Good morning and thank you for joining us today. This morning, Donegal Group issued its first quarter 2022 earnings release outlining its results. The release and the supplemental investor presentation are available in the Investor Relations section of Donegal's website at www. donegalgroup.com. [Operator Instructions] Speaking today will be President and Chief Executive Officer Kevin Burke, Chief Financial Officer, Jeff Miller, Chief Operating Officer Jeffery Hay, and Chief Investment Officer Tony Viozzi. Please be aware that statements made during this call that are not historical facts are forward-looking statements and necessarily involves risks and uncertainties that could cause actual results to vary materially. These factors can be found in Donegal Group's filings with the Securities and Exchange Commission, including its annual report on Form 10-K and quarterly reports on Form 10-Q. The company disclaims any obligation to update or publicly announced the results of any revisions that they may make towards any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. With that, it's my pleasure to turn it over to Kevin Burke. Kevin.

Thank you, Karin, and welcome everyone. I will focus my remarks on the progress that we've made on several strategic initiatives. Jeff Miller will then provide details on our key financial results for the first quarter of 2022. Jeff Hay will then highlight our commercial and personal lines segment results, followed by Tony Viozzi with an update of our investment portfolio. I will then return for some closing remarks before we address the questions that were submitted to us in advance. We continue to make solid progress in modernizing our systems and transforming our business. The new operating platform we have implemented for our workers compensation and our new personal lines products increases our ability to be nimble and pivot quickly to respond to changes in the marketplace. Leveraging the new technology will continue to provide opportunities for increased efficiencies and customer experience enhancements. And we look forward to bringing additional products onto the new platform over the next few years. The successful launch of our new personalized products in six states is a great example of how the new systems are enabling our ongoing business transformation. While we remain diligent in our strategic emphasis of commercial lines and emphasizing the growth, we are pleased to report modest growth in our personal lines premiums for the first time since the onset of our strategic plan to restore personal lines for profitability starting back in 2018. In addition to the roll out of our new products with significant enhancements on our pricing segmentation and capabilities, we launched the new personal lines agency portal that integrates third-party data providers to pre -fill information. And it gives us additional underwriting insights and further enhances the user experience for our agents. We view our strong relationship with our independent agents as a key component…

Thank you, Kevin. We are pleased with the solid premium growth and underwriting results we achieved in the first quarter of 2022. For the first quarter, net premiums earned grew by 6.4% to $199 million. I'd like to remind you that starting in January 2021, we began to include the commercial business from our Mountain States region in the underwriting pool. And those additional premium writings in 2021 will contribute to increases in net earned premiums throughout 2022. The overall combined ratio was 95.8% for the first quarter of 2022 compared to 98.5% in the prior year quarter. The solid underwriting results reflected continued net favorable development of reserves for losses incurred in prior accident years. Lower weather-related loss activity compared to our five-year historical average for the first quarter. And a lower quarterly impact of large fire losses that we experienced on average during 2021. These favorable trends were partially offset by inflationary pressures on loss costs in certain lines of business. There were no unusually severe weather events or conditions in our operating regions during the first quarter of 2022 with weather-related losses totaling $8 million or approximately $2 million lower than the previous five-year first quarter run rate. And representing four percentage points of the loss ratio. The non-weather loss ratio improved 480 basis points, reflecting a lower incident of large fire losses and favorable prior year loss reserve development during the period. Fire losses over $50,000 totaled $9.6 million or 4.8 points of the loss ratio compared to $10.3 million or 5.5 points of the loss ratio for the prior year quarter. The decrease was largely due to a lower frequency of large commercial fires as we had only two fire claims in excess of $500,000 compared to eight in the prior year quarter. Conversely, there…

Thanks, Jeff. And it's a pleasure to be on the call today. So I'd like to start with commercial lines where our net premiums written increased 1.7% overall. We experienced growth in all of our lines of business, except for workers compensation, where the ongoing mandated rate reductions that the industry is experiencing continue to reduce our premiums as well. And while the 1.7% growth rate is modest, we did achieve our written premium goals for the quarter, primarily as a result of both improved rate increases and strong retention rates. Our strategy was to deliberately slow the writing of new business compared to the first quarter of 2021, to give us time to increase premium rates to maintain pace with the inflationary increases in loss costs that we're experiencing. However, our new business growth was even lower than we projected, where we're receiving some agency market feedback that general shopping activity is down in the market, as well as talent shortages within agency plans themselves being particularly impacting agents’ abilities to pursue new business. We did see higher new business volume later in the quarter, and we're optimistic about those improving trends. More than offsetting the shortfall on new business, premium retention remains strong. Holding within the low to mid nineties range with renewal rate increases averaging 8.2%, excluding the workers compensation line of business. The achieved increases were fairly consistent across the lines of business and policy size bands. Also beginning in 2022, we're refining our rate strategies to deliver enhanced renewal price and guidance to our underwriters, allowing us to pursue higher rate increases on the most underpriced accounts to further improve margins. We began this approach in our commercial auto line of business and expect to roll this enhanced guidance for other commercial lines throughout the…

