Donegal Group Inc (DGICA) 2025 Q2 法說會逐字稿

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.

早安，感謝各位今天收看我們的節目。今天上午，多尼戈爾集團發布了 2025 年第二季財報，概述了其業績。新聞稿和補充投資者簡報可在 Donegal 官網 www.donegalgroup.com 的投資者關係欄位中找到。

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 Viozzi.

請注意，今天的會議是預先錄製的，所有參與者都處於唯讀模式。今天發言的有：總裁兼執行長凱文·伯克；首席財務官傑夫·米勒；首席承銷官傑夫·海；首席營運官丹·德拉馬特；以及首席投資官托尼·維奧齊。

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.

請注意，本次電話會議中除歷史事實外的所有陳述均為前瞻性陳述，必然涉及風險和不確定性，可能導致實際結果與歷史事實有重大差異。這些因素可以在 Donegal Group 向美國證券交易委員會提交的文件中找到，包括其 10-K 表格年度報告和 10-Q 表格季度報告。

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.

本公司聲明，對於任何前瞻性聲明，本公司沒有義務更新或公開宣布任何修訂結果，以反映此類聲明發布日期之後發生的預期或非預期事件或情況。

With that, it's my pleasure to turn the call over to Mr. Kevin Burke. Kevin?

接下來，我很高興將電話交給凱文伯克先生。凱文？

Thank you, Karin, 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.

謝謝卡琳，歡迎大家參加我們的財報網路直播。今天，我們很高興向大家介紹我們的季度業績以及我們的營運策略和舉措。雖然第二季與天氣相關的損失高於平均水平，但我們繼續看到商業險和個人險的核心損失率有所改善。儘管天氣相關損失增加，且重大火災損失與去年同期相當，但由於情況有所改善，我們仍然取得了令人滿意的業績。

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.

結合穩健的第二季業績和非常獲利的第一季業績，我們對 2025 年上半年的獲利能力感到滿意，綜合比率為 94.6%，淨收入為 4,210 萬美元，每股攤薄 A 類普通股收益為 1.17 美元。Jeff Hay 和 Dan DeLamater 將提供更多關於影響我們淨保費率和成長的持續因素的詳細資訊。

We're 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 developed during those sessions will inform our 2026 business plan for each region.

我們未能達到預期的商業險和個人險保費成長水準。在我們的 2025 年商業計劃中，我們預計，在繼續專注於持續優異的財務業績的同時，實現盈利增長將是我們即將召開的州戰略會議的一個重要主題。屆時，我們將於 8 月初召集所有高階領導、區域領導以及來自銷售和行銷、承保、產品部門的關鍵領導，進行為期數天的會議。我們在這些會議期間所製定的行動計劃將為我們 2026 年各地區的商業計劃提供參考。

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 roll out 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.

我很高興地報告，我們的系統現代化專案取得了重大里程碑式的進展，上週末我們成功部署了最後一個主要商業線路系統版本。我們將採取分階段推行的方式，先從10月開始在幾個州實施相關政策。此次發布代表了我們對中端市場商業產品和服務能力的最大投資，包括一項全新的商業套餐政策，這將使我們處於有利地位，能夠在我們已確定的未來成長類別和地區中，與小型企業和中端市場客戶競爭。

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.

對於個人保險業務，我們正在繼續成功地將所有剩餘的傳統房屋保險續保業務轉換為新的營運平台，並且在最終版本發布方面取得了巨大進展，以便將所有傳統個人汽車保險和傘式保險續保業務轉換為新平台，我們計劃在今年晚些時候部署該平台。

Many thanks to all the Donegal team members who are committed to bringing this multiyear 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.

非常感謝多尼戈爾團隊的所有成員，他們致力於使這項歷時多年的系統現代化專案圓滿完成。我們很高興即將完成這項工程，並期待它能為我們帶來許多好處，尤其是在採用新技術來提高承保洞察力和營運效率方面。

At this point, I'll turn a call over to Jeff Miller for a review of our financial results for the quarter.

接下來，我將把電話轉交給傑夫·米勒，讓他回顧我們本季的財務表現。

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.

謝謝你，凱文。2025 年第二季淨保費收入為 2.318 億美元，較 2024 年第二季下降 1.1%。淨保費收入下降了 5.4%，新業務量減少和計畫內客戶流失部分被持續的保費率上漲和穩健的客戶留存率所抵消。

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.

個人險淨保費收入下降 15.3%，但商業險淨保費收入成長 1.9%，部分抵銷了這一降幅。2025 年第二季實現的利率成長平均為 7.8%，如果不包括工傷賠償，則平均為 8.7%。2025 年第二季的綜合比率為 97.7%，與去年同期的 103% 相比有了顯著改善，儘管天氣相關損失的影響略高，且重大火災損失也相當。

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.

