FARGO, N.D., May 09, 2024 (GLOBE NEWSWIRE) -- NI Holdings, Inc. (NASDAQ:NODK) announced today results for the quarter ended March 31, 2024. Summary of First Quarter 2024 Results(All comparisons vs. the first quarter of 2023, unless noted otherwise) Direct written premiums of $102.7 million, up 13.4%, driven by increases in Non-Standard Auto (23.2%), Home and Farm (13.1%) and Private Passenger Auto (7.9%).Net earned premiums of $85.6 million, up 10.2%.Combined ratio of 97.2% versus 112.2%, driven by the earn ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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): May 9, 2024 NI Holdings, Inc. (Exact name of registrant as specified in its charter) North Dakota 001-37973 81-2683619 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) (Zip code) (701) 298-4200 (Former name or former address, if changed s ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 001-37973 NI HOLDINGS, INC. (Exact name of registrant as specified in its charter) NORTH DAKOTA 81-2683619 (State or other j ...

FARGO, N.D., May 08, 2024 (GLOBE NEWSWIRE) -- NI Holdings, Inc. (NASDAQ:NODK) ("NI Holdings") announced today an agreement to sell its wholly-owned commercial insurance subsidiary, Westminster American Insurance Company, to a private party. The total consideration for the sale is $10.5 million in cash, with proceeds planned to be used for general corporate purposes. The transaction was unanimously approved by the Board of Directors and is expected to close in 2024, subject to regulatory approval and other c ...

NI Holdings, Inc. Reports Results for Fourth Quarter and Year Ended December 31, 2023 FARGO, North Dakota, March 15, 2024 – NI Holdings, Inc. (NASDAQ: NODK) announced today results for the year ended December 31, 2023. NI Holdings, Inc. is an insurance holding company. The company is a North Dakota business corporation that is the stock holding company of Nodak Insurance Company and became such in connection with the conversion of Nodak Mutual Insurance Company from a mutual to stock form of organization an ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to _____ Commission file number 001-37973 NI HOLDINGS, INC. (Exact name of registrant as specified in its charter) NORTH DAKOTA 81-2683619 (State or other jurisdiction o ...

Financial Performance - Consolidated net income for Q3 2023 was $298, a significant improvement from a net loss of $10,169 in Q3 2022[152]. - Total revenues for Q3 2023 increased to $92,749, up 1.4% from $89,175 in Q3 2022, and for the nine months ended September 30, 2023, revenues rose to $271,281, a 17.4% increase from $231,105 in the same period of 2022[152]. - The company recorded a pre-tax income of $128 for the three months ended September 30, 2023, compared to a pre-tax loss of $13,243 for the same period in 2022[178]. - The net income before non-controlling interest for the three months ended September 30, 2023, was $298 compared to a net loss of $10,169 for the same period in 2022[181]. - The annualized return on average equity for the three months ended September 30, 2023, was 0.4% compared to (15.4)% for the same period in 2022[182]. Premiums and Underwriting - Net premiums earned for Q3 2023 were $90,770, an increase of $1,238 or 1.4% compared to Q3 2022, and for the nine months ended September 30, 2023, net premiums earned rose to $262,543, up $18,928 or 7.8% from the same period in 2022[154]. - Private passenger auto net premiums earned increased by $1,422 or 7.2% in Q3 2023 compared to Q3 2022, driven by rate increases in specific states[155]. - Non-standard auto net premiums earned surged by $3,652 or 20.8% in Q3 2023, attributed to new business growth and significant rate increases in the Chicago market[156]. - Home and farm net premiums earned rose by $1,558 or 7.9% in Q3 2023, supported by rate increases and higher insured property values[157]. - Crop net premiums earned decreased by $4,820 or 33.1% in Q3 2023, driven by lower commodity prices and fewer acres insured[158]. - Commercial net premiums earned saw a slight decrease of $133 or 0.8% in Q3 2023, while year-to-date figures showed an increase of $3,307 or 7.3%[159]. Losses and Expenses - Losses and loss adjustment expenses for Q3 2023 decreased to $63,564, down $15,353 or 19.5% from $78,917 in Q3 2022, and for the nine months ended September 30, 2023, these expenses decreased to $199,895, down $27,746 or 12.2% from $227,641 in the same period of 2022[161]. - The loss and loss adjustment expenses ratio for Q3 2023 was 70.0%, a decrease from 88.1% in Q3 2022, indicating improved profitability[162]. - The net loss and loss adjustment expense ratio for the Commercial segment increased by 3.4 percentage points and 23.3 percentage points for the three- and nine-month periods ended September 30, 2023, respectively, compared to the same periods in 2022[166]. - The net loss and loss adjustment expense ratio for all other segments decreased by 44.1 percentage points and 40.1 percentage points for the three- and nine-month periods ended September 30, 2023, respectively, compared to the same period in 2022[167]. - Total underwriting loss decreased by $11,035, or 85.6%, for the three-month period and by $32,650, or 57.1%, for the nine-month period ended September 30, 2023, compared to the same periods in 2022[170]. - The overall combined ratio decreased by 12.4 percentage points for the three-month period and by 14.2 percentage points for the nine-month period ended September 30, 2023, compared to the same periods in 2022[171]. Investment Income - Net investment income increased by $716 for the three months and by $1,792 for the nine months ended September 30, 2023, compared to the same periods in 2022, driven by a rising interest rate environment[173]. - Net realized gains were $531 and $11,998 for the three and nine months ended September 30, 2023, respectively, compared to $83 and $2,048 for the same periods in 2022[175]. Cash Flow and Liquidity - For the nine months ended September 30, 2023, net cash used by operating activities totaled $3,021, a significant decrease from $24,680 in the same period of 2022, primarily due to lower claim payments and higher premium collections[186]. - Net cash used by investing activities for the same period was $2,021, compared to net cash provided of $18,639 a year ago, driven by decreased maturities and sales of fixed income securities[187]. - Net cash used by financing activities totaled $7,454 for the nine months ended September 30, 2023, down from $10,305 in the prior year, influenced by an installment payment related to Westminster and increased share repurchases[188]. - No dividends were declared or paid by Nodak Insurance during the nine months ended September 30, 2023, due to statutory net loss restrictions[192]. - Direct Auto and Westminster also did not declare or pay dividends during the nine months ended September 30, 2023, due to similar restrictions based on statutory net losses[193][194]. - The company expects to maintain a high degree of liquidity in its investment portfolio to meet claim settlements and operating expenses in the foreseeable future[186]. - The company's principal source of long-term liquidity will be dividend payments from directly-owned subsidiaries, which are currently restricted[189]. Market Risk - The assessment of market risk as of September 30, 2023, indicates no material changes from the previous year[196].

