Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 31, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | NI HOLDINGS, INC. | |
Trading Symbol | NODK | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 20,862,795 | |
Amendment Flag | false | |
Entity Central Index Key | 0001681206 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-37973 | |
Entity Incorporation, State or Country Code | ND | |
Entity Tax Identification Number | 81-2683619 | |
Entity Address, Address Line One | 1101 First Avenue North | |
Entity Address, City or Town | Fargo | |
Entity Address, State or Province | ND | |
Entity Address, Postal Zip Code | 58102 | |
City Area Code | (701) | |
Local Phone Number | 298-4200 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets: | ||
Cash and cash equivalents | $ 52,636 | $ 47,002 |
Fixed income securities, at fair value (net of allowance for expected credit losses of $0 at June 30, 2023 and $0 at December 31, 2022) | 332,989 | 303,324 |
Equity securities, at fair value | 24,654 | 52,393 |
Other investments | 2,005 | 2,005 |
Total cash and investments | 412,284 | 404,724 |
Premiums and agents' balances receivable (net of allowance for expected credit losses of $434 at June 30, 2023 and $425 at December 31, 2022) | 106,946 | 62,173 |
Deferred policy acquisition costs | 34,124 | 29,768 |
Reinsurance premiums receivable | 1,661 | 1,647 |
Reinsurance recoverables on losses (net of allowance for expected credit losses of $0 at June 30, 2023 and $0 at December 31, 2022) | 53,508 | 37,575 |
Income tax recoverable | 12,327 | 13,964 |
Accrued investment income | 2,734 | 2,456 |
Property and equipment, net | 10,276 | 9,843 |
Deferred income taxes | 12,070 | 9,005 |
Receivable from Federal Crop Insurance Corporation | 14,032 | 15,462 |
Goodwill and other intangibles | 17,014 | 17,250 |
Other assets | 10,222 | 10,365 |
Total assets | 687,198 | 614,232 |
Liabilities: | ||
Unpaid losses and loss adjustment expenses | 232,038 | 190,459 |
Unearned premiums | 185,350 | 148,513 |
Accrued expenses and other liabilities | 29,427 | 22,053 |
Total liabilities | 446,815 | 361,025 |
Shareholders’ equity: | ||
Common stock, $0.01 par value, authorized: 25,000,000 shares; issued: 23,000,000 shares; and outstanding: 2023 – 20,885,978 shares, 2022 – 21,076,255 shares | 230 | 230 |
Additional paid-in capital | 95,750 | 95,671 |
Unearned employee stock ownership plan shares | (941) | (941) |
Retained earnings | 201,518 | 214,121 |
Accumulated other comprehensive loss, net of income taxes | (26,986) | (29,286) |
Treasury stock, at cost, 2023 – 2,019,912 shares, 2022 – 1,829,635 shares | (31,122) | (28,818) |
Non-controlling interest | 1,934 | 2,230 |
Total shareholders’ equity | 240,383 | 253,207 |
Total liabilities and shareholders’ equity | $ 687,198 | $ 614,232 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Net of allowance for expected credit losses (in Dollars) | $ 0 | $ 0 |
Premiums and agents' balances receivable net of allowance for expected credit losses (in Dollars) | 434 | 425 |
Reinsurance recoverables on losses net of allowance for expected credit losses (in Dollars) | $ 0 | $ 0 |
Common stock, par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 23,000,000 | 23,000,000 |
Common stock, shares outstanding | 20,885,978 | 21,076,255 |
Treasury stock, shares | 2,019,912 | 1,829,635 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Net premiums earned | $ 94,146 | $ 84,496 | $ 171,773 | $ 154,083 |
Fee and other income | 499 | 415 | 773 | 843 |
Net investment income | 2,505 | 2,015 | 4,744 | 3,668 |
Net investment gains (losses) | (174) | (11,136) | 1,242 | (16,664) |
Total revenues | 96,976 | 75,790 | 178,532 | 141,930 |
Expenses: | ||||
Losses and loss adjustment expenses | 77,506 | 108,595 | 136,331 | 148,724 |
Amortization of deferred policy acquisition costs | 20,579 | 16,244 | 39,167 | 31,867 |
Other underwriting and general expenses | 9,295 | 10,002 | 18,951 | 17,783 |
Total expenses | 107,380 | 134,841 | 194,449 | 198,374 |
Loss before income taxes | (10,404) | (59,051) | (15,917) | (56,444) |
Income tax benefit | (2,169) | (12,415) | (3,182) | (11,847) |
Net loss | (8,235) | (46,636) | (12,735) | (44,597) |
Net loss attributable to non-controlling interest | (113) | (726) | (403) | (596) |
Net loss attributable to NI Holdings, Inc. | $ (8,122) | $ (45,910) | $ (12,332) | $ (44,001) |
Loss per common share: | ||||
Basic (in Dollars per share) | $ (0.38) | $ (2.15) | $ (0.58) | $ (2.06) |
Diluted (in Dollars per share) | $ (0.38) | $ (2.15) | $ (0.58) | $ (2.06) |
Share data: | ||||
Weighted average common shares outstanding used in basic per common share calculations (in Shares) | 21,281,542 | 21,379,803 | 21,325,007 | 21,376,298 |
Plus: Dilutive securities (in Shares) | ||||
Weighted average common shares used in diluted per common share calculations (in Shares) | 21,281,542 | 21,379,803 | 21,325,007 | 21,376,298 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net loss | $ (8,235) | $ (46,636) | $ (12,735) | $ (44,597) |
Other comprehensive income (loss), before income taxes: | ||||
Holding gains (losses) on investments | (3,094) | (16,388) | 2,628 | (37,282) |
Reclassification adjustment for net realized losses included in net loss | 188 | 105 | 487 | 62 |
Other comprehensive income (loss), before income taxes | (2,906) | (16,283) | 3,115 | (37,220) |
Income tax benefit (expense) related to items of other comprehensive income (loss) | 660 | 3,701 | (708) | 8,460 |
Other comprehensive income (loss), net of income taxes | (2,246) | (12,582) | 2,407 | (28,760) |
Comprehensive loss | (10,481) | (59,218) | (10,328) | (73,357) |
Attributable to NI Holdings, Inc. | ||||
Net loss | (8,122) | (45,910) | (12,332) | (44,001) |
Other comprehensive income (loss), before income taxes: | ||||
Holding gains (losses) on investments | (2,954) | (15,738) | 2,490 | (35,935) |
Reclassification adjustment for net realized losses included in net loss | 188 | 105 | 487 | 62 |
Other comprehensive income (loss), before income taxes | (2,766) | (15,633) | 2,977 | (35,873) |
Income tax benefit (expense) related to items of other comprehensive income (loss) | 628 | 3,553 | (677) | 8,154 |
Other comprehensive income (loss), net of income taxes | (2,138) | (12,080) | 2,300 | (27,719) |
Comprehensive loss | (10,260) | (57,990) | (10,032) | (71,720) |
Attributable to Non- Controlling Interest | ||||
Net loss | (113) | (726) | (403) | (596) |
Other comprehensive income (loss), before income taxes: | ||||
Holding gains (losses) on investments | (140) | (650) | 138 | (1,347) |
Reclassification adjustment for net realized losses included in net loss | ||||
Other comprehensive income (loss), before income taxes | (140) | (650) | 138 | (1,347) |
Income tax benefit (expense) related to items of other comprehensive income (loss) | 32 | 148 | (31) | 306 |
Other comprehensive income (loss), net of income taxes | (108) | (502) | 107 | (1,041) |
Comprehensive loss | $ (221) | $ (1,228) | $ (296) | $ (1,637) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Unearned Employee Stock Ownership Plan Shares | Retained Earnings | Accumulated Other Comprehensive Income (Loss), Net of Income Taxes | Treasury Stock | Non-Controlling Interest | Total |
Balance at Dec. 31, 2021 | $ 230 | $ 98,166 | $ (1,184) | $ 267,207 | $ 5,237 | $ (26,452) | $ 4,209 | $ 347,413 |
Net loss | (44,001) | (596) | (44,597) | |||||
Other comprehensive income (loss), net of income taxes | (27,719) | (1,041) | (28,760) | |||||
Purchase of treasury stock | (1,931) | (1,931) | ||||||
Share-based compensation | 1,051 | 1,051 | ||||||
Issuance of vested award shares | (2,390) | 11 | 1,814 | (565) | ||||
Balance at Jun. 30, 2022 | 230 | 96,827 | (1,184) | 223,217 | (22,482) | (26,569) | 2,572 | 272,611 |
Balance at Mar. 31, 2022 | 230 | 96,517 | (1,184) | 269,142 | (10,402) | (25,825) | 3,800 | 332,278 |
Net loss | (45,910) | (726) | (46,636) | |||||
Other comprehensive income (loss), net of income taxes | (12,080) | (502) | (12,582) | |||||
Purchase of treasury stock | (934) | (934) | ||||||
Share-based compensation | 486 | 486 | ||||||
Issuance of vested award shares | (176) | (15) | 190 | (1) | ||||
Balance at Jun. 30, 2022 | 230 | 96,827 | (1,184) | 223,217 | (22,482) | (26,569) | 2,572 | 272,611 |
Balance at Dec. 31, 2022 | 230 | 95,671 | (941) | 214,121 | (29,286) | (28,818) | 2,230 | 253,207 |
Net loss | (12,332) | (403) | (12,735) | |||||
Other comprehensive income (loss), net of income taxes | 2,300 | 107 | 2,407 | |||||
Purchase of treasury stock | (3,223) | (3,223) | ||||||
Share-based compensation | 901 | 901 | ||||||
Issuance of vested award shares | (822) | (271) | 919 | (174) | ||||
Balance at Jun. 30, 2023 | 230 | 95,750 | (941) | 201,518 | (26,986) | (31,122) | 1,934 | 240,383 |
Balance at Mar. 31, 2023 | 230 | 95,568 | (941) | 209,710 | (24,848) | (28,803) | 2,155 | 253,071 |
Net loss | (8,122) | (113) | (8,235) | |||||
Other comprehensive income (loss), net of income taxes | (2,138) | (108) | (2,246) | |||||
Purchase of treasury stock | (2,602) | (2,602) | ||||||
Share-based compensation | 396 | 396 | ||||||
Issuance of vested award shares | (214) | (70) | 283 | (1) | ||||
Balance at Jun. 30, 2023 | $ 230 | $ 95,750 | $ (941) | $ 201,518 | $ (26,986) | $ (31,122) | $ 1,934 | $ 240,383 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (12,735) | $ (44,597) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Net investment losses (gains) | (1,242) | 16,664 |
Deferred income tax benefit | (3,773) | (6,069) |
Depreciation of property and equipment | 370 | 344 |
Amortization of intangibles | 236 | 236 |
Share-based compensation | 901 | 1,051 |
Amortization of deferred policy acquisition costs | 39,167 | 31,867 |
Deferral of policy acquisition costs | (43,523) | (37,837) |
Net amortization of premiums and discounts on investments | 557 | 885 |
Gain on sale of property and equipment | (44) | (186) |
Changes in operating assets and liabilities: | ||
Premiums and agents’ balances receivable | (44,773) | (56,884) |
Reinsurance premiums receivable / payable | (14) | 587 |
Reinsurance recoverables on losses | (15,933) | 4,159 |
Income tax recoverable / payable | 1,637 | (8,111) |
Accrued investment income | (278) | (27) |
Federal Crop Insurance Corporation receivable / payable | 1,430 | 2,140 |
Other assets | 143 | (2,401) |
Unpaid losses and loss adjustment expenses | 41,579 | 43,214 |
Unearned premiums | 36,837 | 45,936 |
Accrued expenses and other liabilities | 7,374 | 22,676 |
Net cash flows from operating activities | 7,916 | 13,647 |
Cash flows from investing activities: | ||
Proceeds from maturities and sales of fixed income securities | 19,239 | 31,846 |
Proceeds from sales of equity securities | 33,223 | 7,837 |
Purchases of fixed income securities | (46,833) | (41,461) |
Purchases of equity securities | (3,755) | (10,171) |
Purchases of property and equipment | (888) | (784) |
Proceeds from sales of property and equipment | 129 | 658 |
Net cash flows from investing activities | 1,115 | (12,075) |
Cash flows from financing activities: | ||
Purchases of treasury stock | (3,223) | (1,931) |
Installment payment on Westminster consideration payable | (6,667) | |
Issuance of vested award shares | (174) | (565) |
Net cash flows from financing activities | (3,397) | (9,163) |
Net increase (decrease) in cash and cash equivalents | 5,634 | (7,591) |
Cash and cash equivalents at beginning of period | 47,002 | 70,623 |
Cash and cash equivalents at end of period | 52,636 | 63,032 |
Federal and state income taxes paid | $ 2,360 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2023 | |
