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Donegal (DGICA)

Donegal Group Inc. is an insurance holding company whose insurance subsidiaries and affiliates offer personal and commercial property and casualty lines of insurance in 24 Mid-Atlantic, Midwestern, New England, Southern and Southwestern states. Donegal Mutual Insurance Company and the insurance subsidiaries of Donegal Group Inc. conduct business together as the Donegal Insurance Group. The Donegal Insurance Group has an A.M. Best rating of A (Excellent). The Class A common stock and Class B common stock of Donegal Group Inc. trade on the NASDAQ Global Select Market under the symbols DGICA and DGICB, respectively. We are focused on several primary strategies, including achieving sustained excellent financial performance, strategically modernizing our operations and processes to transform our business, capitalizing on opportunities to grow profitably and delivering a superior experience to our agents and customers.

Company profile

Ticker
DGICA, DGICB
Exchange
CEO
Kevin G. Burke
Employees
Incorporated
Location
Fiscal year end
SEC CIK
Subsidiaries
Atlantic States Insurance Company • Southern Insurance Company • The Peninsula Insurance Company • Peninsula Indemnity Company • Michigan Insurance Company ...
IRS number
232424711

DGICA stock data

Calendar

5 May 22
29 Jun 22
31 Dec 22
Quarter (USD) Mar 22 Dec 21 Sep 21 Jun 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 56.07M 56.07M 56.07M 56.07M 56.07M 56.07M
Cash burn (monthly) 544.83K 136.21K (no burn) (no burn) (no burn) (no burn)
Cash used (since last report) 1.62M 403.81K n/a n/a n/a n/a
Cash remaining 54.46M 55.67M n/a n/a n/a n/a
Runway (months of cash) 100.0 408.7 n/a n/a n/a n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
14 Jun 22 William Daniel Delamater Class A Common Stock Sell Dispose S No No 16.06 7,089 113.85K 295
14 Jun 22 William Daniel Delamater Class A Common Stock Option exercise Acquire M No No 14.5 7,089 102.79K 7,384
14 Jun 22 William Daniel Delamater Options Class A Common Stock Option exercise Dispose M No No 14.5 7,089 102.79K 0
14 Jun 22 Kraft Kevin Michael SR Class A Common Stock Sell Dispose S No No 16.1 8,500 136.85K 11,936
14 Jun 22 Kraft Kevin Michael SR Class A Common Stock Option exercise Acquire M No No 14.5 8,500 123.25K 20,436
14 Jun 22 Kraft Kevin Michael SR Options Class A Common Stock Option exercise Dispose M No No 14.5 8,500 123.25K 0
14 Jun 22 Donegal Mutual Insurance Class A Common Stock Buy Acquire P No No 16.11 20,295 326.95K 10,909,769
13 Jun 22 Donegal Mutual Insurance Class A Common Stock Buy Acquire P No No 16.03 25,317 405.83K 10,889,474
10 Jun 22 Donegal Mutual Insurance Class A Common Stock Buy Acquire P No No 16.27 18,700 304.25K 10,864,157
10 Jun 22 William Albert Folmar Class A Common Stock Sell Dispose S No No 16.35 4,495 73.49K 816
34.6% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 81 82 -1.2%
Opened positions 8 7 +14.3%
Closed positions 9 11 -18.2%
Increased positions 27 23 +17.4%
Reduced positions 31 39 -20.5%
13F shares Current Prev Q Change
Total value 119.81M 225.95M -47.0%
Total shares 8.93M 9.42M -5.1%
Total puts 0 0
Total calls 0 200 EXIT
Total put/call ratio
Largest owners Shares Value Change
Dimensional Fund Advisors 1.69M $22.62M +1.1%
BLK Blackrock 1.32M $17.69M -4.2%
Vanguard 708.94K $9.51M +0.1%
Renaissance Technologies 558.61K $7.49M +16.9%
ORI Old Republic International 425.5K $5.71M -36.0%
Kennedy Capital Management 419.57K $5.63M -5.2%
Philadelphia Trust 373.35K $5.01M -0.7%
Geode Capital Management 268.13K $3.6M +2.4%
STT State Street 256.36K $3.44M +7.2%
Deprince Race & Zollo 256.03K $3.43M -0.4%
Largest transactions Shares Bought/sold Change
ORI Old Republic International 425.5K -239K -36.0%
Royce & Associates 0 -174.19K EXIT
FHI Federated Hermes 0 -108.04K EXIT
Renaissance Technologies 558.61K +80.8K +16.9%
Keeley-Teton Advisors 88.83K +77.58K +689.4%
BLK Blackrock 1.32M -58.05K -4.2%
Zebra Capital Management 0 -52.69K EXIT
Two Sigma Investments 70.58K +35.28K +99.9%
Two Sigma Advisers 75.3K +30.1K +66.6%
WFC Wells Fargo & Co. 248.29K -26.84K -9.8%

