Exhibit 99.1

                DONEGAL GROUP ACQUIRES 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, January 2, 2004 - Donegal Group Inc. (Nasdaq
DGICA and DGICB) today reported that it had completed the previously announced
acquisition of 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 for approximately $12.5 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.

         Donald H. Nikolaus, President and Chief Executive Officer of Donegal
Group stated "An important part of our strategy is the selective acquisition of
property and casualty insurers to augment our organic growth in our existing
markets and expand into selected geographic regions. The Le Mars acquisition is
the first step in the expansion of our operations to the Midwest."

         Donegal Group Inc. is a property and casualty insurance holding company
whose insurance subsidiaries offer personal and commercial lines of insurance to
businesses and individuals in six Mid-Atlantic states (Connecticut, Delaware,
Maryland, New York, Ohio and Pennsylvania), eight Southeastern states (Alabama,
Arkansas, Georgia, Louisiana, North Carolina, South Carolina, Tennessee and
Virginia) and four Midwestern states (Iowa, Nebraska, Oklahoma and South
Dakota).

         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.