 MARIETTA, Pa., July 27, 2020 GLOBE NEWSWIRE -- Donegal Group Inc. NASDAQ: DGICA and NASDAQ:DGICB today reported its financial results for the second quarter and first half of 2020.The Company will hold a conference call to discuss these results on Tuesday, July 28, 2020 at 11:00 A.M. Eastern Time. You may listen to the webcast of this conference call by accessing the event link at items include: Net income of 22.7 million, or 79 cents per diluted Class A share, for the second quarter of 2020, compared to 4.8 million, or 17 cents per diluted Class A share, for the second quarter of 2019 Net income of 26.4 million, or 92 cents per diluted Class A share, for the first six months of 2020, compared to 27.8 million, or 99 cents per diluted Class A share, for the first six months of 2019 Net investment gains of 6.5 million for the second quarter of 2020, primarily related to unrealized gains in the fair value of equity securities held at June 30, 2020, compared to net investment gains of 1.6 million for the second quarter of 2019 Net premiums earned of 184.4 million for the second quarter of 2020 decreased 2.3 compared to the second quarter of 2019 Net premiums written1 of 193.7 million for the second quarter of 2020 decreased 2.1 compared to the second quarter of 2019 Combined ratio of 92.3 for the second quarter of 2020, compared to 102.0 for the second quarter of 2019 Book value per share of 16.77 at June 30, 2020, compared to 15.67 at year-end 2019 Three Months Ended June 30, Six Months Ended June 30, 2020 2019 Change 2020 2019 Change dollars in thousands, except per share amounts Income Statement Data Net premiums earned184,374 188,763 -2.3 371,627 376,837 -1.4 Investment income, net 7,172 7,290 -1.6 14,548 14,338 1.5 Net investment gains losses 6,486 1,566 314.2 4,209 19,663 NM2 Total revenues 198,900 198,789 0.1 383,811 413,503 -7.2 Net income 22,679 4,789 373.6 26,410 27,812 -5.0 Non-GAAP operating income1 17,555 3,551 394.4 29,896 10,853 175.5 Per Share Data Net income Class A diluted0.79 0.17 364.7 0.92 0.99 -7.1 Net income Class B 0.72 0.15 380.0 0.84 0.90 -6.7 Non-GAAP operating income Class A diluted 0.61 0.13 369.2 1.04 0.39 166.7 Non-GAAP operating income Class B 0.55 0.11 400.0 0.95 0.35 171.4 Book value 16.77 15.34 9.3 16.77 15.34 9.3 1The Definitions of Non-GAAP and Operating Measures section of this release defines and reconciles data that we prepare on an accounting basis other than U.S. generally accepted accounting principles GAAP.2Not meaningful. Management CommentaryKevin G. Burke, President and Chief Executive Officer of Donegal Group Inc., noted, I want to first thank all of the dedicated employees at Donegal who have shown amazing resilience and maintained an outstanding level of professionalism in serving our agents and policyholders as we continue to navigate through unprecedented challenges the COVID-19 pandemic has presented to all of us. Over 90 percent of our team members began working from home in late March, and I am pleased that we have been successful in maintaining our core operations and essential functions. Our relationships with our independent agents are the cornerstone of our business. We quickly adapted to ensure our ability to meet the needs of our agents and policyholders, and we look forward to the time when we can resume personal interactions to further enhance those relationships. While much uncertainty remains with respect to the ultimate impact of the pandemic on our business, our agents are providing a steady flow of new commercial business accounts and we do not currently anticipate significant insured losses directly related to COVID-19. We are proactively addressing challenges as they arise and believe that the positive momentum we gained in 2019 and the first half of 2020 will help carry us through the remainder of 2020 and beyond.Mr. Burke continued, Net income for the second quarter of 2020 represented a continuation of the solid underwriting performance we reported in the first quarter, with the 92.3 combined ratio for the second quarter of 2020 comparing favorably to the 102.0 combined ratio for the prior-year quarter and 97.0 for the first quarter of 2020. Our commercial lines segment continued to operate at a profitable level, with a statutory combined ratio1 of 93.5 for the second quarter of 2020. Our personal lines segment generated a statutory combined ratio of 88.1 for the second quarter of 2020, which was a significant improvement from 108.5 for the prior-year quarter. More specifically, the statutory combined ratio for our personal automobile line of business improved from 107.2 in the prior-year quarter