Financial report summary

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Risks
  • Industry trends, such as increasing loss severity due to higher rates of litigation against the insurance industry and individual insurers, the willingness of courts to expand covered causes of loss, rising jury awards, escalating medical, automobile and property repair costs and other factors may contribute to increased costs and result in ultimate loss settlements that exceed the reserves of our insurance subsidiaries.
  • Our insurance subsidiaries are subject to catastrophe losses and losses from other severe weather events, which are unpredictable and may adversely affect our results of operations, liquidity and financial condition.
  • Our insurance subsidiaries must establish premium rates and loss and loss expense reserves from forecasts of the ultimate costs they expect will arise from risks underwritten during the policy period, and the profitability of our insurance subsidiaries could be adversely affected if their premium rates or reserves are insufficient to satisfy their ultimate costs.
  • The financial results of our insurance subsidiaries depend primarily on their ability to underwrite risks effectively and to charge adequate rates to policyholders.
  • The pace of innovation within the insurance industry is rapidly increasing, and our insurance subsidiaries may be unable to effectively implement new technologies and anticipate changes in customer preferences and insurance needs, which could put our insurance subsidiaries at a competitive disadvantage and adversely affect their future profitability.
  • Loss or significant restriction of the use of credit scoring in the pricing and underwriting of the personal lines insurance products by our insurance subsidiaries could adversely affect their future profitability.
  • Changes in applicable insurance laws or regulations or changes in the way insurance regulators administer those laws or regulations could adversely affect the operating environment of our insurance subsidiaries and increase their exposure to loss or put them at a competitive disadvantage.
  • Insurance companies are subject to assessments, based on their market share in a given line of business, to assist in the payment of unpaid claims and related costs of insolvent insurance companies. Such assessments could adversely affect the financial condition of our insurance subsidiaries.
  • The emergence of COVID-19 has affected the business operations of our insurance subsidiaries and Donegal Mutual, and economic disruption related to the COVID-19 pandemic may adversely affect our revenues, profitability, results of operations, cash flows, liquidity and financial condition.
  • Donegal Mutual is our controlling stockholder. Donegal Mutual and its directors and executive officers have potential conflicts of interest between the best interests of our stockholders and the best interests of the policyholders of Donegal Mutual.
  • Donegal Mutual has sufficient voting power to determine the outcome of substantially all matters submitted to our stockholders for approval.
  • Donegal Mutual’s majority voting control of us, certain provisions of our certificate of incorporation and by-laws and certain provisions of Delaware law make it remote that anyone could acquire actual control of us unless Donegal Mutual were in favor of another person’s acquisition of control of us.
  • We have authorized preferred stock that we could issue without stockholder approval to make it more difficult for a third party to acquire us.
  • Because we are an insurance holding company, no person can acquire or seek to acquire a 10% or greater interest in us without first obtaining approval of the insurance commissioners of the states of domicile of each of our insurance subsidiaries.
  • Our insurance subsidiaries and Donegal Mutual currently conduct business in a limited number of states, with a concentration of business in Pennsylvania, Michigan, Maryland, Delaware, Virginia and Georgia. Any single catastrophe occurrence or other condition affecting losses in these states could adversely affect the results of operations of our insurance subsidiaries.
