%		$	50,225			$	60,299			-16.7	%
Per Share Reconciliation of Net Income
to Non-GAAP Operating Income
Net income – Class A (diluted)	$	0.49			$	0.55			-10.9	%		$	1.40			$	1.72			-18.6	%
Investment losses (gains) (after tax)		0.01				(0.03	)		NM				(0.05	)			(0.05	)		0.0
Other, net		-				-			NM				-				-			NM
Non-GAAP operating income – Class A	$	0.50			$	0.52			-3.8	%		$	1.35			$	1.67			-19.2	%
Net income – Class B	$	0.45			$	0.51			-11.8	%		$	1.29			$	1.58			-18.4	%
Investment losses (gains) (after tax)		0.01				(0.03	)		NM				(0.04	)			(0.05	)		-20.0
Other, net		-				-			NM				-				-			NM
Non-GAAP operating income – Class B	$	0.46			$	0.48			-4.2	%		$	1.25			$	1.53			-18.3	%

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 100% generally indicates underwriting profitability.

Dividend Information

On October 15, 2026, we declared a regular quarterly cash dividend of $0.1925 per share for our Class A common stock and $0.175 per share for our Class B common stock, which are payable on November 16, 2026 to stockholders of record as of the close of business on November 2, 2026.

Pre-Recorded Webcast

At approximately 8:30 am ET on Thursday, October 29, 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 September 30,
				2026				2025
Net premiums earned			$	222,883			$	229,822
Investment income, net of expenses				14,689				13,943
Net investment (losses) gains				(701	)			1,272
Lease income				74				75
Installment payment fees				713				807
	Total revenues			237,658				245,919
Net losses and loss expenses				137,007				142,715
Amortization of deferred acquisition costs				35,881				37,218
Other underwriting expenses				41,724				39,688
Policyholder dividends				490				731
Interest				343				341
Other expenses, net				168				177
	Total expenses			215,613				220,870
Income before income tax expense				22,045				25,049
Income tax expense				3,888				4,969
Net income			$	18,157			$	20,080
Net income per common share:
	Class A - basic		$	0.49			$	0.56
	Class A - diluted		$	0.49			$	0.55
	Class B - basic and diluted		$	0.45			$	0.51
Supplementary Financial Analysts' Data
Weighted-average number of shares
	outstanding:
	Class A - basic			31,658,439				30,953,696
	Class A - diluted			32,166,249				31,439,953
	Class B - basic and diluted			5,576,775				5,576,775
Net premiums written			$	209,733			$	219,615
Book value per common share
	at end of period		$	17.70			$	17.14
Annualized return on average equity				10.9	%			13.0	%

Donegal Group Inc.
Consolidated Statements of Income
(unaudited; in thousands, except share data)
			Nine Months Ended September 30,
				2026				2025
Net premiums earned			$	666,814			$	694,299
Investment income, net of expenses				43,468				38,466
Net investment gains				2,087				2,345
Lease income				222				228
Installment payment fees				2,182				2,534
	Total revenues			714,773				737,872
Net losses and loss expenses				411,562				425,666
Amortization of deferred acquisition costs				108,301				115,950
Other underwriting expenses				127,300				116,033
Policyholder dividends				1,702				2,309
Interest				1,013				1,010
Other expenses, net				1,179				269
	Total expenses			651,057				661,237
Income before income tax expense				63,716				76,635
Income tax expense				11,743				14,483
Net income			$	51,973			$	62,152
Net income per common share:
	Class A - basic		$	1.42			$	1.74
	Class A - diluted		$	1.40			$	1.72
	Class B - basic and diluted		$	1.29			$	1.58
Supplementary Financial Analysts' Data
Weighted-average number of shares
	outstanding:
	Class A - basic			31,520,696				30,587,219
	Class A - diluted			31,996,127				31,071,583
	Class B - basic and diluted			5,576,775				5,576,775
Net premiums written			$	675,434			$	700,521
Book value per common share
	at end of period		$	17.70			$	17.14
Annualized return on average equity				10.6	%			14.1	%

Donegal Group Inc.
Consolidated Balance Sheets
(in thousands)
			September 30,				December 31,
				2026				2025
			(unaudited)
ASSETS
Investments:
	Fixed maturities:
		Held to maturity, at amortized cost	$	804,647			$	776,447
		Available for sale, at fair value		613,935				640,723
	Equity securities, at fair value			51,055				44,370
	Short-term investments, at cost			23,235				38,713
		Total investments		1,492,872				1,500,253
Cash				32,503				26,786
Premiums receivable				220,719				180,804
Reinsurance receivable				410,095				398,582
Deferred policy acquisition costs				69,145				68,670
Prepaid reinsurance premiums				205,818				171,083
Other assets				41,388				40,451
		Total assets	$	2,472,540			$	2,386,629
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
	Losses and loss expenses		$	1,127,476			$	1,100,050
	Unearned premiums			634,396				591,040
	Borrowings under lines of credit			35,000				35,000
	Other liabilities			14,384				20,121
		Total liabilities		1,811,256				1,746,211
Stockholders' equity:
	Class A common stock			348				344
	Class B common stock			56				56
	Additional paid-in capital			399,253				391,811
	Accumulated other comprehensive loss			(32,400	)			(8,296	)
	Retained earnings			335,253				297,729
	Treasury stock			(41,226	)			(41,226	)
		Total stockholders' equity		661,284				640,418
		Total liabilities and stockholders' equity	$	2,472,540			$	2,386,629

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Donegal Group’s third-quarter 2026 earnings?

Donegal Group earned $18.2 million, or $0.49 per diluted Class A share, in the third quarter of 2026. That compared with $20.1 million, or $0.55 per diluted Class A share, in the third quarter of 2025.

Why did Donegal Group introduce 12-month automobile policies in the third quarter of 2026?

The 12-month term option supported personal automobile new business growth, with customers selecting it for the vast majority of new automobile policies written during the quarter. Compared with six-month terms, the longer term effectively doubled net premiums written related to those new policies.

How much did the July storm cost Donegal Group in the third quarter of 2026?

Donegal Group’s insurance subsidiaries incurred $4.2 million in losses from a July severe convective storm during the third quarter of 2026.