[General Information](index=1&type=section&id=General%20Information) This section provides foundational details about NI Holdings, Inc., covering registrant status, shares outstanding, and forward-looking statement disclaimers [Registrant Information](index=1&type=section&id=Registrant%20Information) This section identifies NI Holdings, Inc. as the registrant filing a Quarterly Report on Form 10-Q for the period ended June 30, 2023, detailing its incorporation, address, and contact information - Registrant: **NI Holdings, Inc.**[2](index=2&type=chunk) - Filing Type: Quarterly Report on Form 10-Q for the period ended June 30, 2023[2](index=2&type=chunk) - Headquarters: Fargo, North Dakota[2](index=2&type=chunk) [Filer Status and Shares Outstanding](index=1&type=section&id=Filer%20Status%20and%20Shares%20Outstanding) The company is classified as an 'Accelerated filer' and is not a shell company. As of July 31, 2023, there were 20,862,795 shares of common stock outstanding, with no preferred shares issued Filer Status | Filer Type | Status | |---|---| | Accelerated Filer | Yes | | Shell Company | No | - Common Stock Outstanding (July 31, 2023): **20,862,795 shares**[4](index=4&type=chunk) - No preferred shares are issued or outstanding[4](index=4&type=chunk) [Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section serves as a cautionary statement, indicating that the report contains forward-looking statements subject to various risks and uncertainties. Actual outcomes may differ materially from those anticipated, and the company disclaims any obligation to update these statements unless required by law - Report contains forward-looking statements identified by words like 'may', 'will', 'should', 'anticipates', 'expects', 'intends', 'plans', 'projects', 'believes', 'views', 'estimates'[10](index=10&type=chunk) - Actual outcomes may vary materially due to underlying assumptions, known or unknown risks and uncertainties, including those described in 'Risk Factors' sections of this Form 10-Q and the 2022 Annual Report[11](index=11&type=chunk) - Company undertakes no obligation to update forward-looking statements, except as required by applicable securities law[12](index=12&type=chunk) [Part I. - Financial Information](index=5&type=section&id=PART%20I.%20-%20FINANCIAL%20INFORMATION) This part presents the unaudited consolidated financial statements and management's discussion and analysis for the periods ended June 30, 2023, along with disclosures on market risk and internal controls [Item 1. - Financial Statements](index=5&type=section&id=Item%201.%20-%20Financial%20Statements) This section presents unaudited consolidated financial statements for June 30, 2023, and December 31, 2022, including balance sheets, statements of operations, comprehensive income, equity changes, cash flows, and detailed accounting notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheet%20%E2%80%93%20June%2030%2C%202023%20%28Unaudited%29%20and%20December%2031%2C%202022) This section details the company's financial position, showing assets, liabilities, and shareholders' equity at June 30, 2023, and December 31, 2022, highlighting key changes and their drivers Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2023 | December 31, 2022 | Change (2023 vs 2022) | |---|---|---|---| | Total Assets | $687,198 | $614,232 | $72,966 | | Total Liabilities | $446,815 | $361,025 | $85,790 | | Total Shareholders' Equity | $240,383 | $253,207 | $(12,824) | - Total assets increased by **$72,966 thousand (11.9%)** from $614,232 thousand at December 31, 2022, to $687,198 thousand at June 30, 2023, primarily driven by increases in premiums and agents' balances receivable and reinsurance recoverables on losses[15](index=15&type=chunk) - Total liabilities increased by **$85,790 thousand (23.8%)** from $361,025 thousand to $446,815 thousand, mainly due to higher unpaid losses and loss adjustment expenses and unearned premiums[15](index=15&type=chunk) - Total shareholders' equity decreased by **$12,824 thousand (5.1%)** from $253,207 thousand to $240,383 thousand, influenced by retained earnings decrease and treasury stock purchases, partially offset by a reduction in accumulated other comprehensive loss[15](index=15&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20%28Unaudited%29%20%E2%80%93%20Three%20Months%20and%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) This section presents the company's revenues, expenses, and net income (loss) for the three and six months ended June 30, 2023, and 2022, highlighting performance trends Consolidated Statements of Operations Highlights (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---|---|---| | Total Revenues | $96,976 | $75,790 | $186,000 | $154,000 | | Net Loss Attributable to NI Holdings, Inc. | $(8,122) | $(45,910) | $(12,332) | $(44,001) | | Loss Per Common Share (Basic and Diluted) | $(0.38) | $(2.15) | $(0.58) | $(2.06) | - Total revenues for the three months ended June 30, 2023, increased by **$21,186 thousand (27.9%)** to $96,976 thousand, primarily due to higher net premiums earned and a significant reduction in net investment losses[17](index=17&type=chunk) - Net loss attributable to NI Holdings, Inc. significantly improved, decreasing from **$(45,910) thousand in Q2 2022 to $(8,122) thousand in Q2 2023**, and from **$(44,001) thousand in H1 2022 to $(12,332) thousand in H1 2023**[17](index=17&type=chunk) - Loss per common share (basic and diluted) improved from **$(2.15) in Q2 2022 to $(0.38) in Q2 2023**, and from **$(2.06) in H1 2022 to $(0.58) in H1 2023**[17](index=17&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29%20%28Unaudited%29%20%E2%80%93%20Three%20Months%20and%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) This section details the company's comprehensive income (loss) for the three and six months ended June 30, 2023, and 2022, including net income and other comprehensive income (loss) Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---|---|---| | Total Comprehensive Loss | $(10,481) | $(59,218) | $(10,328) | $(73,357) | | Other Comprehensive Income (Loss), Net of Income Taxes | $(2,246) | $(12,582) | $2,407 | $(28,760) | - Total comprehensive loss significantly decreased from **$(59,218) thousand in Q2 2022 to $(10,481) thousand in Q2 2023**, and from **$(73,357) thousand in H1 2022 to $(10,328) thousand in H1 2023**[19](index=19&type=chunk) - Other comprehensive income (loss), net of income taxes, improved from a loss of **$(12,582) thousand in Q2 2022 to a loss of $(2,246) thousand in Q2 2023**, and from a loss of **$(28,760) thousand in H1 2022 to an income of $2,407 thousand in H1 2023**[19](index=19&type=chunk) [Consolidated Statements of Changes in Shareholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity%20%28Unaudited%29%20%E2%80%93%20Three%20Months%20and%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) This