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It's like a regional **Travelers**, offering a full range of property and casualty insurance for homes, cars, and businesses through independent agencies.

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• Personal Automobile Policies: These policies provide protection against liability for bodily injury and property damage arising from automobile accidents, along with coverage for damage to the insured's own vehicle.
• Homeowners Policies: These policies offer coverage for damage to residences and their contents from various perils, as well as liability protection for injuries to other persons or their property.
• Commercial Automobile Policies: These policies protect businesses against liability for bodily injury and property damage from automobile accidents, and cover damage to vehicles owned by the insured business.
• Commercial Multi-Peril Policies: These policies provide comprehensive protection to businesses by combining liability and physical damage coverages into a single plan.
• Workers' Compensation Policies: These policies provide benefits to employees for injuries or illnesses sustained during the course of their employment.

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Donegal Group Inc. (DGICA) serves a broad customer base through its diverse insurance offerings. As an insurance company, it does not typically have "major customers" in the sense of a few large companies making up a significant portion of its revenue. Instead, its customers are the numerous policyholders it serves across various categories.

Based on the company description, Donegal provides insurance to both individuals and businesses. Its major customer categories can be described as follows:

• Individuals seeking personal automobile insurance: These customers purchase private passenger automobile policies to protect against liability for bodily injury and property damage, as well as loss from damage to their own vehicles.
• Individuals seeking homeowners insurance: This category includes individuals who purchase policies to cover damage to their residences and contents from perils such as fire, lightning, windstorm, and theft, as well as liability arising from injury to other persons or their property.
• Businesses seeking commercial insurance: This broad category encompasses various businesses that purchase commercial automobile policies, commercial multi-peril policies (combining liability and physical damage coverages), and workers' compensation policies for their operations and employees.

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Kevin G. Burke, President and Chief Executive Officer

Kevin G. Burke has served as President and Chief Executive Officer of Donegal Group Inc. since 2015 and has held the same position for Donegal Mutual Insurance Company since 2018. Prior to this, he served as Executive Vice President and Chief Operating Officer of Donegal Group Inc. from 2014 to 2015 and of Donegal Mutual from 2014 to 2018. He also held roles as Senior Vice President of Human Resources for both Donegal Mutual and Donegal Group Inc. from 2005 to 2014, and Vice President of Human Resources for Donegal Mutual from 2001 to 2005, having joined the company in 2000. Mr. Burke also serves as Chairman of the Board of Donegal Group Inc.

Jeffrey D. Miller, Executive Vice President and Chief Financial Officer

Jeffrey D. Miller was appointed Executive Vice President and Chief Financial Officer of Donegal Mutual Insurance Company and Donegal Group Inc. in 2014. Before this, he served as Senior Vice President and Chief Financial Officer for both Donegal Mutual and Donegal Group Inc. from 2005 to 2014.

W. Daniel DeLamater, Executive Vice President & Chief Operating Officer

W. Daniel DeLamater was named Executive Vice President & Chief Operating Officer in 2024. He previously served as Senior Vice President and Head of Field Operations & National Accounts of Donegal Mutual Insurance Company and Senior Vice President of Donegal Group Inc. starting in 2022. From 2020 to 2022, he was the Senior Vice President of National Accounts for Donegal Mutual Insurance Company. Mr. DeLamater has also served as President of Southern Mutual Insurance Company, a member of the Donegal Insurance Group, since 2016, and held various positions at Southern Mutual from 2000 to 2015.

Jeffery T. Hay, Executive Vice President and Chief Underwriting Officer

Jeffery T. Hay was appointed Executive Vice President and Chief Underwriting Officer of Donegal Mutual Insurance Company and Executive Vice President of Donegal Group Inc. in 2025. He served as Senior Vice President and Chief Underwriting Officer of Donegal Mutual Insurance Company and Senior Vice President of Donegal Group Inc. from 2021 to 2024.

Kristi S. Altshuler, Senior Vice President and Chief Analytics Officer

Kristi S. Altshuler has served as Senior Vice President and Chief Analytics Officer of Donegal Mutual Insurance Company since 2019 and Senior Vice President and Chief Analytics Officer of Donegal Group Inc. since 2020.

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The key risks to Donegal Group Inc. (DGICA) primarily stem from its operational efficiency, exposure to catastrophic events and social inflation, and the challenges associated with its strategy to reduce personal lines business for profitability.

