Donegal Group Inc. has bounced back from its net loss in 2022.
The insurance holding company – subsidiaries and affiliates of which offer property and casualty insurance in certain Mid-Atlantic, Midwestern, New England, Southern, and Southwestern states – reported the following financial results:
|
Metric |
Q4 2023 |
Q4 2022 |
FY 2023 |
FY 2022 |
|---|---|---|---|---|
|
Net premiums earned |
$226.2 million |
$213 million |
$882.1 million |
$822.5 million |
|
Net investment income |
$10.7 million |
$9.4 million |
$40.9 million |
$34 million |
|
Total revenues |
$239.5 million |
$223.4 million |
$927.3 million |
$848.2 million |
|
Net income (loss) |
$(2 million) |
$3.5 million |
$4.4 million |
$(2 million) |
|
Operating income (loss) |
$(3.7 million) |
$3 million |
$1.9 million |
$6.1 million |
“As we closed out 2023 and shifted our focus to 2024, we have continued to execute on our numerous strategic initiatives, particularly focusing on action items related to individual state strategies and profit improvement measures,” Donegal Group president and chief executive Kevin G. Burke said in a release. “Our independent agents are responding favorably to our new and modernized small commercial products and agency portal, and we are employing our advanced capabilities to attract growth within that profitable market segment.
“During the fourth quarter, we saw a continuation of improvement within our commercial lines underwriting results, partly due to the lowest quarterly impact of weather-related losses we have experienced since the first quarter of 2022, coupled with lower-than-average large fire loss severity. Our personal lines underwriting results continued to reflect the impact of increased claim severity and residual inflationary impacts on loss trends.
“We are implementing various measures to reduce our operating expenses incrementally over the next several years, noting that the expense ratio impact from costs associated with our major systems modernization project will peak in 2024 before beginning to subside gradually.”
Burke continued: “Actions related to our strategic decision to non-renew commercial accounts in geographies and classes we targeted for exit or profit improvement continued to progress and contributed to the modest decrease in commercial lines net premiums earned. While attrition from this effort more than offset strong renewal and retention rates, we expect the removal of those underperforming accounts will accelerate our return to target profitability levels in future periods.
“As planned, we slowed new business growth in our personal lines and implemented significant rate increases for retained policies throughout 2023. We will continue to take significant rate increases through 2024 to achieve and maintain rate adequacy in our personal lines segment. While the insurance landscape continues to evolve, our dedicated team remains keenly focused on execution as we navigate both the current and future environment with the ultimate goal of achieving sustained excellent financial performance.”
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