與去年同期相比，我們的核心損失率下降了 5 個百分點。核心損失率不包括天氣相關損失、重大火災損失以及先前事故年度損失準備金淨增長的影響。

Compared to the prior-year quarter, we achieved a modest 0.3% point decrease in the Commercial Lines core loss ratio and a significant 12% point decrease in the Personal Lines core loss ratio. The substantial improvement in the Personal Lines core loss ratio was due largely to the ongoing favorable impact of premium rate increases on net premiums earned for that segment.

與上一季相比，我們的商業險核心賠付率小幅下降了 0.3 個百分點，個人險核心賠付率則大幅下降了 12 個百分點。個人險核心賠付率的大幅改善主要歸功於保費率上漲對該業務板塊淨保費收入的持續有利影響。

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-peril loss ratio, down compared to 15.9 percentage points of the loss ratio for that line of business in the second quarter of 2024.

2025 年第二季與天氣相關的損失為 2,580 萬美元，佔損失率的 11.1 個百分點，高於去年同期的 2,470 萬美元，佔損失率的 10.6 個百分點。惡劣天氣造成的商業財產損失總計 650 萬美元，佔季度商業多險種損失率的 12 個百分點，低於 2024 年第二季該業務線損失率的 15.9 個百分點。

The weather impact to the homeowners line was $15.8 million or 46.4 percentage points of the homeowner's 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.

天氣因素對房屋保險的影響為 1,580 萬美元，佔房主損失率的 46.4 個百分點，遠高於去年同期天氣因素造成的損失 31.7 個百分點。總體而言，本季天氣索賠的影響比過去五年第二季的平均水平高出 9.2 個百分點。

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.

我們的保險子公司在 2025 年 4 月的一場風雹災害中遭受損失，損失僅限於其在 Donegal Mutual 投保的 300 萬美元巨災再保險自留額。重大火災損失（我們定義為損失超過 5 萬美元）佔 2025 年第二季損失率的 5.2 個百分點，與去年同期的 5.3 個百分點基本持平。

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% reduction in the loss ratio for the second quarter of 2025 compared to minimal impact of reserve development for the prior-year quarter.

本季商業火災損失的減少很大程度上被房屋火災損失的增加所抵消。我們的保險子公司在先前事故年度發生的損失準備金方面獲得了 300 萬美元的淨有利增長，與上一年同期準備金增長的影響相比，2025 年第二季度的損失率下降了 1.3%。

Specific line of business detail for the second quarter of 2025 primarily included favorable development. Of $2.4 million for personal auto, $1.1 million for homeowners, $738,000 for workers' compensation, and $576,000 for commercial multi-peril, offset partially by $2.3 million of unfavorable development for other Commercial Lines, which is primarily umbrella liability.

2025 年第二季的具體業務線詳情主要包括有利的發展。其中，個人汽車保險賠償 240 萬美元，房屋保險賠付 110 萬美元，工傷賠償賠償 73.8 萬美元，商業綜合險賠付 57.6 萬美元，部分被其他商業險種（主要是傘式責任險）的不利發展損失 230 萬美元所抵銷。

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.

2025 年第二季的費用率為 32.2%，與去年同期的 31.9% 相比略有上升。此次小幅成長主要與代理人和員工的承保激勵成本增加有關，但很大程度上被持續的費用削減計劃的影響以及與我們正在進行的系統現代化計劃相關的技術成本的小幅下降所抵消。

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.

綜上所述，2025 年第二季的承保收入加上 1,250 萬美元的淨投資收入，使得稅後淨收入達到 1,690 萬美元，與 2024 年第二季的稅後淨收入 420 萬美元相比，實現了顯著增長。

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.

為了更詳細地介紹我們在商業和個人保險業務領域的表現以及相關舉措，我將把電話交給 Jeff Hay。

Thank you, Jeff. I am pleased to report bottom-line improvement this quarter and believe that this outcome is a direct and deliberate result of the strategies and diligent action plans that we've put in place over the past few years to strengthen our underwriting discipline.

謝謝你，傑夫。我很高興地報告本季獲利有所改善，並且相信這一結果是我們過去幾年為加強承保紀律而製定的策略和認真行動計劃的直接和刻意的結果。

With our Commercial Lines of business, net premiums written in the second quarter of 2025 slowed to a modest growth rate of 1.9%. This can be attributed to our continued intentional shedding of less profitable business. Additionally, as the market softens for new business, we are maintaining underwriting and pricing discipline rather than chasing business at underpriced levels.

