Welcome to the Annual Meeting for Donegal Group Inc. Our host for today's call is Kevin Burke, President and CEO. I will now turn the call over to your host. Mr. Burke, you may begin.
Good morning, and welcome to the 2026 Annual Meeting of Stockholders of Donegal Group Incorporated. I am Kevin Burke, President and Chief Executive Officer of Donegal Group, and our board of directors has appointed me to serve as the presiding officer of today's annual meeting of stockholders. We are pleased to be hosting a virtual meeting to allow us to conduct matters of business, and provide a brief presentation to our stockholders. Our board has appointed three of our senior officers, David Bawel, Christina Hoffman, and Anthony Viozzi, to serve as inspectors of election for our annual meeting. Each of the inspectors of election has executed a customary oath regarding the performance of his or her duties as an inspector of election. Jennifer Miller, our Corporate Secretary will act as secretary of this annual meeting.
Richard Cohen, a partner of Duane Morris, our outside general counsel, as well as Alex Yanko of KPMG, our independent auditors, are with us today. We have appointed Broadridge Financial Solutions to tabulate our proxies. [Anna Hagberg-Seto] is participating in the meeting as a representative of Broadridge and will provide a certified report of proxy voting to our inspectors of election. Later in the meeting, we will provide time for questions that are germane to this annual meeting. Only validated stockholders may ask questions using the designated field on the web portal. Please note that this meeting is being recorded, but no one attending the meeting via webcast or telephone is permitted to use any audio recording device. I will now call our 2026 annual meeting of stockholders to order. Delaware law and our bylaws govern the conduct of our annual meeting.
In accordance with Delaware law and our bylaws, we will first introduce the three items of stockholder business we describe in our proxy statement, and then conduct the voting on each of those items of business. In accordance with our bylaws, the time has expired for any of our stockholders to present any other items of business for a vote of our stockholders at today's annual meeting. We call our 2026 annual meeting of stockholders for the purposes of, number one, electing four Class A members and one Class C member of our board of directors. Number two, approving on an advisory basis the compensation of our named executive officers. Number three, ratifying the appointment of KPMG as our independent registered public accounting firm for 2026. We will now proceed to consider and vote on the three items of business before this annual meeting.
Our stockholders will vote separately on each of the three items of stockholder business. Donegal Mutual has advised us that it has voted its shares for the following items of business. One, election of the four nominees of Class A director and one nominee for Class C director. Two, approval of, on an advisory basis, the compensation of our named executive officers. Number three, ratification of the appointment of KPMG as our independent registered public accounting firm for 2026. Is there a motion to present for approval each of the three items of business I just reviewed?
I so move.
Is there a second?
Second.
Motion is carried. We will now open the polls and vote separately on each of the three items of stockholder business. Any stockholder who has not yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal, and following the instructions there. Stockholders who have sent in proxies, or voted via telephone or the internet do not need to take any further action unless they want to change their vote.
At this point, we're going to pause momentarily to allow everyone time to vote. Now that everyone has had the opportunity to vote, I declare that the polls are closed for voting. We will report the results of our stockholder voting later in this meeting. At this time, Jeff Miller, our Chief Financial Officer, and I will review our financial results and significant developments during 2025, and our business and strategy plans for 2026. Mr. Miller.
Thank you. I'll start with some key significant financial items for 2025. First of all, we've achieved the highest net income in any year in our 39-year history, which we attribute to excellent underwriting results and a solid increase in investment income. Our mix of business shifted modestly to 62% commercial lines and 38% personal lines based on net premiums written in 2025, and we expect the mix to continue to shift toward a larger portion of commercial lines in 2026 and beyond. We had modest commercial lines earned premium growth of 3%, with solid premium retention and renewal premium increases, offset partially by lower new business writings. We achieved a favorable statutory combined ratio of 98.5% for that segment.
Our personal lines net premiums written declined by 13.6%, primarily due to lower new business writings and strategic non-renewal actions, offset partially by a continuation of renewal premium rate increases and solid retention. We achieved an outstanding 89.3% statutory combined ratio for that segment. In total, we achieved a combined ratio of 95.4% for 2025, comparing favorably to 98.6% for 2024. The improvement primarily reflected a lower core loss ratio, due in part to earned premium rate increases, particularly in personal lines, and lower weather-related loss impact. Our total revenues for 2025 were $978 million, which was a 1.2% decrease from $989.6 million for 2024. Premiums earned decreased 1.7% to $921.2 million. Investment income increased 17.2% to $52.6 million for 2025, and net income increased 56%, from $50.9 million for 2024 to $79.3 million for 2025.
Our total assets increased to $2.4 billion at the end of December 2025, with stockholders' equity of $640.4 million. Our book value per share increased 12.8% during 2025 to $17.33 at the end of December 2025. Positive contributions to book value from net income, and unrealized gains within our available-for-sale fixed maturity portfolio were partially offset by cash dividends declared during the year. We refer you to our year-end earnings release, earnings call replay or transcript, and our 2025 annual report for more details on our financial results. Before I turn it back to Kevin, I would like to announce that our board of directors this morning declared a quarterly cash dividend for both our Class A common stock and our Class B common stock. The Class A common stock dividend was increased to $0.1925 per share, which represents a 5.5% increase over our previous quarterly dividend rate.
