Donegal Group Inc. reported its financial results for the second quarter and first half of 2026, revealing a decline in net premiums earned and net income compared to the same periods in 2025. For the three months ended June 30, 2026, the company earned $222.6 million in net premiums, a decrease of 4.0% from $231.8 million in the prior year. Net income for the quarter was $22.3 million, or $0.60 per diluted share, up from $16.9 million, or $0.46 per diluted share, in the same quarter of 2025. For the first half of 2026, net premiums earned totaled $443.9 million, down 4.4% from $464.5 million in the first half of 2025, while net income decreased to $33.8 million from $42.1 million year-over-year.
The company's total revenues for the second quarter of 2026 were $241.1 million, a decline from $247.1 million in the same quarter of 2025. The decrease in revenue was attributed to lower retention and renewal premium increases, although there was a modest increase in new business writings. Investment income rose to $14.5 million, a 15.6% increase from the previous year, primarily due to higher average investment yields and increased invested assets. Additionally, net investment gains for the quarter were $3.3 million, compared to $1.5 million in the prior year.
Operationally, Donegal Group's loss ratio improved to 59.5% in the second quarter of 2026 from 65.1% in the same quarter of 2025, reflecting a decrease in weather-related losses. The core loss ratio, which excludes weather-related and large fire losses, increased slightly to 51.0% from 50.1%. The company reported favorable loss reserve development of $7.8 million for the quarter, which positively impacted the loss ratio. The expense ratio also increased to 35.8% from 32.2%, driven by higher underwriting-based incentive costs and technology-related expenses.
Looking ahead, Donegal Group anticipates that the decline in personal lines net premiums written will taper off as measures taken to address retention and renewal rates take effect. The company continues to focus on maintaining a strong liquidity position, with net cash provided by operating activities amounting to $26.1 million in the first half of 2026, down from $37.9 million in the same period of 2025. As of June 30, 2026, the company had no outstanding borrowings under its line of credit and maintained a robust investment portfolio, positioning itself for future growth despite current challenges in the insurance market.
About DONEGAL GROUP INC
Donegal Group Inc. is an insurance holding company providing property and casualty insurance through subsidiaries in 21 U.S. states. Its core segments include commercial and personal lines, offering products like auto, homeowners, workers' compensation, and multi-peril coverage. Focused on disciplined underwriting, local market expertise, and technological modernization, it emphasizes organic growth, agency relationships, and operational efficiency to deliver stable, profitable insurance solutions.
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