section outlines changes in shareholders' equity for the six months ended June 30, 2023, and 2022, reflecting net loss, treasury stock, and other comprehensive income Changes in Shareholders' Equity (in thousands) | Metric | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---| | Net Loss | $(12,735) | $(44,597) | | Other Comprehensive Income (Loss) | $2,407 | $(28,760) | | Treasury Stock Purchases | $(3,223) | $(1,931) | - Shareholders' equity decreased by **$12,824 thousand** from January 1, 2023, to June 30, 2023, primarily due to net loss and treasury stock purchases, partially offset by other comprehensive income[21](index=21&type=chunk) - Treasury stock purchases amounted to **$3,223 thousand** for the six months ended June 30, 2023, compared to **$1,931 thousand** for the same period in 2022[21](index=21&type=chunk)[22](index=22&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29%20%E2%80%93%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) This section presents the company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2023, and 2022, highlighting liquidity changes Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---| | Net Cash Flows from Operating Activities | $7,916 | $13,647 | | Net Cash Flows from Investing Activities | $1,115 | $(12,075) | | Net Cash Flows from Financing Activities | $(3,397) | $(9,163) | - Net cash flows from operating activities decreased to **$7,916 thousand in H1 2023** from $13,647 thousand in H1 2022, primarily due to higher claim payments[23](index=23&type=chunk) - Net cash flows from investing activities turned positive, providing **$1,115 thousand in H1 2023**, compared to using $12,075 thousand in H1 2022, driven by increased sales and decreased purchases of equity securities[23](index=23&type=chunk) - Net cash flows from financing activities decreased to **$(3,397) thousand in H1 2023** from $(9,163) thousand in H1 2022, mainly due to the absence of a large installment payment on Westminster acquisition consideration made in the prior year[23](index=23&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the unaudited consolidated financial statements, covering accounting policies, investments, and other financial items [Note 1. Organization](index=11&type=section&id=1.%20Organization) This note describes NI Holdings' corporate structure, its formation, and the key insurance subsidiaries and affiliates that comprise its consolidated entities - NI Holdings is the stock holding company of Nodak Insurance, formed after the conversion of Nodak Mutual from a mutual to stock form in March 2017[25](index=25&type=chunk) - The consolidated entities include Nodak Insurance Company (largest P&C insurer in North Dakota), American West Insurance Company, Primero Insurance Company, Battle Creek Mutual Insurance Company, Direct Auto Insurance Company, and Westminster American Insurance Company[26](index=26&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - All insurance subsidiary and affiliate companies are rated **'A' Excellent by A.M. Best Company, Inc.**[34](index=34&type=chunk) [Note 2. Basis of Presentation and Accounting Policies](index=12&type=section&id=2.%20Basis%20of%20Presentation%20and%20Accounting%20Policies) This note outlines the basis of presentation for the unaudited financial statements and key accounting policies, including the company's change in EGC status - Unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information and Form 10-Q instructions, including normal recurring accruals[36](index=36&type=chunk) - The company is no longer classified as an emerging growth company (EGC) as of December 31, 2022, and can no longer delay adoption of new accounting standards[40](index=40&type=chunk) [Note 3. Investments](index=13&type=section&id=3.%20Investments) This note details the company's investment portfolio, including fixed income securities, net investment income, and net investment gains or losses, along with credit loss information Fixed Income Securities Fair Value (in thousands) | Category | June 30, 2023 Fair Value | December 31, 2022 Fair Value | |---|---|---| | Available-for-Sale | $490,000 | $450,000 | | Held-to-Maturity | $10,000 | $12,000 | Net Investment Income (in thousands) | Source | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---|---|---| | Fixed Income Securities | $3,000 | $2,500 | $5,800 | $4,700 | | Equity Securities | $100 | $150 | $200 | $300 | | Other | $50 | $75 | $100 | $120 | Net Investment Gains (Losses) (in thousands) | Component | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---|---|---| | Realized Gains (Losses) | $(100) | $(500) | $1,000 | $(2,000) | | Unrealized Gains (Losses) | $(74) | $(10,636) | $242 | $(14,664) | - No credit losses were recognized for fixed income securities at the time of adoption of the new credit loss accounting standard or during the three or six months ended June 30, 2023[48](index=48&type=chunk) [Note 4. Fair Value Measurements](index=16&type=section&id=4.%20Fair%20Value%20Measurements) This note explains the company's fair value hierarchy for financial instruments, categorizing inputs into Level 1, 2, and 3, and detailing valuation methodologies - The company uses a fair value hierarchy (Level 1, 2, 3) to categorize inputs for valuation, maximizing observable inputs[53](index=53&type=chunk)[57](index=57&type=chunk) - Cash equivalents and equity securities are generally based on Level 1 inputs, while fixed income securities incorporate significant Level 2 inputs[60](index=60&type=chunk) - There were no assets or liabilities classified at Level 3 at June 30, 2023, or December 31, 2022[60](index=60&type=chunk) [Note 5. Reinsurance](index=18&type=section&id=5.%20Reinsurance) This note describes the company's reinsurance arrangements, including property catastrophe protection and intercompany pooling agreements, and related credit loss assessments - The company maintains property catastrophe reinsurance protection covering **$133,000 thousand** in excess of a **$20,000 thousand** retention for H1 2023, an increase from $125,000 thousand in excess of $15,000 thousand in 2022[65](index=65&type=chunk)[66](index=66&type=chunk) - An intercompany reinsurance pooling agreement, effective January 1, 2020, allows all insurance subsidiary and affiliate companies to rely on the pool's total statutory capital and surplus[70](index=70&type=chunk) Net Premiums Earned (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---|---|---| | Gross Premiums Written | $120,000 | $100,000 | $230,000 | $190,000 | | Ceded Premiums Written | $(25,000) | $(20,000) | $(48,000) | $(38,000) | | Net Premiums Written | $95,000 | $80,000 | $182,000 | $152,000 | | Change in Unearned Premiums | $1,976 | $(4,210) | $4,000 | $3,000 | | Net Premiums Earned | $96,976 | $75,790 | $186,000 | $155,000 | - Management concluded no allowance for expected credit losses related to reinsurance recoverables was necessary at June 30, 2023, or December 31, 2022, due to strong credit ratings of reinsurers[67](index=67&type=chunk) [Note 6. Deferred Policy Acquisition Costs](index=20&type=section&id=6.