Our Class B common stock dividend was declared at $0.1750 per share, which represented a 6.1% increase over the previous quarterly rate. Those dividends are payable May 15th, 2026, to stockholders of record as of May 1st, 2026. With that, I'll turn it back to Kevin.
Thank you, Jeff. Before I get into some of the key focus items for 2026, I do want to reiterate some of Jeff's comments on 2025's performance. It truly was a great year as we accomplished a number of key strategic initiatives, all of which are designed to help us grow our business and expand into various markets, gain market share while improving our overall operating results and enhance profitability. Let me start with our ongoing initiative that we've been reporting on for the last few years. The continued success of our systems modernization is having a positive impact on our overall operating results. The launch of our new products and consistency in our data is placing the organization on sound footing as we can now react and stay with, and at times, ahead of the technology curve.
I am most proud of the collaborative approach between our IS team, the business team, and senior management, and our ability to make thoughtful, objective decisions and work as a team to undertake such a major project. It's truly a testament to the quality of the team that we have at Donegal. In 2025, we implemented our last two major system releases, release 4 and 5. With the successful launch of these two systems, we are now well on our way to converting all of our personal lines legacy policies and remaining commercial lines policies onto the new Guidewire platform. Policy conversion is targeted to complete in mid-2027. Being removed from all legacy systems and the inherent risk associated, this will be a major milestone for the organization.
In late 2024 and 2025, we successfully stood up our small commercial business unit, along with having the systems, talented staff, and business plan to begin to compete in this market segment. We believe the small commercial space is an excellent segment to complement our already strong position within the commercial mid-market space. In 2025, we deployed a commercial lines appetite guide, which is a front-facing interactive guide for our agents to use, and it's a helpful tool when submitting business to us. The guide highlights our targeted classes of business and creates a win-win scenario for our agents and our underwriters as we further refine our mix of commercial business. The appetite guide has been very well received by our agents.
Staying on the underwriting side of the house, we continue to integrate aerial imagery and other risk-assessing tools into our underwriting workflows, which is further enhancing our risk selection and pricing discipline. The integration of these enhanced tools is at the foundation of our improved core loss ratios, giving us confidence we can deliver consistent operating results. In 2025, we continued to implement rate increases where warranted, and we ended 2025 in the best position we have ever been in terms of rate adequacy with the majority of our lines of business. This is an exciting time for Donegal, and 2025 was truly a turning point in the company's history. Over the last several years, we've been focused on building a foundation for the organization to thrive long-term.
This meant major changes within the organization, from a technology standpoint, to recognizing the need to implement a top-tier enterprise analytics division, to acquiring additional industry talent and staying true to who we are as a strong regional company that values relationships with our agents and policyholders. Staying true to those values while essentially rebuilding a new company from the inside out has required extreme focus. It required patience and the ability to stay focused on the long game. With all the foundational work, we enter 2026 with a focus on achieving excellent financial results. The areas of focus for 2026, the top of the list for us, is to achieve sustained underwriting profitability for both personal lines and commercial lines, while continuing to grow the book of business.
As the P&C marketplace begins to show signs of a softening market, it will require us to adhere to our disciplined underwriting approach to preserve profitability, while at the same time leverage our strong relationship with our independent agents and large agency groups to improve our new business results. Although most of the heavy programming work has been accomplished on our systems modernization, we still need to be attentive to the ongoing policy conversion process, which will be completed in mid-2027. We will stay vigilant until the very last policy is converted to the new Guidewire platform, and we can officially sunset the old mainframe system. The successful modernization of our policy systems has provided a solid foundation, for which we can quickly adopt new and emerging technology advancements and innovations.
In 2026, we will begin the migration of our on-premises Guidewire claims, billing, and policy administration systems to the Guidewire Cloud platform. Over the past several years, we have built a robust, cloud-based data infrastructure designed to integrate seamlessly with the Guidewire Cloud ecosystem. This foundation allows us the opportunity to use machine learning models and GenAI applications, and we are currently working to co-develop and launch new GenAI solutions to production part of our cloud migration.
We are excited about 2026, and we look forward to reporting our results in future quarters. At this time, we will open the line for any questions that stockholders may have. Stockholders may ask questions through the web portal, and we will address only questions that are germane to the meeting. We will pause momentarily. Seeing that we do not have any questions listed, we're going to close the question and answer period at this time. Ms. Miller, may we please have the report of the Inspectors of Election?
The Inspectors of Election report that our stockholders have, number one, elected, Kevin G. Burke, David C. King, Annette B. Szady, and Melissa A. Veenstra as Class A directors to serve until our 2029 annual meeting of stockholders, and the taking of office by their successors. Michael K. Callahan as a Class C director to serve until our 2028 annual meeting of stockholders and the taking of office by his successor. Number two, approved on an advisory basis, the compensation of our named executive officers. Number three, ratified the appointment of KPMG as our independent registered public accounting firm for 2026.
Thank you. That concludes the business of our 2026 annual meeting. I want to thank you for your attendance today and also for your continuing support. Is there a motion to adjourn?
I so move.
I second the motion.
All those in favor?
Aye.
Opposed? The motion is carried. Our 2026 annual meeting of stockholders is adjourned. Thank you.
This now concludes the meeting. Thank you for joining, and have a pleasant day.