DGICA Q1'25 Investor Presentation FINAL
First Quarter 2025
Investor Presentation
President and Chief Executive Officer
Executive Vice President and Chief Financial Officer
Company Overview
affiliates offer commercial and personal lines of property and casualty insurance to businesses and individuals in certain Mid-Atlantic, Midwestern, Southeand Southwestestates through approximately 2,100 independent insurance agencies.
The Company offers full lines of commercial products (approx. 58% of 2024 NPW) and personal products (approx. 42% of 2024 NPW), including commercial multi-peril,
automobile, homeowners, workers' compensation and other coverages.
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Strategies to Provide Value to Stakeholders
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Achieving sustained |
Strategically modernizing |
Capitalizing on |
Providing superior |
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our operations and |
experiences to our agents, |
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excellent financial |
opportunities to grow |
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processes to transform our |
policyholders and |
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performance |
profitably |
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business |
employees |
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Maintaining underwriting |
Implementing new |
Continuing expansion |
Ensuring "ease of doing |
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systems to streamline |
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within existing markets |
business" through |
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discipline and premium |
business processes and |
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through independent |
automated agency |
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rate adequacy |
workflows and enhance |
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agents |
portals and interfaces |
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data analytics |
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Utilizing data analytics |
Expanding focus on |
State-specific strategies |
Responsive claims |
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and predictive modeling |
for growth or reduction of |
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process excellence to |
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tools to inform risk |
premiums, agency |
service, underwriting and |
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identify opportunities for |
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selection and pricing |
distribution and |
customer support |
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operational efficiencies |
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decisions |
enhanced profit |
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Continued emphasis on growing commercial lines while
maintaining a profitable book of personal lines
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Significant Benefits to Shareholders from Mutual Relationship
- Pooling agreementfosters an environment of continuity and maintains superior employee relations in which the business can grow.
- Shared combined business plan to enhance market penetration and underwriting profitability.
- Product offerings arecomplementary, offering a broad range of products that expands our ability to service accounts.
1Because of the different relative voting power of Class A common stock and Class B common stock, public stockholders hold approximately 30% of the aggregate voting power of the combined classes and Donegal Mutual holds approximately 70% of the aggregate voting power of the combined classes.
Rated A (Excellent)
by
5
Valuation vs. Multi-Line Insurers
Peer Average 2.13x
1.53
1.21
0.96
0.42
DGICA: Price and Book Value as of 3/31/2025.
Price-to-Book Multiple
4.28
3.22
2.82
2.47
2.15 2.21
1.89 1.91
1.66
Peer Data Source: FactSet; Price as of
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6 |
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Mix of Commercial and Personal Lines
Net Premiums Written
by Line of Business
Year Ended
Other Personal
1.1%
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Commercial Auto |
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Homeowners |
19.6% |
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Workers' Comp |
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14.9% |
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11.0% |
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Personal Auto |
Comm Multi-Peril |
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25.8% |
22.7% |
Other Commercial 4.9%
Commercial Auto
Commercial Multi-Peril
Workers' Comp
Other Commercial
Personal Lines
Personal Automobile
Homeowners
Other Personal
58% of NPW
42% of NPW
Continued Emphasis on Growth in
115,000
105,000
95,000
85,000
75,000
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89.7% |
91.0% |
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89.2% |
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86.4% |
85.5% |
85.4% |
86.6% |
86.2% |
85.4% |
86.8% |
87.2% |
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84.4% |
106,686 |
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105,549 |
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99,210 |
99,325 |
100,075 |
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97,878 |
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96,316 |
96,562 |
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91,254 |
92,334 |
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89,971 |
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87,051 |
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2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
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In-Force Policy Count |
Retention Levels |
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100.0%
95.0%
90.0%
85.0%
80.0%
75.0%
70.0%
65.0%
60.0%
55.0%
50.0%
Strategic Initiatives to Increase Long-Term Profitability
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- Strategic non-renewal actions in
Georgia andAlabama completed in 2024.
- Strategic non-renewal actions in
- Intentional underwriting actions to non-renew underperforming individual accounts/classes of business.
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- Conservatively underwriting new business premium.
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First Quarter 2025 - Overview
Modest Growth
Net Premiums
Earned
2.2%
vs. Q1'24
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Excellent Underwriting Results |
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Portfolio |
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Loss Ratio |
Expense Ratio |
Net Investment |
Avg. |
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Investment |
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Income |
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Yield |
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56.7% |
34.6% |
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3.4% |
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9.6 pts |
1.1 pts |
9.2% |
10 bps |
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vs. Q1'24 |
vs. Q1'24 |
vs. Q1'24 |
vs. Q1'24 |
Percentage change is reflective of Better/(Worse)
Premium growth primarily attributable to strong average renewal premium increases,
offset partially by lower new business volume and planned attrition.
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Financial Results - First Quarter 2025
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(dollars in thousands, except per share data) |
Q1'25 |
Q1'24 |
Change |
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Net Premiums Written |
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(1.7%) |
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Net Premiums Earned |
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2.2% |
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Better/(Worse) |
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Loss Ratio |
56.7% |
66.3% |
9.6 pts |
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Core |
54.2% |
58.7% |
4.5 pts |
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Weather |
3.7% |
4.7% |
1.0 pt |
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Large Fire Losses |
3.3% |
6.6% |
3.3 pts |
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Prior |
(4.5%) |
(3.7%) |
0.8 pts |
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Adverse (Favorable) |
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Expense Ratio |
34.6% |
35.7% |
1.1 pts |
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Dividend Ratio |
0.3% |
0.4% |
0.1 pts |
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Combined Ratio |
91.6% |
102.4% |
10.8 pts |
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Net Investment Income |
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9.2% |
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Net Income |
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323.2% |
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Per Share - Class A (Diluted) |
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294.4% |
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Book Value Per Share |
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11.8% |
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10 |
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First Quarter 2025 - Results by Line of Business
- Continued renewal premium increases averaging ~10.6%, excluding workers' compensation.
- Commercial lines net premiums written increased 3.3% primarily attributable to solid retention and a continuation of renewal premium increases in lines other than workers' compensation, offset partially by lower new business writings.
- Personal lines net premiums written decreased 9.9%, primarily attributable to planned attrition due to lower new business writings and non-renewal actions, offset partially by a continuation of renewal premium rate increases and solid retention.
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Net Premiums Written |
Statutory Combined Ratio |
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($ in millions) |
Q1'25 |
Q1'24 |
Change |
Q1'25 |
Q1'24 |
Change |
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Better/(Worse) |
Better/(Worse) |
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3.3% |
94.7% |
101.6% |
6.9 pts |
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Automobile |
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5.6% |
91.4% |
99.6% |
8.2 pts |
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Workers' Compensation |
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(7.5)% |
117.6% |
111.2% |
(6.4) pts |
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Commercial Multi-peril |
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5.7% |
90.3% |
102.7% |
12.4 pts |
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Other |
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8.6% |
80.8% |
82.2% |
1.4 pts |
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Personal Lines - Total |
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(9.9)% |
83.6% |
100.3% |
16.7 pts |
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Automobile |
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(10.1)% |
85.0% |
99.8% |
14.8 pts |
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Homeowners |
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(9.4)% |
83.8% |
102.9% |
19.1 pts |
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Other |
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(11.2)% |
56.6% |
85.2% |
28.6 pts |
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Total Lines |
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(1.7)% |
90.3% |
101.2% |
10.9 pts |
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Certain components may not foot due to rounding. |
11 |
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Attachments
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