NI Holdings, Inc. Reports Results for Second Quarter Ended June 30, 2024
Rhea-AI Summary
NI Holdings, Inc. (NASDAQ: NODK) reported results for Q2 2024 ended June 30. Key highlights include:
- Direct written premiums decreased 2.6% to $118.5 million
- Net earned premiums increased 8.0% to $85.2 million
- Combined ratio worsened to 113.7% from 107.1%
- Net investment income up 31.2% to $2.5 million
- Basic loss per share of ($0.36) compared to ($0.12) in Q2 2023
The company closed on the sale of Westminster American Insurance Company, resulting in a one-time loss of $7.8 million. Management cited volatile weather impacting the Home and Farm segment and is focusing on aggressive rate and underwriting actions to improve profitability across all business lines.
Positive
- Net earned premiums increased 8.0% to $85.2 million
- Net investment income up 31.2% to $2.5 million
- Strong growth in Non-Standard Auto (26.4%) and Home and Farm (11.5%) segments
- Sale of Westminster American Insurance Company allows refocus on core business
Negative
- Direct written premiums decreased 2.6% to $118.5 million
- Combined ratio worsened to 113.7% from 107.1%
- Basic loss per share increased to ($0.36) from ($0.12) in Q2 2023
- One-time loss of $7.8 million from sale of Westminster American Insurance Company
- Increased weather-related losses in Home and Farm segment
- Unfavorable prior year reserve development in Non-Standard Auto
Insights
NI Holdings' Q2 2024 results reveal a mixed financial picture. The
The combined ratio deteriorated to
On a positive note, net investment income rose
NI Holdings' Q2 results highlight the volatile nature of the insurance industry, particularly in weather-sensitive segments. The company's proactive rate actions in Non-Standard Auto and Home and Farm segments led to growth, demonstrating agility in a challenging market.
The
The strategic sale of Westminster American Insurance Company, while resulting in a short-term loss, could prove beneficial long-term by allowing NI Holdings to concentrate resources on core competencies. This move, coupled with the company's focus on aggressive rate and underwriting actions, suggests a commitment to improving its risk profile and long-term profitability.
FARGO, N.D., Aug. 08, 2024 (GLOBE NEWSWIRE) -- NI Holdings, Inc. (NASDAQ: NODK) announced today results for the quarter ended June 30, 2024.
Summary of Second Quarter 2024 Results – Continuing Operations
(All comparisons vs. continuing operations for the second quarter of 2023, unless noted otherwise)
- Direct written premiums of
$118.5 million compared to$121.6 million . This2.6% reduction was driven by Crop as a result of lower commodity prices impacting multi-peril crop insurance premiums, partially offset by growth in Non-Standard Auto (26.4% ) due to rate and new business increases, and Home and Farm (11.5% ), driven by higher rate and insured values. - Net earned premiums of
$85.2 million , up8.0% . - Combined ratio of
113.7% versus107.1% , driven by increased weather-related losses in Home and Farm and unfavorable prior year reserve development in Non-Standard Auto. - Net investment loss of
$0.6 million and net investment income of$2.5 million , up31.2% driven by higher fixed income reinvestment rates. - Closed on sale of Westminster American Insurance Company, resulting in a one-time loss on sale of
$7.8 million , net of taxes. - Basic loss per share of (
$0.36) compared to ($0.12) .
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||
| Dollars in thousands, except per share data (unaudited) | 2024 | 2023 | Change | 2024 | 2023 | Change | |
| Direct written premiums | ( | ||||||
| Net earned premiums | |||||||
| Loss and LAE ratio | 5.2 pts | (0.8) pts | |||||
| Expense ratio | 1.4 pts | 1.0 pts | |||||
| Combined ratio | 6.6 pts | 0.2 pts | |||||
| Net income (loss) attributable to NI Holdings | NM | ( | |||||
| Continuing operations | (7,478) | (2,463) | NM | (543) | (359) | 51.3% | |
| Discontinued operations | (996) | (5,659) | NM | (1,512) | (11,973) | NM | |
| Loss on sale of discontinued operations | (7,762) | - | NM | (7,762) | - | NM | |
| Return on average equity | ( | ( | (8.2) pts | ( | ( | (0.2) pts | |
| Basic earnings (loss) per share | NM | ( | |||||
| Continuing operations | $(0.36) | $(0.12) | NM | $(0.03) | $(0.02) | 50.0% | |
| NM = not meaningful | |||||||
Management Commentary
“During the second quarter we closed on the strategic sale of Westminster American Insurance Company,” said Michael J. Alexander, President and Chief Executive Officer. “The sale has enabled us to refocus our efforts and resources on our core business and the actions necessary to deliver appropriate returns to our shareholders. We continue to benefit from prior rate actions, which were ahead of much of the industry and contributed to strong growth in our Non-Standard Auto and Home and Farm segments and improved profitability in Private Passenger Auto.
The second quarter is generally a time of volatile weather in the Upper Midwest, and our Home and Farm segment was once again impacted by non-catastrophe weather-related losses during the quarter. Overall, we continue to focus on pursuing continued aggressive rate and underwriting actions, along with other strategic measures to improve our overall risk profile across all lines of business. We remain confident that these actions will enable all segments to achieve profitable results over time.”
Securities and Exchange Commission (SEC) Filings
The Company’s Quarterly Report on Form 10-Q and latest financial supplement can be found on the Company’s website at www.niholdingsinc.com. The Company’s filings with the SEC can also be found at www.sec.gov.
About the Company
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 and the creation of a mutual holding company. The conversion was consummated on March 13, 2017. Immediately following the conversion, all of the outstanding shares of common stock of Nodak Insurance Company were issued to Nodak Mutual Group, Inc., which then contributed the shares to NI Holdings in exchange for
Safe Harbor Statement
Some of the statements included in this news release, particularly those anticipating future financial performance, including investment performance and yields, business prospects, growth and operating strategies, the impact of pricing and underwriting changes on operating results, our ability to deliver appropriate returns to shareholders, and similar matters, are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Actual results could vary materially. Factors that could cause actual results to vary materially include: our ability to maintain profitable operations, the adequacy of the loss and loss adjustment expense reserves, business and economic conditions, interest rates, competition from various insurance and other financial businesses, terrorism, the availability and cost of reinsurance, adverse and catastrophic weather events, including the impacts of climate change, legal and judicial developments, changes in regulatory requirements, our ability to integrate and manage successfully the insurance companies we may acquire from time to time, the impact of inflation on our operating results, and other risks we describe in the periodic reports we file with the Securities and Exchange Commission. You should not place undue reliance on any such forward-looking statements. We disclaim any obligation to update such statements or to announce publicly the results of any revisions that we may make to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to our Annual Report on Form 10-K, as filed with the SEC.
Investor Relations Contact:
Seth Daggett
Executive Vice President, Treasurer and Chief Financial Officer
701-298-4348
IR@nodakins.com
FAQ
What was NODK's direct written premium for Q2 2024?
How did NODK's combined ratio change in Q2 2024 compared to Q2 2023?
What was the impact of NODK's sale of Westminster American Insurance Company?
How did NODK's Non-Standard Auto segment perform in Q2 2024?
