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Donegal Group Inc. (NASDAQ: DGICA) Q2 profit rises 32.3% on weather losses

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Donegal Group Inc. reported second quarter and first-half 2026 results, highlighted by Q2 net income of $22.3 million and a GAAP combined ratio of 95.6%.

For Q2 2026, net premiums earned decreased 4.0% to $222.6 million, but underwriting and investment performance improved. Net income rose 32.3%, non-GAAP operating income grew 25.9%, and annualized return on average equity increased to 13.6% from 11.3%. Commercial lines net premiums earned grew 2.2% while personal lines fell 13.1%. The loss ratio improved to 59.5% from 65.1%, helped by weather-related losses of $11.9 million versus $25.8 million a year earlier, partially offset by higher large fire losses of $15.0 million and a higher expense ratio of 35.8% versus 32.2%. Book value per share was $17.98 at June 30, 2026, up from $16.62 a year earlier and $17.33 at year-end 2025. For the first six months, net premiums earned declined 4.4% and net income decreased 19.6% versus the prior-year period. The company declared quarterly cash dividends of $0.1925 per Class A share and $0.175 per Class B share, payable August 14, 2026.

Positive

  • Q2 2026 net income rose 32.3% to $22.3 million, with the GAAP combined ratio improving to 95.6% from 97.7% and annualized ROE increasing to 13.6%.
  • Book value per share increased to $17.98, up 8.2% year over year, supported by solid underwriting performance and higher net investment income of $14.5 million.

Negative

  • First-half 2026 net income declined 19.6% to 33,816 (dollars in thousands), and the GAAP combined ratio weakened to 97.7% from 94.6% versus the prior-year period.
  • Personal lines premiums continued to contract, with Q2 2026 personal lines net premiums earned down 13.1% and net premiums written down 9.7% compared to Q2 2025.

Filing Explained

The filing uses separate underwriting measures, while the expected personal-lines recovery remains unfinished.

This Form 8-K reports the company’s second-quarter and first-half 2026 results for periods ended June 30, with unaudited financial statements; the disclosure updates the reported book-value measure for common holders to $17.98 per share at June 30, 2026.

The release defines non-GAAP operating income as net income excluding after-tax net investment gains or losses, restructuring charges and other significant non-recurring items; second-quarter operating income was $19,697 thousand versus net income of $22,306 thousand.

It defines the statutory combined ratio as a statutory-accounting measure that excludes investment income and certain other items; the second-quarter total-lines statutory ratio was 94.2%, while the GAAP combined ratio was 95.6%.

The release says second-quarter personal-lines net premiums written declined 9.7% and expects that decline to gradually taper during 2026 as actions take effect; that taper is an expectation, not a reported completed result.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Net income Q2 2026 $22.3 million Three months ended June 30, 2026; up 32.3% vs Q2 2025
Net premiums earned Q2 2026 $222.6 million Decreased 4.0% compared to second quarter of 2025
GAAP combined ratio Q2 2026 95.6% Improved from 97.7% in the second quarter of 2025
Annualized return on average equity Q2 2026 13.6% Up from 11.3% in the prior-year quarter
Book value per share $17.98 At June 30, 2026; up from $16.62 at June 30, 2025
Weather-related losses Q2 2026 $11.9 million Represented 5.3 percentage points of the loss ratio
Large fire losses Q2 2026 $15.0 million Equal to 6.7 percentage points of the loss ratio
Total investments June 30, 2026 $1,515,225 thousand Consolidated investment portfolio at June 30, 2026
combined ratio financial
"Combined ratio of 95.6%, compared to 97.7%"
The combined ratio is a way insurance companies measure how well they are doing by adding up all their costs and claims and comparing them to the money they earn from premiums. If the ratio is below 100%, it means the company is making a profit; if it's above 100%, they are losing money. It helps see if an insurance company is financially healthy or not.
core loss ratio financial
"the core loss ratio, which excludes weather-related losses"
Core loss ratio measures the share of an insurer’s regular earned premiums that is paid out as claims from its ongoing underwriting business, typically excluding one-time events, large catastrophes or accounting adjustments. Investors watch it because it reveals the underlying health and profitability of an insurer’s core operations—think of it as the fuel efficiency of the business: lower ratios mean more premium dollars are left to cover expenses and profit, while higher ratios signal pressure on underwriting performance.
statutory combined ratio financial
"The statutory combined ratio is a non-GAAP standard measurement"
A statutory combined ratio is a percentage used to judge an insurance company’s core operating performance under regulatory accounting rules; it compares claims paid, claims-handling costs and other underwriting expenses to the premiums the company earned. Think of it like a household budget: if the ratio is below 100% the insurer is collecting more in premiums than it spends on claims and running the business, while above 100% means underwriting losses that can erode capital and affect investor returns.
net premiums written financial
"The 3.2% decrease in net premiums written for the second quarter"
Net premiums written is the total amount of insurance premium a company has agreed to collect from customers for new and renewed policies during a period, after subtracting premiums it passes on to other insurers (reinsurance) and cancellations. It matters to investors because it shows the insurer’s actual sales growth and risk retained—like a retailer’s sales after returns and wholesale transfers—so rising net premiums written can signal stronger future revenue and underwriting exposure.
non-GAAP operating income financial
"Non-GAAP operating income 1 was 19,697 for Q2 2026"
Non-GAAP operating income is a measure of a company's profit from its core business activities, calculated by excluding certain expenses or income that are not part of regular operations. It provides a clearer picture of how well the business is performing by focusing on ongoing operations, helping investors compare companies more consistently and make better-informed decisions.
Net premiums earned Q2 2026 $222.6 million -4.0% vs Q2 2025
Net income Q2 2026 $22.3 million +32.3% vs Q2 2025
Non-GAAP operating income Q2 2026 $19,697 thousand +25.9% vs Q2 2025
GAAP combined ratio Q2 2026 95.6% improved from 97.7% in Q2 2025
Annualized ROE Q2 2026 13.6% up from 11.3% in Q2 2025
Net premiums earned six months 2026 $443,932 thousand -4.4% vs first half 2025
Net income six months 2026 $33,816 thousand -19.6% vs first half 2025

