Donegal Group, Inc.

Good morning, and thank you for joining us today. This morning, Donegal Group issued its fourth quarter and full year 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 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 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 Donico 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 is my pleasure to turn it over to Mr. Kevin Burke. Kevin?

Thank you and welcome everyone to our fourth quarter earnings webcast. We are pleased to provide an update today on our quarterly and full year operating results, along with key accomplishments in 2025 and areas of focus for 2026. We ended 2025 with a solid fourth quarter. The combined ratio of a 96.3% reflected excellent underwriting profitability, despite the impact of lower net premiums earned and a few large claims that prevented us from matching the record quarterly net income we achieved in the fourth quarter of 2024. We enjoyed a continuation of relatively favorable weather in our operating regions for the fourth quarter, resulting in a weather loss ratio that was lower than the fourth quarter average for the past five years. Similar to the first nine months of 2025, our core loss ratio for the fourth quarter remained below our target level. driven by excellent underlying results within our personal line segment. For the full year of 2025, net income of $79.3 million represents the highest amount we've achieved. While we celebrate these results, we also recognize the need for quality premium growth in order to achieve economies of scale and sustain excellent financial performance over the long term. Jeff Hay and Dan Delamater will provide further details about our plans to generate increased levels of premium growth. Our 2026 business plan includes strategies for engagement with our independent agents and several initiatives that we expect will generate higher levels of new business submissions, particularly in commercial lines where we are actively pursuing quality mid-market and small business accounts that meet our underwriting criteria. As we shared last quarter, we completed all of the development efforts for the multi-year systems transformation project that we started back in 2018 to replace our legacy systems. We are continuing to follow a phased schedule for the automated conversion of all remaining legacy policies that will be fully completed by mid-2027. That process is on track and progressing well, with minimal disruption to our customers or the impact to policy retention levels to date. The next step in our technology transformation is the migration of our Guidewire claims, billing, and policy administration applications from on-premises systems to cloud-based versions of those applications. We performed a detailed assessment that identified numerous benefits of migrating these applications to the cloud, and we've developed a very comprehensive plan to migrate our claims and billing applications in early 2027. Migrating to Guidewire Cloud will allow us to leverage the substantial investments of Guidewire and other vendors in the development and seamless deployment of GenAI tools and applications within our core business applications. Upon completion of this initiative, the technology modernization journey that we've been on since 2018 will be fully complete, and we will have access to the evolving operating platform that will support our current and future needs. We are excited to move forward and thank all of the Donegal team members and our vendor partners who have labored tirelessly for many years to put us in this very favorable position. At this point, I'll turn a call over to Jeff Miller for a review of our financial results for the quarter.