Organization [Abstract] | |
Organization | 1. Organization NI Holdings is a North Dakota business corporation that is the stock holding company of Nodak Insurance and became such in connection with the conversion of Nodak Mutual 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 were issued to Nodak Mutual Group, which then contributed the shares to NI Holdings in exchange for 55% of the outstanding shares of common stock of NI Holdings. Nodak Insurance then became a wholly-owned stock subsidiary of NI Holdings. Prior to completion of the conversion, NI Holdings conducted no business and had no assets or liabilities. As a result of the conversion, NI Holdings became the holding company for Nodak Insurance and its existing subsidiaries. These unaudited consolidated financial statements include the financial position and results of operations of NI Holdings and the following other entities: Nodak Insurance Company Nodak Insurance is the largest domestic property and casualty insurance company in North Dakota, offering private passenger auto, homeowners, farmowners, commercial multi-peril, crop hail, and Federal multi-peril crop insurance coverages through its captive agents in the state. Nodak Agency, Inc. Nodak Agency is an inactive shell corporation. American West Insurance Company American West is a property and casualty insurance company licensed in eight states in the Midwest and Western regions of the United States (“U.S.”). American West began writing policies in 2002 and primarily writes private passenger auto, homeowners, and farm coverages in South Dakota. American West also writes personal auto coverage in North Dakota, as well as crop hail and Federal multi-peril crop insurance coverages in Minnesota and South Dakota. Primero Insurance Company Primero is a wholly-owned subsidiary of Tri-State, Ltd. Tri-State, Ltd. is an inactive shell corporation 100% owned by Nodak Insurance. Primero is a property and casualty insurance company writing non-standard automobile coverage in the states of Nevada, Arizona, North Dakota, and South Dakota. Primero was acquired by Nodak Insurance in 2014. Battle Creek Mutual Insurance Company Battle Creek is a property and casualty insurance company writing private passenger auto, homeowners, and farm coverages solely in the state of Nebraska. Battle Creek became affiliated with Nodak Insurance in 2011, and Nodak Insurance provides underwriting, claims management, policy administration, and other administrative services to Battle Creek. Because we have concluded that we control Battle Creek, we consolidate the financial statements of Battle Creek, and Battle Creek’s policyholders’ interest in Battle Creek is reflected as a non-controlling interest in shareholders’ equity in our Consolidated Balance Sheets and its net income or loss is excluded from net income or loss attributed to NI Holdings in our Consolidated Statements of Operations. Direct Auto Insurance Company Direct Auto is a property and casualty insurance company licensed in Illinois. Direct Auto began writing non-standard automobile coverage in 2007, and was acquired by NI Holdings on August 31, 2018, via a stock purchase agreement. Westminster American Insurance Company Westminster is a property and casualty insurance company licensed in 18 states and the District of Columbia. Westminster is headquartered in Owings Mills, Maryland and underwrites commercial multi-peril insurance in the states of Delaware, Georgia, Kentucky, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, and the District of Columbia. Westminster was acquired by NI Holdings on January 1, 2020, via a stock purchase agreement. Nodak Insurance markets and distributes its policies through its captive agents, while all other companies utilize the independent agent distribution channel. Additionally, all of the Company’s insurance subsidiary and affiliate companies are rated “A” Excellent by A.M. Best Company, Inc. (“AM Best”). The same executive management team provides oversight and strategic direction for the entire organization. Nodak Insurance provides common product oversight, pricing practices, and underwriting standards, as well as underwriting and claims administration, to itself, American West, and Battle Creek. Primero, Direct Auto, and Westminster personnel manage the day-to-day operations of their respective companies. |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Basis of Presentation and Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | 2. Basis of Presentation and Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. All material intercompany transactions and balances have been eliminated. These financial statements should be read in conjunction with the financial statements and notes thereto included in our 2022 Annual Report. The Consolidated Balance Sheet at December 31, 2022, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of the interim unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim unaudited consolidated financial statements and the reported amounts of revenues, claims, and expenses during the reporting period. Actual results could differ from those estimates. Operating results for the interim periods ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ended December 31, 2023. Our 2022 Annual Report describes the accounting policies and estimates that are critical to the understanding of our results of operations, financial condition, and liquidity. The accounting policies and estimation processes described in the 2022 Annual Report were consistently applied to the unaudited consolidated financial statements as of and for the six months ended June 30, 2023 and 2022. Recent Accounting Pronouncements Prior to December 31, 2022, we were classified as an emerging growth company (“EGC”) and elected to use the extended transition period for complying with certain new or revised financial accounting standards from the Financial Accounting Standards Board (“FASB”) pursuant to Section 13(a) of the Exchange Act. However, beginning on December 31, 2022, we are no longer an EGC and are now unable to delay adoption of these new or revised accounting standards, or to take advantage of reduced corporate governance disclosures. Adopted For information regarding accounting pronouncements that the Company adopted during the periods presented, see Item II, Part 8, Note 2 “Recent Accounting Pronouncements” section of the 2022 Annual Report. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2023 | |
Investments [Abstract] | |
Investments | 3. Investments The amortized cost and estimated fair value of fixed income securities as of June 30, 2023, and December 31, 2022, were as follows: June 30, 2023 Cost or Allowance for Gross Gross Fair Value Fixed income securities: U.S. Government and agencies $ 9,941 $ — $ — $ (909 ) $ 9,032 Obligations of states and political subdivisions 58,753 — 64 (5,407 ) 53,410 Corporate securities 150,137 — 132 (14,403 ) 135,866 Residential mortgage-backed securities 62,623 — 35 (5,886 ) 56,772 Commercial mortgage-backed securities 30,300 — — (4,837 ) 25,463 Asset-backed securities 53,025 — 29 (4,703 ) 48,351 Redeemable preferred stocks 4,747 — — (652 ) 4,095 Total fixed income securities $ 369,526 $ — $ 260 $ (36,797 ) $ 332,989 December 31, 2022 Cost or Allowance for Gross Gross Fair Value Fixed income securities: U.S. Government and agencies $ 11,174 $ — $ 1 $ (1,008 ) $ 10,167 Obligations of states and political subdivisions 60,342 — 38 (6,454 ) 53,926 Corporate securities 136,837 — 109 (15,787 ) 121,159 Residential mortgage-backed securities 53,254 — 85 (5,846 ) 47,493 Commercial mortgage-backed securities 30,837 — — (4,702 ) 26,135 Asset-backed securities 45,786 — — (5,061 ) 40,725 Redeemable preferred stocks 4,747 — — (1,028 ) 3,719 Total fixed income securities $ 342,977 $ — $ 233 $ (39,886 ) $ 303,324 The amortized cost and estimated fair value of fixed income securities by contractual maturity are shown below. Actual maturities could differ from contractual maturities because issuers may have the right to call or prepay these securities. June 30, 2023 Amortized Cost Fair Value Due to mature: One year or less $ 12,199 $ 11,948 After one year through five years 79,650 74,773 After five years through ten years 85,000 75,928 After ten years 41,982 35,659 Mortgage / asset-backed securities 145,948 130,586 Redeemable preferred stocks 4,747 4,095 Total fixed income securities $ 369,526 $ 332,989 December 31, 2022 Amortized Cost Fair Value Due to mature: One year or less $ 10,130 $ 9,971 After one year through five years 81,879 77,031 After five years through ten years 76,648 65,966 After ten years 39,696 32,284 Mortgage / asset-backed securities 129,877 114,353 Redeemable preferred stocks 4,747 3,719 Total fixed income securities $ 342,977 $ 303,324 Fixed income securities with a fair value of $5,918 at June 30, 2023, and $6,613 at December 31, 2022, were deposited with various state regulatory agencies as required by law. The Company has not pledged any assets to secure any obligations. The investment category and duration of the Company’s gross unrealized losses on fixed income securities are shown below. Investments with unrealized losses are categorized with a duration of greater than 12 months when all positions of a security have continually been in a loss position for at least 12 months. June 30, 2023 Less than 12 Months Greater than 12 months Total Fair Unrealized Fair Unrealized Fair Unrealized Fixed income securities: U.S. Government and agencies $ — $ — $ 9,032 $ (909 ) $ 9,032 $ (909 ) Obligations of states and political subdivisions 7,234 (431 ) 40,295 (4,976 ) 47,529 (5,407 ) Corporate securities 17,414 (418 ) 108,662 (13,985 ) 126,076 (14,403 ) Residential mortgage-backed securities 14,358 (260 ) 32,757 (5,626 ) 47,115 (5,886 ) Commercial mortgage-backed securities 2,033 (56 ) 23,155 (4,781 ) 25,188 (4,837 ) Asset-backed securities 12,063 (185 ) 34,836 (4,518 ) 46,899 (4,703 ) Redeemable preferred stocks — — 4,095 (652 ) 4,095 (652 ) Total fixed income securities $ 53,102 $ (1,350 ) $ 252,832 $ (35,447 ) $ 305,934 $ (36,797 ) December 31, 2022 Less than 12 Months Greater than 12 months Total Fair Unrealized Fair Unrealized Fair Unrealized Fixed income securities: U.S. Government and agencies $ 7,078 $ (537 ) $ 2,587 $ (471 ) $ 9,665 $ (1,008 ) Obligations of states and political subdivisions 40,213 (3,554 ) 9,045 (2,900 ) 49,258 (6,454 ) Corporate securities 76,645 (7,944 ) 39,683 (7,843 ) 116,328 (15,787 ) Residential mortgage-backed securities 21,017 (1,805 ) 18,519 (4,041 ) 39,536 (5,846 ) Commercial mortgage-backed securities 18,932 (2,674 ) 7,204 (2,028 ) 26,136 (4,702 ) Asset-backed securities 18,904 (1,522 ) 21,809 (3,539 ) 40,713 (5,061 ) Redeemable preferred stocks 3,015 (732 ) 705 (296 ) 3,720 (1,028 ) Total fixed income securities $ 185,804 $ (18,768 ) $ 99,552 $ (21,118 ) $ 285,356 $ (39,886 ) We, along with our investment advisors, frequently review our investment portfolio for declines in fair value that could be indicative of credit losses. Beginning on December 31, 2022, credit losses are recognized through an allowance account. We consider a number of factors when determining if an allowance for credit losses is necessary, including payment and default history, credit spreads, credit ratings and rating actions, and probability of default. We determine the credit loss component of fixed maturity investments by utilizing discounted cash flow modeling to determine the present value of the security and comparing the present value with the amortized cost of the security. We did not recognize