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

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FAQ

How did Donegal Group Inc. (DGICA) perform in Q2 2026?
Donegal Group Inc. reported Q2 2026 net income of $22.3 million, up 32.3% from $16.9 million in Q2 2025. Net premiums earned declined 4.0% to $222.6 million, while the GAAP combined ratio improved to 95.6% from 97.7%.

What were Donegal Group Inc. (DGICA) first-half 2026 results?
For the six months ended June 30, 2026, Donegal Group Inc. generated net income of 33,816 (dollars in thousands), a 19.6% decrease from 42,071 a year earlier. Net premiums earned fell 4.4% to 443,932 (dollars in thousands), and the GAAP combined ratio rose to 97.7%.

How did commercial and personal lines perform for DGICA in Q2 2026?
In Q2 2026, commercial lines net premiums earned rose 2.2% to 141,516 (dollars in thousands), while personal lines fell 13.1% to 81,058. Net premiums written increased 0.8% in commercial lines but declined 9.7% in personal lines compared with Q2 2025.

What drove Donegal Group Inc. (DGICA) underwriting results in Q2 2026?
Donegal’s Q2 2026 loss ratio improved to 59.5% from 65.1%, aided by lower weather-related losses of $11.9 million versus $25.8 million. This was partly offset by higher large fire losses of $15.0 million and a higher expense ratio of 35.8%.

What are DGICA’s book value and ROE as of June 30, 2026?
At June 30, 2026, Donegal Group Inc. reported book value per share of $17.98, up from $16.62 a year earlier. Q2 2026 annualized return on average equity was 13.6%, compared to 11.3% in the prior-year quarter.

What dividends did Donegal Group Inc. (DGICA) declare in July 2026?
On July 16, 2026, Donegal Group Inc. declared a regular quarterly cash dividend of $0.1925 per Class A share and $0.175 per Class B share, payable August 14, 2026 to stockholders of record on July 31, 2026.

How is Donegal Group Inc. (DGICA) investing its portfolio?
As of June 30, 2026, Donegal had $1,515,225 in total investments (dollars in thousands), with 95.0% in fixed-maturity securities. The average investment yield was 3.8%, and the average tax-equivalent yield was 4.0%.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

 

FORM 8-K

_____________________

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event Reported): July 30, 2026

 

Donegal Group Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware 0-15341 23-2424711
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification Number)

 

1195 River Road, P.O. Box 302, Marietta, Pennsylvania 17547
(Address of Principal Executive Offices) (Zip Code)

 

(717) 426-1931

(Registrant's telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
     
  ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading Symbols   Name of Each Exchange on Which Registered
Class A Common Stock, $.01 par value   DGICA   The NASDAQ Global Select Market
Class B Common Stock, $.01 par value   DGICB   The NASDAQ Global Select Market

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On July 30, 2026, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

Exhibit 99.1   Press release dated July 30, 2026
Exhibit 104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Donegal Group Inc.
     
