NI Holdings (NODK) Q2 2024 earnings summary

Executive summary

• Net loss for Q2 2024 was $16.2 million, compared to $8.1 million in the prior year, driven by higher weather-related losses, unfavorable prior year reserve development, and a one-time after-tax loss of $7.8 million from the sale of Westminster American Insurance Company.

• Net premiums earned increased 8.0% year-over-year to $85.2 million, with growth in Private Passenger Auto, Non-Standard Auto, and Home and Farm segments.

• Direct written premiums declined 2.6% to $118.5 million, mainly due to lower crop insurance premiums, partially offset by growth in Non-Standard Auto and Home and Farm.

• Combined ratio rose to 113.7% in Q2 2024 from 107.1% in Q2 2023, reflecting higher loss and expense ratios.

• Sale of Westminster American Insurance Company completed June 30, 2024, resulting in a strategic shift and reporting Westminster as discontinued operations.

Financial highlights

• Net premiums earned: $85.2 million in Q2 2024, up from $78.8 million in Q2 2023; $155.1 million for the six months ended June 30, 2024, up from $141.7 million year-over-year.

• Net investment income grew 31.2% to $2.5 million in Q2 2024 due to higher interest rates.

• Net investment losses were $(580) in Q2 2024, compared to $(173) in Q2 2023.

• Basic loss per share from continuing operations was $(0.36), compared to $(0.12) a year ago.

• Return on average equity declined to (12.7%) from (4.5%) year-over-year.

Outlook and guidance

• Management expects to generate sufficient funds from operations and maintain high liquidity to meet claim settlements and operating expenses.

• Focused on aggressive rate and underwriting actions to improve risk profile and profitability across all segments.

• Confident that strategic measures and refocusing on core business will enable profitable results over time.

• No material changes in risk factors or market risk assessment from the prior annual report.