UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 22, 2005

Donegal Group Inc.

Registrant’s telephone number, including area code: (717)426-1931

Item 2.02 Results of Operations.

     On April 22, 2005, the Registrant issued a press release regarding the Company’s financial results for its first quarter ended March 31, 2005. The press release is exhibit 99.1 to this Form 8-K. The information in this report shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01. Financial Statements and Exhibits

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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EXHIBIT INDEX

EXHIBIT 99.1

DONEGAL GROUP INC. ANNOUNCES FIRST QUARTER RESULTS

Ralph G. Spontak
Senior Vice President and Chief Financial Officer
Phone (717) 426-1931
Fax (717) 426-7009

For Immediate Release

     MARIETTA, Pennsylvania, April 22, 2005 – Donegal Group Inc. (Nasdaq: DGICA and DGICB ) today reported net income for the quarter ended March 31, 2005 of $8,417,088, or $.46 per share on a diluted basis, compared to $6,286,636, or $.35 per share on a diluted basis, before extraordinary item, for the quarter ended March 31, 2004. Net income for the quarter ended March 31, 2004 was $11,732,306, or $.65 per share on a diluted basis, which included an extraordinary gain of $5,445,670, or $.30 per share on a diluted basis, related to an acquisition.

     The Company’s first quarter results were characterized by solid premium growth and continued excellent underwriting results, with the Company posting a combined ratio of 90.6% for the first quarter of 2005 compared to a combined ratio of 92.7% for the comparable period in 2004.

     All 2004 per share information has been restated to reflect a 4-for-3 stock split in the form of a 33 1/3% stock dividend issued on March 28, 2005 to stockholders of record as of March 1, 2005.

     Revenues for the first quarter of 2005 were $78,079,058, an increase of 14.8% over a year earlier. Premiums earned for the first quarter were $71,762,523, a 14.5% increase over the first quarter of 2004. Investment income increased 16.6% to $4,407,468 for the first quarter of 2005 compared to $3,780,017 for the first quarter of 2004 as the Company continues to move some of its short-term funds into tax-exempt securities. Service fees

for the first quarter of 2005 were $989,560, an increase of 18.7% over the first quarter of 2004 total of $833,897.

     The Company’s loss ratio for the first quarter of 2005 improved to 57.9% compared to 64.4% for the first quarter of 2004, benefiting from continued pricing improvements and from a relative absence of severe weather in the first quarter of 2005. The Company’s expense ratio decreased to 32.2% for the first quarter of 2005 compared to 32.5% for the fourth quarter of 2004, but was up from 27.8% in the first quarter of 2004, which was favorably impacted by the purchase accounting for the acquisitions in that quarter. The Company’s workers’ compensation policy dividend ratio in the first quarter of 2005 remained unchanged from a year earlier at 0.5%.

     “We are pleased that operating results were improved in both the personal lines and commercial lines sectors, with commercial lines benefiting from improved loss ratios in the workers’ compensation area” stated Donald H. Nikolaus, President and Chief Executive Officer of Donegal Group Inc. “The acquisitions completed in 2004 have continued to perform well and the identification of other solid acquisition candidates continues to be a high priority for the Company,” stated Nikolaus.

     These strong results helped the Company increase its book value per common share 7.1% to $13.81 per share as of March 31, 2005 compared to $12.90 at December 31, 2004.

     The Company announced yesterday that its Board of Directors approved a quarterly cash dividend payable May 16, 2005 of $.10 per share of Class A Common Stock and $.085 per share of Class B Common Stock, to stockholders of record as of May 2, 2005. These dividends represent an increase when compared to the prior year’s cash dividends adjusted for the 4-for-3 stock split.

     The extraordinary gain in the first quarter of 2004 of $5,445,670 resulted from GAAP purchase accounting for unallocated negative goodwill from the Le Mars Insurance Company acquisition completed in early January, 2004.

     The Company will hold a conference call on Friday April 22, 2005, beginning at 11:00 A. M. Eastern Time. You may participate in the conference call by calling 1-800-510-0219 (Passcode 79280048). An instant replay of the conference call will be available until May 2, 2005, by calling 1-888-286-8010 (Passcode 80139543).

     Donegal Group Inc. is an insurance holding company whose insurance subsidiaries offer personal and commercial property and casualty lines of insurance in

six Mid-Atlantic states (Connecticut, Delaware, Maryland, New Hampshire, New York and Pennsylvania), eight Southeastern states (Alabama, Georgia, Louisiana, North Carolina, South Carolina, Tennessee, Virginia and West Virginia) and five Midwestern states (Iowa, Nebraska, Ohio, Oklahoma and South Dakota).

     All statements contained in this press release that are not historic facts are based on current expectations. Such statements are forward-looking (as defined in the Private Securities Litigation Reform Act of 1995) in nature and necessarily involve a number of risks and uncertainties. Actual results could vary materially. The factors that could cause actual results to vary materially include, but are not limited to, the ability of the Company to maintain profitable operations, the adequacy of the Company’s reserves for losses and loss adjustment expenses, business and economic conditions in the areas in which the Company operates, competition from various insurance and non-insurance businesses, terrorism, legal and judicial developments, changes in regulatory requirements and other risks that are described from time to time in the Company’s filings with the Securities and Exchange Commission. The Company disclaims any obligation to update such statements or to announce publicly the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

(Tables Follow)

* Per share information restated for 4-for-3 stock split

Consolidated Statements of Income
(unaudited; in thousands, except per share data)

Consolidated Balance Sheet
(unaudited; in thousands)