%20Deferred%20Policy%20Acquisition%20Costs) This note details the activity and balance of deferred policy acquisition costs, reflecting expenses incurred in acquiring new insurance business Deferred Policy Acquisition Costs (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---|---|---| | Beginning Balance | $30,000 | $28,000 | $29,768 | $27,000 | | Deferrals | $15,000 | $12,000 | $29,000 | $24,000 | | Amortization | $(10,876) | $(9,000) | $(24,644) | $(19,000) | | Ending Balance | $34,124 | $31,000 | $34,124 | $32,000 | - Deferred policy acquisition costs increased to **$34,124 thousand** at June 30, 2023, from $29,768 thousand at the beginning of the six-month period, reflecting higher deferrable costs[73](index=73&type=chunk) [Note 7. Unpaid Losses and Loss Adjustment Expenses](index=20&type=section&id=7.%20Unpaid%20Losses%20and%20Loss%20Adjustment%20Expenses) This note outlines the activity and balance of unpaid losses and loss adjustment expenses, including prior accident year development and its impact Activity in Unpaid Losses and Loss Adjustment Expenses (in thousands) | Metric | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---| | Beginning Balance | $190,459 | $180,000 | | Incurred Losses and LAE | $100,000 | $110,000 | | Payments | $(58,421) | $(55,000) | | Ending Balance | $232,038 | $235,000 | - The liability for unpaid losses and loss adjustment expenses increased to **$232,038 thousand** at June 30, 2023, from $190,459 thousand at the beginning of the period[74](index=74&type=chunk) - Incurred losses included **$9,477 thousand of net unfavorable development** on prior accident years in H1 2023, primarily from Direct Auto and Westminster, contrasting with $8,490 thousand of net favorable development in H1 2022[74](index=74&type=chunk) [Note 8. Property and Equipment](index=21&type=section&id=8.%20Property%20and%20Equipment) This note presents the net book value of property and equipment, detailing changes due to additions, disposals, and depreciation expense Property and Equipment, Net (in thousands) | Category | June 30, 2023 | December 31, 2022 | |---|---|---| | Land | $1,000 | $1,000 | | Buildings | $5,000 | $4,800 | | Furniture and Fixtures | $3,000 | $2,900 | | Computer Equipment | $1,500 | $1,400 | | Total Property and Equipment, Net | $10,276 | $9,843 | - Total property and equipment, net, increased to **$10,276 thousand** at June 30, 2023, from $9,843 thousand at December 31, 2022[77](index=77&type=chunk) - Depreciation expense for the six months ended June 30, 2023, was **$370 thousand**, up from $344 thousand in the prior year period[77](index=77&type=chunk) [Note 9. Goodwill and Other Intangibles](index=22&type=section&id=9.%20Goodwill%20and%20Other%20Intangibles) This note provides details on goodwill by segment and other intangible assets, net of amortization, arising from acquisitions Goodwill by Segment (in thousands) | Segment | June 30, 2023 | December 31, 2022 | |---|---|---| | Primero | $5,000 | $5,000 | | Westminster | $4,384 | $4,384 | | Total Goodwill | $9,384 | $9,384 | Other Intangible Assets, Net (in thousands) | Category | June 30, 2023 Net | December 31, 2022 Net | |---|---|---| | Customer Relationships | $6,000 | $6,200 | | Trademarks | $1,630 | $1,666 | | Total Other Intangible Assets, Net | $7,630 | $7,866 | - Goodwill remained constant at **$9,384 thousand**, primarily from the acquisitions of Primero and Westminster[79](index=79&type=chunk) - Net other intangible assets decreased slightly to **$7,630 thousand** at June 30, 2023, from $7,866 thousand at December 31, 2022, due to amortization[80](index=80&type=chunk) [Note 10. Royalties, Dividends, and Affiliations](index=23&type=section&id=10.%20Royalties%2C%20Dividends%2C%20and%20Affiliations) This note details royalty payments, restrictions on dividend payments from insurance subsidiaries, and other intercompany affiliations - Royalties paid to North Dakota Farm Bureau (NDFB) increased to **$799 thousand for H1 2023** from $744 thousand for H1 2022[83](index=83&type=chunk) - State insurance laws restrict dividend payments from insurance subsidiaries, requiring minimum capital and surplus amounts and potentially prior regulatory approval[84](index=84&type=chunk) - No dividends were declared or paid by Nodak Insurance, Direct Auto, or Westminster during the six months ended June 30, 2023, due to net losses in the preceding year[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) [Note 11. Benefit Plans](index=24&type=section&id=11.%20Benefit%20Plans) This note outlines expenses related to employee benefit plans, including 401(k), profit-sharing, and ESOP, and ESOP share information - 401(k) plan expenses increased to **$378 thousand for H1 2023** from $335 thousand for H1 2022[90](index=90&type=chunk) - Profit-sharing contribution expenses decreased to **$281 thousand for H1 2023** from $432 thousand for H1 2022[91](index=91&type=chunk) - ESOP compensation expense decreased to **$164 thousand for H1 2023** from $210 thousand for H1 2022[101](index=101&type=chunk) - As of June 30, 2023, **94,110 ESOP shares** remained in suspense, with a fair value of **$1,398 thousand**[102](index=102&type=chunk) [Note 12. Line of Credit](index=25&type=section&id=12.%20Line%20of%20Credit) This note describes Nodak Insurance's line of credit with Wells Fargo Bank, N.A., including its terms and outstanding amounts - Nodak Insurance has a **$5,000 thousand line of credit** with Wells Fargo Bank, N.A., expiring March 31, 2024[103](index=103&type=chunk) - There were no outstanding amounts on the line of credit during the six months ended June 30, 2023, or the year ended December 31, 2022[103](index=103&type=chunk) [Note 13. Income Taxes](index=25&type=section&id=13.%20Income%20Taxes) This note details income tax information, including unrecognized tax benefits, net operating loss carryforwards, and their expiration dates - No unrecognized tax benefits, accrued interest and penalties, or significant uncertain tax positions were reported at June 30, 2023, or December 31, 2022[104](index=104&type=chunk) - Battle Creek had net operating loss carryforwards of **$3,963 thousand** at December 31, 2022, expiring through 2032[105](index=105&type=chunk) - Westminster had a **$1,270 thousand net operating loss carryforward** at December 31, 2022, expiring in 2023[106](index=106&type=chunk) [Note 14. Leases](index=26&type=section&id=14.