Donegal Group, Inc.

Good morning and thank you for joining us today. This morning, Donegal Group issued its second quarter 2024 earnings release outlining its results. The release and the 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 was pre-recorded 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 Dallamater, and Chief Investment Officer Tony Viazzi. 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 Donable 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?

Thank you, Karen, and welcome everyone. In today's call, we'll provide commentary on our quarterly financial results and an update on a number of strategic initiatives that we expect will continue to drive improved results in future periods. Above average severe convective storm activity continued into the second quarter of 2024, with hail, tornado, and wind events reported across the country. There were more than 1,200 tornadoes reported for the first half of 2024, which is the highest number on record since 2011. Experts predict that these events have resulted in damages exceeding $20 billion. While we are working to restore properties for a number of policyholders who incurred tornado losses, we are pleased that decisions that we made as part of our state and regional strategies in recent years as well as our ongoing management of geographic risk concentrations, served us well in mitigating the weather loss impact to our second quarter results. We will discuss more details about weather-related losses and other key earnings drivers as the call progresses. Our top-line growth storyline is similar to the one that we've been sharing over the past year. Commercial lines premiums earned and written in the second quarter continue to reflect the impact of the strategic non-renewals of all commercial policies in the state of Georgia and Alabama which is now essentially completed. We continue to achieve higher levels of commercial lines new business relative to prior year quarter in targeted states and classes of business. We are making solid progress in refining our small commercial business underwriting strategies and the capabilities to accelerate small business growth. We are looking forward to our annual state strategy sessions that will occur in early August when our sales, underwriting, and claims leaders across our organization will collaborate to refine our strategies and action plans in each of the 23 states in which we conduct business. We expect that small commercial growth will be a significant emphasis within our 2025 business plan. as we prioritize opportunities for profitable growth within updated state-specific action plans in the next few months. For personalized, our strategy remains to implement renewal premium rate increases to further improve margins and actively control new business growth. Earned premiums now reflect significant rate increases we implemented over the past several years, and we expect further margin expansion within this segment in future periods. As we reported in our first quarter call, we're working on the final two major software releases within our systems modernization project. Development efforts are on track for a major commercial line systems release that will include a new commercial package policy and modernize the other commercial products remaining on our legacy systems. Other members of our project team are working diligently on a major release to convert all remaining personalized policies on our legacy systems. The first phase of this release includes homeowners and dwelling and fire policies, and the second phase will include all remaining personal auto policies. We're continuing to progress well towards the implementation dates beginning in 2025 for both of these major releases. I will now turn the call over to Jeff Miller to review our second quarter financial results.

Thanks, Kevin. For the second quarter of 2024, net premiums earned increased 8.3% to $234.3 million. Net premiums written increased by 9.1% as strong premium rate increases and retention were offset partially by planned attrition in states and classes of business we are exiting or have targeted for profit improvement. Rate increases achieved during the second quarter of 2024 remained in double-digit percentages, averaging 11% in total and 13% when excluding workers' comp. The combined ratio was 103% for the second quarter of 2024 compared to 104.7% for the prior year quarter, with a decline in the expense ratio primarily accounting for the decrease. The core loss ratio was unchanged from the prior year quarter. Weather-related losses of $24.7 million or 10.6 percentage points of the loss ratio for the second quarter of 2024 compared to 19.7 million or 9.1 percentage points for the second quarter of 2023. The higher impact was primarily due to severity of commercial property losses, with $8.2 million of losses contributing 15.9 percentage points to the quarterly commercial multi-parallel loss ratio, compared to 9.2 percentage points of the loss ratio for that line of business in the second quarter of 2023. The weather impact to the homeowners line was $11.2 million, or 31.7 percentage points of the homeowners loss ratio, which compared to 30 points in the prior year quarter. In total, the quarterly weather claim impact was higher than the previous five-year average for the second quarter of 8.8 percentage points. Our insurance subsidiaries incurred $6 million in losses from a May tornado event that caused significant commercial property losses in Indiana and Michigan and exceeded their aggregate catastrophe reinsurance retention with Donegal Mutual. Large fire losses, which we define as over $50,000 in damages, contributed 5.3 percentage points to the loss ratio for the second quarter of 2024, which was slightly lower than 5.9 percentage points for the prior year quarter. Despite a handful of New Mexico wildfire claims for commercial properties, we experienced modest decreases in the frequency of both commercial and homeowners' fire losses compared to the prior year quarter. Our insurance subsidiaries experienced minimal development of reserves for losses incurred in prior accident years, with virtually no impact on the loss ratio for the second quarters of 2024 and 2023. The expense ratio of 31.9% for the second quarter of 2024 represented a meaningful decrease compared to 34.2% for the prior year quarter. The decrease primarily reflected ongoing impacts of expense reduction initiatives that Dan will highlight in a few minutes, offset partially by higher technology costs related to our ongoing systems modernization initiatives. In summary, the underwriting loss we incurred for the second quarter of 2024 was more than offset by $11.1 million of investment income and modest net investment gains. resulting in after-tax net income of $4.2 million compared to $2 million for the second quarter of 2023. I will now turn the call over to Chief Underwriting Officer Jeff Hay for more details about our commercial and personal line segment results and related initiatives.