Donegal Group Inc., an insurance holding company, reported net income of $20.1 million for the third quarter of 2025, up 19.9% from $16.8 million in the same period a year earlier.
Net premiums written amounted to $219.6 million, down 5.4% compared to $232.2 million, driven by the net combination of a 3.4% increase in commercial lines net premiums written and a 15.9% decrease in personal lines.
Donegal Group reported a combined ratio of 95.9%, an improvement from 96.4% a year earlier. The loss ratio was 62.1%, with an expense ratio of 33.5%, compared to 61.5% and 34.5%, respectively, in Q3’24.
The decrease in the expense ratio primarily reflected the favourable impact of ongoing expense management initiatives and lower underwriting-based incentive costs for agents and employees.
Investment income stood at $13.9 million, up 28.8% from $10.8 million, driven by higher average investment yields.
The company also reported net investment gains of $1.3 million in Q3’25, compared to $1.9 million, primarily related to unrealised gains in the fair value of equity securities, partially offset by net realised investment losses on the strategic sales of available-for-sale fixed-maturity securities.
Kevin G. Burke, President and Chief Executive Officer of Donegal Group Inc., said, “We are encouraged to see a continuation of favorable results in the third quarter, which reflects the benefits of our strategic and tactical efforts over the past several years. While benign weather conditions contributed meaningfully to our quarterly performance, we were also pleased with the overall core loss ratio for the third quarter. We remain confident that our disciplined underwriting and ongoing strategic execution will provide sustained excellent financial performance over time.
“In our commercial lines business segment, we achieved strong renewal price increases coupled with solid retention. The 96.6% statutory combined ratio1 for this segment reflected our intentional underwriting approach. We have not achieved our target for new business writings through the first nine months of the year, which we attribute to a data-driven refinement of our underwriting appetite. We are proactively working with our agents to increase their submissions of accounts within our desired classes of business. We recently fully deployed the final major commercial lines release of our multi-year systems transformation project, providing enhanced products and service capabilities we expect will enhance our ability to target and win profitable middle market accounts. Coupled with our small business systems and capabilities implemented in recent years, we are now in a solid position to grow our commercial risk portfolio at a measured, intentional pace.
“In our personal lines business segment, we have been maintaining our focus on profitability and controlling new business levels to protect our underwriting margins. We have recently deployed the final major personal lines release of our systems transformation project, which will facilitate the conversion of all remaining legacy policies to our new platform in a phased approach that will be completed in June 2027. We expect modest declines in personal lines premiums through the balance of 2025 and into 2026, as we gradually increase our writing of new business with a goal of maintaining a stable, profitable book of personal lines business.
“We believe that we are now operating from a position of strength and that we are well positioned to navigate the evolving insurance landscape in the years ahead. We will continue to engage with our independent agency partners to identify growth opportunities, further enhance and refine the efficiency of our operations, and execute on our strategic priorities.”
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