就我們的商業保險業務而言，2025 年第二季的淨保費收入成長放緩至 1.9% 的溫和成長。這可以歸因於我們持續有意識地剝離獲利能力較弱的業務。此外，隨著新業務市場疲軟，我們堅持承保和定價紀律，而不是以低價追逐業務。

We experienced strong retention and desired business throughout the second quarter of 2025 and continue to see the desired mix in new business written. For the second quarter, 69.2% of new business was written in our highly targeted classes that contributed to our higher than expected profitability. This outcome directly aligns with the strategies around targeted classes of business and geographic regions that I've mentioned in previous calls.

我們在 2025 年第二季度實現了強勁的客戶留存率和理想的業務成長，並且在新業務的簽約中也繼續保持了理想的組合。第二季度，我們高度精準的目標客戶群貢獻了 69.2% 的新業務，這為我們帶來了高於預期的獲利能力。這一結果與我在先前的電話會議中提到的針對特定業務類別和地理區域的策略直接吻合。

Our overall quarterly rate and exposure increase came in at 11.1%, excluding workers' compensation as we continue to emphasize driving the most rate in areas where the intersections of class, line of business, and geography are most challenged.

我們整體季度費率和風險敞口增長了 11.1%，不包括工傷賠償，因為我們繼續強調在階級、業務線和地理位置交叉最具挑戰性的地區推動最高的費率。

Renewal rate increases were led by commercial multi-peril at 11.7%, followed by continued strong rate in the commercial auto line at 10.9%, and an increase in commercial umbrella to 10.1%.

續保費率上漲主要由商業綜合險領銜，漲幅達 11.7%，其次是商業汽車險，漲幅持續強勁，達 10.9%，商業傘險漲幅也達 10.1%。

For the second quarter of 2025 we saw a 14% decrease in the impact of large fire losses over the prior-year quarter. This was driven by a decrease in the overall number of large fires offset somewhat by a modest increase in their severity. The second-quarter impact from weather-related losses decreased significantly by [$4.3 million] compared to the second quarter of 2024, resulting in the 3.3-percentage-point decrease in our loss ratio.

2025 年第二季度，重大火災損失的影響比去年同期下降了 14%。這主要是由於大型火災總數減少，但火災嚴重程度略有增加所抵消。與 2024 年第二季相比，第二季天氣相關損失的影響大幅減少了 430 萬美元，導致我們的損失率下降了 3.3 個百分點。

From a profitability perspective, our second-quarter Commercial lines core loss ratio decreased 0.3 percentage points from the prior-year quarter. The 6.1-percentage-point decrease for commercial multi-peril and a 2.0% decrease for commercial auto was offset somewhat by a 6.1-percentage-point increase for workers' compensation.

從獲利能力的角度來看，我們第二季的商業險核心賠付率比去年同期下降了0.3個百分點。商業綜合險種下降 6.1 個百分點，商業汽車險下降 2.0 個百分點，但工傷賠償金上升 6.1 個百分點，在一定程度上抵消了這些降幅。

Turning now to loss trends we observed in the second quarter, workers' comp frequency continued to perform favorably. In recent quarters, we have observed increases in indemnity and medical severity that were in line with our historical trends. The workers' comp market continues to be very competitive with pressure from continued negative rate filings from bureaus showing no signs of abating in 2025. Despite these negative rate changes, we still consider ourselves rate adequate in this line due to continuing negative frequency trends and in check severity trends overall.

現在來看我們在第二季觀察到的損失趨勢，工傷賠償頻率持續保持良好表現。在最近幾個季度，我們觀察到賠償金額和醫療嚴重程度有所增加，這與我們的歷史趨勢相符。由於各機構持續提交負利率申請，工傷賠償市場競爭依然非常激烈，而且這種壓力在 2025 年也沒有減弱的跡象。儘管這些負面的比率變化，但由於持續的負面頻率趨勢和整體上控制的嚴重程度趨勢，我們仍然認為我們在該領域擁有足夠的比率。

For commercial auto, we saw a moderating of the increases in auto physical damage severity that I mentioned in last quarter's call reverting back to the longer term decreasing trend. In line with that observation, liability severity also reverted to the longer-term trend line for commercial auto, breaking from the past few quarters when we saw some increases in severity.

對於商用汽車，我們看到汽車物理損壞嚴重程度的增長有所放緩，正如我在上個季度電話會議中提到的那樣，汽車物理損壞嚴重程度的增長又回到了長期下降的趨勢。與此觀察結果一致，商業汽車的責任嚴重程度也恢復到了長期趨勢線，打破了過去幾季責任嚴重程度上升的局面。

In our other Commercial Lines of business, which is primarily umbrella liability, we experienced a single large bodily injury claim in the second quarter due to a severe auto accident in Pennsylvania, as well as increases in umbrella liability reserves related to a handful of other auto accidents that occurred in prior accident years.

