“Donegal Group Inc. reported fourth-quarter 2025 net income of $17.2 million, or $0.47 per diluted Class A share, reflecting a year-over-year decline in the quarter but contributing to a strong full-year performance with net income surging 56% to $79.3 million, or $2.18 per diluted Class A share. Net premiums earned fell 4.1% in Q4 to $226.9 million, while the combined ratio improved to 96.3%, signaling effective underwriting discipline. Book value per share rose to $17.33, underscoring resilience in a challenging insurance environment despite moderated top-line growth.”
Donegal Group: Q4 Earnings Snapshot
Donegal Group Inc., a regional property and casualty insurer operating through a network of independent agents primarily in the Mid-Atlantic and Southeast regions, released its fourth-quarter and full-year 2025 financial results. The company delivered a profitable quarter despite a contraction in earned premiums, highlighting ongoing efforts to balance growth with disciplined underwriting and expense management.
In the fourth quarter, net premiums earned decreased 4.1% to $226.9 million from the prior-year period. This decline stemmed largely from strategic actions in the personal lines segment, where the company has been transitioning legacy policies to a modern platform and selectively managing exposure in certain lines to prioritize profitability over volume. Total revenues for the quarter came in around $240 million, reflecting the impact of lower premiums offset partially by investment income and other sources.
Net income for the quarter stood at $17.2 million, translating to $0.47 per diluted Class A share. This figure represented a decrease compared to the prior year’s fourth quarter, influenced by the reduced premium base and typical seasonal factors in claims activity. However, the company’s underwriting performance remained strong, with a combined ratio of 96.3%. This metric, which measures claims and expenses relative to premiums earned, indicates that Donegal generated underwriting profit in the period, a positive sign of operational efficiency amid industry pressures from inflation, catastrophe events, and competitive pricing dynamics.
Investment operations provided steady support, as the company’s portfolio benefited from higher yields in a persistent elevated interest rate environment. While specific investment income details were not broken out in every snapshot, the overall profitability benefited from this non-underwriting contribution.
For the full year 2025, the picture was notably stronger. Net income climbed significantly to $79.3 million, or $2.18 per diluted Class A share, marking a 56% increase over 2024. This improvement reflected cumulative benefits from rate actions taken in prior periods, favorable loss reserve development in certain lines, and controlled expense growth. Book value per share advanced to $17.33, providing a solid capital foundation and supporting ongoing dividend payments to shareholders.
The personal lines segment, which includes private passenger automobile and homeowners insurance, continued to show excellent profitability trends despite the premium headwinds. Management highlighted progress in converting remaining legacy policies to a new technology platform, with completion expected by mid-2027. This initiative aims to enhance competitiveness in new business production and operational efficiency over time.
In commercial lines, which encompass workers’ compensation, commercial multi-peril, and other business coverages, the company maintained focus on profitable classes and geographies. Overall, the underwriting discipline across segments helped achieve a favorable combined ratio for both the quarter and the year.
Looking ahead, Donegal’s leadership emphasized a measured approach to growth in 2026. The company plans to pursue modest premium expansion through its independent agency partners, targeting attractive markets and classes of business while maintaining strict profitability thresholds. Executives noted that the personal lines premium declines experienced in 2025 are expected to moderate gradually as new business efforts gain traction, without sacrificing long-term underwriting targets.
Key financial highlights from the fourth quarter and full year include:
Q4 Net Premiums Earned : $226.9 million (-4.1% YoY)
Q4 Combined Ratio : 96.3%
Q4 Net Income : $17.2 million ($0.47 per diluted Class A share)
Full-Year Net Income : $79.3 million ($2.18 per diluted Class A share, +56% YoY)
Book Value per Share (end of 2025) : $17.33
These results position Donegal Group as a stable performer in the regional insurance space, where many peers continue to grapple with elevated loss costs and regulatory challenges. The company’s focus on strategic underwriting, technological upgrades, and capital preservation remains central to its long-term strategy.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial recommendations, or an endorsement of any security. Readers should conduct their own research and consult qualified professionals before making investment decisions.