EXHIBIT 99.1

Donegal Group Inc. Announces Third Quarter 2013 Results

MARIETTA, Pa., Oct. 25, 2013 (GLOBE NEWSWIRE) -- Donegal Group Inc. (Nasdaq:DGICA) (Nasdaq:DGICB) today reported its financial results for the third quarter and first nine months of 2013. Highlights include:

• Net income of $7.7 million for the third quarter of 2013, as improved underwriting results contributed to an 11.9% increase over net income for the third quarter of 2012
• 8.0% increase in net premiums earned and 5.7% increase in net premiums written for the third quarter of 2013, reflecting continuing organic growth in commercial lines and the impact of premium rate increases
• 96.0% statutory combined ratio¹ for the third quarter of 2013, representing the lowest combined ratio for any quarterly period in the past five years
• Operating income¹ of $7.4 million for the third quarter of 2013, representing a 24.0% increase over operating income of $6.0 million for the third quarter of 2012
• Book value per share of $14.95 at September 30, 2013, increasing from $14.84 at June 30, 2013

¹The "Definitions of Non-GAAP and Operating Measures" section of this release defines and reconciles data that the Company prepares on an accounting basis other than U.S. generally accepted accounting principles ("GAAP").

Donald H. Nikolaus, the President and Chief Executive Officer of Donegal Group Inc., noted, "During the third quarter of 2013, our insurance operations benefitted from favorable insurance market conditions within our operating regions and a continuation of positive momentum in the achievement of our growth objectives. Further, our GAAP and statutory combined ratios both were the best we have achieved for any quarter during the past five years.

"Our quarterly results reflect the continuing implementation of a strategic business plan that includes long-term objectives of outperforming the property and casualty insurance industry in terms of service, profitability and book value growth," Mr. Nikolaus noted. "We continue to focus on expanding our commercial lines business, achieving solid new business growth and renewal premium increases in the 5-7% range. Our regional focus, independent agency relationships and proven commitment to the small to mid-size commercial insurance market are important advantages that contributed to a 93.0% statutory combined ratio for this business segment for the third quarter of 2013."

Mr. Nikolaus continued, "The absence of significant catastrophe weather events and fewer large fire losses in the third quarter of 2013 clearly enhanced the performance of our personal lines insurance operations. However, we believe our strategic underwriting initiatives were also an important factor in our achievement of a 97.9% statutory combined ratio for this business segment. Personal lines net written premium growth of 2.1% consisted almost entirely of rate increases we have implemented over the past year.

"Our organic growth and profit improvement initiatives have been integral to our favorable underwriting results. We believe those initiatives will drive further improvement in future periods. In addition, we continue to pursue appropriate acquisition opportunities to add scale to our operations and to help us achieve our long-term performance objectives," Mr. Nikolaus added.

Mr. Nikolaus concluded by noting, "On September 17, 2013, the A.M. Best Company affirmed its A (Excellent) financial strength rating and stable ratings outlook for the members of the Donegal Insurance Group. In its report, the A.M. Best Company stated that it based the ratings affirmation of the Donegal Insurance Group members on the Donegal Insurance Group's supportive risk-adjusted capitalization, sound balance sheet liquidity, generally positive earnings, and a history of successful strategic acquisitions and affiliations, among other factors."

At September 30, 2013, the Company's book value per share was $14.95, compared to $15.63 at December 31, 2012 and $15.74 at September 30, 2012. The lower book value per share at September 30, 2013 reflects a reduction in net unrealized gains in the fair value of the Company's available-for-sale fixed-income securities portfolio due to increased market interest rates.

Insurance Operations

Donegal Group is an insurance holding company whose insurance subsidiaries offer personal and commercial property and casualty lines of insurance in four Mid-Atlantic states (Delaware, Maryland, New York and Pennsylvania), three New England states (Maine, New Hampshire and Vermont), seven Southeastern states (Alabama, Georgia, North Carolina, South Carolina, Tennessee, Virginia and West Virginia) and eight Midwestern states (Indiana, Iowa, Michigan, Nebraska, Ohio, Oklahoma, South Dakota and Wisconsin). The insurance subsidiaries of Donegal Group conduct business together with Donegal Mutual Insurance Company as the Donegal Insurance Group.

