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DONEGAL ANNOUNCES AGREEMENT WITH PIONEER MUTUAL

 DONEGAL ANNOUNCES AGREEMENT WITH PIONEER MUTUAL
 MARIETTA, Pa., Dec. 26 /PRNewswire/ -- Donald H. Nikolaus, president


of Donegal Group Inc. (NASDAQ: DGIC), today announced that Donegal Mutual Insurance Company, the holder of approximately 85 percent of DGI's outstanding common stock, had entered into an agreement with Pioneer Mutual Insurance Company of Greenville, Ohio, whereby Donegal Mutual would purchase a surplus note of Pioneer Mutual for $2,000,000 and nominees of Donegal Mutual would constitute a majority of Pioneer Mutual's board of directors. It is also contemplated that Donegal Mutual would be responsible for the management of Pioneer Mutual. Pioneer is an Ohio domiciled property and casualty insurance company doing business in Ohio and Indiana with direct premiums written of approximately $4.5 million in 1990. Consummation of the transaction is subject to the approval of the Superintendent of Insurance of the State of Ohio which Donegal Mutual anticipates receiving in early 1992.
 Nikolaus noted: "The Pioneer transaction will enable Donegal to expand its underwriting presence into desirable markets in Ohio and Indiana more quickly than would otherwise be the case on economically advantageous terms. We look forward to a long, successful relationship with Pioneer."
 -0- 12/26/91
 /CONTACT: Ralph G. Spontak of Donegal Group Inc., 717-426-1931/
 (DGIC) CO: Donegal Mutual Insurance Company; Pioneer Mutual Insurance Company ST: Pennsylvania, Ohio IN: INS SU: TNM FC -- NY021 -- 5347 12/26/91 16:23 EST
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Publication:PR Newswire
Date:Dec 26, 1991
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