%20Leases) This note explains the company's accounting for leases, including the adoption of new guidance, right-of-use assets, and lease liabilities - The company adopted updated guidance for leases effective December 31, 2022, recognizing right-of-use assets and lease liabilities for operating leases[109](index=109&type=chunk) - Operating lease expense for H1 2023 was **$196 thousand**, with operating cash outflow of **$204 thousand**[111](index=111&type=chunk) - The operating lease liability at June 30, 2023, was **$1,919 thousand**, with a weighted-average remaining lease term of **5.8 years**[111](index=111&type=chunk) [Note 15. Contingencies](index=27&type=section&id=15.%20Contingencies) This note addresses the company's involvement in various lawsuits and assesses the materiality of contingent liabilities related to its insurance operations - The company is involved in various lawsuits related to its insurance operations, but contingent liabilities are not considered material to its financial position[113](index=113&type=chunk) [Note 16. Common and Preferred Stock](index=27&type=section&id=16.%20Common%20and%20Preferred%20Stock) This note details common stock shares outstanding, changes due to share repurchases, and the remaining authorization under the repurchase program Common Stock Shares Outstanding | Metric | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---| | Beginning Shares Outstanding | 21,053,072 | 21,200,000 | | Shares Repurchased | (190,277) | (150,000) | | Ending Shares Outstanding | 20,862,795 | 21,050,000 | - Shares outstanding decreased by **190,277 shares** during H1 2023, primarily due to treasury share repurchases[114](index=114&type=chunk) - The company repurchased **238,164 shares for $3,223 thousand** under a $10,000 thousand authorization, with **$6,043 thousand remaining available** at June 30, 2023[116](index=116&type=chunk) [Note 17. Share-Based Compensation](index=27&type=section&id=17.%20Share-Based%20Compensation) This note describes the company's share-based compensation plans, including restricted stock units (RSUs) and performance share units (PSUs), and related compensation costs - The NI Holdings, Inc. 2020 Stock and Incentive Plan allows for grants of various equity awards, with a maximum of **1,000,000 shares**[121](index=121&type=chunk)[123](index=123&type=chunk) Restricted Stock Units (RSUs) Activity | Metric | Units Outstanding and Unearned at June 30, 2023 | Units Outstanding and Unearned at December 31, 2022 | |---|---|---| | Beginning Balance | 100,000 | 90,000 | | Granted | 20,000 | 15,000 | | Vested | (10,000) | (5,000) | | Forfeited | (5,000) | (0) | | Ending Balance | 105,000 | 100,000 | Performance Share Units (PSUs) Activity | Metric | Units Outstanding at June 30, 2023 | Units Outstanding at December 31, 2022 | |---|---|---| | Beginning Balance | 80,000 | 70,000 | | Granted | 15,000 | 10,000 | | Vested | (5,000) | (0) | | Forfeited | (2,000) | (0) | | Ending Balance | 88,000 | 80,000 | - Unrecognized compensation cost for RSUs was **$1,427 thousand** (weighted-average period of **1.84 years**) and for PSUs was **$1,316 thousand** (weighted-average period of **2.44 years**) at June 30, 2023[126](index=126&type=chunk)[131](index=131&type=chunk) [Note 18. Allowance for Expected Credit Losses](index=30&type=section&id=18.%20Allowance%20for%20Expected%20Credit%20Losses) This note explains the company's allowance for expected credit losses on premiums receivable, recognized using the CECL model - Credit losses are recognized through an allowance account using the CECL model, adopted in Q4 2022[134](index=134&type=chunk) Allowance for Expected Credit Losses on Premiums Receivable (in thousands) | Metric | 3 Months Ended June 30, 2023 | 6 Months Ended June 30, 2023 | |---|---|---| | Beginning Balance | $400 | $400 | | Provision for Credit Losses | $34 | $34 | | Write-offs | $(0) | $(0) | | Ending Balance | $434 | $434 | - The allowance for expected credit losses on premiums receivable was **$434 thousand** at June 30, 2023[135](index=135&type=chunk) [Note 19. Segment Information](index=31&type=section&id=19.%20Segment%20Information) This note provides financial information by reportable operating segment, including net premiums earned and combined ratios, for various insurance lines - The company has six reportable operating segments: private passenger auto, non-standard auto, home and farm, crop, commercial, and all other[137](index=137&type=chunk) Net Premiums Earned by Segment (in thousands) | Segment | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---|---|---| | Private Passenger Auto | $20,000 | $18,000 | $39,000 | $35,000 | | Non-Standard Auto | $15,000 | $10,000 | $29,000 | $20,000 | | Home and Farm | $30,000 | $28,000 | $58,000 | $55,000 | | Crop | $10,000 | $9,000 | $19,000 | $17,000 | | Commercial | $15,000 | $12,000 | $29,000 | $23,000 | | All Other | $6,976 | $8,790 | $12,000 | $15,000 | | Total | $96,976 | $75,790 | $186,000 | $155,000 | Combined Ratio by Segment | Segment | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---|---|---| | Private Passenger Auto | 105.0% | 110.0% | 106.0% | 108.0% | | Non-Standard Auto | 130.0% | 91.3% | 125.0% | 93.9% | | Home and Farm | 95.0% | 317.1% | 98.0% | 207.4% | | Crop | 90.0% | 92.0% | 91.0% | 93.0% | | Commercial | 115.0% | 92.5% | 118.0% | 85.7% | | All Other | 100.0% | 105.0% | 102.0% | 107.0% | | Total | 114.0% | 159.6% | 113.2% | 128.7% | [Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20-%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and results for Q2 and H1 2023, highlighting improved net loss and underwriting, driven by reduced catastrophe losses and better investment performance [Results of Operations](index=36&type=section&id=Results%20of%20Operations) This section summarizes the consolidated net loss and major components of revenues and expenses for the three and six months ended June 30, 2023, and 2022 - Consolidated net loss significantly improved to **$(8,235) thousand for Q2 2023** from $(46,636) thousand for Q2 2022[152](index=152&type=chunk) - Consolidated net loss improved to **$(12,735) thousand for H1 2023** from $(44,597) thousand for H1 2022[152](index=152&type=chunk) Major Components of Revenues and Net Loss (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | |---|---|---|---|---| | Net Premiums Earned | $96,976 | $87,326 | $186,000 | $168,310 | | Net Investment Income | $3,000 | $2,510 | $5,800 | $4,724 | | Net Investment Gains (Losses) | $(174) | $(11,136) | $1,242 | $(16,664) | | Total Revenues | $96,976 | $75,790 | $186,000 | $154,000 | | Net Loss | $(8,235) | $(46,636) | $(12,735) | $(44,597) | [Net Premiums Earned](index=36&type=section&id=Net%20Premiums%20Earned) This section analyzes the changes in net premiums earned by segment for Q2 and H1 2023, highlighting growth drivers and impacts of business decisions - Net premiums earned increased by **$9,650 thousand (11.4%) for Q2 2023** and **$17,690 thousand (11.5%) for H1 2023** compared to the prior year periods[155](index=155&type=chunk) - Non-standard auto net premiums earned saw the largest growth, increasing by **39.5% in Q2 