Donegal First-Quarter Net Jumps Threefold
NU Online News Service, April 20, 9:55 a.m. EDT?Donegal Group Inc. said its first-quarter net profit rose threefold to $11.73 million, compared with $3.84 million reported during the corresponding period one year ago.[@@]
The Marietta, Pa.-based insurer said the company benefited from improved underwriting results, with the combined ratio falling to 92.7?down from 97.2 reported during the 2003 first quarter.
Donegal also saw income boosted by an extraordinary gain of some $5.45 million, resulting from GAAP purchase accounting for unallocated negative goodwill from the Le Mars Insurance Company acquisition, which was completed in January.
Donegal noted that its previously announced purchase of the Peninsula Insurance Company and Peninsula Indemnity Company also became effective this past January.
First-quarter revenues were about $68 million, an increase of 30.3 percent over a year ago. Premiums earned for the quarter were reported at some $62.7 million, a 30.8 percent rise over the 2003 first quarter.
Net investment income for the quarter was $3.78 million, up from $3.36 million one year ago.
Donegal's chief executive Donald Nikolaus commented that the profitable results of the newly acquired companies?coupled with a continuation of the strong underwriting results by Donegal's core companies and a relatively normal weather period? resulted in a combined ratio that is as low as the company has ever achieved.
"The rate increases taken over the past few years, coupled with our continued dedication to sound underwriting principles and our ongoing expense control, have all contributed to a winning formula," Mr. Nikolaus said.
Donegal Group Inc. offers various personal, farm and commercial property-casualty insurance, in about 15 eastern states. The company's personal insurance products offerings range from auto and boat policies to homeowners and fire coverage. Its commercial insurance products include business owners, multi-peril and workers' compensation policies.
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