8-K
NI Holdings, Inc. (NODK)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934
Date of Report (Date of earliest event reported):March 8,2023
| 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.) |
| 1101 First Avenue North<br><br> <br>Fargo, North Dakota | ||
| (Address of principal executive offices) | ||
| 58102 | ||
| (Zip code) | ||
| (701) 298-4200 | ||
| (Registrant’s telephone number, including area code) | ||
| N/A | ||
| (Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value per share | NODK | Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
| Item 2.02. | Results of Operations and Financial Condition. |
|---|
On March 8, 2023, the Company issued a press release announcing its financial results for the quarter and year ended December 31, 2022. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.
The information in this Item 2.02 and the Exhibit attached hereto is furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such document or filing.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
(d) Exhibits
| Exhibit Number | Description |
|---|---|
| 99.1 | Press Release dated March 8, 2023. |
| 104 | Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline<br>XBRL document. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NI Holdings, Inc. | ||
|---|---|---|
| Date: March 8, 2023 | By: | /s/ Michael J. Alexander |
| Michael J. Alexander | ||
| President and Chief Executive Officer |
NI Holdings, Inc. Reports Results for Fourth Quarterand Year Ended December 31, 2022
FARGO, North Dakota, March 8, 2023 – NI Holdings, Inc. (NASDAQ: NODK) announced today results for the year ended December 31, 2022.
Summary of Year-End 2022 Results
(All comparisons vs. year-end 2021, unless notedotherwise)
| · | Direct written premiums of $88.1 million, up<br>16.9% compared to prior year quarter and full year direct written premiums of $389.7 million, up 13.9% compared to prior year | |||||
|---|---|---|---|---|---|---|
| · | Direct written premium growth across all segments<br>compared to prior year, led by Non-Standard Auto up 26.8%, Crop up 22.2% and Commercial up 15.3% | |||||
| --- | --- | |||||
| · | Net earned premiums of $84.7 million, up 8.6%<br>compared to prior year quarter and full year net earned premiums of $328.3 million up 9.6% compared to prior year | |||||
| --- | --- | |||||
| · | Combined Ratio of 119.9% for full year 2022 versus<br>104.3% for prior year, driven by elevated loss costs as a result of higher inflation and an increase in catastrophe events in the current<br>year | |||||
| --- | --- | |||||
| · | Total pre-tax catastrophe losses, net of reinsurance,<br>of $68.5 million year-to-date, which adversely impacted the year-to-date combined ratio by 21.2 percentage points | |||||
| --- | --- | |||||
| · | Net investment losses of $13.1 million year-to-date,<br>driven by unfavorable equity market conditions | |||||
| --- | --- | |||||
| · | Earnings per share of $0.04 compared to $0.29<br>for the quarter, and loss per share of $2.49 compared to earnings per share of $0.39 for the year | |||||
| --- | --- | |||||
| · | The Company repurchased 95,741 shares of common<br>stock at an average price of $13.68 per share for a total of $1.3 million during the quarter and 269,160 shares of common stock at an<br>average price of $15.53 for a total of $4.1 million during the year | |||||
| --- | --- | |||||
| Three Months Ended December 31, | Year Ended December 31, | |||||
| --- | --- | --- | --- | --- | --- | --- |
| Dollars in thousands, except per share data<br><br> <br>(unaudited) | 2022 | 2021 | Change | 2022 | 2021 | Change |
| Direct written premiums | $88,064 | $75,338 | 16.9% | $389,706 | $342,215 | 13.9% |
| Net earned premiums | $84,675 | $78,000 | 8.6% | $328,290 | $299,589 | 9.6% |
| Loss and LAE ratio | 78.9% | 65.2% | 13.7 pts | 89.7% | 72.2% | 17.5 pts |
| Expense ratio | 30.6% | 33.5% | (2.9 pts) | 30.2% | 32.1% | (1.9 pts) |
| Combined ratio | 109.4% | 98.6% | 10.8 pts | 119.9% | 104.3% | 15.6 pts |
| Net income (loss) attributable to NI Holdings | $890 | $6,128 | (85.5%) | ($53,096) | $8,416 | nm |
| Return on average equity | 1.4% | 7.2% | (5.8 pts) | (17.9%) | 2.4% | (20.3 pts) |
| Basic earnings (loss) per share | $0.04 | $0.29 | (86.2%) | ($2.49) | $0.39 | nm |
nm = not meaningful
Management Commentary
“In the fourth quarter our Commercial segment continued to be challenged by increased frequency and severity of fire losses in addition to freeze losses related to Winter Storm Elliott, while all of our segments were impacted by elevated industrywide loss costs,” said Michael J. Alexander, President and Chief Executive Officer. “We were pleased with the performance in our Private Passenger Auto and Home/Farm segments during the quarter as our earlier underwriting actions and rate increases have started to drive improved performance in those segments. The company continued its strong growth this quarter, led by the Non-Standard Auto segment, as a result of new business growth and rate increases implemented earlier this year.
For the year, 2022 proved to be challenging for the company. We faced elevated loss costs as a result of inflation, record weather-related losses, and difficult equity markets. Despite these challenging conditions, we saw an improvement in our results late in the year, driven by our earlier rate and underwriting actions. We remain committed to continuing to take these actions as long as necessary to build upon that momentum throughout 2023.”
Securities and Exchange Commission (SEC) Filings
The Company’s Annual Report on Form 10-Kand 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 connectionwith the conversion of Nodak Mutual Insurance Company from a mutual to stock form of organization and the creation of a mutual holdingcompany. The conversion was consummated on March 13, 2017. Immediately following the conversion, all of the outstanding shares of commonstock of Nodak Insurance Company were issued to Nodak Mutual Group, Inc., which then contributed the shares to NI Holdings in exchangefor 55% of the outstanding shares of common stock of NI Holdings. Nodak Insurance Company then became a wholly-owned stock subsidiaryof NI Holdings. NI Holdings’ financial statements are the consolidated financial results of NI Holdings; Nodak Insurance, includingNodak’s wholly-owned subsidiaries American West Insurance Company and Primero Insurance Company, and its affiliate Battle CreekMutual Insurance Company; Direct Auto Insurance Company; and Westminster Insurance Company.
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, growthand operating strategies, the impact of pricing and underwriting changes on operating results, and similar matters, are forward-lookingstatements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Actual results could vary materially. Factorsthat could cause actual results to vary materially include: our ability to maintain profitable operations, the adequacy of the loss andloss adjustment expense reserves, business and economic conditions, interest rates, competition from various insurance and other financialbusinesses, terrorism, the availability and cost of reinsurance, adverse and catastrophic weather events, including the impacts of climatechange, legal and judicial developments, changes in regulatory requirements, our ability to integrate and manage successfully the insurancecompanies we may acquire from time to time, the impact of inflation on our operating results, and other risks we describe in the periodicreports 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-lookingstatements 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 thatcould affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to our AnnualReport on Form 10-K, as filed with the SEC.
***Investor Relations Contact:***Seth Daggett
Executive Vice President, Treasurer and Chief Financial Officer701-298-4348IR@nodakins.com