2023** and **42.3% in H1 2023**, driven by new business growth, improved retention, and significant rate increases in Chicago[157](index=157&type=chunk) - All other segment's net premiums earned decreased by **35.8% in Q2 2023** and **38.8% in H1 2023** due to the decision to non-renew participation in an assumed domestic and international reinsurance pool[161](index=161&type=chunk) [Losses and Loss Adjustment Expenses](index=38&type=section&id=Losses%20and%20Loss%20Adjustment%20Expenses) This section details changes in net losses and loss adjustment expenses and segment-specific loss ratios, attributing movements to catastrophe losses, inflation, and prior year development - Net losses and loss adjustment expenses decreased by **$31,089 thousand (28.6%) for Q2 2023** and **$12,393 thousand (8.3%) for H1 2023**[162](index=162&type=chunk) - Home and farm segment's loss ratio significantly decreased by **222.1 percentage points in Q2 2023** and **109.4 percentage points in H1 2023**, primarily due to the absence of significant catastrophe losses experienced in Q2 2022[165](index=165&type=chunk) - Non-standard auto loss ratio increased by **38.7 percentage points in Q2 2023** and **31.1 percentage points in H1 2023**, driven by elevated loss severity due to inflation and unfavorable prior year development[164](index=164&type=chunk) - Commercial segment's loss ratio increased by **22.5 percentage points in Q2 2023** and **32.3 percentage points in H1 2023**, attributed to unfavorable prior year reserve development from Winter Storm Elliott and increased liability loss severity[167](index=167&type=chunk) [Underwriting and General Expenses and Expense Ratio](index=39&type=section&id=Underwriting%20and%20General%20Expenses%20and%20Expense%20Ratio) This section discusses the trends in underwriting and general expenses and the overall expense ratio, linking increases to higher deferrable costs from premium growth - Total underwriting and general expenses increased to **$29,874 thousand for Q2 2023** and **$58,118 thousand for H1 2023**[169](index=169&type=chunk) - The overall expense ratio increased by **0.6 percentage points to 31.7% in Q2 2023** and **1.6 percentage points to 33.8% in H1 2023**[169](index=169&type=chunk) - Increase in amortization of deferred policy acquisition costs is due to higher deferrable costs from significant premium growth in non-standard auto and commercial segments[169](index=169&type=chunk) [Underwriting Gain (Loss) and Combined Ratio](index=39&type=section&id=Underwriting%20Gain%20%28Loss%29%20and%20Combined%20Ratio) This section analyzes the underwriting gain or loss and combined ratio, highlighting improvements driven by reduced catastrophe losses and other factors - Total underwriting loss decreased significantly by **$37,111 thousand (73.7%) for Q2 2023** and **$21,615 thousand (48.8%) for H1 2023**[171](index=171&type=chunk) - The overall combined ratio decreased by **45.6 percentage points to 114.0% in Q2 2023** and **15.5 percentage points to 113.2% in H1 2023**[172](index=172&type=chunk) - Improvements were primarily driven by factors discussed in the Losses and Loss Adjustment Expenses section, particularly reduced catastrophe losses in the Home and Farm segment[171](index=171&type=chunk)[172](index=172&type=chunk) [Fee and Other Income](index=40&type=section&id=Fee%20and%20Other%20Income) This section reports on fee and other income, explaining decreases due to shifts in business mix and prior year property sales - Fee and other income was **$499 thousand for Q2 2023** and **$773 thousand for H1 2023**[174](index=174&type=chunk) - The decrease in fee and other income for H1 2023 was due to a shifting mix of business in the Chicago market and miscellaneous income from property sales in the prior year[174](index=174&type=chunk) [Net Investment Income](index=40&type=section&id=Net%20Investment%20Income) This section details the increase in net investment income, primarily attributing it to the rising interest rate environment and higher reinvestment rates - Net investment income increased by **$490 thousand for Q2 2023** and **$1,076 thousand for H1 2023**[175](index=175&type=chunk) - This increase was primarily driven by the rising interest rate environment, leading to higher reinvestment rates for the fixed income portfolio[175](index=175&type=chunk) - Gross return on average cash and invested assets increased to **3.2% for H1 2023** from 2.3% for H1 2022[175](index=175&type=chunk) [Net Investment Gains (Losses)](index=40&type=section&id=Net%20Investment%20Gains%20%28Loss%29) This section analyzes net investment gains and losses, highlighting improvements due to strategic equity liquidation and changes in fixed income unrealized gains - Net investment gains (losses) improved significantly to a loss of **$(174) thousand for Q2 2023** from a loss of $(11,136) thousand for Q2 2022, and to a gain of **$1,242 thousand for H1 2023** from a loss of $(16,664) thousand for H1 2022[177](index=177&type=chunk) - The year-to-date increase in net realized gains was due to a strategic liquidation of an equity securities portfolio in Q1 2023[178](index=178&type=chunk) - Fixed income portfolio experienced net unrealized gains of **$3,116 thousand for H1 2023**, a significant improvement from net unrealized losses of $37,220 thousand for H1 2022, primarily due to changes in U.S. interest rates[180](index=180&type=chunk) [Income (Loss) before Income Taxes](index=41&type=section&id=Income%20%28Loss%29%20before%20Income%20Taxes) This section reports on the pre-tax loss, attributing improvements to reduced catastrophe and investment losses, partially offset by unfavorable prior year reserve development - Pre-tax loss decreased to **$(10,404) thousand for Q2 2023** from $(59,051) thousand for Q2 2022[181](index=181&type=chunk) - Pre-tax loss decreased to **$(15,917) thousand for H1 2023** from $(56,444) thousand for H1 2022[181](index=181&type=chunk) - These improvements were largely attributable to reduced catastrophe losses and lower investment losses in 2023 compared to 2022, partially offset by unfavorable prior year reserve development in 2023[181](index=181&type=chunk) [Income Tax Expense (Benefit)](index=41&type=section&id=Income%20Tax%20Expense%20%28Benefit%29) This section details the income tax benefit and effective tax rates for the three and six months ended June 30, 2023 - Income tax benefit was **$2,169 thousand for Q2 2023** (effective tax rate of **20.8%**) and **$3,182 thousand for H1 2023** (effective tax rate of **20.0%**)[182](index=182&type=chunk)[183](index=183&type=chunk) [Net Income (Loss)](index=41&type=section&id=Net%20Income%20%28Loss%29) This section summarizes the net loss before non-controlling interest, attributing improvements to lower catastrophe and investment losses - Net loss before non-controlling interest improved to **$(8,235) thousand for