Donegal Group Reports $5.2 Million Q4 Net; $18.3 Million Full Year

Pennsylvania-based Donegal Group Inc. reported net income for the fourth quarter of 2003 of $5,179,206, or $.47 per share on a diluted basis, compared to $3,627,496, or $.39 per share on a diluted basis, for the fourth quarter of 2002.

For the full year ended Dec. 31, 2003 the company posted record net income of $18,293,976, or $1.85 per share on a diluted basis and a return on average equity of 12.2 percent, compared to $12,002,722, or $1.31 per share on a diluted basis and a return on average equity of 9.4 percent, in 2002.

“We are pleased with our quarterly and year 2003 results that reflect the emphasis that the company has placed on premium adequacy, underwriting discipline and expense control over the last several years together with a profitable growth strategy,” stated President and CEO Donald Nikolaus.

The report noted that Donegal “continued its strong underwriting results through the end of the year, achieving a combined ratio for the fourth quarter of 93.8 percent, compared to 97.9 percent for the fourth quarter of 2002. The company’s loss ratio showed marked improvement from a year earlier at 63.1 percent for the fourth quarter of 2003, compared to 70.4 percent for the fourth quarter of 2002.” As a result the company’s book value per common share increased to $16.29 as of December 31, 2003, compared to $14.52 as of December 31, 2002.”

It reported that “revenues for the fourth quarter of 2003 were $55,694,338, an increase of 7.2 percent over a year earlier, with net premiums earned for the fourth quarter of $50,710,542, a 6.8 percent increase over the fourth quarter of 2002. The lower interest rate environment continued to impact investment income, which decreased 5.9 percent to $3,309,105 for the fourth quarter of 2003, compared to $3,517,404 for the fourth quarter of 2002, despite an increase in average invested assets.

“Revenues for the full year 2003 were $214,992,328, an increase of 5.5 percent over a year earlier, with net premiums earned for the year of $196,792,696, a 5.9 percent increase over 2002. The company’s combined ratio for the year ended December 31, 2003 was 95.0 percent, compared to 99.6 percent for the year ended December 31, 2002, with both personal and commercial lines showing improvement over the prior year.”