Large fire losses increased 20% from the prior year quarter, driven by higher frequency and severity. But for the full year, we saw a significant improvement as large fire losses were down 18%. Weather-related losses in the fourth quarter for homeowners increased 18% compared to the prior year period. Similar to our strategy in commercial lines, we are actively diversifying our geographic footprint to optimize our mix of business and reduce our overall risk of losses from severe weather events. We have modeled weather risk and evaluated our insured homeowners property concentrations down to the county level, which led to strategies to grow, maintain or shrink exposures in those counties to proactively mitigate the increasing occurrence of severe weather events.
We also recently began implementing several other underwriting actions to mitigate weather losses. We’ve tightened our underwriting guidelines for roof coverages in general, but effective in the first quarter of 2024 we’re also mandating a limited loss settlement, roof endorsement and increasing wind hail deductibles on new homeowners policies in all of our states. Additionally, we’ll be applying similar requirements on our renewal policies on a state-by-state basis. And over time, we expect these measures will reduce our overall impact from roof damage claims as we move forward in 2024, our teams are fully engaged aligned and continue to work diligently to execute on strategies and action plans to drive incremental improvement in our underwriting results over time.
We’re confident in those strategies and optimistic that our actions will soon show the results we expect. With that, I’ll turn the call over to Dan later.
Daniel DeLamater: Thank you, Jeff. In addition to the underwriting actions that Jeff mentioned, I would like to discuss several operational initiatives that support those efforts. As we closed out 2023, we completed the realignment of our regional structure and solidified the leadership for our regional operations. We have historically managed our business in distinct regions with each of them having their own marketing, underwriting and claims functions. We entered 2023 with six operating regions and decided in an effort to achieve further operating efficiencies, increased effectiveness and greater economies of scale to consolidate from six to four operating regions. Leaders in these four regions are now collaboratively working together with cohesive and overlapping marketing, underwriting, product development and claims resources to drive a consistent strategy and working environment.
This productive operating structure will also ensure a greater degree of consistency in our operating routines and controls. I’d like to highlight a few teams who are working tirelessly to move Donegal forward. First, our product development team members are continuing to work closely with both the underwriting staff and marketing teams to closely manage each regional product portfolio. Secondly, our analytics team provides visibility into business drivers by refining our data production and visualization to provide quick and easy access to key metrics at a regional state sub state and agency level. And lastly, our marketing team actively engages in profitability initiatives to earn the best quality new business in the specific classes and lines of business that we are targeting and they hold our independent agency partners accountable to their commitments in delivering this focused new business production along with home office and regional leaders.
Representatives from all of these dedicated teams participated in monthly portfolio management meetings to ensure excellent transparent reporting and accountability for successful execution of the strategies and action plans underway. As Jeff Miller mentioned earlier, to further support our underwriting improvement efforts, we have also launched a targeted expense reduction effort as we reach the peak expense impact of our multiyear systems modernization project in 2024, we recognize the challenge our expense ratio poses to our profitability, while not yet reflected in our fourth quarter results. We are actively working to reduce our expenses, and we expect to achieve meaningful cost reductions throughout 2024 and beyond. Our senior leadership team has worked collaboratively to identify tangible expense savings in several areas where we can improve our operational efficiency, while also still making significant investments in developing our people, enhancing our products and capabilities, improving customer service and making other investments that will facilitate achievement of our long-term strategic objectives.
Areas we have identified for expense savings include managing, quote activity on the front end to eliminate expensive underwriting reports for accounts that are unlikely to lead to quality policy acquisitions, agency incentive compensation plan adjustments to further align compensation with desired results, implementing policy holder credit card surcharges for premium payments to pass along the increased costs related to that payment option and a thorough review of all external vendors and consulting expenses to eliminate any services not deemed critical for the core operations of the organization. We project that these actions and others will generate savings approximating a full point of our expense ratio in 2024 with a target of achieving two full points of expense ratio reduction by the end of 2025, coupled with gradual decreases in the impact of depreciation expense allocations related to Donegal Mutual’s technology modernization that will be winding down after 2026.
We believe these expense savings initiatives will complement the underwriting actions Jeff has outlined and further help us to achieve our strategic goal of sustained excellent financial performance. Our action plans are not only defensive in nature. We’re also playing offense in a number of areas. For instance, our dedicated national accounts team is fully engaged with a number of our agency partners in consideration of the fast changing independent agency landscape, we’re following an intentional and targeted approach with these national accounts that contributed a substantial portion of new business volume in 2023 and account for an increased percentage of our total premium base. I’m extremely pleased with the level of engagement we’re seeing at the main street level all the way to regular interactions with the national leadership teams of these groups.
I especially look forward to the profitable growth opportunities these groups will provide to us in the future, particularly as we seek to grow in the small commercial market segment. All told, we’re continuing to expand our focus and operational excellence. And with that, I’ll turn it over to Tony for an investment update. Tony?
