Donegal Group, Inc.

Good morning, and thank you for joining us today. This morning, Donegal Group issued its third 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 prerecorded 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 Delamater, and Chief Investment Officer Tony Viasi. 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 Donegal 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 strategies and actions that we expect will continue to drive favorable results in future periods. We will outline the factors that contributed to the highest level of quarterly earnings we've achieved since 2020. We achieved net income of $16.8 million, or 51 cents per Class A share, despite incurring $6 million of pre-tax catastrophe losses related to Hurricane Helene. We will provide more details about weather-related losses and other key earnings drivers later in the call. Having completed our strategic non-renewals of all commercial policies in the state of Georgia and Alabama in July, our commercial lines growth in the quarter reflected higher levels of commercial lines new business in targeted states and classes of business, as well as solid renewal premium increases and retention levels. We are now ramping up our small business commercial underwriting strategies for all four of our operating regions to build momentum in small business growth, which will be a key area of focus for us in 2025 and the years ahead. We completed our fourth annual state strategy sessions in August, and we are refining our strategies and action plans as we finalize our 2025 business plan. Our team is fully aligned and we are looking forward to capitalizing on opportunities for profitable growth in 2025. We are making excellent progress on the final two software releases within our systems modernization project. In fact, over this weekend, we will deploy the first phase of one of these releases, which will facilitate the automated conversion of our remaining legacy homeowners and dwelling and fire policies, converting to our new platform as they renew, starting with policies effective in January 2025. As you will hear from the other presenters today, we remain focused on solid execution, and I am confident that our strategies and actions will continue to generate favorable results through the fourth quarter and looking ahead to 2025 and beyond. I will now turn the call over to Jeff Miller to review our third quarter financial results.

Thanks, Kevin. For the third quarter of 2024, net premiums earned increased 6% to $238 million. Net premiums written increased by 5.9%, as strong premium rate increases and retention were offset partially by planned attrition in states and classes of business we have targeted for profit improvement. Rate increases achieved during the third quarter of 2024 remained in double-digit percentages, averaging 12.6% in total and 13.6% when excluding workers' comp. The combined ratio was 96.4% for the third quarter of 2024, compared to 104.5% for the prior year quarter, with a decrease in the loss ratio primarily accounting for the improvement. The core loss ratio declined 6.6 percentage points from the prior year quarter due to a combination of higher earned premiums and improved claim frequency and severity. and we were pleased to see improvement in the core loss ratios of all of our lines of business. Weather-related losses of 24.4 million or 10.3 percentage points of the loss ratio for the third quarter of 2024 were slightly lower than the 25.7 million or 11.5 percentage points we incurred for the third quarter of 2023. The lower impact was primarily due to reduced severity of commercial property losses with $5.3 million of losses contributing 10 percentage points to the quarterly commercial multi-parallel loss ratio compared to 17.5 percentage points of the loss ratio for that line of business in the third quarter of 2023. In our homeowners line, weather-related losses totaled $16.3 million, or 45.2 percentage points of the loss ratio compared to 49.2 points in the prior year quarter. In total, The quarterly weather claim impact was higher than the previous five-year average for the third quarter of 9.4 percentage points. Our insurance subsidiaries incurred $6 million in net losses from Hurricane Helene, which caused significant homeowners losses in Georgia in late September. That $6 million impact reflected our insurance subsidiaries' full aggregate reinsurance retention amount under their property catastrophe reinsurance agreement with Donegal Mutual. Large fire losses, which we define as over $50,000 in damages, contributed 3.7 percentage points to the loss ratio for the third quarter of 2024, which was lower than 4.9 percentage points for the prior year quarter. The decrease reflected lower average severity of commercial fire losses, as homeowners' fire loss activity was comparable to the prior year quarter. Our insurance subsidiaries had $6.2 million of favorable reserve development for losses incurred in prior accident years, which decreased the loss ratio by 2.6 percentage points for the third quarter of 2024, compared to $7.3 million that decreased the loss ratio by 3.3 percentage points for the prior year third quarter. Breaking the development down by line of business, we had favorable development of $4 million in commercial multi-parallel, $2.2 million in other commercial, $933,000 in workers' compensation, and $800,000 in personal auto, offset partially by $1.6 million of unfavorable development in commercial auto due primarily to higher-than-expected severity of a handful of claims. The expense ratio was 34.5% for the third quarter of 2024, compared to 34.1% for the third quarter of 2023. Dan will provide more details about our expense ratio and our ongoing expense reduction initiatives in a few minutes. In summary, the combined contributions of underwriting and investment income for the third quarter of 2024 resulted in an after-tax net income of $16.8 million, compared to a net loss of $805,000 for the third quarter of 2023. As Kevin stated earlier, we are pleased with this improvement in our net income, particularly considering that the main driver of the favorable performance was an improvement in our core loss ratio. For more details about that improvement and specifics about our commercial and personal lines segment results, I will now turn the call over to Jeff Hay.