any credit losses for fixed income securities at the time of adoption of the new credit loss accounting standard or during the three or six months ended June 30, 2023. Therefore, there was no beginning or ending balance of credit losses for the three or six months ended June 30, 2023, or the year ended December 31, 2022. See Item II, Part 8, Note 3 “Summary of Significant Accounting Policies” section of the 2022 Annual Report for additional information. Net investment income consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Fixed income securities $ 2,781 $ 2,406 $ 5,411 $ 4,567 Equity securities 283 395 603 724 Real estate 156 75 306 241 Cash and cash equivalents 94 10 146 12 Total gross investment income 3,314 2,886 6,466 5,544 Investment expenses 809 871 1,722 1,876 Net investment income $ 2,505 $ 2,015 $ 4,744 $ 3,668 Net investment gains (losses) consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Gross realized gains: Fixed income securities $ — $ 5 $ — $ 51 Equity securities 357 1,196 13,088 2,269 Total gross realized gains 357 1,201 13,088 2,320 Gross realized losses, excluding credit impairment losses: Fixed income securities (188 ) (110 ) (487 ) (113 ) Equity securities (288 ) (64 ) (1,134 ) (242 ) Total gross realized losses, excluding credit impairment losses (476 ) (174 ) (1,621 ) (355 ) Net realized gains (losses) (119 ) 1,027 11,467 1,965 Change in net unrealized gain on equity securities (55 ) (12,163 ) (10,225 ) (18,629 ) Net investment gains (losses) $ (174 ) $ (11,136 ) $ 1,242 $ (16,664 ) |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements The Company uses fair value measurements to record fair value adjustments to certain assets to determine fair value disclosures. Investment securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record other assets or liabilities at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-market accounting or write-downs of individual assets. Accounting guidance on fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The three levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. Level 2 includes fixed income securities with quoted prices that are traded less frequently than exchange traded instruments. Valuation techniques include matrix pricing which is a mathematical technique used widely in the industry to value fixed income securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). The Company bases its fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy. Fair value measurements for assets where there exists limited or no observable market data and, therefore, are based primarily upon the estimates of the Company or other third-parties, are often calculated based on the characteristics of the asset, the economic and competitive environment, and other such factors. Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts which could have been realized in a sale transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective period-end and have not been re-evaluated or updated for purposes of our consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period-end. Additionally, changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future valuations. The Company uses quoted values and other data provided by an independent pricing service in its process for determining fair values of its investments. The evaluations of such pricing services represent an exit price and a good faith opinion as to what a buyer in the marketplace would pay for a security in a current sale. This pricing service provides us with one quote per instrument. For fixed income securities that have quoted prices in active markets, market quotations are provided. For fixed income securities that do not trade on a daily basis, the independent pricing service prepares estimates of fair value using a wide array of observable inputs including relevant market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. The observable market inputs that the Company’s independent pricing service utilizes may include (listed in order of priority for use) benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers, and other reference data on markets, industry, and the economy. Additionally, the independent pricing service uses an option-adjusted spread model to develop prepayment and interest rate scenarios. Should the independent pricing service be unable to provide a fair value estimate, we would attempt to obtain a non-binding fair value estimate from a number of broker-dealers and would review this estimate in conjunction with a fair value estimate reported by an independent business news service or other sources. In instances where only one broker-dealer provides a fair value for a fixed income security, we would use that estimate. In instances where the Company would be able to obtain fair value estimates from more than one broker-dealer, we would review the range of estimates and select the most appropriate value based on the facts and circumstances. Should neither the independent pricing service nor a broker-dealer provide a fair value estimate, we would develop a fair value estimate based on cash flow analyses and other valuation techniques that utilize certain unobservable inputs. Accordingly, the Company classifies such a security as a Level 3 investment. The fair value estimates of our investments provided by the independent pricing service at each period-end were utilized, among other resources, in reaching a conclusion as to the fair value of its investments. Management reviews the reasonableness of the pricing provided by the independent pricing service by employing various analytical procedures. We also use information from our third-party investment advisors who utilize different independent pricing services to further validate the reasonableness of the valuation of our fixed income portfolio. If, after this review, management does not believe the pricing for any security is a reasonable estimate of fair value, then it will seek to resolve the discrepancy through discussions with the independent pricing service. In its review, management did not identify any such discrepancies and no adjustments were made to the estimates provided by the independent pricing service for the three or six months ended June 30, 2023, or the year ended December 31, 2022. The classification within the fair value hierarchy is then confirmed based on the final conclusions from the pricing review. The valuation of cash equivalents and equity securities are generally based on Level 1 inputs, which use the market-approach valuation technique. The valuation of our fixed income securities generally incorporates significant Level 2 inputs using the market and income approach techniques. We may assign a lower level to inputs typically considered to be Level 2 based on our assessment of liquidity and relative level of uncertainty surrounding inputs. There were no assets or liabilities classified at Level 3 at June 30, 2023, or December 31, 2022. The following tables set forth our assets which are measured on a recurring basis by the level within the fair value hierarchy in which fair value measurements fall: June 30, 2023 Total Level 1 Level 2 Level 3 Fixed income securities: U.S. Government and agencies $ 9,032 $ — $ 9,032 $ — Obligations of states and political subdivisions 53,410 — 53,410 — Corporate securities 135,866 — 135,866 — Residential mortgage-backed securities 56,772 — 56,772 — Commercial mortgage-backed securities 25,463 — 25,463 — Asset-backed securities 48,351 — 48,351 — Redeemable preferred stock 4,095 — 4,095 — Total fixed income securities 332,989 — 332,989 — Equity securities: Common stock 22,807 22,807 — — Non-redeemable preferred stock 1,847 1,847 — — Total equity securities 24,654 24,654 — — Cash equivalents 34,004 34,004 — — Total assets at fair value $ 391,647 $ 58,658 $ 332,989 $ — December 31, 2022 Total Level 1 Level 2 Level 3 Fixed income securities: U.S. Government and agencies $ 10,167 $ — $ 10,167 $ — Obligations of states and political subdivisions 53,926 — 53,926 — Corporate securities 121,159 — 121,159 — Residential mortgage-backed securities 47,493 — 47,493 — Commercial mortgage-backed securities 26,135 — 26,135 — Asset-backed securities 40,725 — 40,725 — Redeemable preferred stock 3,719 — 3,719 — Total fixed income securities 303,324 — 303,324 — Equity securities: Common stock 50,699 50,699 — — Non-redeemable preferred stock 1,694 1,694 — — Total equity securities 52,393 52,393 — — Cash equivalents 27,255 27,255 — — Total assets at fair value $ 382,972 $ 79,648 $ 303,324 $ — There were no liabilities measured at fair value on a recurring basis at June 30, 2023, or December 31, 2022. |
Reinsurance
Reinsurance | 6 Months Ended |
Jun. 30, 2023 | |
Reinsurance [Abstract] | |
Reinsurance | 5. Reinsurance External Reinsurance The Company’s consolidated financial statements reflect the effects of assumed and ceded reinsurance transactions. Assumed reinsurance refers to the acceptance of certain insurance risks that other insurance companies have underwritten. Ceded reinsurance involves transferring certain insurance risks (along with the related written and earned premiums) the Company has underwritten to other insurance companies who agree to share these risks. The primary purpose of these agreements is to protect the Company, at a cost, from losses in excess of the amount it is prepared to accept and to protect the Company’s capital. Our ceded reinsurance is placed either on an automatic basis under general reinsurance contracts known as treaties or through facultative contracts placed on substantial individual risks. These contracts do not relieve the Company from its obligations to policyholders. During the six-month period ended June 30, 2023, the Company maintained property catastrophe reinsurance protection covering $133,000 in excess of a $20,000 retention. Additionally, per risk excess of loss treaties provided coverage of $4,000 in excess of $1,000 for property risks and $11,000 in excess of $1,000 for casualty risks, with facultative contracts in place to provide coverage up to $20,000 in excess of $5,000 per property. Aggregate stop loss reinsurance agreements were placed for both crop hail and multi-peril crop coverage. The crop hail aggregate attached at a 100% net loss ratio providing 50 points of cover. The multi-peril crop aggregate attached at a 105% net loss ratio providing 45 points of cover. In addition to the aggregate covers, underlying multi-peril crop reinsurance was provided through the Federal Crop Insurance Corporation (“FCIC”). During the year ended December 31, 2022, the Company maintained property catastrophe reinsurance protection covering $125,000 in excess of a $15,000 retention. Additionally, per risk excess of loss treaties provided coverage of $4,000 in excess of $1,000 for property risks and $11,000 in excess of $1,000 for casualty risks, with facultative contracts in place to provide coverage up to $20,000 in excess of $5,000 per property. Aggregate stop loss reinsurance agreements were placed for both crop hail and multi-peril crop coverage. The crop hail aggregate attached at a 100% net loss ratio providing 50 points of cover. The multi-peril crop aggregate attached at a 105% net loss ratio providing 45 points of cover. In addition to the aggregate covers, underlying multi-peril crop reinsurance was provided through the FCIC. The Company actively monitors and evaluates the financial condition of the reinsurers and develops estimates of the uncollectible amounts due from reinsurers. Beginning on December 31, 2022, credit losses are recognized