Donegal Group, Inc.

Good morning, and thank you for joining us today. This morning, Donegal Group issued its second quarter 2025 earnings release outlining its results. The release and a 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 Fiazzi. 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 the call over to Mr. Kevin Burke. Kevin?

Thank you, Karen, and welcome everyone to our earnings webcast. We are pleased to provide an update today on our quarterly results and our operating strategies and initiatives. While weather-related losses were higher than average during the second quarter, we continue to see improvement in our core loss ratios in both commercial and personal lines. The improvement allowed us to generate favorable results despite elevated weather-related losses and a comparable level of large fire losses to the prior year quarter. Combining the solid second quarter results with our very profitable first quarter results, we are pleased with our profitability for the first half of 2025, with a combined ratio of 94.6%, net income of $42.1 million, and $1.17 earnings per diluted Class A common share. Jeff Hay and Dan Delamater will provide further details about the ongoing factors that impacted our net premiums rate and growth. We are not achieving the level of commercial lines and personal lines premium growth that we projected in our 2025 business plan. While we remain focused on delivering sustained, excellent financial results, achieving profitable growth will be a prominent theme during our upcoming state strategy sessions, where we gather all of our senior leadership, regional leadership, and key leaders from our sales and marketing, underwriting, product divisions for several days in early August. The action plans we develop during those sessions will inform our 2026 business plan for each region. I am pleased to report a significant milestone in our systems modernization project. As we successfully deployed our final major commercial line systems release this past weekend, we will follow a phased rollout approach beginning with policies effective in October for several states. This release represents our largest investment ever in the middle market commercial products and service capabilities, including a completely new commercial package policy, and will put us in a solid position to compete for both small business and mid-market accounts in the classes and locations we've identified for future growth. For personal lines, we're continuing to successfully convert all remaining legacy homeowner policy renewals to the new operating platform, and we are making great progress on the final release to facilitate conversion of all legacy personal auto and umbrella policy renewals to the new platform which we plan on deploying later this year. Many thanks to all the Donegal team members who are committed to bringing this multi-year systems modernization project to a successful completion. We're excited to be nearing the finish line and look forward to the advantages it will bring us, especially in terms of adopting new technologies for increased underwriting insights and operational efficiencies. At this point, I'll turn a call over to Jeff Miller for a review of our financial results for the quarter.

Thanks, Kevin. For the second quarter of 2025, net premiums earned of $231.8 million decreased 1.1% compared to the second quarter of 2024. Net premiums written decreased by 5.4% as lower new business volume and planned attrition were offset partially by continuing premium rate increases and solid retention levels. A 15.3% decrease in personal lines net written premium was offset partially by 1.9% growth in commercial lines. Rate increases achieved during the second quarter of 2025 averaged 7.8% in total and 8.7% when excluding workers' compensation. The combined ratio was 97.7% for the second quarter of 2025, greatly improved compared to 103% for the prior year quarter, despite a slightly higher impact of weather-related losses and comparable large fire losses. We experienced a 5 percentage point decrease in the core loss ratio compared to the prior year quarter. The core loss ratio excludes the impact of weather-related losses, large fire losses, and net development of reserves for losses incurred in prior accident years. Compared to the prior year quarter, we achieved a modest 0.3 percentage point decrease in the commercial lines core loss ratio and a significant 12 percentage point decrease in the personal lines core loss ratio. The substantial improvement in the personal line's core loss ratio was due largely to the ongoing favorable impact of premium rate increases on net premiums earned for that segment. Weather-related losses of $25.8 million, or 11.1 percentage points of the loss ratio for the second quarter of 2025, increased from $24.7 million, or 10.6 percentage points for the prior year quarter. Commercial property losses from severe weather totaled $6.5 million and contributed 12 percentage points to the quarterly commercial multi-parallel loss ratio, down compared to 15.9 percentage points of the loss ratio for that line of business in the second quarter of 2024. The weather impact to the homeowners line was $15.8 million, or 46.4 percentage points of the homeowners loss ratio, which was substantially higher than 31.7 points of weather loss impact 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 9.2 percentage points. One of our insurance subsidiaries incurred losses from an April 2025 wind and hail event that were limited to its $3 million catastrophe reinsurance retention with Donegal Mutual. Large fire losses, which we define as over $50,000 in damages, contributed 5.2 percentage points to the loss ratio for the second quarter of 2025, which was in line with 5.3 percentage points for the prior year quarter. A decrease in commercial fire losses was largely offset by an increase in homeowners' fire losses during the quarter. Our insurance subsidiaries experienced $3 million of net favorable development of reserves for losses incurred in prior accident years, representing a 1.3-point reduction in the loss ratio for the second quarter of 2025, compared to minimal impact of reserve development for the prior year quarter. specific line of business detail for the second quarter of 2025 primarily included favorable development of 2.4 million dollars for personal auto 1.1 million dollars for homeowners 738 thousand dollars for workers compensation and 576 thousand dollars for commercial multi-parallel offset partially by 2.3 million dollars of unfavorable development for other commercial lines, which is primarily umbrella liability. The expense ratio of 32.2% for the second quarter of 2025 increased modestly compared to 31.9% for the prior year quarter. The modest increase primarily related to an increase in underwriting-based incentive costs for agents and employees, offset to a large degree by ongoing impacts of expense reduction initiatives, and a modest decrease in technology costs related to our ongoing systems modernization initiative. In summary, the underwriting income for the second quarter of 2025, combined with $12.5 million of net investment income, contributed to after-tax net income of $16.9 million, which was a significant increase compared to the after-tax net income of $4.2 million for the second quarter of 2024. To provide more details about our results in our commercial and personal line segments and related initiatives, I will turn the call over to Jeff Hay.