  • If the independent agents who market the products of our insurance subsidiaries and Donegal Mutual do not maintain their current levels of premium writing with us and Donegal Mutual, fail to comply with established underwriting guidelines of our insurance subsidiaries and Donegal Mutual or otherwise inappropriately market the products of our insurance subsidiaries and Donegal Mutual, the business, financial condition and results of operations of our insurance subsidiaries could be adversely affected.
  • The business of our insurance subsidiaries and Donegal Mutual may not continue to grow and may be materially adversely affected if our insurance subsidiaries and Donegal Mutual cannot retain existing, and attract new, independent agents or if insurance consumers increase their use of insurance distribution channels other than independent agents.
  • We are dependent on dividends from our insurance subsidiaries for the payment of our operating expenses and dividends to our stockholders; however, there are regulatory restrictions and business considerations that may limit the amount of dividends our insurance subsidiaries may pay to us.
  • If A.M. Best downgrades the rating it has assigned to Donegal Mutual or any of our insurance subsidiaries, it would adversely affect their competitive position.
  • The growth and profitability of our insurance subsidiaries depend, in part, on the effective maintenance and ongoing development of Donegal Mutual’s information technology systems, and the allocation of related costs to our insurance subsidiaries may adversely impact their profitability.
  • Our strategy to grow in part through acquisitions of other insurance companies exposes us to risks that could adversely affect our results of operations and financial condition.
  • If we cannot obtain sufficient capital to fund the organic growth of our insurance subsidiaries and to make acquisitions, we may not be able to expand our business.
  • Competition within the property and casualty insurance industry may adversely impact the revenues and profit margins of our insurance subsidiaries.
  • The investment portfolios of our insurance subsidiaries consist primarily of fixed-income securities; therefore, the investment income and the fair value of the investment portfolios of our insurance subsidiaries could decrease as a result of a number of factors.
  • We and our insurance subsidiaries depend on key personnel. The loss of any member of our executive management or the senior management of our insurance subsidiaries could negatively affect the continuation of our business strategies and achievement of our growth objectives.
  • The reinsurance agreements on which our insurance subsidiaries rely do not relieve our insurance subsidiaries from their primary liability to their policyholders, and our insurance subsidiaries face a risk of non-payment from their reinsurers as well as the non-availability of reinsurance in the future.
  • The disruption or failure of Donegal Mutual’s information technology systems or the compromise of the security of those systems that results in the theft or misuse of confidential information could materially impact adversely the business of Donegal Mutual and our insurance subsidiaries.
  • The price of our common stock may be adversely affected by its low trading volume.
  • Donegal Mutual’s majority voting control of our stock, anti-takeover provisions of our certificate of incorporation and by-laws and certain state laws make it unlikely anyone could acquire control of us unless Donegal Mutual were in favor of the acquisition of control.
Management Discussion
  • Our insurance subsidiaries’ net premiums earned increased to $776.0 million for 2021, an increase of $34.0 million, or 4.6%, compared to 2020, primarily reflecting the inclusion of the business of the Mountain States Insurance Group in the underwriting pool beginning with policies effective in 2021, as well solid premium retention and renewal premium increases. Our insurance subsidiaries earn premiums and recognize them as income over the terms of the policies they issue. Such terms are generally one year or less in duration. Therefore, increases or decreases in net premiums earned generally reflect increases or decreases in net premiums written in the preceding twelve-month period compared to the same period one year earlier.

Content analysis

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Positive
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Legalese
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H.S. sophomore Avg
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