     
Date: July 30, 2026 By:  /s/ Jeffrey D. Miller        
    Jeffrey D. Miller
    Executive Vice President & Chief Financial Officer
     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit Number   Description
     
Exhibit 99.1   Press release dated July 30, 2026
Exhibit 104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT 99.1

Donegal Group Inc. Announces Second Quarter and First Half 2026 Results

MARIETTA, Pa., July 30, 2026 (GLOBE NEWSWIRE) -- Donegal Group Inc. (NASDAQ: DGICA) and (NASDAQ: DGICB) today reported its financial results for the second quarter and first half of 2026.

Significant Items for Second Quarter of 2026 (all comparisons to second quarter of 2025):

  • Net premiums earned decreased 4.0% to $222.6 million
  • Combined ratio of 95.6%, compared to 97.7%
  • Net income of $22.3 million, or 60 cents per diluted Class A share, compared to $16.9 million, or 46 cents per diluted Class A share
  • Net investment gains (after tax) of $2.6 million, or 7 cents per diluted Class A share, compared to $1.2 million, or 3 cents per diluted Class A share, are included in net income
  • Annualized return on average equity of 13.6%, compared to 11.3%
  • Book value per share of $17.98 at June 30, 2026, compared to $16.62 at June 30, 2025

Financial Summary

 Three Months Ended June 30, Six Months Ended June 30,
  2026   2025  % Change  2026   2025  % Change
 (dollars in thousands, except per share amounts)
            
Income Statement Data           
Net premiums earned$222,574  $231,775  -4.0% $443,932  $464,476  -4.4%
Investment income, net 14,491   12,540  15.6   28,778   24,524  17.3 
Net investment gains 3,267   1,544  111.6   2,788   1,073  159.8 
Total revenues 241,119   247,148  -2.4   477,115   491,953  -3.0 
Net income 22,306   16,866  32.3   33,816   42,071  -19.6 
Non-GAAP operating income1 19,697   15,647  25.9   31,587   41,224  -23.4 
Annualized return on average equity 13.6%  11.3% 2.3 pts   10.4%  14.6% -4.2 pts 
            
Per Share Data           
Net income – Class A (diluted)$0.60  $0.46  30.4% $0.91  $1.17  -22.2%
Net income – Class B 0.55   0.43  27.9   0.84   1.08  -22.2 
Non-GAAP operating income – Class A (diluted) 0.53   0.43  23.3   0.85   1.14  -25.4 
Non-GAAP operating income – Class B 0.49   0.40  22.5   0.79   1.06  -25.5 
Book value 17.98   16.62  8.2   17.98   16.62  8.2 
            

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”).

Management Commentary

Kevin G. Burke, President and Chief Executive Officer of Donegal Group Inc., stated, “Our net premiums earned for the second quarter of 2026 reflected a continuation of challenging trends and market conditions we experienced last quarter. Against that backdrop, we are pleased to report solid quarterly results that provided further growth in our book value to $17.98 per share at June 30, 2026, compared to $17.54 at the end of the first quarter of 2026.

“Net premiums written1 for our commercial lines business segment grew by 0.8% compared to the prior-year quarter, resulting primarily from improved new business production that was mostly offset by lower renewal premium increases and retention levels. As expected, we experienced a continuing decline in our personal lines net premiums written that we expect will gradually taper over the course of 2026 as actions we have taken to slow and eventually reverse the decline take effect. 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.

“On the whole, our underwriting results for the second quarter of 2026 were solid, which we primarily attribute to favorable core loss ratios in both our commercial and personal lines segments, lower-than-average weather-related losses and favorable prior-year reserve development, offset partially by a moderate increase in large fire losses. Solid underwriting performance and enhanced investment income allowed us to continue growing our book value in the second quarter.

“While we face a softening phase of the insurance cycle, we have established a strong foundation over the past several years, and we continue to believe that the effective ongoing execution of our strategies will enhance stockholder value over time. For example, we are beginning to realize benefits from our ongoing emphasis on enhanced engagement with our independent agents as a means of attracting profitable growth opportunities.”