在我們其他商業險種業務中，主要是傘式責任險，第二季度我們遇到了一起因賓夕法尼亞州發生的嚴重交通事故而導致的大型人身傷害索賠，此外，由於之前事故年度發生的幾起其他交通事故，傘式責任險準備金也有所增加。

Commercial multi-peril severity continues to moderate due to reduced frequency of large fires. And favorable negative overall frequency. Severity in the general liability portion of commercial multi-peril continues to moderate, but reserve increases are still larger than the longer-term trend line. We continue to monitor the impact of social inflation that has become an insurance industry focus area with the proliferation of attorney advertising, jury anchoring, third-party litigation financing, and the growth in nuclear verdicts.

由於大型火災發生頻率降低，商業多災種災害的嚴重程度持續下降。以及有利的負面整體頻率。商業綜合險種一般責任險部分的嚴重程度持續趨於緩和，但準備金的成長幅度仍大於長期趨勢線。我們持續關注社會通膨的影響，隨著律師廣告的氾濫、陪審團錨定、第三方訴訟融資以及巨額賠償判決的增長，社會通膨已成為保險業的焦點。

Unlike the first quarter of 2025, the second quarter was an active weather quarter. Jeff quantified the impact in his comments, but it is worth noting that we've had limited exposure to the recent devastating flash floods in the states of Texas and New Mexico, and at the timing of this call have had no claims reported related to these events. Our hearts go out to those who have lost family members, friends, and property in these horrific events.

與 2025 年第一季不同，第二季是一個天氣活躍的季度。傑夫在他的評論中量化了影響，但值得注意的是，我們對德克薩斯州和新墨西哥州最近發生的毀滅性山洪暴發接觸有限，而且截至本次通話時，尚未收到與這些事件相關的索賠報告。我們向在這些可怕的事件中失去家人、朋友和財產的人們致以最深切的慰問。

Turning to our Personal Line segment. The controls that we have deliberately put in place continue to limit new business in the second quarter. Even so, we wrote 1.2 million in new business in the quarter, a 29% increase over the first quarter of 2025, as we have strategically and intentionally begun to release some of the new business controls to increase new business flow now that we have achieved rate adequacy across our footprint.

接下來我們來看個人保險業務部分。我們特意採取的控制措施將繼續限制第二季的新業務。即便如此，本季度我們仍實現了 120 萬美元的新業務，比 2025 年第一季度增長了 29%，因為我們已戰略性地、有目的地開始放鬆一些新業務控制，以增加新業務流量，因為我們現在已在整個業務範圍內實現了費率充足性。

Total Personal Lines net written premiums for the second quarter declined by 15.3%, contributing to a decrease in the number of policies enforced from year-end 2024 by 10.5%.

第二季個人險淨保費總額下降了 15.3%，導致 2024 年底生效的保單數量減少了 10.5%。

The shrinking of our book can be attributed to two deliberate actions. One, the significant slowdown in new business; and two, the targeted cancellation of certain segments for underwriting reasons. Both actions were intentional and necessary to improve portfolio quality, strengthen underwriting discipline, and stabilize profitability. The impact of these initiatives on our growth rate is expected to taper off soon.

我們這本書篇幅的縮減可歸因於兩個刻意採取的措施。第一，新業務大幅放緩；第二，基於承保原因，有針對性地取消某些業務板塊的保單。這兩項措施都是有意為之，也是提高投資組合品質、加強承保紀律和穩定獲利能力所必需的。這些舉措對我們成長率的影響預計很快就會減弱。

In addition to new business reductions, the non-renewal of a legacy Maryland book of business, as I've described in previous calls, is well underway. This exit had a large impact on the second quarter's total premium decline for Personal Lines. Excluding this intentional non-renewal activity, the Personal Lines decline would have been in the 9% to 10% range. The impact of this initiative will continue until the non-renewals are completed in August of this year. Our real retention rate for Personal Lines, excluding the impact of the Maryland non-renewals, was a healthy 87.4%.

除了新業務的減少，正如我在之前的電話會議中所描述的那樣，不再續簽馬裡蘭州的傳統業務也正在順利進行中。這次退出對第二季個人險種的總保費下降產生了很大影響。如果排除這種故意不續保的行為，個人險種的下降幅度將在 9% 到 10% 之間。這項舉措的影響將持續到今年8月所有不續約合約全部到期為止。不計馬裡蘭州未續保的影響，我們個人險種的實際續保率達到了健康的 87.4%。

We recognize that over the past few years, our actions have understandably caused some uncertainty for our independent agents who focus on Personal Lines. Strengthening agency engagement and managing these relationships is a key part of our strategy going forward.

