Good day, ladies and gentlemen, and welcome to the fourth quarter 2007 Donegal Group Earnings Conference Call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call Mr. Jeff Miller, Senior Vice President and Chief Financial Officer. Please proceed.

Good morning, everyone and welcome to the Donegal Group Earnings Release Conference Call for the fourth quarter and year ended December 31, 2007. I am Jeff Miller, Senior Vice President and Chief Financial Officer and I will begin the conference call with some financial highlights and discussion of the quarterly and full year financial results. I will then turn the call over to Don Nikolaus, President and Chief Executive Officer for his comments on our results and an update on the business trends that we are experiencing. Certain statements made in our earnings release and this conference call are forward looking in nature and involve a number of risks and uncertainties. Please refer to our earnings release for more information about forward looking statements. Further information on risk factors that could actual results to differ materially from those projected in the forward-looking statement is available in the report on Form 10-K that we submitted to the SEC. You can find a copy of our Form 10K on the investor’s portion of our website under the SEC Filings link. We are pleased to report a solid level of earnings for the fourth quarter 2007, reflecting the continuation of favorable underwriting results in spite of a modest increase in weather related claim activity and a moderation in favorable prior accident year claims settlement during the quarter versus the fourth quarter of 2006. Our net income for the fourth quarter 2007 was $10.8 million or $0.43 per share of Class A common stock on a diluted basis compared to $11 million or $0.44 per share of class A stock on a diluted basis for the fourth quarter of 2006. Total revenues for the fourth quarter of 2007 were $86.9 million, an increase of 3.2 % over the total revenues of $84.2 million for…

Thank you Jeff and good morning everyone, thank you for joining our call. As Jeff has reviewed with you we have had quite a solid fourth quarter in what many of you know to be a challenging environment in the property casualty insurance industry. We feel a sense of gratification and satisfaction that obtaining a 90.5% combined with some weather plus the competitive environment we think is confirmation of the very underwriting focused strategy that we have been operating under for quite some period of time. What I would like to do is cover a number of specifics that would have taken place during the fourth quarter and talk a little bit about the marketplace and what we have planned and how we’re going to implement and execute in the first quarter and the balance of the year 2008. Generally, at these calls we make an announcement in regard to the number of new agency appointments. The number of new agency appointments in the fourth quarter was 42. It would bring to a total for the year of 2007 of 199 new agency appointments. It is certainly above what we would have projected. I think we were talking somewhere in the 165 to 170 range for the year. We have exceeded that. It is certainly a major part of our initiative to expand our distribution system. To give you a little bit of additional statistics on newly appointed agencies, those agencies that would have been appointed in 2005, 2006 and 2007 accounted for approximately 25% of the new policies written for the year 2007 that’s personal lines policies and they would have accounted for about 22% of the commercial lines new policies written. Needless to say, as you appoint agencies as we have indicated previously, it takes time to get…

Thank you Don, Karen if we could open the line for questions please.

(Operator Instructions) Your first question comes from the line of Joseph Demarino with Piper Jaffray please proceed.

Good afternoon, you gave some detail on your thoughts on acquisitions but just looking for a little bit more color in terms of the size of the acquisitions you might be looking at and how it might be financed.

We would be happy to answer that. We look at acquisitions of various sizes; we are sometimes willing to look at a smaller acquisition if it will give us access to a new state because generally we like to enter into new jurisdictions with some reasonably credible book of business. So, we might be willing to take a look at an acquisition where the premiums are 10, 15 to $20 million. The ideal acquisition would certainly be above that and in terms of the maximum size, we certainly wouldn’t rule out and would certainly look for opportunities for acquisitions where the premiums would be 75 or $100 million. In terms of financing them, many of the acquisitions that we have done to this point have been on the mutual side where we have infused surplus notes and have gained management control through our mutual and then eventually demutualizing it so there’s initially less capital required. From the standpoint of if it were a stock acquisition, we believe we are well capitalized; we have access to lines of credit if we need to have that so that we think that we would have the necessary resources to do acquisitions within the ranges that we would think would make sense for us.

Also, I apologize if you’ve already answered this but what was the favorable development in the fourth quarter and then what is your statutory capital?

The favorable development in the fourth quarter I believe I quoted as $2 million, the statutory surplus was $318.9 million, and that’s a bit lower than what we would have told you in September. That’s a result of some inner company dividends that are paid up to Donegal Group, the holding company in December in the amount of $18 million.

Okay thanks one last question, what caused the change in your reinsurance recoverable? I think it went from 90.6 to 78.9 in the quarter.

The change in the reinsurance recoverable is largely related to the reduction of reserves. If you look at the corresponding change in the liability for losses and loss expenses, you will see a comparable reduction and that relates to the settlement of larger claims from which we have collected the reinsurance.

Okay, thank you.

You’re welcome.

Your next question comes from the line of Scott LaRau with Donegal Insurance please proceed. Scott LaRau – Private Investor: I wish I was with Donegal Insurance; I am a private investor. Jeff, a year ago we bought 78,000 shares, Donegal did, at $19.90 today the share price is 20% lower, $16.00. Why is Donegal not, I repeat not, fully buying back shares?

As I told you in my comments Scott, we did buy back 100,000 shares during the fourth quarter and have not been active in the markets since the end of the year because that’s a quiet period and we do not buy shares during that quiet period. Scott LaRau – Private Investor: We have a 500,000 share repurchase, you have 266,000 that tells me you have 45% more to go. Why are you holding back at these levels? I can’t understand you have one million in net income per week and you would think it’s time to reward the shareholder.

Well Scott, this is Don Nikolaus. As you know companies, review their capital management on an ongoing basis and it’s a judgment factor in terms of whether it’s an appropriate circumstance time to be using capital to repurchase shares. In the fourth quarter, we repurchased 100,000 shares which we think is a substantial number of shares. When we announced the buy back, we indicated that it would be a buy back over a period of time and that we have, we think, handled that appropriately and prudently. There is not necessarily any silver bullet to concluding that buying back your shares is somehow or another going to magically increase the stock price because there are many companies very large ones that have spent billions of dollars in the last year buying back shares and the price of their stock is down. There’s a lot of dynamics that go into where the price of your stock is the most of which we absolutely have no control over other than making sure that we try to run this business on a day to day basis to create shareholder value and to generate the maximum profitability. Scott LaRau – Private Investor: I understand but there is 72% of the float at Donegal Insurance. Donegal Group held by four institutions, four. I can’t believe they are happy including the mutual with the performance of the stock down 20% in a year. The company having more gas 245,000 more shares to buy and they’re not buying it.

Well Scott I am going to answer one more answer and then I think we have to move on to the next question. One of the issues of course is that we have always been concerned over a 20 year period of time with the amount of the daily float in our stock. Therefore, buying it back and depending upon how much you buy back doesn’t help the amount of float that’s out there. We have heard over the years different opinions but certainly some vocal opinion that you don’t want to be doing things that are going to reduce the amount of float because there are many institutions that want to see a larger float if they are to consider your particular company in their investment strategy. There are lots of issues but we understand your input and we appreciate it.

There are no additional questions at this time. I would now like to turn the call over to Mr. Jeff Miller for closing remarks.

We appreciate everyone’s participation this morning in the conference call and wish everyone a good day. Thank you very much.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect, good day.