Donegal Group Inc (NASDAQ:DGICB) Q4 2019 Earnings Conference Call - Final Transcript

Feb 25, 2020 • 11:00 am ET


Donegal Group Inc (NASDAQ:DGICB) Q4 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by. And welcome to the Donegal Group Q4 and Year End 2019 Earnings Conference Call. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Jeff Miller, Chief Financial Officer. Thank you. Please go ahead.

Jeffrey D. Miller

Thank you very much. Good morning, and welcome to the Donegal Group conference call for the fourth quarter and year ended December 31, 2019. Yesterday afternoon, we issued a news release outlining our quarterly results. For a copy of that release, please visit the Investor Relations section of our website at In today's call, Kevin Burke, President and Chief Executive Officer, will provide an update on our business strategy and highlight recent developments. I'll follow Kevin's comments with an overview of our quarterly financial details.

At the conclusion of our prepared comments, we will open the line for any questions that you might have. Before we get started, you should be aware that our commentary today includes forward-looking statements that involve a number of risks and uncertainties. We described forward-looking statements in our news release and we provided further information about risk factors that could cause actual results to differ materially from those we projected in the forward-looking statements in the report on Form 10-K that we submitted to the SEC. You can access our Form 10-K through the Investors section of our website.

We use certain non-GAAP financial measures to analyze our business results and we refer you to the reconciliation of non-GAAP information included in the news release we issued yesterday. With that, I will turn it over to Kevin.

Kevin G. Burke

Thanks, Jeff, and welcome everyone. For the past two years, our team has been working to improve our profitability to ensure that we have a solid foundation and effective strategy that will position Donegal Group to deliver consistent underwriting profitability and book value growth over time. We are pleased with the progress that we made in 2019. We saw a number of favorable trends in the fourth quarter that are providing significant positive momentum as we enter 2020.

We benefited through the year from our earned premium increases from pricing actions we implemented over the past 18 months and we expect this segment of the insurance market we serve to remain relatively stable in 2020, allowing us to implement additional pricing increases where warranted. Weather conditions in our operating regions were closer to historical norms throughout 2019, contributing to a substantial reduction in weather-related losses compared to 2018.

The key highlight for the fourth quarter results was solid bottom line performance evidenced by net income of $0.50 per diluted Class A share. Jeff will go through the details of the drivers of the significant improvement over the prior fourth quarter year. But I wanted to highlight the fact that as a result of solid earnings, our book value increased by