我們意識到，在過去幾年裡，我們的一些舉措無疑為專注於個人保險業務的獨立代理人帶來了一些不確定性。加強與代理商的合作並管理這些關係是我們未來策略的關鍵組成部分。

We've also enhanced our capabilities to influence new business production quickly, a strength we intend to use with appropriate discipline. Our focus is now on balancing that agility with strategic intent, caution, and a long-term perspective. With this refined approach, we expect to begin making meaningful progress in terms of Personal Lines premium production by the end of this year.

我們也增強了快速影響新業務生產的能力，我們打算以適當的紀律來運用這項優勢。我們現在的重點是在保持敏捷性的同時，兼顧策略意圖、謹慎態度和長遠眼光。透過這種改進的方法，我們預計到今年年底，個人保險業務的保費收入將開始取得實質進展。

Kevin mentioned earlier the progress we have made in the conversion of our legacy homeowners policies to our new systems and products. As we convert policies at the renewal dates, we are putting in place larger deductibles specifically related to wind and hail, both of which had previously been at historically low levels as a part of our efforts to control the impact of evolving weather patterns.

Kevin 之前提到過，我們在將原有的房屋保險政策轉換為新的系統和產品方面取得了進展。在續保日期轉換保單時，我們將提高與風災和冰雹相關的免賠額，這兩項免賠額此前都處於歷史低位，這是我們為控制不斷變化的天氣模式的影響而採取的措施之一。

Additionally, similar to our competitors, we are limiting roof coverage for older roofs. Both of these coverage adjustments result in lower renewal premiums, which will continue to impact our overall premium growth until the conversion is complete. However, we believe these changes are necessary to combat the increasing weather activity and roof repair costs, and that reduction in premium will be more than offset by lower claim impact moving forward.

此外，與我們的競爭對手一樣，我們對舊屋頂的覆蓋範圍有所限制。這兩項承保範圍調整都會導致續保保費降低，這將持續影響我們的整體保費成長，直到轉換完成。然而，我們認為這些改變是必要的，以應對日益頻繁的極端天氣和不斷上漲的屋頂維修成本，而且保費的降低將被未來索賠影響的減少所抵消。

With our achievement of rate adequacy across our Personal Lines of business, our average rate and exposure increased in the second quarter of 2025 slowed to 5.9%. For personal auto, we saw a rate and exposure increase of only 4.5%. We continued to achieve higher levels of rate and exposure for homeowners, averaging 8.1% in the quarter. We are actively refining our rate strategy in response to current loss costs and market conditions.

隨著我們在個人業務領域實現了費率充足，2025 年第二季我們的平均費率和風險敞口增速放緩至 5.9%。對於個人汽車保險，我們看到的利率和風險敞口僅增加了 4.5%。我們繼續提高房主的利率和曝光率，本季平均達到 8.1%。我們正積極根據當前的損失成本和市場狀況調整我們的費率策略。

The loss ratio from personal auto decreased in the second quarter of 2025 by 16.2 percentage points compared to the prior-year quarter. This improvement was primarily driven by improvement in the core loss ratio, with increased weather losses largely offset by more favorable prior-year reserve development.

2025年第二季個人汽車事故損失率比去年同期下降了16.2個百分點。這項改善主要得益於核心損失率的改善，天氣損失的增加很大程度上被上一年更有利的儲備發展所抵消。

For homeowners, the loss ratio increased by 12.4 percentage points compared to the second quarter of 2024. This loss ratio increase was driven by 14.7 points of additional weather-related loss impact and 2.9 points of higher large fire activity, partially offset by 3.6 points of more favorable prior-year reserve development.

對於房主而言，損失率比 2024 年第二季增加了 12.4 個百分點。損失率上升的原因是天氣相關損失影響增加 14.7 個百分點，以及大型火災活動增加 2.9 個百分點，部分被上一年儲備金發展更為有利的 3.6 個百分點所抵銷。

The core loss ratio improved by 1.6 percentage points. The increase in large fire losses was driven by an increase in frequency offset partially by a modest decrease in severity.

鐵芯損耗率提高了1.6個百分點。重大火災損失的增加是由於火災發生頻率的增加，但火災嚴重程度的略微下降部分抵消了這一增長。

Weather-related losses increased by 41% over the prior-year quarter as we experienced significant wind and hail activity across our greater Midwest, Michigan, and Mid-Atlantic regions in all three months of the second quarter of 2025. We believe that many of the deliberate actions that I've outlined today, including our selective non-renewal strategies and Commercial Lines, shrinking of our Personal Lines property exposure, and controlling coverage terms on converted policies helped to reduce significantly the losses we would have incurred in the absence of those actions.