The Company's net premiums written increased 5.7% for the third quarter of 2013 compared to the third quarter of 2012. This increase represented the combination of 12.1% growth in commercial lines writings and 2.1% growth in personal lines writings. The $7.3 million growth in net premiums written for the third quarter of 2013 compared to the third quarter of 2012 included:

• $2.3 million, or 1.8% of total net premiums written, related to a change in the Michigan Insurance Company ("MICO") quota-share reinsurance agreement that continues to increase the amount of business MICO retains. The Company acquired MICO in December 2010.
• $4.3 million in commercial lines premiums, excluding the MICO reinsurance change, that the Company attributes primarily to premium rate increases and new commercial accounts the Company's insurance subsidiaries have written throughout their operating regions.
• $679,000 in personal lines premiums, excluding the MICO reinsurance change. The modest increase reflects the premium rate increases and underwriting initiatives the Company has implemented over the past four quarters.

The Company's net premiums written increased 7.3% in the first nine months of 2013. The increase included $7.8 million related to the MICO reinsurance change. Excluding the MICO reinsurance change, commercial lines premiums rose $17.6 million and personal lines premiums increased $2.6 million for the first nine months of 2013 compared to the first nine months of 2012.

Mr. Nikolaus commented, "Less severe weather and a lower incidence of large fire losses were clearly factors in the overall improvement in our third quarter results compared to the prior-year third quarter. We also continue to see the positive impact of higher premium rates on the results of many of our lines of business, including personal auto and homeowners. We expect to make continued progress toward our performance objectives for our personal lines of insurance as we continue to file for rate increases in most of our regions.

"Our third quarter of 2013 commercial lines underwriting results benefited from solid performance in our workers' compensation and commercial multi-peril lines of business. For commercial automobile, our results were influenced by a few large losses, as well as the receipt of new information that resulted in increased reserves for prior year losses. Our ongoing review process routinely includes a close look at underwriting controls on risks with substantial losses, but our reviews did not identify any concerns with respect to these situations," Mr. Nikolaus noted.

For the third quarter of 2013, the Company's statutory loss ratio declined to 65.1%, compared to 68.2% for the third quarter of 2012. For the first nine months of 2013, the Company's statutory loss ratio declined to 68.2% from 69.6% for the first nine months of 2012.

Large fire losses totaling $3.1 million for the third quarter of 2013, or 2.4 percentage points of the Company's loss ratio, declined from the $6.6 million, or 5.5 percentage points of the Company's loss ratio, during the third quarter of 2012.Weather-related losses of $9.4 million for the third quarter of 2013, representing 7.2 percentage points of the Company's loss ratio, compared favorably to $11.3 million in weather-related losses for the third quarter of 2012, or 9.3 percentage points of the Company's loss ratio. Weather loss activity in the third quarter of 2013 nearly matched the Company's five-year average for third quarter weather losses of $9.3 million and included losses from several localized wind and hail events in the Midwest region. Development of reserves for losses incurred in prior accident years added 2.4 percentage points to the Company's loss ratios for the third quarter of 2013 and 2012.

The Company's statutory expense ratio¹ was 30.6% for the third quarter of 2013, compared to 29.1% for the third quarter of 2012. The increase in the Company's expense ratio reflected increased underwriting-based incentive costs for the third quarter of 2013.

Investment Operations

Donegal Group's investment strategy is to generate an appropriate amount of after-tax income on its invested assets while minimizing credit risk through investment in high-quality securities. As a result, the Company had invested 88.8% of its consolidated investment portfolio in diversified, highly rated and marketable fixed-maturity securities at September 30, 2013.

A 1.9% decrease in net investment income for the third quarter of 2013 primarily reflected the impact of the lower average investment yield on the Company's fixed-maturity securities portfolio compared to the third quarter of 2012. Net realized investment gains were $349,000 for the third quarter of 2013, compared to $1.3 million for the third quarter of 2012. The Company had no impairments in its investment portfolio that it considered to be other than temporary during the third quarter of 2013 or 2012.

Jeffrey D. Miller, Senior Vice President and Chief Financial Officer of Donegal Group Inc., in commenting on the Company's investment operations, noted, "The broader investment markets have been unsettled in recent months, leading to swings in reported market values for many of our fixed-maturity holdings. We generally intend to hold our fixed-maturity securities until their stated maturity, so we are able to look beyond modest changes in value due to outside factors. During the third quarter of 2013, we increased our cash position to enable us to take advantage of potential shifts in market rates. For the near term, we plan to focus our new money investments on shorter duration fixed maturities and dividend-paying equity securities as opportunities arise."