to 76.1 for the second quarter of 2020, primarily reflecting a marked reduction in personal auto claim frequency that resulted from lower driving activity in April and May of 2020. Personal automobile claim counts trended higher as driving activity returned to higher levels during the month of June, and we do not expect the favorable automobile loss experience to carry into the third quarter. In addition to the favorable underwriting performance, the market value of our equity securities improved during the second quarter of 2020, driving net investment gains of 6.5 million, compared to 1.6 million in the prior-year quarter.Jeffrey D. Miller, Executive Vice President and Chief Financial Officer of Donegal Group Inc., commented on the second quarter results, Net premiums written continued to be characterized by an increase in commercial lines activity and a decline in personal lines activity. Overall net premiums written declined slightly as an 8.7 reduction in personal lines net premiums written offset 4.0 growth in commercial lines net premiums written. The loss ratio was 57.1 for the second quarter of 2020, compared to 69.7 for the prior-year quarter, with the decrease largely due to lower frequency of automobile claims. The expense ratio for the second quarter of 2020 increased to 34.3 from 31.3, due primarily to our establishment during the second quarter of 2020 of 1.6 million in reserves for potential credit losses related to uncollectible premiums due to the effect of COVID-19 economic disruption. The expense ratio also reflected an increase in technology systems-related expenses, higher commercial growth-based incentive costs for our agents and increased underwriting-based incentive costs for our agents and employees.Mr. Burke concluded, Our net income along with unrealized gains within our available-for-sale fixed-maturity portfolio related to a decline in market interest rates during the first half of 2020 contributed to an increase in our book value per share to 16.77 at June 30, 2020, which represented a 7.0 increase compared to our book value per share of 15.67 at December 31, 2019.Insurance Operations Donegal Group is an insurance holding company whose insurance subsidiaries offer personal and commercial property and casualty lines of insurance in three Mid-Atlantic states Delaware, Maryland and Pennsylvania, three New England states Maine, New Hampshire and Vermont, six Southern states Alabama, Georgia, North Carolina, South Carolina, Tennessee and Virginia and eight Midwestern states Illinois, Indiana, Iowa, Michigan, Nebraska, Ohio, South Dakota and Wisconsin. Donegal Mutual Insurance Company and the insurance subsidiaries of Donegal Group conduct business together as the Donegal Insurance Group. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 Change 2020 2019 Change dollars in thousands Net Premiums Earned Commercial lines101,870 94,788 7.5 203,645 186,269 9.3 Personal lines 82,504 93,975 -12.2 167,982 190,568 -11.9 Total net premiums earned184,374 188,763 -2.3 371,627 376,837 -1.4 Net Premiums Written Commercial lines: Automobile34,518 31,245 10.5 72,911 65,547 11.2 Workers compensation 26,693 29,024 -8.0 60,862 62,416 -2.5 Commercial multi-peril 37,814 35,454 6.7 78,241 73,294 6.7 Other 8,583 7,740 10.9 17,293 15,887 8.9 Total commercial lines 107,608 103,463 4.0 229,307 217,144 5.6 Personal lines: Automobile 49,048 56,197 -12.7 96,816 112,223 -13.7 Homeowners 31,482 32,685 -3.7 55,259 57,713 -4.3 Other 5,565 5,458 2.0 10,558 10,638 -0.8 Total personal lines 86,095 94,340 -8.7 162,633 180,574 -9.9 Total net premiums written193,703 197,803 -2.1 391,940 397,718 -1.5 Net Premiums WrittenThe 2.1 decrease in net premiums written for the second quarter of 2020 compared to the second quarter of 2019, as shown in the table above, represents an 8.7 decline in personal lines net premiums written, offset by 4.0 growth in commercial lines net premiums written. The 4.1 million decrease in net premiums written for the second quarter of 2020 compared to the second quarter of 2019 included: 4.1 million increase in commercial lines premiums that we attribute primarily to new commercial accounts our insurance subsidiaries have written throughout their operating regions and a continuation of renewal premium increases. 8.2 million decline in personal lines premiums that we attribute to net attrition as a result of underwriting measures our insurance subsidiaries implemented to slow new policy growth and to increase pricing on renewal policies, partially offset by premium rate increases our insurance subsidiaries have implemented over the past four quarters. 