Thanks, Jeff. We continue to maintain a large percentage of high-quality fixed income securities in our investment portfolio, representing approximately 95% of the $1.3 billion of invested assets as of March 31, 2022. We have strategically increased allocations in corporate and municipal debt over the last two quarters to take advantage of rising market yields and widening credit spreads. More recently, we have also been adding assets to the mortgage-backed portfolio and reducing equity exposure in what we feel will be a more volatile market in the short-term. We expect to be strategic investment strategies coupled with our laddered holdings to enhance our cash flow for the reinvestment opportunities as the market bond rates stabilize and continue to rise. Net investment income increased 4.6% from the first quarter of 2021 to $7.9 million. Investing new money from premium growth and profitable operating results has allowed us to consistently maintain and increase our investment income. While our average tax equivalent yield helped study in the first quarter, our average reinvestment rate exceeded the rate we were receiving on maturing assets for the first time in several years. That investment losses of $76,000 were modest compared to the net investment gains of $2.5 million with a prior year quarter gains and losses in both periods were primarily related to unrealized gains or losses in the fair value of the relatively modest equity portfolio we held at the end of the respective periods based on carrying values at year-end 2021, we classified 44% of the bond portfolio as available for sale. We adjust the carrying value of it available for sale bonds to market value at the end of each quarter and recorded the unrealized gain or loss as an adjustment to our stockholder’s equity. While the interest rates spike during the first quarter was beneficial to us in terms of reinvestment rates. It also resulted in a $20.6 million after-tax decline in the market value of the bond holdings, which equates to $0.65. per share. That decline more than offset the contributions of our favorable operating results, lowering book value per share from $16.95 at year-end 2021 to $16.72 at March 31, 2022. I will now turn it back to Kevin for closing remarks.

Thanks, Tony. As a result of the investments we've made in technology, data analytics, and the acquisition of new talent to further support our talented team of professionals, we're very encouraged by the path that we're on. We're beginning to see the positive impact of many of the initiatives that we've implemented, but we know that our work is not complete. Our excitement about Donegal's prospects for the future fuels our drive, and seek further advancements and team engagement to successfully enhance our profitability over time. We've never been in a better position to achieve our business goals. And we look forward to reporting on the progress in future quarters. I want to thank our hard working staff for the dedication they're demonstrating as we continue to make great strides in transforming our business. And thanks to you, our shareholders, for your continued support throughout this time of transition and great progress. At this time, we'll ask Karin to moderate our question-and-answer session.

Thank you, Kevin. I'd like to take a moment to discuss the format for the question-and-answer section. Along with the announcement of Donegal's Q1 2022 earnings and webcast schedule, We've requested and received questions from interested parties in advance. While we have worked, answered some of these questions into our prepared remarks where appropriate, There were a few questions that we will address directly. The first question we received relates demand inflationary impact on loss cost trends. How will Donegal's pricing strategy change in response to these trends. Jeff Hay, could you respond to this question?

Thank you for that question. We have changed our pricing strategy as the result of the record levels of inflation that we're experiencing. And we close to doubled the rate achievement in the first quarter in our commercial lines of business. And. plan to continue with that strategy of really balancing our rate achievement with our overall retention goals. And thus far, we've been pretty successful in that endeavor. We're also providing guidance to our commercial underwriters on the accounts that we deemed to be the most underpriced based on predictive analytics that we've done. So we can push even harder for increased rates on those risks. And based on our analysis of rate indications, we believe that we can achieve rate increases that will largely offset the inflation rate as those rate increases are earned over time. Separately on the personal lines side of things, the timing and implementation of our new product suite, it's actually allowing us to manage our new business pricing separately from our renewal legacy book. And while we're managing market dynamics through price segmentation adjustments within our new product, we can separately take larger rate increases across our renewal legacy book to combat these inflationary pressures while also maintaining high levels of retention for the segment overall. However, it will take us some time to obtain the necessary regulatory approvals and implement our rate plan during 2022, which will delay our achievement in the overall earnings of rate adequacy in our personal lines book of business similar to other carriers in the marketplace.

