Donegal Group, Inc. (NASDAQ:DGICA) Q3 2023 Earnings Conference Call October 26, 2023 8:30 AM ET

Company Participants

Karin Daly - IR

Kevin Burke - President, CEO & Chairman

Jeffrey Miller - EVP & CFO

Jeffery Hay - SVP

Vincent Viozzi - SVP & CIO

Conference Call Participants

Karin Daly

Good morning, and thank you for joining us today. This morning, Donegal Group issued its third quarter 2023 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 (Operator Instructions). Note that we have incorporated responses for many of the questions we received directly into management's remarks.

Speaking today will be President and Chief Executive Officer, Kevin Burke; Chief Financial Officer, Jeff Miller; Chief Underwriting Officer, Jeff Hay; and Chief Investment Officer, Tony Viozzi.

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 is my pleasure to turn it over to Mr. Kevin Burke. Kevin?

Kevin Burke

Thank you, Karin, and welcome everyone. We are pleased to provide an update today on many of the strategic initiatives we have in flight, as we execute an intentional strategy to improve our financial performance, modernize our operations and put us in a position to grow profitably as economic conditions begin to stabilize.

Donegal's third quarter of 2023 showed significant disparity between business segments. While we saw significant improvement in our commercial lines segment results, our personal lines segment results continued to reflect the ongoing impact of inflationary pressures in several lines of business, with the largest impact in personal automobile, as claim severity remained at historically high levels due primarily to higher repair and replacement costs.

We experienced an increase in the frequency of severe weather events throughout our regions during the quarter. None of these events generated an accumulation of losses that exceeded our catastrophe retention level. But the active weather patterns, coupled with ongoing inflationary impacts on repair and labor costs, generated the highest weather-related loss ratio we reported in any quarterly report going back to 2018.