Donegal Group Inc. Announces Preliminary Estimate of April and May Storm Impact

Donegal Group Inc. DGICA DGICB announced today that it expects the severe storm activity in April and May to result in estimated pre-tax weather-related claims, net of reinsurance, of approximately $13-15 million for the second quarter of 2011. These claims include $7-8 million from wind and hail events in the Mid-Atlantic region, $4-5 million from the numerous tornadoes that hit Southern states and $2 million from wind and hail events in Midwestern states. Catastrophe and other weather-related claims impacted the Company's pre-tax second quarter of 2010 results by approximately $10 million after reinsurance. Donald H. Nikolaus, President and Chief Executive Officer of Donegal Group Inc., commented, "Although we expect the unusual frequency of April and May storm activity in our operating areas to impact our second quarter results of operations, our relatively conservative reinsurance program will temper the severity of that impact. We routinely evaluate geographical risk profiles as part of our enterprise risk management program. As a result of these evaluations, we decided within the past several years to discontinue writing homeowners insurance in certain areas. In addition, we have not historically offered insurance coverage in other areas where severe weather events in April and May caused horrific losses of life and property."