through an allowance account developed using a new credit loss model (current expected credit losses or “CECL”). See the Part II, Item 8, Note 2 “Recent Accounting Pronouncements” section of the 2022 Annual Report for additional information. Credit loss estimates are made based on periodic evaluation of balances due from reinsurers, changes in reinsurer credit standing, judgments regarding reinsurers’ solvency, known disputes, reporting characteristics of the underlying reinsured business, historical experience, current economic conditions, and the state of reinsurer relations in general. Collection risk is mitigated by entering into reinsurance arrangements only with reinsurers that have strong credit ratings and statutory surplus above certain levels. At June 30, 2023, and December 31, 2022, management has concluded that it is not necessary to record an allowance for expected credit losses related to reinsurance recoverables. All of our significant reinsurance partners are rated “A-” (Excellent) or better by AM Best, and there is no history of write-offs. A reconciliation of direct to net premiums on both a written and an earned basis is as follows: Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Premiums Written Premiums Earned Premiums Written Premiums Earned Direct premium $ 144,250 $ 106,162 $ 234,806 $ 191,636 Assumed premium 2,440 827 2,839 1,403 Ceded premium (20,439 ) (12,843 ) (28,898 ) (21,266 ) Net premiums $ 126,251 $ 94,146 $ 208,747 $ 171,773 Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 Premiums Written Premiums Earned Premiums Written Premiums Earned Direct premium $ 144,962 $ 94,251 $ 220,495 $ 167,650 Assumed premium 3,226 1,691 5,087 3,552 Ceded premium (20,175 ) (11,446 ) (25,835 ) (17,119 ) Net premiums $ 128,013 $ 84,496 $ 199,747 $ 154,083 A reconciliation of direct to net losses and loss adjustment expenses is as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Direct losses and loss adjustment expenses $ 95,149 $ 110,670 $ 166,010 $ 156,165 Assumed losses and loss adjustment expenses 67 1,535 157 1,545 Ceded losses and loss adjustment expenses (17,710 ) (3,610 ) (29,836 ) (8,986 ) Net losses and loss adjustment expenses $ 77,506 $ 108,595 $ 136,331 $ 148,724 If 100% of our ceded reinsurance was cancelled as of June 30, 2023, or December 31, 2022, no ceded commissions would need to be returned to the reinsurers. Reinsurance contracts are typically effective from January 1 through December 31 each year. Intercompany Reinsurance Pooling Arrangement Effective January 1, 2020, all of our insurance subsidiary and affiliate companies entered into an intercompany reinsurance pooling agreement. Nodak Insurance is the lead company of the pool, and assumes the net premiums, net losses, and underwriting expenses from each of the other five companies. Nodak Insurance then retrocedes balances back to each company, while retaining its own share of the pool’s net underwriting results, based on individual pool percentages established in the respective pooling agreement. This arrangement allows each insurance company to rely upon the capacity of the pool’s total statutory capital and surplus. As a result, they are evaluated by AM Best on a group basis and hold a single combined financial strength rating, long-term issuer credit rating, and financial size category. For the six months ended June 30, 2023, and the year ended December 31, 2022, the pooling share percentages by insurance company were: Pool Percentage Nodak Insurance Company 66.0% American West Insurance Company 7.0% Primero Insurance Company 3.0% Battle Creek Mutual Insurance Company 2.0% Direct Auto Insurance Company 13.0% Westminster American Insurance Company 9.0% Total 100.0% |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs | 6 Months Ended |
Jun. 30, 2023 | |
ASU 2018-12 Transition [Abstract] | |
Deferred Policy Acquisition Costs | 6. Deferred Policy Acquisition Costs Expenses directly related to successfully acquired insurance policies, primarily commissions, premium taxes and underwriting costs, are deferred and amortized over the terms of the policies. We update our acquisition cost assumptions periodically to reflect actual experience, and we evaluate the costs for recoverability. The table below shows the deferred policy acquisition costs and asset reconciliation: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Balance, beginning of period $ 31,350 $ 26,272 $ 29,768 $ 24,947 Deferral of policy acquisition costs 23,353 20,889 43,523 37,837 Amortization of deferred policy acquisition costs (20,579 ) (16,244 ) (39,167 ) (31,867 ) Balance, end of period $ 34,124 $ 30,917 $ 34,124 $ 30,917 |
Unpaid Losses and Loss Adjustme
Unpaid Losses and Loss Adjustment Expenses | 6 Months Ended |
Jun. 30, 2023 | |
Reinsurance [Abstract] | |
Unpaid Losses and Loss Adjustment Expenses | 7. Unpaid Losses and Loss Adjustment Expenses Activity in the liability for unpaid losses and loss adjustment expenses is summarized as follows: Six Months Ended June 30, 2023 2022 Balance, beginning of period: Liability for unpaid losses and loss adjustment expenses $ 190,459 $ 139,662 Reinsurance recoverables on losses 37,575 21,200 Net balance, beginning of period 152,884 118,462 Incurred related to: Current year 126,854 157,214 Prior years 9,477 (8,490 ) Total incurred 136,331 148,724 Paid related to: Current year 50,010 59,634 Prior years 60,675 41,717 Total paid 110,685 101,351 Balance, end of period: Liability for unpaid losses and loss adjustment expenses 232,038 182,876 Reinsurance recoverables on losses 53,508 17,041 Net balance, end of period $ 178,530 $ 165,835 During the six months ended June 30, 2023, the Company’s incurred reported losses and loss adjustment expenses included $9,477 of net unfavorable development on prior accident years, primarily attributable to Direct Auto and Westminster. During the six months ended June 30, 2022, the Company’s incurred reported losses and loss adjustment expenses included $8,490 of net favorable development on prior accident years, primarily attributable to Direct Auto, Battle Creek, and American West. Changes in unpaid losses and loss adjustment expense reserves are generally the result of ongoing analysis of recent loss development trends. As additional information becomes known regarding individual claims, original estimates are increased or decreased accordingly. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2023 | |
Property and Equipment [Abstract] | |
Property and Equipment | 8. Property and Equipment Property and equipment consisted of the following: June 30, 2023 December 31, 2022 Estimated Useful Life Cost: Land $ 1,403 $ 1,403 indefinite Building and improvements 14,491 14,271 10 – 43 years Electronic data processing equipment 1,637 1,310 5 – 7 years Furniture and fixtures 2,968 2,919 5 – 7 years Automobiles 1,317 1,310 2 – 3 years Gross cost 21,816 21,213 Accumulated depreciation (11,540 ) (11,370 ) Total property and equipment, net $ 10,276 $ 9,843 Depreciation expense was $188 and $176 for the three months ended June 30, 2023 and 2022, respectively, and $370 and $344 for the six months ended June 30, 2023 and 2022, respectively. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | 9. Goodwill and Other Intangibles Goodwill The following table presents the carrying amount of the Company’s goodwill by segment: June 30, 2023 December 31, 2022 Non-standard auto from acquisition of Primero $ 2,628 $ 2,628 Commercial from acquisition of Westminster 6,756 6,756 Total $ 9,384 $ 9,384 Other Intangible Assets The following table presents the carrying amount of the Company’s other intangible assets: June 30, 2023 Gross Carrying Accumulated Net Subject to amortization: Trade names $ 748 $ 415 $ 333 Distribution network 6,700 1,303 5,397 Total subject to amortization 7,448 1,718 5,730 Not subject to amortization: State insurance licenses 1,900 — 1,900 Total $ 9,348 $ 1,718 $ 7,630 December 31, 2022 Gross Carrying Accumulated Net Subject to amortization: Trade names $ 748 $ 365 $ 383 Distribution network 6,700 1,117 5,583 Total subject to amortization 7,448 1,482 5,966 Not subject to amortization: State insurance license 1,900 — 1,900 Total $ 9,348 $ 1,482 $ 7,866 Amortization expense was $118 and $118 for the three months ended June 30, 2023 and 2022, respectively, and $236 and $236 for the six months ended June 30, 2023 and 2022, respectively. Other intangible assets that have finite lives, including trade names and distribution networks, are amortized over their useful lives. As of June 30, 2023, the estimated amortization of other intangible assets with finite lives for each of the five years in the period ending December 31, 2027, and thereafter is as follows: Year ending December 31, 2023 (six months remaining) $ 219 2024 422 2025 422 2026 422 2027 422 Thereafter 3,823 Total other intangible assets with finite lives $ 5,730 |
Royalties, Dividends, and Affil
Royalties, Dividends, and Affiliations | 6 Months Ended |
Jun. 30, 2023 | |
Royalties, Dividends, and Affiliations [Member] | |
Royalties, Dividends, and Affiliations | 10. Royalties, Dividends, and Affiliations North Dakota Farm Bureau Nodak Insurance was organized by the North Dakota Farm Bureau (“NDFB”) to provide insurance protection for its members. We have a royalty agreement with the NDFB that recognizes the use of their trademark and provides royalties to the NDFB based on the premiums written on Nodak Insurance’s policies. Royalties paid to the NDFB were $442 and $405 during the three months ended June 30, 2023 and 2022, respectively, and $799 and $744 for the six months ended June 30, 2023 and 2022, respectively. Royalty amounts payable of $167 and $119 were accrued as a liability to the NDFB at June 30, 2023, and December 31, 2022, respectively. Dividends State insurance laws require our insurance subsidiaries to maintain certain minimum capital and surplus amounts on a statutory basis. Our insurance subsidiaries are subject to regulations that restrict the payment of dividends from statutory surplus and may require prior approval from their domiciliary insurance regulatory authorities. Our insurance subsidiaries are also subject to risk-based capital requirements that may further affect their ability to pay dividends. Our insurance subsidiaries statutory capital and surplus at December 31, 2022, exceeded the amount of statutory capital and surplus necessary to satisfy risk-based capital requirements by a significant margin. For information regarding the availability of subsidiaries to pay dividends to NI Holdings during 2023, see Item II, Part 8, Note 12 “Related Party Transactions” section of the 2022 Annual Report. Battle Creek Mutual Insurance Company The following tables disclose the standalone balance sheets and statements of operations of Battle Creek, prior to intercompany eliminations, to illustrate the impact of including Battle Creek in our Consolidated Balance Sheets and Statements of Operations: June 30, 2023 December 31, 2022 Assets: Cash and cash equivalents $ 4,321 $ 5,008 Investments 13,931 13,350 Premiums and agents’ balances receivable 5,606 5,422 Deferred policy acquisition costs 682 595 Reinsurance recoverables on losses (2) 12,641 12,597 Accrued investment income 60 59 Income tax recoverable — 225 Deferred income taxes 800 780 Property and equipment 313 319 Other assets 61 52 Total assets $ 38,415 $ 38,407 Liabilities: Unpaid losses and loss adjustment expenses $ 5,218 $ 6,453 Unearned premiums 3,698 2,959 Notes payable (1) 3,000 3,000 Pooling payable (1) 7,699 8,337 Reinsurance losses payable (2) 13,783 13,125 Accrued expenses and other liabilities 3,083 2,303 Total liabilities 36,481 36,177 Equity: Non-controlling interest 1,934 2,230 Total equity 1,934 2,230 Total liabilities and equity $ 38,415 $ 38,407 (1) Amount fully eliminated in consolidation. (2) Amount partly eliminated in consolidation. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenues: Net premiums earned $ 1,882 $ 1,690 $ 3,435 $ 3,082 Fee and other income (expenses) 7 (2 ) 17 (7 ) Net investment income 80 27 147 40 Total revenues 1,969 1,715 3,599 3,115 Expenses: Losses and loss adjustment expenses 1,550 2,171 2,727 2,974 Amortization of deferred policy acquisition costs 411 325 783 637 Other underwriting and general expenses 155 157 318 274 Total expenses 2,116 2,653 3,828 3,885 Loss before income taxes (147 ) (938 ) (229 ) (770 ) Income tax expense (benefit) (34 ) (212 ) 174 (174 ) Net loss $ (113 ) $ (726 ) $ (403 ) $ (596 ) |