2025 年第二季度，由於中西部地區、密西根州和大西洋中部地區在三個月內遭遇了嚴重的強風和冰雹天氣，與去年同期相比，天氣造成的損失增加了 41%。我們相信，我今天概述的許多刻意採取的行動，包括我們選擇性的不續保策略和商業險種、減少個人險種財產風險敞口以及控制轉換保單的承保條款，都極大地減少瞭如果沒有這些行動我們將遭受的損失。

I'm also pleased to share that the rate adjustments we've implemented over the past several years limited the increase in the second-quarter weather loss ratio relative to our previous five-year average to only 1.9 percentage points, which is notable when considering the weather losses were 37% higher than the previous five-year average for the second quarter.

我也很高興地告訴大家，過去幾年我們實施的費率調整，使得第二季度天氣損失率相對於過去五年平均水平的增幅僅為 1.9 個百分點，考慮到第二季度天氣損失比過去五年平均水平高出 37%，這一結果非常值得關注。

I will now turn the call over to Dan DeLamater for an update on our operational strategies and developments. Dan?

現在我將把電話交給丹‧德拉馬特，讓他介紹我們的營運策略和發展。擔？

Thank you, Jeff. As we assess our operational performance for the first half of the year, I will first provide an update on our efficiency initiatives and the expense reduction efforts we've discussed in previous calls.

謝謝你，傑夫。在評估上半年營運績效時，我將首先介紹我們在先前的電話會議中討論過的提高效率的舉措和降低成本的工作進展。

For the second quarter of 2025, we operated at an expense ratio of 32.2%, which continues to follow an excellent trajectory when excluding the impact of higher projected incentive payments for agents and employees that are based on our underwriting performance.

2025 年第二季度，我們的營運費用率為 32.2%，若不計入基於承保業績的代理人和員工預計更高的激勵支付的影響，該費用率仍保持著良好的發展勢頭。

By comparison, you will recall that our expense ratio stood at 31.9% for the second quarter of 2024 and 34.2% for the second quarter of 2023. We're pleased that we continue to realize significant improvement from our investments in automation and our expense management initiatives. Together, these efforts allowed us to operate at an expense ratio of 33.4% for the first half of 2025. Despite higher incentive accruals, this compares favorably to our expense ratio of 33.8% for the first half of 2024 and 35.3% for the first half of 2023.

相較之下，您可能還記得，我們​​ 2024 年第二季的費用率為 31.9%，2023 年第二季的費用率為 34.2%。我們很高興看到，我們在自動化和費用管理方面的投資持續取得顯著成效。綜合這些努力，我們得以在 2025 年上半年將營運費用率控制在 33.4%。儘管激勵性支出有所增加，但這與我們 2024 年上半年 33.8% 的費用率和 2023 年上半年 35.3% 的費用率相比，仍然具有優勢。

We're starting to come down off of the 2024 peak expense impact of our ongoing systems modernization project, and we expect that in the coming years, we'll continue to experience a lower impact on our operating expense metrics from costs related to this project.

我們正在逐步擺脫 2024 年系統現代化專案帶來的支出高峰影響，預計在未來幾年，與該專案相關的成本對我們的營運支出指標的影響將繼續降低。

The multiple targeted initiatives across every department in the organization, we remain on pace to meet our year-end 2025 expectation of reducing our expense ratio by 2 points from our original business plan projection for 2024. This reduction is the product of dozens of intentional efforts, large and small, and I'm proud of our leadership team and our entire staff for their thoughtfulness and commitment to this achievement. And to ensure that these improvements and efforts are sustained, we have launched an entirely new budgeting and expense tracking process and accountability protocol.

憑藉組織內各部門的多項有針對性的舉措，我們仍有望在 2025 年底實現預期目標，即比 2024 年的原始業務計劃預測降低 2 個百分點的費用率。這項減少是數十項大大小小的有意識努力的結果，我為我們的領導團隊和全體員工的深思熟慮和對這項成就的奉獻精神感到自豪。為了確保這些改進和努力能夠持續下去，我們推出了一套全新的預算和費用追蹤流程以及問責機制。

As Kevin mentioned, we're in the final planning stages of our annual state strategy sessions in an annual multi-day planning summit, we bring together a cross-departmental mix of several dozen professionals, including senior, departmental, and regional leadership along with important departmental contributors.

正如凱文所提到的，我們正處於年度州戰略會議的最後規劃階段。在一年一度的多日規劃高峰會上，我們將匯集數十位跨部門的專業人士，包括高階、部門和區域領導以及重要的部門貢獻者。

Together, they'll define our product mix, rate strategy, marketing strategy, and growth objectives in every state in line of business where we write. These sessions are especially important as we underwrite property books in increasingly weather-prone states and regions, but they also help to steer our regional marketing and underwriting teams, product teams, and national accounts team toward appropriate product mix and appropriate growth plans across all lines and classes.