Insurance Operations

Donegal Group Inc. 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 Inc. conduct business together as the Donegal Insurance Group.

 Three Months Ended June 30, Six Months Ended June 30,
  2026   2025  % Change  2026   2025  % Change
 (dollars in thousands)
                
Net Premiums Earned               
Commercial lines$141,516  $138,527  2.2% $280,480  $274,743  2.1%
Personal lines 81,058   93,248  -13.1   163,452   189,733  -13.9 
Total net premiums earned$222,574  $231,775  -4.0% $443,932  $464,476  -4.4%
                
Net Premiums Written               
Commercial lines:               
Automobile$54,608  $50,584  8.0% $115,388  $107,109  7.7%
Workers' compensation 20,573   24,243  -15.1   47,467   52,997  -10.4 
Commercial multi-peril 53,980   56,478  -4.4   114,606   117,268  -2.3 
Other 16,944   13,609  24.5   32,751   28,158  16.3 
Total commercial lines 146,105   144,914  0.8   310,212   305,532  1.5 
Personal lines:               
Automobile 45,519   52,741  -13.7   91,436   107,933  -15.3 
Homeowners 32,333   33,590  -3.7   59,272   62,378  -5.0 
Other 2,455   2,568  -4.4   4,782   5,062  -5.5 
Total personal lines 80,307   88,899  -9.7   155,490   175,373  -11.3 
Total net premiums written$226,412  $233,813  -3.2% $465,702  $480,905  -3.2%
                
                

Net Premiums Written

The 3.2% decrease in net premiums written for the second quarter of 2026 compared to the second quarter of 2025, as shown in the table above, represents the net combination of a 0.8% increase in commercial lines net premiums written and a 9.7% decrease in personal lines net premiums written. The $7.4 million decrease in net premiums written for the second quarter of 2026 compared to the second quarter of 2025 included:

  • Commercial Lines: $1.2 million increase that we attribute primarily to new business writings, offset partially by a lower level of renewal premium increases and retention.
  • Personal Lines: $8.6 million decrease that we attribute primarily to modestly higher attrition, offset partially by more modest renewal premium rate increases and incremental growth in new business writings.

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 six months ended June 30, 2026 and 2025:

 Three Months Ended Six Months Ended
 June 30 June 30
 2026 2025 2026 2025
        
GAAP Combined Ratios (Total Lines)       
Loss ratio - core losses51.0% 50.1% 52.3% 52.1%
Loss ratio - weather-related losses5.3  11.1  6.5  7.4 
Loss ratio - large fire losses6.7  5.2  6.1  4.3 
Loss ratio - net prior-year reserve development-3.5  -1.3  -3.1  -2.9 
Loss ratio59.5  65.1  61.8  60.9 
Expense ratio35.8  32.2  35.6  33.4 
Dividend ratio0.3  0.4  0.3  0.3 
Combined ratio95.6% 97.7% 97.7% 94.6%
        
Statutory Combined Ratios       
Commercial lines:       
Automobile91.1% 97.7% 91.4% 94.6%
Workers' compensation105.4  104.9  109.0  111.3 
Commercial multi-peril108.7  97.5  111.2  93.9 
Other100.2  119.8  100.4  100.6 
Total commercial lines100.9  101.0  102.7  97.8 
Personal lines:       
Automobile83.6  79.3  82.0  82.2 
Homeowners81.8  115.1  88.2  99.0 
Other63.5  55.2  71.0  55.9 
Total personal lines82.3  91.7  84.0  87.5 
Total lines94.2% 97.4% 96.0% 93.9%
        
        

Loss Ratio

For the second quarter of 2026, the loss ratio decreased to 59.5%, compared to 65.1% for the second 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 54.0% for the second quarter of 2026 remained relatively consistent with 54.5% for the second quarter of 2025. For the personal lines segment, the core loss ratio of 45.8% for the second quarter of 2026 increased modestly from 43.3% for the second quarter of 2025.

Weather-related losses were $11.9 million, or 5.3 percentage points of the loss ratio, for the second quarter of 2026, compared to $25.8 million, or 11.1 percentage points of the loss ratio, for the second quarter of 2025. Weather-related loss activity for the second quarter of 2026 was much lower than our previous five-year average of $20.3 million, or 9.4 percentage points of the loss ratio, for second-quarter weather-related losses.