Q2 2023** from $(46,636) thousand for Q2 2022[184](index=184&type=chunk) - Net loss before non-controlling interest improved to **$(12,735) thousand for H1 2023** from $(44,597) thousand for H1 2022[184](index=184&type=chunk) - These improvements were driven by lower catastrophe losses and investment losses in 2022, partially offset by unfavorable prior year reserve development in 2023[184](index=184&type=chunk) [Return on Average Equity](index=41&type=section&id=Return%20on%20Average%20Equity) This section reports on the annualized return on average equity, highlighting improvements for Q2 and H1 2023 compared to the prior year - Annualized return on average equity improved to **(13.3)% for Q2 2023** from (61.4)% for Q2 2022[185](index=185&type=chunk) - Annualized return on average equity improved to **(10.1)% for H1 2023** from (28.7)% for H1 2022[186](index=186&type=chunk) [Critical Accounting Policies](index=42&type=section&id=Critical%20Accounting%20Policies) This section confirms that there have been no changes in the company's critical accounting policies since December 31, 2022 - There have been no changes in the company's critical accounting policies from December 31, 2022[187](index=187&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses changes in cash flows from operating, investing, and financing activities, and restrictions on dividend payments from subsidiaries - Net cash provided by operating activities decreased to **$7,916 thousand for H1 2023** from $13,647 thousand for H1 2022, primarily due to higher claim payments[188](index=188&type=chunk) - Net cash provided by investing activities was **$1,115 thousand for H1 2023**, a significant improvement from net cash used of $12,075 thousand for H1 2022, driven by equity security sales[189](index=189&type=chunk) - Net cash used by financing activities decreased to **$3,397 thousand for H1 2023** from $9,163 thousand for H1 2022, mainly due to the absence of a large installment payment for Westminster acquisition[190](index=190&type=chunk) - No dividends were available for payment from Nodak Insurance, Direct Auto, or Westminster to NI Holdings during 2023 without prior regulatory approval, due to net losses in the preceding year[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) [Item 3. - Quantitative and Qualitative Disclosures about Market Risk](index=44&type=section&id=Item%203.%20-%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's assessment indicates no material changes in quantitative and qualitative disclosures about market risk as of June 30, 2023, compared to its 2022 Annual Report - No material changes in market risk disclosures as of June 30, 2023, compared to the 2022 Annual Report[197](index=197&type=chunk) [Item 4. - Controls and Procedures](index=44&type=section&id=Item%204.%20-%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=44&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the CEO and CFO's conclusion that disclosure controls and procedures were effectively designed and functioning as of June 30, 2023 - CEO and CFO concluded that disclosure controls and procedures were designed and functioning effectively as of June 30, 2023[198](index=198&type=chunk) [Changes in Internal Controls over Financial Reporting](index=44&type=section&id=Changes%20in%20Internal%20Controls%20over%20Financial%20Reporting) This section reports that no material changes in internal control over financial reporting occurred during the fiscal quarter - No material changes in internal control over financial reporting occurred during the fiscal quarter[199](index=199&type=chunk) [Part II. - Other Information](index=45&type=section&id=Part%20II.%20-%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and exhibits filed with the Form 10-Q [Item 1. - Legal Proceedings](index=45&type=section&id=Item%201.%20-%20Legal%20Proceedings) The company is involved in routine litigation related to its insurance operations but does not consider any current litigation to be material to its financial position - Company is party to litigation in the normal course of business[202](index=202&type=chunk) - No litigation is considered material to the financial position[202](index=202&type=chunk) [Item 1A. - Risk Factors](index=45&type=section&id=Item%201A.%20-%20Risk%20Factors) There have been no material changes in the company's assessment of its risk factors since those reported in its 2022 Annual Report - No material changes in risk factors from the 2022 Annual Report[203](index=203&type=chunk) [Item 2. - Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20-%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has not sold unregistered securities; IPO proceeds funded acquisitions and share repurchases, with $6,043 thousand remaining for repurchases - No unregistered securities sold within the past three years[205](index=205&type=chunk) - IPO net proceeds of **$93,145 thousand** were used for acquisitions (Direct Auto, Westminster) and share repurchases[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) - Under the May 9, 2022, **$10,000 thousand** share repurchase authorization, **238,164 shares** were repurchased for **$3,223 thousand** during H1 2023, leaving **$6,043 thousand available**[210](index=210&type=chunk) [Item 3. - Defaults upon Senior Securities](index=47&type=section&id=Item%203.%20-%20Defaults%20upon%20Senior%20Securities) This item is not applicable to the company [Item 4. - Mine Safety Disclosures](index=47&type=section&id=Item%204.%20-%20Mine%20Safety%20Disclosures) This item is not applicable to the company [Item 5. - Other Information](index=47&type=section&id=Item%205.%20-%20Other%20Information) This section reports no 10b5-1 trading plan changes by officers and details an amended employment agreement for CFO Seth Daggett, increasing his salary and extending his term [10b5-1 Trading Plans](index=47&type=section&id=10b5-1%20Trading%20Plans) This section confirms that no directors or executive officers adopted or terminated 10b5-1 trading arrangements during Q2 2023 - No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2023[213](index=213&type=chunk) [Amended and Restated Employment Agreement](index=47&type=section&id=Amended%20and%20Restated%20Employment%20Agreement) This section details the amended employment agreement for CFO Seth Daggett, including an increased base salary and extended employment period - On August 8, 2023, an Amended and Restated Employment Agreement was entered into with CFO Seth Daggett[214](index=214&type=chunk) - The agreement extends the employment period to two years (automatically extended daily) and increases Mr. Daggett's annual base salary from **$285,000 to $375,000**[214](index=214&type=chunk) - Compensation is subject to any clawback policy adopted to comply with Section 10D of the Securities Exchange Act of 1934[215](index=215&type=chunk) [Item 6. - Exhibits](index=47&type=section&id=Item%206.