Donegal Insurance Group business insurance

Overview

Donegal Insurance Group is a Lancaster County, Pennsylvania, regional carrier that grew from an 1889 farmers' fire mutual into a group of personal and commercial insurers selling through independent agents in 21 states. It has an unusual structure: Donegal Mutual Insurance Company, owned by its policyholders, holds majority voting control of Donegal Group Inc., a holding company whose Class A and Class B shares trade on Nasdaq (DGICA, DGICB). The mutual and the public company's insurance subsidiaries operate together as one group under the Donegal name.

The Donegal group was ranked No. 97 among U.S. business insurers by 2025 commercial lines direct premiums written, with $649.1 million, based on NAIC market share data. It has no line in the national top 10. Its commercial book is classic main-street business: commercial multiple peril (BOP and package) $286.0 million, commercial auto $237.4 million, workers' compensation $111.2 million and a small farmowners book of $7.4 million. All-lines premium was $1.12 billion. Commercial lines have become the larger segment: in 2025 they were about 62% of Donegal Group's net premiums written, up from roughly 58% a year earlier, as personal lines shrank on purpose.

The NAIC group's insurers include Donegal Mutual Insurance Company, Atlantic States Insurance Company, Michigan Insurance Company, Southern Insurance Company of Virginia, Peninsula Insurance Company and Peninsula Indemnity Company, Southern Mutual Insurance Company (an affiliate in Georgia and South Carolina), and Mountain States Commercial Insurance Company and Mountain States Indemnity Company. Kevin G. Burke is president and CEO of Donegal Group Inc.

History

On May 13, 1889, Pennsylvania's governor granted a charter to the Donegal and Conoy Mutual Fire Insurance Company of Marietta, formed by local farmers to protect their farms and buildings. It took the name Donegal Mutual Insurance Company in 1949, added auto insurance in the early 1950s and homeowners in 1952. Acquisitions followed:

• 1976 — Reading Mutual and Laurel State Mutual, both in Pennsylvania.
• Early 1980s — expansion into Maryland and Delaware; in 1984 Donegal Mutual took over Southern Mutual Insurance Company of Virginia, now Southern Insurance Company of Virginia.
• 1986 — Donegal Mutual formed Donegal Group Inc. as a downstream holding company and took it public, keeping majority control. Atlantic States Insurance Company was formed as its first subsidiary, originally to write workers' comp.
• 1990s — Delaware Atlantic, Pioneer Insurance Company (Ohio and New York) and Southern Heritage were acquired, then merged into Atlantic States or Southern of Virginia in 2001 and 2006.
• 2002 — Le Mars Insurance Company of Iowa, Donegal's entry into the Midwest. 2004 — Peninsula Insurance and Peninsula Indemnity of Maryland. 2008 — Sheboygan Falls Insurance Company of Wisconsin.
• 2009 — an affiliation with Southern Mutual Insurance Company of Athens, Georgia, adding Georgia and South Carolina business.
• 2010 — Michigan Insurance Company of Grand Rapids. At the end of 2023 its operations were folded into a combined "Greater Midwest" region.
• 2017 — Mountain States Mutual Casualty Company of Albuquerque merged into Donegal Mutual. As the Mountain States Insurance Group, it sells commercial lines in Colorado, New Mexico, Texas and Utah, and more recently Arizona.

Donegal Group describes itself as an acquirer of small to medium-sized "main street" insurers, and its regional offices still reflect those deals: Glen Allen, Virginia; Athens, Georgia; Grand Rapids, Michigan; and Albuquerque.

Business insurance products

Donegal's commercial lineup is aimed at small and mid-size businesses:

• Businessowners policy (BOP). Building and business personal property usually at replacement cost with no coinsurance requirement, business income for up to 12 consecutive months with no dollar limit or waiting period, and built-in equipment breakdown coverage. More than 100 classes are eligible. See What is a business owner's policy (BOP)?.
• BOP Contractor's for artisan contractors, covering tools and equipment in the shop, the truck or the job site, with a "Tradesman's Plus" upgrade.
• Commercial package policy for larger or more complex accounts (see Commercial package policies: when a BOP is too small).
• Commercial auto, its fastest-growing commercial line: net premiums written rose 7.0% in 2025 and 8.0% in the second quarter of 2026.
• Workers' compensation, with dividend plans that return premium to employers with good safety records. Comp premium has been shrinking (down 10.7% in 2025 and 15.1% in the second quarter of 2026).
• Commercial excess liability (umbrella), employment practices liability, liquor liability, contractors' errors and omissions, and an auto dealers program covering service vehicles, customers' cars and inventory.
• Chamber of commerce group programs in some areas: loss-sensitive programs with rate discounts and dividends for members.

