Reinsurance

12 Months Ended

Dec. 31, 2025

10 - Reinsurance

Unaffiliated Reinsurers

Our insurance subsidiaries and Donegal Mutual participate in a consolidated third-party reinsurance program, for which the coverage and parameters are common to all of our insurance subsidiaries and Donegal Mutual. The program utilizes several different reinsurers, all of which have an A.M. Best rating of A- (Excellent) or better or, with respect to foreign reinsurers, have a financial condition that, in the opinion of our management, is equivalent to a company with at least an A- rating from A.M. Best. The following information describes the external reinsurance Donegal Mutual and our insurance subsidiaries had in place for 2025:

•

for property insurance, excess of loss reinsurance that provided for coverage of $36.0 million per loss over a set retention of $4.0 million and catastrophe reinsurance, under which they recovered 100% of an accumulation of many losses resulting from a single event, including natural disasters, over a set retention of $25.0 million up to aggregate losses of $200.0 million per occurrence;

•

for liability insurance, excess of loss reinsurance that provided for coverage of $69.0 million per occurrence over a set retention of $6.0 million; and

•

for workers' compensation insurance, excess of loss reinsurance that provided for coverage of $17.0 million on any one life over a set retention of $3.0 million.

For property insurance, our insurance subsidiaries had excess of loss reinsurance that provided for coverage of $36.0 million per loss over a set retention of $4.0 million. For liability insurance, our insurance subsidiaries had excess of loss reinsurance that provided for coverage of $69.0 million per occurrence over a set retention of $6.0 million. For workers’ compensation insurance, our insurance subsidiaries had excess of loss reinsurance that provided for coverage of $17.0 million on any one life over a set retention of $3.0 million.

As many as 30 reinsurers provided coverage for 2025 on any one treaty with no reinsurer taking more than 17% of any one treaty. The amount of coverage provided under each of these types of reinsurance depended upon the amount, nature, size and location of the risks being reinsured.

In order to write automobile insurance in the State of Michigan, several of our insurance subsidiaries are required to be members of the Michigan Catastrophic Claims Association (“MCCA”). MCCA provides reinsurance to those insurance subsidiaries for personal automobile and commercial automobile personal injury claims in the state of Michigan over a set retention.

In addition to the pooling agreement and third-party reinsurance, our insurance subsidiaries had a catastrophe reinsurance agreement with Donegal Mutual, under which each of our insurance subsidiaries recovered 100% of an accumulation of multiple losses resulting from a single event, including natural disasters, over a set retention of $3.0 million up to aggregate losses of $22.0 million per occurrence. The agreement also provided additional coverage for an accumulation of losses from a single event including a combination of our insurance subsidiaries over a combined retention of $6.0 million. Several of our insurance subsidiaries also had a liability reinsurance agreement with Donegal Mutual, under which each of those participating insurance subsidiaries recovered 100% of losses related to any liability claim over a set retention of $3.0 million up to losses of $3.0 million per occurrence.

Our insurance subsidiaries and Donegal Mutual also purchased facultative reinsurance to cover certain exposures, including property exposures in excess of the covered limits of their respective treaty reinsurance.

The following amounts represent ceded reinsurance transactions with unaffiliated reinsurers during 2025, 2024 and 2023:

	2025			2024			2023
Premiums written	$	32,093,676		$	38,495,838		$	43,030,879
Premiums earned		32,499,899			38,688,465			42,416,710
Losses and loss expenses		(3,178,091	)		(2,537,221	)		16,318,760
Prepaid reinsurance premiums		6,134,104			6,540,327			6,732,955
Liability for losses and loss expenses		86,978,777			101,730,415			116,717,187

Total Reinsurance

The following amounts represent total ceded reinsurance transactions with both affiliated and unaffiliated reinsurers during 2025, 2024 and 2023:

	2025		2024		2023
Premiums earned	$	405,133,479	$	411,032,074	$	388,073,427
Losses and loss expenses		202,503,757		214,853,176		275,171,587
Prepaid reinsurance premiums		171,083,219		176,161,872		168,724,466
Liability for losses and loss expenses		395,229,241		417,012,858		437,013,974

The following amounts represent the effect of reinsurance on premiums written for 2025, 2024 and 2023:

	2025			2024			2023
Direct	$	695,699,115		$	737,539,403		$	702,227,408
Assumed		609,182,350			623,210,848			589,675,724
Ceded		(400,054,828	)		(418,469,480	)		(396,206,492	)
Net premiums written	$	904,826,637		$	942,280,771		$	895,696,640

The following amounts represent the effect of reinsurance on premiums earned for 2025, 2024 and 2023:

	2025			2024			2023
Direct	$	709,082,223		$	735,818,955		$	686,584,907
Assumed		617,234,831			611,864,599			583,559,906
Ceded		(405,133,479	)		(411,032,074	)		(388,073,427	)
Net premiums earned	$	921,183,575		$	936,651,480		$	882,071,386
Percentage of assumed premiums earned to net premiums earned		67.0	%		65.3	%		66.2	%