UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    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): September 4, 2003
                                                           -----------------

                               Donegal Group Inc.
                     ---------------------------------------
             (Exact name of registrant as specified in its charter)

     Delaware                           0-15341                   23-2424711
- ----------------------------     -------------------------   ------------------
(State or other jurisdiction     (Commission file number )   (IRS employer
 of incorporation)                                           identification no.)

1195 River Road, Marietta, Pennsylvania                       17547
- ---------------------------------------                       -----
(Address of principal executive offices)                   (Zip code)

         Registrant's telephone number, including area code: (888) 877-0600
                                                             --------------

                                       N/A
                                      ----
          (Former name or former address, if changed since last report)

Item 7.  Financial Statements and Exhibits.

                  (c) Exhibits.

                  The following exhibit is filed herewith:

                  Exhibit No.                       Description

                     99.1                Press release issued by Donegal Group
                                         Inc. (the "Company") dated September 4,
                                         2003

                                   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.

                                                              DONEGAL GROUP INC.

Date:   September 4, 2003                          By:/s/ Ralph G. Spontak
                                                   -----------------------------
                                                   Ralph G. Spontak, Senior Vice
                                                   President, Chief Financial
                                                   Officer and Secretary

                                  EXHIBIT INDEX

Exhibit
Number                     Description

    99.1                   Press release dated September 4, 2003 issued by the
                           Company.

                                                                  EXHIBIT 99.1

                    DGI TO ACQUIRE LE MARS INSURANCE COMPANY

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

                                                          For Immediate Release

         MARIETTA, Pennsylvania, September 4, 2003 - Donegal Group Inc. (Nasdaq
DGICA and DGICB) today reported that it had agreed to acquire all of the
outstanding capital stock of an affiliated company, Le Mars Mutual Insurance
Company of Iowa, following the conversion of Le Mars to a stock insurance
company. The conversion, which is subject to approval by the policyholders of Le
Mars and the Insurance Commissioner of the State of Iowa, is expected to be
completed by the end of 2003. DGI will acquire the stock of Le Mars for $8.2
million. DGI also expects to make an additional capital contribution to Le Mars
of approximately $4.0 million.

         Le Mars operates as a multiple line carrier in Iowa, Nebraska, Oklahoma
and South Dakota. Personal lines coverages represent a majority of premiums
written, with the balance coming from farmowners and mercantile and service
businesses. Le Mars' largest line of business is private passenger automobile
liability and physical damage; other principal lines include homeowners and
commercial multi-peril. On a statutory basis as of July 31, 2003, Le Mars had
total admitted assets of $37.3 million, and policyholders' surplus (exclusive of
a $4.0 million surplus note held by DGI) of $7.2 million. For the year ended
December 31, 2002 and the seven months ended July 31, 2003 on a statutory basis,
Le Mars had earned premiums of $21.0 million and $10.3 million, respectively.
Since June 2002, the Donegal Insurance Group has been assisting Le Mars in the
restructuring of its insurance business for the purpose of restoring Le Mars'
underwriting profitability.

         "We look forward to completion of the Le Mars acquisition as the first
step in the expansion of our operations to the mid-West," stated Donald H.
Nikolaus, President and Chief Executive Officer of Donegal Group.

         Donegal Group Inc. is a regional property-casualty insurance holding
company currently doing business in 14 Mid-Atlantic and Southern states through
its insurance subsidiaries, Atlantic States Insurance Company and Southern
Insurance Company of Virginia.

         All statements contained in this 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
involve a number of risks and uncertainties. Actual results could vary
materially. Among the factors that could cause actual results to vary materially
include: 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 Company's primary operating areas,
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 periodic reports the Company
files with the Securities and Exchange Commission. Undue reliance should not be
placed on any such forward-looking statements.