Benefit Plans
Benefit Plans | 6 Months Ended |
Jun. 30, 2023 | |
Benefit Plans [Abstract] | |
Benefit Plans | 11. Benefit Plans Nodak Insurance sponsors a 401(k) plan with an automatic and matching contribution for eligible employees at Nodak Insurance, Primero, and Direct Auto. Westminster also sponsors a separate 401(k) plan. American West and Battle Creek have no employees. The Company reported expenses related to the 401(k) plans totaling $189 and $187 during the three months ended June 30, 2023 and 2022, respectively, and $378 and $335 during the six months ended June 30, 2023 and 2022, respectively. Nodak Insurance also contributes an additional elective amount of employee compensation as a profit-sharing contribution for eligible employees that is invested in a portfolio of investments directed by the Company. The reported expenses related to this profit-sharing contribution were $32 and $242 during the three months ended June 30, 2023 and 2022, respectively, and $281 and $432 during the six months ended June 30, 2023 and 2022, respectively. All fees associated with the plans are deducted from the eligible employee accounts. The Company also offers a non-qualified deferred compensation plan to key executives of the Company (as designated by the Board of Directors). The Company’s policy is to fund the plan by amounts that represent the excess of the maximum contribution allowed by the Employee Retirement Income Security Act over the key executives’ allowable 401(k) contribution. The plan also allows employee-directed deferral of key executives’ compensation or incentive payments. The Company reported expenses related to this plan totaling $76 and $23 during the three months ended June 30, 2023 and 2022, respectively, and $98 and $127 during the six months ended June 30, 2023 and 2022, respectively. In connection with our initial public offering (“IPO”) in March 2017, the Company established its Employee Stock Ownership Plan (the “ESOP”). The ESOP is intended to be an employee stock ownership plan within the meaning of Internal Revenue Code Section 4975(e)(7) and invests solely in common stock of the Company. Upon establishment of the ESOP, Nodak Insurance loaned $2,400 to the ESOP’s related trust (the “ESOP Trust”). The ESOP loan was for a period of ten The shares purchased by the ESOP Trust in the offering are held in a suspense account as collateral for the ESOP loan. Nodak Insurance makes semi-annual cash contributions to the ESOP in amounts no smaller than the amounts required for the ESOP Trust to make its loan payments to Nodak Insurance. While the ESOP makes two loan payments per year, a pre-determined portion of the shares are released from the suspense account and allocated to participant accounts at the end of the calendar year. This release and allocation occurs on an annual basis over the ten-year term of the ESOP loan. Nodak Insurance has a lien on the shares of common stock of the Company held by the ESOP to secure repayment of the loan from the ESOP to Nodak Insurance. If the ESOP is terminated as a result of a change in control of the Company, the ESOP may be required to pay the costs of terminating the plan. It is anticipated that the only assets held by the ESOP will be shares of the Company’s common stock. Participants in the ESOP cannot direct the investment of any assets allocated to their accounts. The ESOP participants are employees of Nodak Insurance. The employees of Primero, Direct Auto, and Westminster do not participate in the ESOP. Each employee of Nodak Insurance automatically becomes a participant in the ESOP if such employee is at least 21 years old, has completed a minimum of one thousand hours of service with Nodak Insurance, and has completed an Eligibility Computation Period. Employees are not permitted to make any contributions to the ESOP. Participants in the ESOP receive annual reports from the Company showing the number of shares of common stock of the Company allocated to the participants’ accounts and the market value of those shares. The shares are allocated to participants based on compensation as provided for in the ESOP. In connection with the establishment of the ESOP, the Company created a contra-equity account on the Consolidated Balance Sheet equal to the ESOP’s basis in the shares. The basis of those shares was set at $10.00 per share as part of the IPO. As shares are released from the ESOP suspense account, the contra-equity account is credited, which reduces the impact of the contra-equity account on the Company’s Consolidated Balance Sheet over time. The Company records compensation expense related to the shares released, equal to the number of shares released from the suspense account multiplied by the average market value of the Company’s stock during the period. The Company recognized compensation expense related to the ESOP of $83 and $101 during the three months ended June 30, 2023 and 2022, respectively, and $164 and $210 during the six months ended June 30, 2023 and 2022, respectively. Through June 30, 2023, and December 31, 2022, the Company had released and allocated 145,890 ESOP shares to participants, with a remainder of 94,110 ESOP shares in suspense at June 30, 2023, and December 31, 2022. Using the Company’s quarter-end market price of $14.85 per share, the fair value of the unearned ESOP shares was $1,398 at June 30, 2023. |
Line of Credit
Line of Credit | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Line of Credit | 12. Line of Credit Nodak Insurance has a $5,000 line of credit with Wells Fargo Bank, N.A. The terms of the line of credit include a floating interest rate of the bank’s Prime Rate with a floor rate of 3.25%. There were no |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Taxes [Abstract] | |
Income Taxes | 13. Income Taxes At June 30, 2023, and December 31, 2022, we had no unrecognized tax benefits, no accrued interest and penalties, and no significant uncertain tax positions. No interest and penalties were recognized during the three- and six-month periods ended June 30, 2023 or the year ended December 31, 2022. At June 30, 2023, and December 31, 2022, the Company, other than Battle Creek and Westminster, had no income tax related carryforwards for net operating losses, alternative minimum tax credits, or capital losses. Battle Creek, which files its income tax returns on a stand-alone basis, had net operating loss carryforwards of $3,963 at December 31, 2022. These net operating loss carryforwards expire through 2032. Westminster, which became part of the Company’s consolidated federal income tax return beginning in 2020, had a $1,270 net operating loss carryforward at December 31, 2022. This net operating loss carryforward expires in 2023. As of June 30, 2023, federal income tax years 2019 through 2021 remain open for examination. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | 14. Leases Primero leases a facility in Spearfish, South Dakota under a non-cancellable operating lease expiring in 2028, and leases a facility in Las Vegas, Nevada on a month-to-month basis. Direct Auto leases a facility in Chicago, Illinois under a non-cancellable operating lease expiring in 2029. Nodak Insurance leases a facility in Fargo, North Dakota under a non-cancellable operating lease expiring in 2024. Effective for the year ended December 31, 2022, the Company adopted the updated guidance for leases. This guidance was adopted in the fourth quarter of 2022, and accordingly, the expense amounts for the periods ended June 30, 2023, are not comparable to the periods ended June 30, 2022. See Part II, Item 8, Note 2 “Recent Accounting Pronouncements” in the 2022 Annual Report for additional information. Under the new guidance, lease expense for these operating leases is recognized on a straight-line basis over the term of the lease, and a right-of-use asset and lease liability is recognized as part of other assets and other liabilities, respectively, in the Consolidated Balance Sheet at the origination of the lease. We currently do not have leases that include options to purchase or provisions that would automatically transfer ownership of the leased property to the Company. We determine whether a contract is or contains a lease at the inception of the contract. A contract will be deemed to be or contain a lease if the contract conveys the right to control and directs the use of identified property or equipment for a period of time in exchange for consideration. We generally must also have the right to obtain substantially all of the economic benefits from the use of the property and equipment. Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates based on the floating interest rate on our Line of Credit with Wells Fargo Bank, N.A. at the lease commencement date, as rates are not implicitly stated in most leases. Additional information regarding our operating leases are as follows: As of and For the Three Months As of and For the Six Months 2023 2022 2023 2022 Operating lease expense $ 98 $ 98 $ 196 $ 196 Other information on operating leases: Operating cash outflow from operating leases 103 69 204 137 Right-of-use assets obtained in exchange for new lease liabilities 247 — 247 — Weighted average discount rate 3.95% 3.25% 3.95% 3.25% Weighted average remaining lease term in years 5.8 years 6.6 years 5.8 years 6.6 years The following table presents the contractual maturities of our operating leases for each of the five years in the period ending December 31, 2027, and thereafter, reconciled to our operating lease liability at June 30, 2023: Year ending December 31, 2023 (six months remaining) $ 195 2024 381 2025 346 2026 351 2027 356 Thereafter 509 Total undiscounted lease payments 2,138 Less: present value adjustment 219 Operating lease liability at June 30, 2023 $ 1,919 |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 15. Contingencies We have been named as a defendant in various lawsuits relating to our insurance operations. Contingent liabilities arising from litigation, income taxes, and other matters are not considered to be material to our financial position. |
Common and Preferred Stock