1. Operational Inefficiency and High Expense Ratio: Donegal Group Inc. faces a significant challenge with its operational inefficiency, particularly evidenced by its high expense ratio which consistently remains above the industry average. In late 2025, the company's expense ratio was around 33.5% to 34.9%, substantially higher than the sector median of 25-27%. This elevated expense ratio often leads to underwriting losses, even when the company achieves favorable loss ratios, thus hindering overall profitability and return on equity. While the company is investing in IT modernization, these efforts are projected to add to the expense ratio in the short term, with long-term efficiency improvements yet to be fully realized.
2. Exposure to Catastrophic Events and Social Inflation: As a property and casualty insurer, Donegal Group Inc. is inherently vulnerable to significant financial losses arising from catastrophic events such as natural disasters like hurricanes, floods, and wildfires. The company's geographic concentration in certain regions further increases this vulnerability. Beyond natural events, the business is also impacted by "social inflation," which includes increasing loss severity due to higher rates of litigation, expanding covered causes of loss by courts, rising jury awards, and escalating medical and repair costs. These factors contribute to higher claim costs that can exceed reserves, directly pressuring loss ratios and overall profitability.
3. Revenue Shrinkage from Strategic Underwriting Changes and Competition: Donegal Group Inc. has intentionally pursued a strategy of pruning its unprofitable personal lines business to improve its combined ratio and achieve greater profitability. This has resulted in a decline in net premiums earned, with the personal insurance segment experiencing a significant drop (e.g., 13.9% in Q4 2025 and 9.9% in Q1 2025). While this strategy aims to enhance margins, it leads to overall revenue shrinkage and limits growth potential, especially amidst intense competition from both regional and national insurers. The ongoing reduction in personal lines premiums constrains the company's overall growth prospects and signals uncertainty regarding its ability to deliver consistent revenue expansion.

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The emergence of direct-to-consumer digital insurance platforms and Insurtech companies. These platforms leverage advanced technology, data analytics, and user-friendly online and mobile interfaces to offer insurance policies directly to consumers, often with streamlined processes for quotes, policy management, and claims. This model directly challenges Donegal's traditional reliance on independent insurance agencies for distribution and customer acquisition, potentially disrupting its market share and competitive positioning across its personal and commercial lines by offering a different customer experience, efficiency, and potentially lower-cost alternatives.

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• Private Passenger Automobile Insurance: The U.S. private passenger automobile insurance market recorded direct premiums written of approximately $359.51 billion in 2024.
• Homeowners Insurance: The United States homeowners insurance market size was estimated at $175.60 billion in 2025 and is projected to reach $184.59 billion in 2026.
• Commercial Automobile Insurance: The U.S. commercial auto insurance market size was valued at $79.3 billion in 2024, with direct written premiums recorded at approximately $61.6 billion in 2024. The market size was $80.1 billion in 2025.
• Commercial Multi-Peril Insurance: The direct premiums written year-to-date for commercial multiple peril insurance in the U.S. was $16.80 billion, showing a 4% year-over-year growth.
• Workers' Compensation Insurance: The market size of the Workers' Compensation Insurance industry in the United States is projected to be $51.2 billion in 2026. In 2024, the total direct premiums written in the workers' compensation market were approximately $57.48 billion.

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Here are the expected drivers of future revenue growth for Donegal (DGICA) over the next 2-3 years:

1. Sustained Premium Rate Increases: Donegal has emphasized "rate achievement" and "aggressive renewal rate increases" across its lines of business, particularly in segments where profitability has been challenging. This strategy aims to drive premium growth and improve underwriting results.
2. Profitable Commercial Lines Expansion: The company is strategically focused on achieving "profitable, controlled commercial lines growth" by targeting quality mid-market and small business accounts. While personal lines have seen intentional contraction for profitability, commercial lines have shown modest premium growth and are a key area for future expansion.
3. Operational Efficiency and Enhanced Agent Engagement through Technology Modernization: Donegal has completed a multi-year systems transformation project and is rolling out new commercial lines systems, along with GenAI initiatives. These efforts are expected to "enhance operational efficiency and customer service," "unlock" productivity and growth, and improve agency engagement, ultimately facilitating new business acquisition and retention.
4. Targeted New Business Acquisition: Despite a focus on profitability that has led to a reduction in overall new business in certain areas, Donegal's 2026 business plan includes "numerous strategies and action plans to enhance agency engagement" and leverage system enhancements to generate "higher levels of new business" in profitable segments and targeted geographies.

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Capital Allocation Decisions of Donegal Group Inc. (DGICA)

Share Repurchases

• Donegal Group Inc. primarily focuses on dividend payments rather than share repurchase programs for shareholder returns.

Share Issuance

• Donegal Mutual Insurance Co. purchased 9,000 shares of Donegal Group Inc. Class A Common Stock on March 3, 2026, for approximately $158,652.

Inbound Investments

• Donegal Mutual Insurance Co., an affiliate, made an investment by purchasing 9,000 shares of Donegal Group Inc. Class A Common Stock totaling approximately $158,652 on March 3, 2026.

Capital Expenditures

• As of September 30, 2025, Donegal Group Inc. had no material commitments for capital expenditures.
• The company is undergoing a multi-year systems modernization project.
• Costs related to the systems modernization project, allocated by Donegal Mutual Insurance Company to Donegal Group's insurance subsidiaries, peaked at approximately 1.3 percentage points of the full-year 2024 expense ratio and are expected to gradually subside.