Donegal Group Inc., or DGI, is an insurance holding company whose insurance
subsidiaries offer personal and commercial lines of property and casualty insurance
to businesses and individuals in 21 Mid-Atlantic, Midwestern, New England and
Southern states.
Donegal Mutual Insurance Company, or Donegal Mutual, organized us as an insurance
holding company on August 26, 1986. Donegal Mutual held approximately 48% of
our outstanding Class A common stock and approximately 83% of our outstanding
Class B common stock. Donegal Mutual’s ownership provides Donegal Mutual
with approximately 74% of the aggregate voting power of our outstanding shares
of Class A common stock and our outstanding shares of Class B common stock.
. While maintaining the separate corporate existence of each company, our insurance
subsidiaries and Donegal Mutual conduct business together as the Donegal Insurance
Group. As such, Donegal Mutual and our insurance subsidiaries share the same
business philosophy, the same management, the same employees and the same facilities
and offer the same types of insurance products.
We have been an effective consolidator of smaller “main street”
property and casualty insurance companies, and we expect to pursue opportunities
to acquire other insurance companies to expand our business in a given region
or to commence operations in a new region. Since 1995, we have completed six
acquisitions of property and casualty insurance companies or began to participate
in their business through Donegal Mutual’s entry into quota-share reinsurance
agreements with them.
Our insurance subsidiaries and Donegal Mutual provide their policyholders with
a selection of insurance products at competitive rates, while pursuing profitability
by adhering to a strict underwriting discipline. Our insurance subsidiaries
derive a substantial portion of their insurance business from smaller to mid-sized
regional communities. We believe this focus provides our insurance subsidiaries
with competitive advantages in terms of local market knowledge, marketing, underwriting,
claims servicing and policyholder service. At the same time, we believe our
insurance subsidiaries have cost advantages over many smaller regional insurers
that result from economies of scale our insurance subsidiaries realize through
centralized accounting, administrative, data processing, investment and other
services.
We believe we have a substantial opportunity, as a well-capitalized regional
insurance holding company with a solid business strategy, to grow profitably
and compete effectively with national property and casualty insurers. Our downstream
holding company structure, with Donegal Mutual holding approximately 74% of
the aggregate voting power of our common stock, has proven its effectiveness
and success over the 29 years of our existence. Over that time period, we have
grown significantly in terms of revenue and financial strength, and the Donegal
Insurance Group has developed an excellent reputation as a regional group of
property and casualty insurers.
We own 48.2% of Donegal Financial Services Corporation, or DFSC. DFSC is a grandfathered
unitary savings and loan holding company that owns all of the outstanding capital
stock of Union Community Bank, a state savings bank, or UCB. UCB has 15 banking
offices, substantially all of which are located in Lancaster County, Pennsylvania.
Donegal Mutual owns the remaining 51.8% of DFSC.
We have four segments: our investment function, our personal lines of insurance,
our commercial lines of insurance and our investment in DFSC.
ss Strategy
Our strategy is designed to allow our insurance subsidiaries to achieve their
longstanding goal of outperforming the United States property and casualty insurance
industry in terms of profitability and service, thereby providing value to the
policyholders of our insurance subsidiaries and, ultimately, providing value
to our stockholders.
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