Yahoo Finance Donegal Group Inc. (NASDAQ:DGICA) Q1 2024 Earnings Call Transcript
Donegal Group Inc. (NASDAQ:DGICA) Q1 2024 Earnings Call Transcript April 26, 2024
Donegal Group Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Karin Daly: Good morning, and thank you for joining us today. This morning, Donegal Group issued its first quarter 2024 earnings release outlining its results. The release and a supplemental investor presentation are available in the Investor Relations section of Donegal's website at www.donegalgroup.com. Please be advised that today's conference is prerecorded and all participants are in listen-only mode. Speaking today will be President and Chief Executive Officer, Kevin Burke; Chief Financial Officer, Jeff Miller; Chief Underwriting Officer, Jeff Hay; Chief Operating Officer, Dan DeLamater; and Chief Investment Officer, Tony Viozzi. Please be aware that statements made during this call that are not historical facts are forward-looking statements and necessarily involve risks and uncertainties that could cause actual results to vary materially.
These factors can be found in Donegal Group's filings with the Securities and Exchange Commission, including its annual report on Form 10-K and quarterly reports on Form 10-Q. The company disclaims any obligation to update or publicly announce the results of any revisions that they may make to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. With that, it's my pleasure to turn it over to Mr. Kevin Burke. Kevin?
Kevin Burke: Thank you, Karin, and welcome, everyone. We will provide some details on our quarterly financial results and an update on the progress of a number of initiatives that we expect will generate incremental improvement in our results as the year progresses. We saw a significant improvement in our results for the first quarter of 2024 relative to the fourth quarter of 2023, but we will discuss a few factors that prevented us from achieving our targeted level of underwriting profit and overall earnings as the call progresses. From a top line growth perspective, our Commercial Lines premiums earned and written continue to reflect the impact of the strategic nonrenewals of all commercial policies in the state of Georgia and Alabama.
That initiative will be largely completed in the second quarter of 2024 and we are pleased that we were successful in achieving higher levels of Commercial Lines new business relative to prior year quarter in states and classes of business we have targeted for growth. Our dedicated small business underwriting team is also making great progress working with our marketing team to communicate our value proposition to specific agency partners and executing a strategy designed to accelerate small business growth in targeted geographic areas and classes of business in the years to come. We expect to see more meaningful increases in small business premiums as we continue to refine and expand our operating capabilities throughout the remainder of this year to enable us to effectively capitalize on profitable growth opportunities in 2025.
In Personal Lines, we're continuing to implement significant rate increases that account for virtually all of the premium increases in that segment as we actively control new business growth levels to essentially maintain overall exposures within that segment. Earned premiums will reflect even higher levels of rate increases in future quarters, which we expect will continue to drive performance improvements as loss trends continue to stabilize and we get closer to rate adequacy. We are making solid progress on our last two major software releases within our systems modernization project. We've begun the development phase of the major commercial systems release that will include a new commercial package policy and modernize other commercial products remaining on our legacy systems.
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