Common and Preferred Stock | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Common and Preferred Stock | 16. Common and Preferred Stock Changes in the number of common stock shares outstanding are as follows: Six Months Ended June 30, 2023 2022 Shares outstanding, beginning of period 21,076,255 21,219,808 Treasury shares repurchased through stock repurchase authorization (238,164 ) (111,244 ) Issuance of treasury shares for vesting of restricted stock units 47,887 101,292 Shares outstanding, end of period 20,885,978 21,209,856 The changes in the number of common shares outstanding excludes certain non-forfeitable stock award shares that are included in the weighted average common shares outstanding used in basic earnings per common share calculations. In addition, the net loss per diluted common share for the three- and six-month periods ended June 30, 2023, excluded the weighted average effects of 61,935 and 61,614 shares of stock awards, respectively, since the impacts of these potential shares of common stock were anti-dilutive. On August 11, 2021, our Board of Directors approved an authorization for the repurchase of up to approximately $5,000 of the Company’s outstanding common stock. During the year ended December 31, 2021, we completed the repurchase of 81,095 shares of our common stock for $1,554 under this authorization. During the year ended December 31, 2022, we completed the repurchase of 214,937 shares of our common stock for $3,446 to close out this authorization. Of these amounts, 111,244 shares were repurchased for $1,932 during the six months ended June 30, 2022. On May 9, 2022, our Board of Directors approved an authorization for the repurchase of up to approximately $10,000 of the Company’s outstanding common stock. During the year ended December 31, 2022, we completed the repurchase of 54,223 shares of our common stock for $734 under this authorization. During the six months ended June 30, 2023, we completed the repurchase of 238,164 shares of our common stock for $3,223. At June 30, 2023, $6,043 remains available under this authorization. The cost of this treasury stock is a reduction of shareholders’ equity within our Consolidated Balance Sheets. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (“IRA”) which, among other changes, created a new corporate alternative minimum tax (“AMT”) based on adjusted financial statement income and imposes a 1% excise tax on corporate stock repurchases, subject to certain adjustments. The effective date of these provisions was January 1, 2023. The Company is not currently subject to the AMT based on our reported GAAP earnings for the past three years and does not expect the IRA to have a material impact on the Company’s financial position and results of operations. Preferred Stock The Company’s Articles of Incorporation provide authority to issue up to five million shares of preferred stock. No preferred shares are issued or outstanding. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | 17. Share-Based Compensation The NI Holdings, Inc. 2020 Stock and Incentive Plan (the “Plan”) is designed to promote the interests of the Company and its shareholders by aiding the Company in attracting and retaining employees, officers, consultants, independent contractors, advisors, and non-employee directors capable of assuring the future success of the Company, to offer such persons incentives to put forth maximum efforts for the success of the Company’s business, and to afford such persons an opportunity to acquire an ownership interest in the Company, thereby aligning the interests of such persons with the Company’s shareholders. The Plan provides for the grant of nonqualified stock options, incentive stock options, restricted stock units (“RSUs”), stock appreciation rights, dividend equivalents, and performance share units (“PSUs”) to employees, officers, consultants, advisors, non-employee directors, and independent contractors designated by the Compensation Committee of the Board of Directors (the “Compensation Committee”). Awards made under the Plan are based upon, among other things, a participant’s level of responsibility and performance within the Company. The total aggregate number of shares of common stock that may be issued under the Plan shall not exceed 1,000,000 shares, subject to adjustments as provided in the Plan. No eligible participant may be granted any awards for more than 100,000 shares in the aggregate in any calendar year, subject to adjustment in accordance with the Plan. The aggregate amount payable pursuant to all performance awards denominated in cash to any eligible person in any calendar year is limited to $1,000 in value. Directors who are not also employees of the Company may not be granted awards denominated in shares that exceed $150 in any calendar year. Restricted Stock Units The Compensation Committee has awarded RSUs to non-employee directors and select executives. RSUs are promises to issue actual shares of common stock at the end of a vesting period. The RSUs granted to executives under the Plan were based on salary and vest 20% per year over a five-year period, while RSUs granted to non-employee directors vest 100% on the date of the next annual meeting of shareholders following the grant date. Dividend equivalents on RSUs are accrued during the vesting period and paid in cash at the end of the vesting period but are subject to forfeiture until the underlying shares become vested. Participants do not have voting rights with respect to RSUs. The Company recognizes stock-based compensation costs for RSUs based on the grant date fair value. The compensation costs are normally expensed over the vesting periods to each vesting date; however, the cost of RSUs granted to executives are expensed immediately if the executive has met certain retirement criteria and the RSUs become non-forfeitable. Estimated forfeitures are included in the determination of compensation costs. No forfeitures are currently estimated. A summary of the Company’s outstanding and unearned RSUs is presented below: RSUs Weighted-Average Units outstanding and unearned at January 1, 2022 108,380 $ 16.86 RSUs granted during 2022 59,600 17.61 RSUs earned during 2022 (52,620 ) 17.39 Units outstanding and unearned at December 31, 2022 115,360 17.00 RSUs granted during 2023 85,000 13.76 RSUs earned during 2023 (53,780 ) 16.32 Units outstanding and unearned at June 30, 2023 146,580 15.37 The following table shows the impact of RSU activity to the Company’s financial results: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 RSU compensation expense $ 257 $ 225 $ 559 $ 498 Income tax benefit (58 ) (51 ) (127 ) (113 ) RSU compensation expense, net of income taxes $ 199 $ 174 $ 432 $ 385 At June 30, 2023, there was $1,427 of unrecognized compensation cost related to outstanding RSUs. That cost is expected to be recognized over a weighted-average period of 1.84 years. Performance Share Units The Compensation Committee has awarded PSUs to select executives. PSUs are promises to issue actual shares of common stock at the end of a vesting period if certain performance conditions are met. The PSUs granted to employees under the Plan were based on salary and include a three-year adjusted book value cumulative growth target with threshold and stretch goals. They will vest on the third anniversary of the grant date, subject to the participant’s continuous employment through the vesting date and the level of performance achieved. Dividend equivalents on PSUs are accrued and paid in cash at the end of the performance period in accordance with the level of performance achieved but are subject to forfeiture until the underlying shares become vested. Participants do not have voting rights with respect to PSUs. The Company recognizes stock-based compensation costs for PSUs based on the grant date fair value over the performance period of the awards. Estimated forfeitures are included in the determination of compensation costs. The current cost estimates represent the Company’s forecasted performance against cumulative growth targets. A summary of the Company’s outstanding PSUs is presented below: PSUs Weighted-Average Fair Value Per Share Units outstanding at January 1, 2022 190,600 $ 16.06 PSUs granted during 2022 (at target) 61,800 18.10 PSUs earned during 2022 (86,684 ) 15.21 Performance adjustment (1) 31,200 15.21 Forfeitures (6,916 ) 15.21 Units outstanding at December 31, 2022 190,000 17.00 PSUs granted during 2023 (at target) 87,400 13.85 PSUs earned during 2023 — — Performance adjustment (1) (63,600 ) 14.26 Forfeitures — — Units outstanding at June 30, 2023 213,800 16.53 (1) The following table shows the impact of PSU activity to the Company’s financial results: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 PSU compensation expense $ 139 $ 262 $ 277 $ 523 Income tax benefit (32 ) (60 ) (63 ) (119 ) PSU compensation expense, net of income taxes $ 107 $ 202 $ 214 $ 404 The cost estimates for PSU grants represent initial target awards until we can reasonably forecast the financial performance of each PSU award grant. At the end of the performance period, we will reflect a performance adjustment, which may be either an increase or decrease from the initial target awards. The actual number of shares to be issued at the end of the performance period will range from 0% to 150% of the initial target awards. At June 30, 2023, there was $1,316 of unrecognized compensation cost related to outstanding PSUs. That cost is expected to be recognized over a weighted-average period of 2.44 years. |
Allowance for Expected Credit L
Allowance for Expected Credit Losses | 6 Months Ended |
Jun. 30, 2023 | |
Allowance for Expected Credit Losses [Abstract] | |
Allowance for Expected Credit Losses | 18. Allowance for Expected Credit Losses Premiums Receivable Beginning on December 31, 2022, credit losses are recognized through an allowance account developed using the new CECL model. This guidance was adopted in the fourth quarter of 2022, and accordingly, there was no allowance for expected credit losses as of June 30, 2022. See the Part II, Item 8, Note 2 “Recent Accounting Pronouncements” section of the 2022 Annual Report for additional information. The following table presents the balances of premiums and agents’ receivable balances, net of the allowance for expected credit losses as of June 30, 2023, and the changes in the allowance for expected credit losses for the three and six months ended June 30, 2023. As of and For the Three Months Ended Premiums Allowance for Balance, beginning of period $ 64,502 $ 445 Current period charge for expected credit losses 189 Write-offs of uncollectible premiums receivable 200 Balance, end of period $ 106,946 $ 434 As of and For the Six Months Ended Premiums Allowance for Balance, beginning of period $ 62,173 $ 425 Current period charge for expected credit losses 278 Write-offs of uncollectible premiums receivable 269 Balance, end of period $ 106,946 $ 434 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | 19. Segment Information We have six reportable operating segments, which consist of private passenger auto insurance, non-standard auto insurance, home and farm insurance, crop insurance, commercial insurance, and all other (which primarily consists of assumed reinsurance and our excess liability business). We operate only in the U.S., and no single customer or agent provides 10 percent or more of our revenues. The following tables provide available information of these segments for the three- and six-month periods ended June 30, 2023 and 2022. For purposes of evaluating profitability of the non-standard auto segment, we combine the policy fees paid by the insured with the underwriting gain or loss as its primary measure. As a result, these fees are allocated to the non-standard auto segment (included in fee and other income) in the tables below. The remaining fee and other income amounts are not allocated to any segment. We do not assign or allocate all line items in our Unaudited Consolidated Statement of Operations or Unaudited Consolidated Balance Sheet to our operating segments. Those line items include investment income, net investment gains (losses), fee and other income excluding non-standard auto, and income tax expense (benefit) within the Unaudited Consolidated Statement of Operations. For the Unaudited Consolidated Balance Sheet, those items include cash and investments, property and equipment, other assets, accrued expenses, income taxes recoverable or payable, and shareholders’ equity. Three Months Ended June 30, 2023 Private Non-Standard Home and Crop Commercial All Other Total Direct premiums earned $ 21,508 $ 21,744 $ 22,995 $ 17,526 $ 21,076 $ 1,313 $ 106,162 Assumed premiums earned — — — 501 — 326 827 Ceded premiums earned (965 ) (99 ) (2,580 ) (4,691 ) (4,435 ) (73 ) (12,843 ) Net premiums earned 20,543 21,645 20,415 13,336 16,641 1,566 94,146 Direct losses and loss adjustment expenses 18,455 14,139 18,414 12,702 29,685 1,754 95,149 Assumed losses and loss adjustment expenses — — — — — 67 67 Ceded losses and loss adjustment expenses 411 — (499 ) (4,492 ) (11,556 ) (1,574 ) (17,710 ) Net losses and loss adjustment expenses 18,866 14,139 17,915 8,210 18,129 247 77,506 Gross margin 1,677 7,506 2,500 5,126 (1,488 ) 1,319 16,640 Underwriting and general expenses 5,754 8,684 6,150 2,648 6,249 389 29,874 Underwriting gain (loss) (4,077 ) (1,178 ) (3,650 ) 2,478 (7,737 ) 930 (13,234 ) Fee and other income 239 499 (939 ) Net investment income 2,505 Net investment gains (losses) (174 ) Loss before income taxes (10,404 ) Income tax benefit (2,169 ) Net loss (8,235 ) Net loss attributable to non-controlling interest (113 ) Net loss attributable to NI Holdings, Inc. $ (8,122 ) Operating Ratios: Loss and loss adjustment expense ratio 91.8% 65.3% 87.8% 61.6% 108.9% 15.8% 82.3% Expense ratio 28.0% 40.1% 30.1% 19.9% 37.6% 24.8% 31.7% Combined ratio 119.8% 105.4% 117.9% 81.5% 146.5% 40.6% 114.0% Balances at June 30, 2023: Premiums and agents’ balances receivable $ 23,840 $ 10,322 $ 9,793 $ 44,951 $ 17,213 $ 827 $ 106,946 Deferred policy acquisition costs 5,785 8,871 7,974 2,832 8,198 464 34,124 Reinsurance recoverables on losses 727 — 4,691 3,114 42,635 2,341 53,508 Receivable from Federal Crop Insurance Corporation — — — 14,032 — — 14,032 Goodwill and other intangibles — 2,736 — — 14,278 — 17,014 Unpaid losses and loss adjustment expenses 31,935 52,866 30,503 11,603 96,390 8,741 232,038 Unearned premiums 35,317 28,067 48,690 27,193 43,066 3,017 185,350 Three Months Ended June 30, 2022 Private Non-Standard Home and Crop Commercial All Other Total Direct premiums earned $ 19,824 $ 15,577 $ 21,703 $ 17,709 $ 18,161 $ 1,277 $ 94,251 Assumed premiums earned — — — 491 — 1,200 1,691 Ceded premiums earned (559 ) (65 ) (1,748 ) (5,905 ) (3,130 ) (39 ) (11,446 ) Net premiums earned 19,265 15,512 19,955 12,295 15,031 2,438 84,496 Direct losses and loss adjustment expenses 16,866 4,133 62,188 13,237 13,081 1,165 110,670 Assumed losses and loss adjustment expenses — — — 244 — 1,291 1,535 Ceded losses and loss adjustment expenses (12 ) — (357 ) (3,151 ) (90 ) — (3,610 ) Net losses and loss adjustment expenses 16,854 4,133 61,831 10,330 12,991 2,456 108,595 Gross margin 2,411 11,379 (41,876 ) 1,965 2,040 (18 ) (24,099 ) Underwriting and general expenses 5,553 6,867 6,056 1,609 5,576 585 26,246 Underwriting gain (loss) (3,142 ) 4,512 (47,932 ) 356 (3,536 ) (603 ) (50,345 ) Fee and other income 254 415 4,766 Net investment income 2,015 Net investment gains (losses) (11,136 ) Loss before income taxes (59,051 ) Income tax benefit (12,415 ) Net loss (46,636 ) Net loss attributable to non-controlling interest (726 ) Net loss attributable to NI Holdings, Inc. $ (45,910 ) Operating Ratios: Loss and loss adjustment expense ratio 87.5% 26.6% 309.9% 84.0% 86.4% 100.7% 128.5% Expense ratio 28.8% 44.3% 30.3% 13.1% 37.1% 24.0% 31.1% Combined ratio 116.3% 70.9% 340.2% 97.1% 123.5% 124.7% 159.6% Balances at June 30, 2022: Premiums and agents’ balances receivable $ 21,287 $ 16,678 $ 10,468 $ 42,905 $ 16,175 $ 823 $ 108,336 Deferred policy acquisition costs 5,427 8,201 7,838 1,060 7,929 462 30,917 Reinsurance recoverables on losses 591 — 2,766 1,976 10,960 748 17,041 Goodwill and other intangibles — 2,786 — — 14,700 — 17,486 Unpaid losses and loss adjustment expenses 29,105 38,689 49,052 12,755 43,876 9,399 182,876 Unearned premiums 31,885 24,030 45,942 26,205 42,379 3,284 173,725 Payable to Federal Crop Insurance Corporation — — — 7,102 — — 7,102 Six Months Ended June 30, 2023 Private Non-Standard Home and Crop Commercial All Other Total Direct premiums earned $ 42,050 $ 42,716 $ 45,426 $ 17,516 $ 41,306 $ 2,622 $ 191,636 Assumed premiums earned — — — 501 — 902 1,403 Ceded premiums earned (1,853 ) (192 ) (5,021 ) (5,405 ) (8,648 ) (147 ) (21,266 ) Net premiums earned 40,197 42,524 40,405 12,612 32,658 3,377 171,773 Direct losses and loss adjustment expenses 34,080 31,177 27,937 12,032 59,007 1,777 166,010 Assumed losses and loss adjustment expenses — — — — — 157 157 Ceded losses and loss adjustment expenses 412 — (1,303 ) (4,596 ) (22,764 ) (1,585 ) (29,836 ) Net losses and loss adjustment expenses 34,492 31,177 26,634 7,436 36,243 349 136,331 Gross margin 5,705 11,347 13,771 5,176 (3,585 ) 3,028 35,442 Underwriting and general expenses 12,172 17,677 12,355 2,680 12,336 898 58,118 Underwriting gain (loss) (6,467 ) (6,330 ) 1,416 2,496 (15,921 ) 2,130 (22,676 ) Fee and other income 471 773 (5,859 ) Net investment income 4,744 Net investment gains (losses) 1,242 Loss before income taxes (15,917 ) Income tax benefit (3,182 ) Net loss (12,735 ) Net loss attributable to non-controlling interest (403 ) Net loss attributable to NI Holdings, Inc. $ (12,332 ) Operating Ratios: Loss and loss adjustment expense ratio 85.8% 73.3% 65.9% 59.0% 111.0% 10.3% 79.4% Expense ratio 30.3% 41.6% 30.6% 21.2% 37.8% 26.6% 33.8% Combined ratio 116.1% 114.9% 96.5% 80.2% 148.8% 36.9% 113.2% Six Months Ended June 30, 2022 Private Non-Standard Home and Crop Commercial All Other Total Direct premiums earned $ 39,125 $ 30,019 $ 42,882 $ 17,692 $ 35,391 $ 2,541 $ 167,650 Assumed premiums earned — — — 491 — 3,061 3,552 Ceded premiums earned (1,118 ) (129 ) (3,715 ) (5,901 ) (6,172 ) (84 ) (17,119 ) Net premiums earned 38,007 29,890 39,167 12,282 29,219 5,518 154,083 Direct losses and loss adjustment expenses 31,392 12,624 69,380 13,134 28,144 1,491 156,165 Assumed losses and loss adjustment expenses — — — 244 — 1,301 1,545 Ceded losses and loss adjustment expenses 173 — (709 ) (3,214 ) (5,136 ) (100 ) (8,986 ) Net losses and loss adjustment expenses 31,565 12,624 68,671 10,164 23,008 2,692 148,724 Gross margin 6,442 17,266 (29,504 ) 2,118 6,211 2,826 5,359 Underwriting and general expenses 11,321 12,958 12,029 1,057 10,912 1,373 49,650 Underwriting gain (loss) (4,879 ) 4,308 (41,533 ) 1,061 (4,701 ) 1,453 (44,291 ) Fee and other income 642 843 4,950 Net investment income 3,668 Net investment gains (losses) (16,664 ) Loss before income taxes (56,444 ) Income tax benefit (11,847 ) Net loss (44,597 ) Net loss attributable to non-controlling interest (596 ) Net loss attributable to NI Holdings, Inc. $ (44,001 ) Operating Ratios: Loss and loss adjustment expense ratio 83.1% 42.2% 175.3% 82.8% 78.7% 48.8% 96.5% Expense ratio 29.8% 43.4% 30.7% 8.6% 37.3% 24.9% 32.2% Combined ratio 112.8% 85.6% 206.0% 91.4% 116.1% 73.7% 128.7% |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. All material intercompany transactions and balances have been eliminated. These financial statements should be read in conjunction with the financial statements and notes thereto included in our 2022 Annual Report. The Consolidated Balance Sheet at December 31, 2022, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of the interim unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim unaudited consolidated financial statements and the reported amounts of revenues, claims, and expenses during the reporting period. Actual results could differ from those estimates. Operating results for the interim periods ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ended December 31, 2023. Our 2022 Annual Report describes the accounting policies and estimates that are critical to the understanding of our results of operations, financial condition, and liquidity. The accounting policies and estimation processes described in the 2022 Annual Report were consistently applied to the unaudited consolidated financial statements as of and for the six months ended June 30, 2023 and 2022. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Prior to December 31, 2022, we were classified as an emerging growth company (“EGC”) and elected to use the extended transition period for complying with certain new or revised financial accounting standards from the Financial Accounting Standards Board (“FASB”) pursuant to Section 13(a) of the Exchange Act. However, beginning on December 31, 2022, we are no longer an EGC and are now unable to delay adoption of these new or revised accounting standards, or to take advantage of reduced corporate governance disclosures. Adopted For information regarding accounting pronouncements that the Company adopted during the periods presented, see Item II, Part 8, Note 2 “Recent Accounting Pronouncements” section of the 2022 Annual Report. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investments [Abstract] | |
Schedule of amortized cost and estimated fair value of income securities | June 30, 2023 Cost or Allowance for Gross Gross Fair Value Fixed income securities: U.S. Government and agencies $ 9,941 $ — $ — $ (909 ) $ 9,032 Obligations of states and political subdivisions 58,753 — 64 (5,407 ) 53,410 Corporate securities 150,137 — 132 (14,403 ) 135,866 Residential mortgage-backed securities 62,623 — 35 (5,886 ) 56,772 Commercial mortgage-backed securities 30,300 — — (4,837 ) 25,463 Asset-backed securities 53,025 — 29 (4,703 ) 48,351 Redeemable preferred stocks 4,747 — — (652 ) 4,095 Total fixed income securities $ 369,526 $ — $ 260 $ (36,797 ) $ 332,989 December 31, 2022 Cost or Allowance for Gross Gross Fair Value Fixed income securities: U.S. Government and agencies $ 11,174 $ — $ 1 $ (1,008 ) $ 10,167 Obligations of states and political subdivisions 60,342 — 38 (6,454 ) 53,926 Corporate securities 136,837 — 109 (15,787 ) 121,159 Residential mortgage-backed securities 53,254 — 85 (5,846 ) 47,493 Commercial mortgage-backed securities 30,837 — — (4,702 ) 26,135 Asset-backed securities 45,786 — — (5,061 ) 40,725 Redeemable preferred stocks 4,747 — — (1,028 ) 3,719 Total fixed income securities $ 342,977 $ — $ 233 $ (39,886 ) $ 303,324 |
Schedule of fixed maturities | June 30, 2023 Amortized Cost Fair Value Due to mature: One year or less $ 12,199 $ 11,948 After one year through five years 79,650 74,773 After five years through ten years 85,000 75,928 After ten years 41,982 35,659 Mortgage / asset-backed securities 145,948 130,586 Redeemable preferred stocks 4,747 4,095 Total fixed income securities $ 369,526 $ 332,989 December 31, 2022 Amortized Cost Fair Value Due to mature: One year or less $ 10,130 $ 9,971 After one year through five years 81,879 77,031 After five years through ten years 76,648 65,966 After ten years 39,696 32,284 Mortgage / asset-backed securities 129,877 114,353 Redeemable preferred stocks 4,747 3,719 Total fixed income securities $ 342,977 $ 303,324 |