他們將共同製定我們在所有業務所在州的產品組合、價格策略、行銷策略和成長目標。這些會議尤其重要，因為我們承保的財產保險業務越來越多地受到天氣因素的影響，但它們也有助於引導我們的區域行銷和承保團隊、產品團隊和全國客戶團隊制定適當的產品組合和所有險種和類別的成長計劃。

Our teams are aligned and highly engaged, and our monthly portfolio monitoring meetings provide transparency and accountability toward our state by state objectives. As a matter of fact, we continue to see the benefits of these efforts as we mitigate our exposure to severe weather, especially in active times like the second quarter of 2025, as you heard Jeff mention. These efforts are ongoing and will require continued focus in the future, but we are encouraged by the results that they're already yielding.

我們的團隊目標一致，積極投入，每月召開的投資組合監控會議確保了各州目標的透明度和問責制。事實上，正如你聽到傑夫提到的那樣，我們不斷看到這些努力帶來的好處，因為我們減輕了自身遭受極端天氣的影響，尤其是在像 2025 年第二季度這樣天氣活躍的時期。這些努力仍在進行中，未來仍需要繼續關注，但我們對目前的成果感到鼓舞。

One overarching challenge that our entire organization is focused on is top-line growth. We're proud to operate from a place of bottom-line strength, but we also recognize the need to close the gaps we're seeing in new business against our 2025 business plan.

我們整個組織關注的一個總體挑戰是營收成長。我們為自身強大的獲利能力感到自豪，但我們也意​​識到，我們需要縮小與 2025 年業務計劃相比，新業務方面存在的差距。

Rate achievement is clearly important, and we are not interested in chasing underpriced new business. We continue to engage with our marketing teams, our independent agents, and our analytics and underwriting teams to identify profitable new business opportunities in states and classes that match our objectives. With that, we continue to keep a careful eye on economic inflation and the potential impacts of federal tariff policy.

達成費率目標顯然很重要，我們對追求低價新業務不感興趣。我們將繼續與我們的行銷團隊、獨立代理商以及分析和核保團隊合作，在符合我們目標的州和類別中尋找有利可圖的新業務機會。為此，我們將繼續密切關注經濟通膨和聯邦關稅政策的潛在影響。

As we monitor social inflation as an industry-specific challenge, our claims team continues to watch the specific impact for medical inflation on our bodily injury claims. We're not necessarily seeing an outsized medical inflation in workers' compensation and other bodily injury claims, as these costs have remained relatively stable with increases generally in line with economic inflation, but we are seeing the impact of general social inflationary trends and third-party litigation funding.

鑑於社會通膨是保險業面臨的挑戰，我們的理賠團隊將繼續關注醫療通膨對人身傷害索賠的具體影響。我們並沒有看到工傷賠償和其他人身傷害索賠中出現過大的醫療通膨，因為這些費用一直保持相對穩定，其增長通常與經濟通膨保持一致，但我們確實看到了普遍的社會通膨趨勢和第三方訴訟融資的影響。

Additionally, as discussed last quarter, we continue to recognize an increase in medical utilization rates via more medical visits, more diagnostic testing, and a greater use of prescription medications. All of these factors will continue to put pressure on claim costs in the affected lines of business, and so we'll continue to manage rate levels to achieve targeted returns.

此外，正如上個季度所討論的，我們繼續觀察到醫療利用率的上升，表現為就診次數增加、診斷測試增多以及處方藥使用量增加。所有這些因素將繼續給受影響業務線的理賠成本帶來壓力，因此我們將繼續管理費率水平，以實現預期收益。

We're obviously pleased with the favorable bottom-line results our team achieved for the first half of 2025. We believe this sets a solid foundation for the remainder of 2025, and we will continue to engage with our agency partners to identify new business opportunities over the coming six months and beyond.

我們團隊對 2025 年上半年的良好業績感到非常滿意。我們相信這將為 2025 年剩餘時間奠定堅實的基礎，我們將繼續與我們的代理商合作夥伴合作，在未來六個月及以後尋找新的商機。

I'll now turn it over to Tony Viozzi for an investment update. Tony?

接下來我將把麥克風交給東尼‧維奧齊，請他介紹一下投資方面的最新情況。托尼？

Thanks, Dan. Our long-term investment strategy, along with opportunities asset allocation, continues to serve us well as we seek to preserve and grow our capital conservatively. Regarding portfolio mix, we continue to buy high-quality bonds while taking advantage of wider spreads in recent months that we expect will provide ongoing strength to our investment portfolio.

謝謝你，丹。我們的長期投資策略，以及機會資產配置，在我們尋求保守地保值增值的過程中，繼續為我們帶來良好的效果。在投資組合組成方面，我們繼續買入高品質債券，同時利用近幾個月來擴大的利差，我們預計這將為我們的投資組合帶來持續的強勁表現。

During the second quarter of 2025, net investment income rose to $12.5 million, an increase of 13.3% from the second quarter of 2024. The average tax equivalent yield for the quarter was 3.64%, up from 3.40% for the second quarter of 2024. Market rates and spreads continued to be favorable, and we continue to invest portfolio cash flow into much higher yielding bonds.