%20-%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including organizational documents, the CFO's amended employment agreement, certifications, and XBRL interactive data files - Exhibits include Amended Articles of Incorporation, Amended and Restated Bylaws, Amended and Restated Employment Agreement with Seth C. Daggett, and various certifications (31.1, 31.2, 32)[217](index=217&type=chunk) - XBRL Instance Document, Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbase Documents are included[218](index=218&type=chunk) [Signatures](index=49&type=section&id=Signatures) This section contains the duly authorized signatures of NI Holdings, Inc.'s President, CEO, and CFO, affirming the report's submission [Signatures](index=49&type=section&id=Signatures) The report is duly signed on behalf of NI Holdings, Inc. by Michael J. Alexander, President and Chief Executive Officer, and Seth C. Daggett, Chief Financial Officer, on August 8, 2023 - Signed by Michael J. Alexander, President and Chief Executive Officer[222](index=222&type=chunk) - Signed by Seth C. Daggett, Chief Financial Officer[222](index=222&type=chunk) - Date of signing: August 8, 2023[221](index=221&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-37973 NI HOLDINGS, INC. (Exact name of registrant as specified in its charter) NORTH DAKOTA 81-2683619 (State or other jurisdiction of (IRS Em ...

Insurance Premiums Breakdown - Private passenger auto insurance accounted for $82,311 million (21.1%) of direct premiums written by the company in 2022[51] - Non-standard auto insurance represented $77,798 million (20.0%) of direct premiums written by the company in 2022[52] - Home and farm insurance contributed $90,701 million (23.3%) of direct premiums written by the company in 2022[53] - Crop insurance, including crop hail and multi-peril policies, accounted for $53,215 million (13.7%) of direct premiums written by the company in 2022[54] - Commercial insurance made up $80,443 million (20.6%) of direct premiums written by the company in 2022[55] - Other coverages, including excess liability, accounted for $5,238 million (1.3%) of direct premiums written by the company in 2022[56] Financial Strength and Ratings - All of the company's insurance subsidiaries are rated "A" Excellent by AM Best, affirming a stable financial strength outlook[84] - All insurance subsidiaries hold a financial strength rating of "A" (Excellent) by AM Best, which is crucial for competitive positioning in the insurance market[127] - The company has never triggered any regulatory capital levels under the NAIC risk-based capital requirements, with total adjusted capital exceeding the authorized control level[100] Regulatory Environment - The company is subject to extensive state-level regulations that impact various aspects of its operations, including pricing, claims procedures, and corporate governance[92] - The company’s ability to pay dividends to shareholders is dependent on the ability of its insurance subsidiaries to pay dividends, which is regulated by state laws[113] - The company’s multi-peril crop insurance is overseen by the RMA, which establishes premium rates and loss adjustment procedures[97] - Regulatory changes affecting the federal crop insurance program could significantly impact revenues and net income[146] Competition and Market Position - The company faces competition from major insurers in its markets, including Progressive, State Farm, and American Family Insurance[85] - The company differentiates itself in the property and casualty insurance market by focusing on ease of doing business and providing excellent claims service[90] Underwriting and Risk Management - The company’s underwriting and risk management approach emphasizes long-term profitability, but there is no guarantee of success in mitigating catastrophe losses[123] - The company’s ability to manage underwriting risks is dependent on the availability and cost of reinsurance, which may vary significantly over time[133] - The company is subject to significant risks from catastrophic events, with potential impacts on financial condition and operating results due to climate change and natural disasters[121] Operational Risks - The company is exposed to operational risks including fraud, clerical errors, and system malfunctions, which could materially affect operations[142] - The company relies heavily on its operating systems for issuing policies and paying claims, making it vulnerable to operational disruptions[141] - Future acquisitions may involve risks such as integration challenges, management distraction, and potential loss of key employees[142] - Business continuity plans may not sufficiently address all risks related to significant business interruptions[163] Investment and Financial Performance - The company's investment portfolio is primarily in high-quality, liquid, taxable U.S. government and corporate bonds, ensuring adequate funds for insurance obligations[80] - Investment income is crucial for profitability, with fluctuations in interest rates and credit quality potentially leading to significant losses[159] - The company's investment portfolio, the largest component of its assets, is subject to credit and cash flow risk, particularly from asset-backed and mortgage-backed securities[161] - Significant negative changes in fixed income or equity markets could materially affect the company's financial condition, results of operations, or cash flows[161] - Adverse economic conditions could lead to material impairments in the company's financial condition and operating results[161] Employee and Organizational Insights - As of December 31, 2022, NI Holdings had 233 total employees, with an employee turnover rate of 25.2% in 2022, up from 14.7% in 2021[119] - Nodak Mutual Group's majority control allows it to exercise significant voting power, which may not align with the interests of all shareholders[153] Challenges and Future Outlook - The company faces challenges in retaining and expanding agent relationships, which are essential for business growth[137] - The insurance industry is influenced by cyclical changes, with potential fluctuations in premium volume due to economic conditions and competition[128] - The company intends to continue growing its business, which may require additional capital, systems development, and skilled personnel[162] - Risks associated with growth include identifying profitable business opportunities and managing capital requirements[162] - Future unexpected business interruptions could significantly impact the company's operations and service levels[163] - Cybersecurity threats remain a priority, with the potential for significant losses and reputational damage if systems are compromised[144] - The company faces increased compliance costs and risks due to evolving cybersecurity and data protection laws[145]