Donegal has no E&S company, surety or standalone professional lines, so a broker will place those elsewhere.

Who it insures

Donegal writes in Delaware, Maryland and Pennsylvania (Mid-Atlantic); Georgia, North Carolina, South Carolina, Tennessee and Virginia (Southern); Illinois, Indiana, Iowa, Michigan, Nebraska, Ohio, South Dakota and Wisconsin (Midwest); and Arizona, Colorado, New Mexico, Texas and Utah (Southwest). Products and coverages vary by state; in the Southwest, Donegal sells commercial lines through Mountain States.

Its stated targets are small and mid-size businesses, including the contractors, Auto dealer insurance and Auto repair shop insurance its programs name, plus restaurants and bars that need liquor liability. In 2025 Donegal refined its commercial underwriting appetite, which management said caused it to miss its new-business target. For 2026 it is pursuing "modest premium growth" in geographies and classes it has identified as attractive, with new agent incentives to bring in submissions. A borderline risk may find the appetite tighter than a few years ago.

How to buy

Only through an independent agent. Donegal's site sends buyers to a find-an-agent search and does not offer direct quotes. Agents quote and issue commercial business through its WriteBiz system. Policyholders can pay bills and report claims through an online account or the Donegal mobile app. Commercial accounts get loss control services, including resource guides, consultations by phone or email, fleet telematics and dashcam guidance, and discounted online safety training. Payroll-rated comp and sales-rated liability policies carry a premium audit.

Claims

Report a claim 24/7 at 800-877-9006, or online through your policyholder account. For emergencies, Donegal says an on-call claim representative will usually call back within one hour; non-emergency reports are picked up the next business day. Workers' comp policyholders have a 24/7 nurse triage hotline run with CorVel at 855-563-1035 for non-life-threatening injuries, with telehealth referrals and English- and Spanish-speaking nurses. Using the hotline does not replace the first report of injury, which still has to go to Donegal (see the workers' comp claims process for employers). Medical bill review is handled by CareWorks.

Financial strength and ratings

AM Best affirmed the A (Excellent) financial strength rating and "a" (Excellent) issuer credit ratings of the Donegal Insurance Group members, with stable outlooks, in May 2025, and affirmed the "bbb" (Good) issuer credit rating of Donegal Group Inc. AM Best cited a very strong balance sheet, adequate operating performance, a neutral business profile and appropriate enterprise risk management. The outlook had been negative in 2020. Donegal's 2026 earnings releases still describe the group as rated A (Excellent).

Results have improved after several weak years. Donegal Group reported net income of $79.3 million for 2025, up 56%, and a GAAP combined ratio of 95.4%, against 98.6% in 2024. The commercial segment ran hotter: its statutory combined ratio was 98.5% in 2025 against 98.2% in 2024, as large fires and umbrella losses offset a stable core loss ratio. In the second quarter of 2026 the overall combined ratio was 95.6% and commercial net premiums written rose 0.8%, while personal lines fell 9.7% as planned.

Strengths and weaknesses

Donegal is a solidly rated, agency-loyal regional with a long acquisition record and a commercial book that now outweighs its personal lines. Its commercial margins are thin and its appetite is tightening.

• Strengths: A (Excellent) from AM Best (affirmed May 2025) with a very strong balance sheet. A main-street commercial lineup (BOP, contractors' BOP, package, auto, comp, umbrella, EPLI, liquor) across 21 states. Public-company disclosure through Donegal Group Inc. gives unusual visibility into results by line. A 24/7 comp nurse hotline and practical loss control for small accounts.
• Weaknesses: Commercial lines ran a 98.5% statutory combined ratio in 2025, and management has narrowed its commercial appetite. Workers' comp is shrinking fast. No direct buying, no E&S and no surety. Its structure, with a mutual controlling a listed holding company, means policyholder and shareholder interests can pull in different directions.

How to contact Donegal Insurance Group