NI Holdings Reports Loss Amid Catastrophe and Auto Insurance Reductions
NI Holdings reported a net loss of $10.4 million for the year ending December 31, 2025, marking a reversal from its previous positive performance. This downturn was primarily due to strategic reductions and a significant catastrophe loss in North Dakota. The loss per share amounted to $0.50, contrasting with earnings of $0.31 per share in 2024. In the fourth quarter, the company experienced a loss per share of $0.15, down from an EPS of $0.47 in the same quarter the previous year.
Direct written premiums fell by 15.3% for the full year to $289.8 million, while the fourth quarter saw a sharper decline of 26% to $54.1 million. This reduction was influenced by a deliberate scaling back in nonstandard auto insurance, with the company exiting markets in Illinois, South Dakota, and Arizona. However, growth in home and farm insurance within North Dakota, South Dakota, and Nebraska partially balanced this contraction.
Net earned premiums decreased by 18.9% in the fourth quarter to $58.2 million and by 12.7% over the year to $270.7 million. The reduction in premiums was attributed to the shrinking auto insurance segment and reinsurance effects. The insurer's combined ratio rose significantly in the fourth quarter to 109.6%, an increase of 29.6 points year-over-year, impacted by adverse reserve developments from prior years in nonstandard auto and a drop in net earned premiums.
For the year, the combined ratio increased to 109.9%, worsening by 9.2 points from 2024. Key factors included unfavorable reserve developments in liability losses and decreased net earned premiums in the nonstandard auto sector. The second quarter experienced additional pressure from a significant catastrophe event in North Dakota, requiring reinstatement premiums, though weather impacts in South Dakota and Nebraska were less severe.
Despite underwriting challenges, net investment income rose by 6.9% to $11.7 million, driven by higher yields and a larger fixed-income portfolio. This was partially offset by lower returns on cash equivalents. Overall, total revenues for the year reached approximately $285.1 million, including net earned premiums and investment income. The year marked a period of transition for NI Holdings, with strategic reductions in nonstandard auto insurance exposure and management of a major catastrophe loss.
When compared with peers like Selective Insurance Group and Donegal Group, NI Holdings' combined ratio of nearly 110% positioned it less favorably. Selective attained a combined ratio of 97.2% with premium growth, and Donegal improved to 95.4% despite a slight contraction in net premiums earned. Safety Insurance Group also demonstrated tighter underwriting, reporting a combined ratio of 98.8%.
NI Holdings continues to address challenges related to reserves in auto, reductions in nonstandard exposure, and the financial implications of a significant single-state catastrophe. The company's performance in 2025, marked by premium contraction and a high combined ratio, is contrasted against regional peers who achieved a more favorable alignment with the industry's mid-90s target combined ratio.