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Donegal Group (DGICA) Incurs Loss in Q4, Revenues Rise Y/Y

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Donegal Group Inc. (DGICA - Free Report) reported fourth-quarter 2018 operating loss of 30 cents per share, in line with the Zacks Consensus Estimate. The company had earned 4 cents per share in the year-ago quarter.

Quarter in Detail

Operating revenues totaled $195 million, missing the Zacks Consensus Estimate by 1.3%. However, the top line increased 3.1% year over year.

Net premiums written of $168.3 million decreased 1.8% year over year, attributable to reductions in personal lines, new business premiums and higher reinsurance reinstatement premiums, partially offset by organic growth in commercial lines.

Net premiums earned increased 2.8% year over year to $186.2 million in the quarter. Net investment income was $7.6 million, up 23.2% from the year-ago quarter.

Total expenses increased 8.4% to $206.5 million.

Combined ratio of 110.5% deteriorated from 104.8% in the prior-year quarter.

Donegal Group, Inc. Price, Consensus and EPS Surprise

Full-Year Highlights

Donegal Group reported operating loss per share of $1.00 against 30 cents earned in 2017. It missed the Zacks Consensus Estimate of earnings of 80 cents.

Net premiums earned of $741.3 million increased 5.5% from 2017.

Operating revenues totaled $776.6 million, missing the Zacks Consensus Estimate by 3.7%. However, the top line increased 5.9% year over year.

Combined ratio of 110.1% deteriorated 710 bps from 2017.

Financial Update

Cash of nearly $52.6 million as of Dec 31, 2018 was up from $37.8 million at the end of 2017.

Total investments of $1 billion increased 2.5% from 2017.

Total shareholders’ equity of $398.9 million as of Dec 31, 2018 declined from $448.7 million at 2017-end level.

Book value per share was $14.05 as of Dec 31, 2018, down nearly 12% from year-end 2017.

Zacks Rank

Donegal Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Among the other players from the same space that have reported fourth-quarter results so far, MGIC Investment Corp. (MTG - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate on the bottom line while The Progressive Corp. (PGR - Free Report) missed the same.  

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