Donegal reports $16.9m Q2’25 net income with slight net premium decrease

Donegal Group Inc., the US insurance company, has announced its financial results for the second quarter of 2025, reporting a rise in net income to $16.9 million and an improved combined ratio of 97.7%, while net premiums saw a slight decrease of 1.1%.

Q2 2025’s net income improved from $4.2 million reported in Q2 2024. Net premiums earned stood at $231.8 million in the quarter, from the $234.3 million seen in the same period last year.

Net premium written (NPW) decreased 5.4%, to $233.8 million from $247.1 in Q2 2024. This represents the net combination of a 1.9% increase in commercial lines net premiums written and a 15.3% decrease in personal lines net premiums written.

The $13.3 million decrease in NPW for Q2 2025 compared to Q2 2024 included a $2.7 million increase in Commercial Lines, mainly driven by solid retention and a continuation of renewal premium increases in lines other than workers’ compensation, offset partially by lower new business writings.

NPW in the quarter was also driven by a $16.0 million decrease in Personal Lines. This was primarily attributed to planned attrition due to lower new business writings and non-renewal actions, offset partially by a continuation of renewal premium rate increases and solid retention.

Donegal also reported net investment gains (after tax) of $1.2 million, or 3 cents per diluted Class A share, compared to $0.6 million, or 2 cents per diluted Class A share, which are included in net income.

Kevin G. Burke, President and Chief Executive Officer of Donegal Group Inc., stated: “We are pleased with the progress we have made and the results we delivered for both the second quarter and first half of 2025, which we believe reflect the strength of our strategic execution and underwriting discipline. A meaningful improvement in our core loss ratio for both periods underscores our commitment to disciplined risk management and sustainable profitability.

He continued: “As expected, net premiums written declined this quarter, as lower new business writings and planned attrition modestly outpaced ongoing premium rate increases and solid retention levels. As a proactive measure, we intentionally slowed new business writings in our personal lines of business to protect underwriting margins and ensure we remain focused on profitable growth opportunities. We continue to identify and pursue profitable new business opportunities in states and classes that match our objectives.”

A significant milestone for the company was the deployment of its final major commercial lines systems release, marking an important step in its multi-year systems modernisation project.

Burked said: “During the second half of 2025, we will begin to roll out this enhanced platform on a state-by-state basis, enabling us to more effectively target and win key middle market accounts. When the rollout is completed in the first half of 2026, we will be operating on a single modern technology platform for all of our middle market and small business commercial product offerings.

“As we look ahead, we remain focused on disciplined execution, organizational alignment and operational excellence to further strengthen our long-term competitive position and enhance value for our stockholders.”

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