The Company owns 48.2% of the outstanding stock of Donegal Financial Services Corporation ("DFSC"), which owns all of the outstanding capital stock of Union Community Bank. The Company accounts for its investment in DFSC using the equity method of accounting. The Company's equity in the earnings of DFSC was $735,000 for the third quarter of 2013, compared to $1.3 million for the third quarter of 2012. Donegal Mutual Insurance Company owns the remaining 51.8% of the outstanding stock of DFSC.

Definitions of Non-GAAP and Operating Measures

The Company prepares its consolidated financial statements on the basis of GAAP. The Company's insurance subsidiaries also prepare financial statements based on statutory accounting principles state insurance regulators prescribe or permit ("SAP"). In addition to using GAAP-based performance measurements, the Company also utilizes certain non-GAAP financial measures that it believes provide value in managing its business and for comparison to the financial results of its peers. These non-GAAP measures are operating income (loss) and statutory combined ratio.

Operating income (loss) is a non-GAAP financial measure investors in insurance companies commonly use. The Company defines operating income (loss) as net income (loss) excluding after-tax net realized investment gains or losses. Because the Company's calculation of operating income (loss) may differ from similar measures other companies use, investors should exercise caution when comparing the Company's measure of operating income (loss) to the measure of other companies.

The following table provides a reconciliation of the Company's net income to the Company's operating income for the periods indicated:

Statutory combined ratio is a non-GAAP standard measurement of underwriting profitability that is based upon amounts determined under SAP. The statutory combined ratio is the sum of:

• the statutory loss ratio, which is the ratio of calendar-year incurred losses and loss expenses to premiums earned;
• the statutory expense ratio, which is the ratio of expenses incurred for net commissions, premium taxes and underwriting expenses to premiums written; and
• the statutory dividend ratio, which is the ratio of dividends to holders of workers' compensation policies to premiums earned.

The statutory combined ratio does not reflect investment income, federal income taxes or other non-operating income or expense. A statutory combined ratio of less than 100% generally indicates underwriting profitability.

Conference Call and Webcast

The Company will hold a conference call and webcast on Friday, October 25, 2013, beginning at 10:00 A.M. Eastern Time. You may listen via the Internet by accessing the webcast link on the Company's web site at http://investors.donegalgroup.com. A replay of the conference call will also be available via the Company's web site.

About the Company

Donegal Group is an insurance holding company. The Company's Class A common stock and Class B common stock trade on the NASDAQ Global Select Market under the symbols DGICA and DGICB, respectively. As an effective acquirer of small to medium-sized "main street" property and casualty insurers, Donegal Group has grown profitably since its formation in 1986. The Company continues to seek opportunities for growth while striving to achieve its longstanding goal of outperforming the property and casualty insurance industry in terms of service, profitability and growth in book value.

As Forbes reported, Donegal Group Inc. was named to a list of the 100 Most Trustworthy Companies for 2013 and 2012, ranking the company among firms that have consistently demonstrated transparent and conservative accounting practices and solid corporate governance and management. A reprint of the Forbes article is available as a "Featured Report" on the Company's web site.

Safe Harbor

We base all statements contained in this release that are not historic facts on our current expectations. These statements are forward-looking in nature (as defined in the Private Securities Litigation Reform Act of 1995) and involve a number of risks and uncertainties. Actual results could vary materially. Factors that could cause actual results to vary materially include: our ability to maintain profitable operations, the adequacy of the loss and loss expense reserves of our insurance subsidiaries, business and economic conditions in the areas in which we operate, interest rates, competition from various insurance and other financial businesses, terrorism, the availability and cost of reinsurance, adverse and catastrophic weather events, legal and judicial developments, changes in regulatory requirements, our ability to integrate and manage successfully the companies we may acquire from time to time and other risks we describe from time to time in the periodic reports we file with the Securities and Exchange Commission. You should not place undue reliance on any such forward-looking statements. We disclaim any obligation to update such statements or to announce publicly the results of any revisions that we may make to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

CONTACT: Jeffrey D. Miller, Senior Vice President
         & Chief Financial Officer
         Phone: (717) 426-1931
         E-mail: investors@donegalgroup.com