Large fire losses, which we define as individual fire losses in excess of $50,000, for the second quarter of 2026 were $15.0 million, or 6.7 percentage points of the loss ratio. That amount was higher than the large fire losses of $12.1 million, or 5.2 percentage points of the loss ratio, for the second quarter of 2025. We experienced an increase in commercial property fire losses that was partially offset by a decrease in homeowners fire losses compared to the prior-year quarter.

Net favorable development of reserves for losses incurred in prior accident years reduced the loss ratio by 3.5 percentage points for the second quarter of 2026 compared to 1.3 percentage points for the second quarter of 2025. Our insurance subsidiaries experienced favorable development primarily in the personal automobile, workers’ compensation, commercial automobile and homeowners lines of business.

Expense Ratio

The expense ratio was 35.8% for the second quarter of 2026, compared to 32.2% for the second quarter of 2025. The increase in the expense ratio primarily reflected the impacts of higher underwriting-based incentive costs for agents and employees as well as higher technology-related expenses and a lower base of net premiums earned compared to the prior-year quarter.

Investment Operations

Our 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 95.0% of our consolidated investment portfolio in diversified, highly rated and marketable fixed-maturity securities at June 30, 2026.

 June 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$94,269  6.2% $103,619  6.9%
Obligations of states and political subdivisions 512,924  33.8   485,710  32.4 
Corporate securities 388,993  25.7   383,927  25.6 
Mortgage-backed securities 444,935  29.4   445,227  29.7 
Allowance for expected credit losses (1,306) -0.1   (1,313) -0.1 
Total fixed maturities 1,439,815  95.0   1,417,170  94.5 
Equity securities, at fair value 48,880  3.2   44,370  3.0 
Short-term investments, at cost 26,530  1.8   38,713  2.5 
Total investments$1,515,225  100.0% $1,500,253  100.0%
        
Average investment yield 3.8%    3.6%  
Average tax-equivalent investment yield 4.0%    3.7%  
Average fixed-maturity duration (years) 5.7     5.5   
        
        

Net investment income of $14.5 million for the second quarter of 2026 increased 15.6% compared to $12.5 million for the second quarter of 2025. The increase in net investment income primarily reflected an increase in average investment yield and higher average invested assets relative to the prior-year second quarter.

Net investment gains of $3.3 million for the second quarter of 2026 were primarily related to unrealized gains in the fair value of equity securities held at June 30, 2026, offset partially by net realized investment losses on the sale of available-for-sale fixed-maturity securities. Net investment gains of $1.5 million for the second quarter of 2025 were primarily related to unrealized gains in the fair value of equity securities held at June 30, 2025, offset partially by net realized investment losses on the sale of available-for-sale fixed-maturity securities.

Our book value per share was $17.98 at June 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 $3.3 million of after-tax unrealized losses within our available-for-sale fixed-maturity portfolio during 2026 that decreased our book value by $0.09 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 June 30, Six Months Ended June 30,
 2026 2025 % Change 2026 2025 % Change
 (dollars in thousands)
            
Reconciliation of Net Premiums           
Earned to Net Premiums Written           
Net premiums earned$222,574 $231,775 -4.0% $443,932 $464,476 -4.4%
Change in net unearned premiums 3,838  2,038 88.3   21,770  16,429 32.5 
Net premiums written$226,412 $233,813 -3.2% $465,702 $480,905 -3.2%
            
            

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

 Three Months Ended June 30, Six Months Ended June 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$22,306  $16,866  32.3% $33,816  $42,071  -19.6%
Investment gains (after tax) (2,609)  (1,219) 114.0   (2,229)  (847) 163.2 
Non-GAAP operating income$19,697  $15,647  25.9% $31,587  $41,224  -23.4%
            
Per Share Reconciliation of Net Income           
to Non-GAAP Operating Income           
Net income – Class A (diluted)$0.60  $0.46  30.4% $0.91  $1.17  -22.2%
Investment gains (after tax) (0.07)  (0.03) 133.3   (0.06)  (0.03) 100.0 
Non-GAAP operating income – Class A$0.53  $0.43  23.3% $0.85  $1.14  -25.4%
            
Net income – Class B$0.55  $0.43  27.9% $0.84  $1.08  -22.2%
Investment gains (after tax) (0.06)  (0.03) 100.0   (0.05)  (0.02) 150.0 
Non-GAAP operating income – Class B$0.49  $0.40  22.5% $0.79  $1.06  -25.5%
            
            

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 100% generally indicates underwriting profitability.

