Overview

• Insurance holding company's Q4 net premiums earned decreased 4.1% yr/yr

• Revenue for Q4 down 4%

Outlook

• Donegal aims for modest premium growth through independent agency partners in 2026

• Company expects personal lines premium decline to subside gradually throughout 2026

• Donegal introduces new incentives to boost new business submissions in 2026

Result Drivers

• COMMERCIAL LINES GROWTH - Modest growth in commercial lines net premiums was driven by solid premium retention and renewal premium increases, despite lower new business writings

• PERSONAL LINES DECLINE - Personal lines saw a significant decrease in net premiums due to planned attrition and lower new business writings

• INVESTMENT INCOME INCREASE - Net investment income rose 17.5% due to higher average invested assets and increased investment yield

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q4 Revenue	Slight Miss*	$240.14 mln	$241.49 mln (1 Analyst)
Q4 Adjusted EPS	Miss	$0.50	$0.53 (1 Analyst)
Q4 Net Income		$17.19 mln
Q4 Combined Ratio		96.30%
Q4 Expense Ratio		34.90%

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The one available analyst rating on the shares is "hold"

• The average consensus recommendation for the property & casualty insurance peer group is "buy."

• Wall Street's median 12-month price target for Donegal Group Inc is $21.00, about 12.8% above its February 18 closing price of $18.61

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

Press Release: ID:nGNXqYP11

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