2025 年第二季度，淨投資收益增至 1,250 萬美元，較 2024 年第二季成長 13.3%。本季平均稅收等值收益率為 3.64%，高於 2024 年第二季的 3.40%。市場利率和利差依然有利，我們將繼續把投資組合現金流投資於更高殖利率的債券。

Also during the second quarter, we shifted a portion of our asset allocation out of US Treasury and agency debt into non-agency structured notes and tax-exempt municipal bonds. Cash flow for the quarter yielding 3.34% was reinvested at 5.67%. That 233-basis-point spread on $90 million is projected to boost annual investment income by $2 million moving forward.

第二季度，我們也將部分資產配置從美國國債和機構債券轉移到非機構結構性票據和免稅市政債券。本季現金流收益率為 3.34%，再投資收益率為 5.67%。預計這9000萬美元的233個基點的利差將使未來的年度投資收益增加200萬美元。

Net investment gains for the second quarter of 2025 totaled $1.5 million. Equity gains of $2.8 million were partially offset by $1.3 million and realized losses generated in a modest bond portfolio restructuring. Taking advantage of market opportunities during the quarter, we were able to swap $26 million of bonds yielding 1.51% for bonds yielding 5.67%. This restructuring allowed us to add 416 basis points of yield on those funds. While at the same time, improving credit quality and extending duration to lock in rates that we viewed as attractive. We will continue to selectively adjust asset allocation in response to opportunities the market presents.

2025年第二季淨投資收益總計150萬美元。股權收益 280 萬美元被適度債券組合重組產生的 130 萬美元已實現損失部分抵銷。利用本季的市場機會，我們得以將 2,600 萬美元收益率為 1.51% 的債券置換為收益率為 5.67% 的債券。此次重組使我們這些基金的收益率增加了 416 個基點。同時，我們提高了信貸質量，延長了期限，以鎖定我們認為有吸引力的利率。我們將繼續根據市場提供的機會，選擇性地調整資產配置。

In closing, we are projecting about $135 million in portfolio cash flow over the next 12 months with an average yield of 3.50%. Today, we are investing at an average yield of 5.40%, adding to our non-agency structured notes, tax exempt municipals, MBS, and corporate debt. We look forward to continuing opportunities to increase our average portfolio yield in the current environment.

最後，我們預計未來 12 個月的投資組合現金流約為 1.35 億美元，平均收益率為 3.50%。今天，我們以平均 5.40% 的收益率進行投資，增加了對非機構結構性票據、免稅市政債券、抵押貸款支持證券和公司債券的投資。我們期待在當前環境下繼續尋找機會，提高我們投資組合的平均收益率。

As of June 30, 2025, our book value increased to $16.62, a $0.38 improvement over $16.24 at March 31, 2025. This increase in book value was primarily driven by strong underwriting results and growing investment income, as well as gains in the value of our equities and available for sale bond portfolio.

截至 2025 年 6 月 30 日，我們的帳面價值增至 16.62 美元，比 2025 年 3 月 31 日的 16.24 美元提高了 0.38 美元。帳面價值的成長主要得益於強勁的承銷業績和不斷增長的投資收益，以及我們的股票和可供出售債券組合價值的成長。

With that, I will now turn it back to Kevin for closing remarks.

接下來，我將把發言權交還給凱文，請他作總結發言。

Thanks, Tony. With a solid first half of 2025 in the books, we remain vigilant to ensure our team is fully aligned and engaged in the execution of our strategies and building on the positive momentum we achieved over this past year. We look forward to reporting on our progress and plans for the year ahead in future calls.

謝謝你，托尼。2025 年上半年業績穩健，我們將繼續保持警惕，確保我們的團隊完全團結一致，積極參與策略的執行，並鞏固過去一年的積極勢頭。我們期待在未來的電話會議中報告我們的進展和未來一年的計劃。

I'll now turn a call back to Karin. Thank you.

我現在把電話轉回給卡琳。謝謝。

Thank you, Kevin. While we requested and received questions in advance of today's call, we have worked answers to these questions into our prepared remarks. If there are any additional questions, please feel free to reach out to us.

謝謝你，凱文。雖然我們在今天的電話會議之前徵集並收到了問題，但我們已將這些問題的答案融入我們準備好的演講稿中。如有任何其他疑問，請隨時與我們聯繫。

This now concludes the Donegal Group's second-quarter 2025 earnings webcast. You may now disconnect.

多尼戈爾集團2025年第二季業績網路直播到此結束。您現在可以斷開連線了。