Great. Thank you. A follow-up to last cost trends, this question relates to the shift in large fire losses from commercial to personal. Were there any identifiers that suggest the uptick in homeowners large fire losses may become a longer-term issue within personal lines? Jeff Miller, any insights on the trend in the quarter?

Yes, I'll be glad to address that question. As we monitored the significant increase in large commercial fire losses during 2021, we commented in our calls that we were unable to identify any correlation or commonality in those fires. And while we were certainly pleased that the incidents of large commercial fires returned to a more normal range in the first quarter of 2022, as I mentioned in my prepared remarks, there were six homeowners fire claims in excess of $500,000 in the first quarter of 2022 compared to only one in the prior quarter. There really were no factors in these large number losses -- homeowner losses, that suggests there is a particular trend forming. We typically see a higher volume of homeowner fire losses in the first quarter when heating systems are in full use. But we have no reason to believe that trend will continue as the year progresses. The shift between lines is noteworthy, but in total, the number of large buyers and the average severity were both generally in line with the first quarter of 2021.

Okay. Jeff, hey, I believe this next question is for you. In growth plan, what are your specific plans to achieve profitable growth?

Sure, thanks, Karin, I can take that one. I'll separate it out because the strategies really do vary between personal lines and commercial lines. First for commercial lines, we are being very deliberate about our management of retention, new business, and rate in hopefully what is the short-term accelerated inflationary environment. Our lower levels of new business and moderate growth levels are very intentional while we manage rate levels in response to the inflationary dynamic. However, in the longer term, we are building out new corporate underwriting as a function to increase our underwriting specialization in specific industries, account sizes in lines of business. And that will afford us to take advantage of additional market opportunities down the road. The formation of our centralized underwriting operations team that I previously mentioned in my prepared remarks will also drive automation and efficiencies in our processes that will flow through into the market through improved responsiveness to our agents, improved online buying ability for our agents, as well as improved pricing competitiveness in the marketplace. Now, for our personal lines, our future growth is tied and dependent on the success of our new products suite. And the enabling technologies is supportive on both the front-end, and the back-end, especially scalability in these lines, are being driven by these capabilities. As I mentioned earlier, we're also managing the balance between the success of these new products with retention and adequacy levels of our renewal legacy book of business. And that will be a critical for our overall profitability for the personal lines division. Kevin talked earlier about our focus on building stronger relationships with a national agency groups in many of the agents in these groups have large personal lines books of business. So we will see those growing relationships. We do see those as a source of profitable personal lines growth moving forward.

The next question is regarding the expense ratio. It picked up a bit quarter-over-quarter. What is the expected run rate for expenses, especially as technology improvements continue? And are you seeing other inflationary impacts such as weak inflation for the longer-term impact expenses. Jeff Miller, I assume you'd like to take this one?

We've been providing updates on our major technology upgrade over the past several years and expenses related to the technology systems, and it's about a full point to the first quarter of 2022 expense ratio, which is right where we projected it to be. That compared to half-a-point in the prior year quarter. The other main driver of the increase was increased underwriting-based incentive accruals for agents and employees due to the more favorable loss ratio. As we've talked about in the past, there is a direct inverse relationship between our loss ratio and our expense ratio as a result of those underwriting-based incentive costs that vary depending on our profitability. The current quarter expense ratio was very consistent with past quarter's when we had similar loss ratio. In direct to response to that question, we're not necessarily seeing a material impact of wage inflation on the expense ratio as of this point. But we do continue to add talent and expertise to support our ongoing initiatives and to increase our capabilities. As we look ahead to the next couple of years, we're projecting an expense ratio between 34.5% and 35% as the run rate that we expect over the next couple of years.

Great. Thank you for that insight. The final question relates to the investment portfolio. How will you mitigate the market value impact from the bond portfolio moving forward, if rates continue to rise? Tony, I'll refer to you for this one.

Thank you, Karin. At this point, we're not seeing projections for higher rates on the 10-year U.S. Treasury. With that said, we continue to classify longer-term investments as held to maturity to mitigate the potential for market value adjustments should rates rise farther. At the same time, we're building a strong cash flowing portfolio in the shorter end of the curve, so that we have the funds available to reinvest as we anticipate a rise in short-term rates.

Thank you. And that wraps up the questions received in advance of the call. If there are any further questions, please feel free to reach out to us. Thank you to all interested parties for submitting questions and listening in today. I will now turn it back to Kevin for any final remarks.

Thanks, Karin. We hope our commentary has been informative today, and that you have a sense of the many strategic and tactical initiatives we're working on to generate and sustain positive financial results. Thank you for joining us today, and have a good day.

This now concludes the first quarter of 2022 earnings webcast. You may now disconnect.