Thanks, Kevin. I will begin my comments with a discussion of the fourth quarter results compared to the fourth quarter of 2024 and then provide highlights of the results for the full year compared to 2024. For the fourth quarter of 2025, net premiums earned of $226.9 million decreased 4.1%. Net premiums written decreased by 3.4%, following similar trend lines we described throughout 2025, as lower new business volume was offset partially by premium rate increases and solid retention levels. A 12.7% decrease in personal lines net premiums written was offset partially by 3.2% growth in commercial lines. Rate increases achieved during the fourth quarter of 2025 averaged 5.9% in total and 6.6% when excluding workers' compensation. The combined ratio was 96.3% for the fourth quarter of 2025 compared to 92.9% for the prior year quarter. The increase reflected a 1.3 percentage point increase in the loss ratio and a 2.1 percentage point increase in the expense ratio. We monitor the loss ratio impact of several components, starting with the core loss ratio, which excludes the impact of weather-related losses, large fire losses, and net development of reserves for losses incurred in prior accident years. We experienced a 2 percentage point improvement in the core loss ratio. There was a 2.7 percentage point decrease in the commercial lines core loss ratio and a 1.6 percentage point decrease in the personal lines core loss ratio. Weather-related losses totaled $8.2 million, or 3.6 percentage points, of the loss ratio for the fourth quarter of 2025, increasing modestly from $7.7 million, or 3.3 percentage points, for the prior year quarter. The quarterly weather claim impact was lower than the previous five-year average for the fourth quarter of 5.2 percentage points. Our insurance subsidiaries did not incur losses from any catastrophic weather events in the fourth quarter of 2025 or 2024. In terms of weather impact by segment, commercial property losses from severe weather totaled $2.4 million and contributed 4.4 percentage points to the quarterly loss ratio for the commercial multi-parallel line of business. For personal lines, the weather impact to the homeowners line was $4.6 million, or 14.6 percentage points of the homeowners loss ratio. Large fire losses, which we define as over $50,000 in damages, contributed 6.2 percentage points to the loss ratio for the fourth quarter of 2025 compared to 4 percentage points for the prior year quarter. We experienced increases in the severity of both commercial and homeowners' fire losses during the quarter. Our insurance subsidiaries experienced $2.2 million of net development of reserves for losses incurred in prior accident years, adding one percentage point to the loss ratio for the fourth quarter of 2025, compared to virtually no impact in the prior year quarter. Line of business detail for the fourth quarter of 2025 primarily included unfavorable development of $3.9 million for other commercial, which is primarily umbrella liability, and $2.3 million for commercial auto, primarily in accident years 2022 and 2024. That was largely offset by favorable development of $1.6 million for personal auto, $1.4 million for commercial multi-parallel, and $1.2 million for workers' compensation. The expense ratio of 34.9% for the fourth quarter of 2025 increased compared to 32.8% for the prior year quarter. The increase was primarily related to the direction of year-end adjustments to our estimates for underwriting-based agency incentive costs, as well as the impact of the decline in net premiums earned upon which the expense ratio is based. Dan Delamater will provide more details about our ongoing focus on expense management later in the call. Net investment income increased 17.5% to $14.2 million for the fourth quarter of 2025 due primarily to higher average invested assets and an increase in average investment yield. Tony will provide further details about our favorable investment performance later in the call. We achieved net income of $17.2 million for the fourth quarter of 2025, compared to $24 million for the fourth quarter of 2024. The decrease was primarily due to lower net premiums earned and higher expenses incurred. Turning to the full year of 2025 results, the loss ratio of 61.3% compared favorably to 64.5% for 2024. with a 2.6 percentage point improvement in the core loss ratio. That improvement primarily reflected a 7.2 percentage point decrease in the personal line's core loss ratio, as the commercial line's core loss ratio for 2025 was in line with 2024. Weather-related losses for the full year of 2025 were $56.9 million, or 6.2 percentage points of the loss ratio, comparing favorably to $67.7 million, or 7.2 percentage points of the loss ratio for the full year of 2024. Weather impact for 2025 was 1 percentage point lower than the previous five-year average of 7.2 percentage points of the full year loss ratio. Large fire losses contributed 4.8 percentage points to the 2025 loss ratio, in line with 4.9 percentage points for 2024. Net favorable development of reserves for losses incurred in prior accident years reduced the 2025 loss ratio by 1.1 percentage points, slightly lower than the 1.6 percentage point reduction in 2024. Details by line of business include favorable development of $7.9 million in commercial multi-parallel, $4.3 million in personal auto, $2.2 million for commercial auto, $1.5 million for homeowners, $1.2 million for personal umbrella, and $1 million for workers' comp. That favorable development was partially offset by $7.9 million of unfavorable development in commercial umbrella. netting to a favorable development in total of $10.3 million. The favorable development related primarily to accident years 2021, 2023, and 2024, with unfavorable development for reserves in accident years 2020 and 2022 that resulted from higher-than-expected severity for a relatively small number of casualty claims. The expense ratio was 33.8% for the full year of 2025, nearly unchanged from 33.7% for the full year of 2024. The combined ratio was 95.4% for 2025, comparing favorably to 98.6% for 2024. As Kevin highlighted earlier, the favorable underwriting results, coupled with a 17.2% increase in net investment income, contributed to a record $79.3 million in net income for 2025, increasing 56% compared to net income of $50.9 million for 2024. Before I close, I'll provide a brief summary of the renewal of our reinsurance program for 2026. We made no changes to the coverage limits or retention levels in place for 2025 under our third-party reinsurance program or the intercompany reinsurance agreements between our insurance subsidiaries and Donegal Mutual. Due primarily to a decrease in property exposures during 2025 and lower property reinsurance rates, we project a $3 million decrease in reinsurance costs for 2026 compared to 2025. With that, I will now turn the call over to Jeff Hay to provide more details about our commercial and personal line segment results.