Donegal Group Inc. (NASDAQ:DGICA), a $557 million market cap insurance company, recently reported significant stock transactions by Donegal Mutual Insurance Co., a major stakeholder. On December 6th, Donegal Mutual Insurance Co. acquired a total of 270,000 shares of Donegal Group's Class A common stock. The purchase was carried out at prices ranging from $16.3997 to $16.672 per share, amounting to a total investment of approximately $4.5 million. According to InvestingPro data, the stock is trading near its 52-week high of $17, following an impressive 29% gain over the past six months.
Following these transactions, Donegal Mutual Insurance Co. now holds 13,046,126 shares directly. These acquisitions reflect the ongoing interest and investment in Donegal Group Inc. by one of its principal shareholders. The company has maintained dividend payments for 24 consecutive years, demonstrating strong financial stability. InvestingPro analysis reveals 10+ additional key insights about DGICA's valuation and financial health, available in the comprehensive Pro Research Report.
In other recent news, Donegal Group reported a net income of $16.8 million, or $0.51 per Class A share, in its Third Quarter 2024 Earnings Call. This was despite facing $6 million in pre-tax catastrophe losses due to Hurricane Helene. The company's net premiums earned rose to $238 million, a 6% increase, and the combined ratio improved to 96.4%. Donegal Group also highlighted its strategic focus on small business growth and software enhancements, which have shown resilience in the face of industry challenges and severe weather impacts.
Moreover, Donegal Group completed strategic exits from commercial policies in Georgia and Alabama, and plans for software enhancements to improve policy management are slated for January 2025. The company is also aligning strategies for growth across regions with a cohesive business plan for 2025, with an emphasis on securing rate increases to mitigate inflation and claims costs, and a disciplined expense reduction to improve the expense ratio by two points by the end of 2025.
In other developments, while the company faced some challenges with its workers' compensation line affected by wage inflation and a 7.3% decline in policies-in-force in personal lines, it also saw growth in net premiums written in commercial lines and personal lines. Investment income increased by 2.8% to $10.8 million, and equity holdings increased by 39% compared to the end of 2023.
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