Donegal Group Inc. Provides Information Relating to Claim Activity in Second Quarter
July 14 2017 - 8:30AM
Donegal Group Inc. (NASDAQ:DGICA) (NASDAQ:DGICB) announced
today that its results of operations for the second quarter of 2017
will reflect significant loss activity.
Weather-related losses added approximately $20.1 million to the
Company’s losses for the second quarter of 2017, including a
provision of approximately $3.6 million for additional
weather-related losses incurred but not yet reported at June 30,
2017 and approximately $2.7 million from events that occurred
during the first quarter of 2017. The claims resulted from
numerous wind and hail events related to severe weather patterns
that persisted in the Company’s operating regions during extended
periods during the second quarter of 2017. None of the loss
accumulations from these events exceeded the Company’s $5.0 million
third-party catastrophe reinsurance retention. The Company’s
previous five-year average for second quarter weather-related
losses was $10.5 million.
In addition to the weather-related losses, the Company incurred
approximately $7.6 million of large fire losses for the second
quarter of 2017, compared to approximately $3.7 million of large
fire losses for the second quarter of 2016. The Company
attributes this increase to a higher volume of fire losses that
impacted the Company’s homeowners line of business. The
Company also increased its loss and loss expense reserves by
approximately $5.8 million related primarily to
higher-than-anticipated severity of commercial automobile liability
and commercial multi-peril losses that the Company incurred in 2015
and 2016.
As a result of the increased claims and reserving activity, the
Company currently expects to report a net loss between $0.07 and
$0.09 per diluted share of its Class A common stock for the second
quarter of 2017. The Company will provide further details
with respect to the quarterly claims activity in its earnings
conference call and webcast scheduled for July 19, 2017 at 11:00AM
Eastern Time.
About the Company
Donegal Group Inc. is an insurance holding company with
insurance subsidiaries offering personal and commercial property
and casualty lines of insurance in 21 Mid-Atlantic, Midwestern, New
England and Southern states. The insurance subsidiaries of
Donegal Group Inc. and Donegal Mutual Insurance Company conduct
business together as the Donegal Insurance Group. The Donegal
Insurance Group has an A.M. Best rating of A (Excellent).
The Company's Class A common stock and Class B common stock
trade on NASDAQ under the symbols DGICA and DGICB,
respectively. As an effective consolidator of small to
medium-sized "main street" property and casualty insurers, Donegal
Group Inc. has grown profitably over the last three decades.
The Company continues to seek opportunities for growth while
striving to achieve its longstanding goal of outperforming the
industry in terms of service, profitability and growth in book
value.
For Further Information:
Jeffrey D. Miller, Executive Vice President and Chief Financial Officer
Phone: (717) 426-1931
E-mail: investors@donegalgroup.com
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