NI Holdings Q2 Results: Direct Written Premiums Down 7.6% to $109.5mln, Combined Ratio at 125.1%

NI Holdings reported a 7.6% decline in direct written premiums to $109.5 million in Q2 2025, driven by a 56.4% reduction in the Non-Standard Auto segment. The combined ratio deteriorated to 125.1% due to catastrophic losses and unfavorable claim developments. However, net investment income rose by 40.8% to $2.7 million due to higher reinvestment rates in the fixed income portfolio. The company saw positive results from geographic diversification efforts in South Dakota and Nebraska.

NI Holdings, Inc. (NASDAQ: NODK) announced its second-quarter 2025 results, revealing a mixed performance marked by a decline in direct written premiums, a deterioration in the combined ratio, and significant challenges in the Non-Standard Auto segment. The company reported a 7.6% decrease in direct written premiums to $109.5 million, driven primarily by a 56.4% reduction in the Non-Standard Auto segment [1].

The combined ratio deteriorated to 125.1%, an increase of 11.4 percentage points from the previous year, due to catastrophic losses and unfavorable claim developments. The total pre-tax catastrophe losses, net of reinsurance, amounted to $20.0 million for the quarter and year-to-date, which adversely impacted the loss and loss adjustment expense ratios by 30.2 and 15.7 percentage points, respectively [1].

Despite these challenges, NI Holdings reported a net loss of $12.05 million, a significant improvement compared to the same period last year when the net loss was $19.62 million. The net investment income increased by 40.8% to $2.7 million, primarily driven by higher reinvestment rates in the fixed income portfolio [1].

The company highlighted the positive impact of geographic diversification efforts in South Dakota and Nebraska, where favorable weather conditions offset the challenges in North Dakota. The Home and Farm segment grew by 8.1% with higher rates and new business growth in North Dakota, partially offsetting the reduction in Non-Standard Auto premiums [2].

Management commented on the results, acknowledging the impact of the recent historic storms in North Dakota and expressing confidence in the company's ability to navigate these challenges. The return on average equity decreased to -19.4% compared to -12.8% in the previous year, reflecting ongoing profitability challenges [1].

The continued reduction in Non-Standard Auto exposure represents a necessary but painful portfolio restructuring that will likely pressure top-line results until the company stabilizes its performance. Investors should closely monitor NI Holdings' progress in addressing these challenges and the potential impact on future financial results.

References:
[1] https://www.niholdingsinc.com/news-releases/news-release-details/ni-holdings-inc-reports-results-second-quarter-ended-june-30-1
[2] https://www.stocktitan.net/news/NODK/ni-holdings-inc-reports-results-for-second-quarter-ended-june-30-zlbb51s7b068.html