Dividend Information

On July 16, 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 August 14, 2026 to stockholders of record as of the close of business on July 31, 2026.

Pre-Recorded Webcast

At approximately 8:30 am ET on Thursday, July 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 June 30,
  2026   2025 
    
Net premiums earned$222,574  $231,775 
Investment income, net of expenses 14,491   12,540 
Net investment gains 3,267   1,544 
Lease income 74   76 
Installment payment fees 713   844 
Other income, net -   369 
Total revenues 241,119   247,148 
    
Net losses and loss expenses 132,556   150,917 
Amortization of deferred acquisition costs 36,123   39,501 
Other underwriting expenses 43,562   35,150 
Policyholder dividends 560   819 
Interest 337   337 
Other expenses, net 433   - 
Total expenses 213,571   226,724 
    
Income before income tax expense 27,548   20,424 
Income tax expense 5,242   3,558 
    
Net income$22,306  $16,866 
    
Net income per common share:   
Class A - basic$0.61  $0.47 
Class A - diluted$0.60  $0.46 
Class B - basic and diluted$0.55  $0.43 
    
Supplementary Financial Analysts' Data   
    
Weighted-average number of shares outstanding:   
Class A - basic 31,472,806   30,678,158 
Class A - diluted 31,891,385   31,336,862 
Class B - basic and diluted 5,576,775   5,576,775 
    
Net premiums written$226,412  $233,813 
    
Book value per common share at end of period
$17.98  $16.62 
    
Annualized return on average equity 13.6%  11.3%
        


Donegal Group Inc.
Consolidated Statements of Income
(unaudited; in thousands, except share data)
    
 Six Months Ended June 30,
  2026   2025 
    
Net premiums earned$443,932  $464,476 
Investment income, net of expenses 28,778   24,524 
Net investment gains 2,788   1,073 
Lease income 148   153 
Installment payment fees 1,469   1,727 
Total revenues 477,115   491,953 
    
Net losses and loss expenses 274,555   282,950 
Amortization of deferred acquisition costs 72,420   78,732 
Other underwriting expenses 85,576   76,345 
Policyholder dividends 1,212   1,578 
Interest 670   670 
Other expenses, net 1,011   93 
Total expenses 435,444   440,368 
    
Income before income tax expense 41,671   51,585 
Income tax expense 7,855   9,514 
    
Net income$33,816  $42,071 
    
Net income per common share:   
Class A - basic$0.93  $1.19 
Class A - diluted$0.91  $1.17 
Class B - basic and diluted$0.84  $1.08 
    
Supplementary Financial Analysts' Data   
    
Weighted-average number of shares outstanding:   
Class A - basic 31,450,682   30,400,944 
Class A - diluted 31,909,925   30,884,992 
Class B - basic and diluted 5,576,775   5,576,775 
    
Net premiums written$465,702  $480,905 
    
Book value per common share at end of period
$17.98  $16.62 
    
Annualized return on average equity 10.4%  14.6%
        


Donegal Group Inc.
Consolidated Balance Sheets
(in thousands)
    
 June 30, December 31,
  2026   2025 
 (unaudited)  
    
ASSETS
Investments:   
Fixed maturities:   
Held to maturity, at amortized cost$803,295  $776,447 
Available for sale, at fair value 636,520   640,723 
Equity securities, at fair value 48,880   44,370 
Short-term investments, at cost 26,530   38,713 
Total investments 1,515,225   1,500,253 
Cash
 23,722   26,786 
Premiums receivable 217,819   180,804 
Reinsurance receivable 413,119   398,582 
Deferred policy acquisition costs 71,900   68,670 
Prepaid reinsurance premiums 197,964   171,083 
Other assets 42,337   40,451 
Total assets$2,482,086  $2,386,629 
    
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
   
Losses and loss expenses$1,129,135  $1,100,050 
Unearned premiums 639,692   591,040 
Borrowings under lines of credit 35,000   35,000 
Other liabilities 12,150   20,121 
Total liabilities 1,815,977   1,746,211 
Stockholders' equity:   
Class A common stock 345   344 
Class B common stock 56   56 
Additional paid-in capital 394,280   391,811 
Accumulated other comprehensive loss (11,616)  (8,296)
Retained earnings 324,270   297,729 
Treasury stock (41,226)  (41,226)
Total stockholders' equity 666,109   640,418 
Total liabilities and stockholders' equity$2,482,086  $2,386,629 
        


Source: View Original Filing on SEC EDGAR

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