Schedule of gross unrealized loss | June 30, 2023 Less than 12 Months Greater than 12 months Total Fair Unrealized Fair Unrealized Fair Unrealized Fixed income securities: U.S. Government and agencies $ — $ — $ 9,032 $ (909 ) $ 9,032 $ (909 ) Obligations of states and political subdivisions 7,234 (431 ) 40,295 (4,976 ) 47,529 (5,407 ) Corporate securities 17,414 (418 ) 108,662 (13,985 ) 126,076 (14,403 ) Residential mortgage-backed securities 14,358 (260 ) 32,757 (5,626 ) 47,115 (5,886 ) Commercial mortgage-backed securities 2,033 (56 ) 23,155 (4,781 ) 25,188 (4,837 ) Asset-backed securities 12,063 (185 ) 34,836 (4,518 ) 46,899 (4,703 ) Redeemable preferred stocks — — 4,095 (652 ) 4,095 (652 ) Total fixed income securities $ 53,102 $ (1,350 ) $ 252,832 $ (35,447 ) $ 305,934 $ (36,797 ) December 31, 2022 Less than 12 Months Greater than 12 months Total Fair Unrealized Fair Unrealized Fair Unrealized Fixed income securities: U.S. Government and agencies $ 7,078 $ (537 ) $ 2,587 $ (471 ) $ 9,665 $ (1,008 ) Obligations of states and political subdivisions 40,213 (3,554 ) 9,045 (2,900 ) 49,258 (6,454 ) Corporate securities 76,645 (7,944 ) 39,683 (7,843 ) 116,328 (15,787 ) Residential mortgage-backed securities 21,017 (1,805 ) 18,519 (4,041 ) 39,536 (5,846 ) Commercial mortgage-backed securities 18,932 (2,674 ) 7,204 (2,028 ) 26,136 (4,702 ) Asset-backed securities 18,904 (1,522 ) 21,809 (3,539 ) 40,713 (5,061 ) Redeemable preferred stocks 3,015 (732 ) 705 (296 ) 3,720 (1,028 ) Total fixed income securities $ 185,804 $ (18,768 ) $ 99,552 $ (21,118 ) $ 285,356 $ (39,886 ) |
Schedule of Net Investment Income | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Fixed income securities $ 2,781 $ 2,406 $ 5,411 $ 4,567 Equity securities 283 395 603 724 Real estate 156 75 306 241 Cash and cash equivalents 94 10 146 12 Total gross investment income 3,314 2,886 6,466 5,544 Investment expenses 809 871 1,722 1,876 Net investment income $ 2,505 $ 2,015 $ 4,744 $ 3,668 |
Schedule of net investment gains (losses) | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Gross realized gains: Fixed income securities $ — $ 5 $ — $ 51 Equity securities 357 1,196 13,088 2,269 Total gross realized gains 357 1,201 13,088 2,320 Gross realized losses, excluding credit impairment losses: Fixed income securities (188 ) (110 ) (487 ) (113 ) Equity securities (288 ) (64 ) (1,134 ) (242 ) Total gross realized losses, excluding credit impairment losses (476 ) (174 ) (1,621 ) (355 ) Net realized gains (losses) (119 ) 1,027 11,467 1,965 Change in net unrealized gain on equity securities (55 ) (12,163 ) (10,225 ) (18,629 ) Net investment gains (losses) $ (174 ) $ (11,136 ) $ 1,242 $ (16,664 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurements [Abstract] | |
Schedule of assets which are measured on a recurring basis | June 30, 2023 Total Level 1 Level 2 Level 3 Fixed income securities: U.S. Government and agencies $ 9,032 $ — $ 9,032 $ — Obligations of states and political subdivisions 53,410 — 53,410 — Corporate securities 135,866 — 135,866 — Residential mortgage-backed securities 56,772 — 56,772 — Commercial mortgage-backed securities 25,463 — 25,463 — Asset-backed securities 48,351 — 48,351 — Redeemable preferred stock 4,095 — 4,095 — Total fixed income securities 332,989 — 332,989 — Equity securities: Common stock 22,807 22,807 — — Non-redeemable preferred stock 1,847 1,847 — — Total equity securities 24,654 24,654 — — Cash equivalents 34,004 34,004 — — Total assets at fair value $ 391,647 $ 58,658 $ 332,989 $ — December 31, 2022 Total Level 1 Level 2 Level 3 Fixed income securities: U.S. Government and agencies $ 10,167 $ — $ 10,167 $ — Obligations of states and political subdivisions 53,926 — 53,926 — Corporate securities 121,159 — 121,159 — Residential mortgage-backed securities 47,493 — 47,493 — Commercial mortgage-backed securities 26,135 — 26,135 — Asset-backed securities 40,725 — 40,725 — Redeemable preferred stock 3,719 — 3,719 — Total fixed income securities 303,324 — 303,324 — Equity securities: Common stock 50,699 50,699 — — Non-redeemable preferred stock 1,694 1,694 — — Total equity securities 52,393 52,393 — — Cash equivalents 27,255 27,255 — — Total assets at fair value $ 382,972 $ 79,648 $ 303,324 $ — |
Reinsurance (Tables)
Reinsurance (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Reinsurance [Abstract] | |
Schedule of reconciliation of direct to net premiums on both a written and an earned basis | Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Premiums Written Premiums Earned Premiums Written Premiums Earned Direct premium $ 144,250 $ 106,162 $ 234,806 $ 191,636 Assumed premium 2,440 827 2,839 1,403 Ceded premium (20,439 ) (12,843 ) (28,898 ) (21,266 ) Net premiums $ 126,251 $ 94,146 $ 208,747 $ 171,773 Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 Premiums Written Premiums Earned Premiums Written Premiums Earned Direct premium $ 144,962 $ 94,251 $ 220,495 $ 167,650 Assumed premium 3,226 1,691 5,087 3,552 Ceded premium (20,175 ) (11,446 ) (25,835 ) (17,119 ) Net premiums $ 128,013 $ 84,496 $ 199,747 $ 154,083 |
Schedule of reconciliation of direct to net losses and loss adjustment expenses | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Direct losses and loss adjustment expenses $ 95,149 $ 110,670 $ 166,010 $ 156,165 Assumed losses and loss adjustment expenses 67 1,535 157 1,545 Ceded losses and loss adjustment expenses (17,710 ) (3,610 ) (29,836 ) (8,986 ) Net losses and loss adjustment expenses $ 77,506 $ 108,595 $ 136,331 $ 148,724 |
Schedule of pooling share percentages by insurance company | Pool Percentage Nodak Insurance Company 66.0% American West Insurance Company 7.0% Primero Insurance Company 3.0% Battle Creek Mutual Insurance Company 2.0% Direct Auto Insurance Company 13.0% Westminster American Insurance Company 9.0% Total 100.0% |
Deferred Policy Acquisition C_2
Deferred Policy Acquisition Costs (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
ASU 2018-12 Transition [Abstract] | |
Schedule of deferred policy acquisition costs and asset reconciliation | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Balance, beginning of period $ 31,350 $ 26,272 $ 29,768 $ 24,947 Deferral of policy acquisition costs 23,353 20,889 43,523 37,837 Amortization of deferred policy acquisition costs (20,579 ) (16,244 ) (39,167 ) (31,867 ) Balance, end of period $ 34,124 $ 30,917 $ 34,124 $ 30,917 |
Unpaid Losses and Loss Adjust_2
Unpaid Losses and Loss Adjustment Expenses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Reinsurance [Abstract] | |
Schedule of activity in the liability for unpaid losses and loss adjustment expenses | Activity in the liability for unpaid losses and loss adjustment expenses is summarized as follows: Six Months Ended June 30, 2023 2022 Balance, beginning of period: Liability for unpaid losses and loss adjustment expenses $ 190,459 $ 139,662 Reinsurance recoverables on losses 37,575 21,200 Net balance, beginning of period 152,884 118,462 Incurred related to: Current year 126,854 157,214 Prior years 9,477 (8,490 ) Total incurred 136,331 148,724 Paid related to: Current year 50,010 59,634 Prior years 60,675 41,717 Total paid 110,685 101,351 Balance, end of period: Liability for unpaid losses and loss adjustment expenses 232,038 182,876 Reinsurance recoverables on losses 53,508 17,041 Net balance, end of period $ 178,530 $ 165,835 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following: June 30, 2023 December 31, 2022 Estimated Useful Life Cost: Land $ 1,403 $ 1,403 indefinite Building and improvements 14,491 14,271 10 – 43 years Electronic data processing equipment 1,637 1,310 5 – 7 years Furniture and fixtures 2,968 2,919 5 – 7 years Automobiles 1,317 1,310 2 – 3 years Gross cost 21,816 21,213 Accumulated depreciation (11,540 ) (11,370 ) Total property and equipment, net $ 10,276 $ 9,843 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill by segment | June 30, 2023 December 31, 2022 Non-standard auto from acquisition of Primero $ 2,628 $ 2,628 Commercial from acquisition of Westminster 6,756 6,756 Total $ 9,384 $ 9,384 |
Schedule of other intangible assets | June 30, 2023 Gross Carrying Accumulated Net Subject to amortization: Trade names $ 748 $ 415 $ 333 Distribution network 6,700 1,303 5,397 Total subject to amortization 7,448 1,718 5,730 Not subject to amortization: State insurance licenses 1,900 — 1,900 Total $ 9,348 $ 1,718 $ 7,630 December 31, 2022 Gross Carrying Accumulated Net Subject to amortization: Trade names $ 748 $ 365 $ 383 Distribution network 6,700 1,117 5,583 Total subject to amortization 7,448 1,482 5,966 Not subject to amortization: State insurance license 1,900 — 1,900 Total $ 9,348 $ 1,482 $ 7,866 |
Schedule of amortization of other intangible assets with finite lives | Other intangible assets that have finite lives, including trade names and distribution networks, are amortized over their useful lives. As of June 30, 2023, the estimated amortization of other intangible assets with finite lives for each of the five years in the period ending December 31, 2027, and thereafter is as follows: Year ending December 31, 2023 (six months remaining) $ 219 2024 422 2025 422 2026 422 2027 422 Thereafter 3,823 Total other intangible assets with finite lives $ 5,730 |
Royalties, Dividends, and Aff_2
Royalties, Dividends, and Affiliations (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Royalties, Dividends, and Affiliations [Member] | |
Schedule of impact of including battle creek in our consolidated balance sheets and statements of operations | The following tables disclose the standalone balance sheets and statements of operations of Battle Creek, prior to intercompany eliminations, to illustrate the impact of including Battle Creek in our Consolidated Balance Sheets and Statements of Operations: June 30, 2023 December 31, 2022 Assets: Cash and cash equivalents $ 4,321 $ 5,008 Investments 13,931 13,350 Premiums and agents’ balances receivable 5,606 5,422 Deferred policy acquisition costs 682 595 Reinsurance recoverables on losses (2) 12,641 12,597 Accrued investment income 60 59 Income tax recoverable — 225 Deferred income taxes 800 780 Property and equipment 313 319 Other assets 61 52 Total assets $ 38,415 $ 38,407 Liabilities: Unpaid losses and loss adjustment expenses $ 5,218 $ 6,453 Unearned premiums 3,698 2,959 Notes payable (1) 3,000 3,000 Pooling payable (1) 7,699 8,337 Reinsurance losses payable (2) 13,783 13,125 Accrued expenses and other liabilities 3,083 2,303 Total liabilities 36,481 36,177 Equity: Non-controlling interest 1,934 2,230 Total equity 1,934 2,230 Total liabilities and equity $ 38,415 $ 38,407 (1) Amount fully eliminated in consolidation. (2) Amount partly eliminated in consolidation. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenues: Net premiums earned $ 1,882 $ 1,690 $ 3,435 $ 3,082 Fee and other income (expenses) 7 (2 ) 17 (7 ) Net investment income 80 27 147 40 Total revenues 1,969 1,715 3,599 3,115 Expenses: Losses and loss adjustment expenses 1,550 2,171 2,727 2,974 Amortization of deferred policy acquisition costs 411 325 783 637 Other underwriting and general expenses 155 157 318 274 Total expenses 2,116 2,653 3,828 3,885 Loss before income taxes (147 ) (938 ) (229 ) (770 ) Income tax expense (benefit) (34 ) (212 ) 174 (174 ) Net loss $ (113 ) $ (726 ) $ (403 ) $ (596 ) |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of operating leases | Additional information regarding our operating leases are as follows: As of and For the Three Months As of and For the Six Months 2023 2022 2023 2022 Operating lease expense $ 98 $ 98 $ 196 $ 196 Other information on operating leases: Operating cash outflow from operating leases 103 69 204 137 Right-of-use assets obtained in exchange for new lease liabilities 247 — 247 — Weighted average discount rate 3.95% 3.25% 3.95% 3.25% Weighted average remaining lease term in years 5.8 years 6.6 years 5.8 years 6.6 years |
Schedule of contractual maturities of our operating leases | Year ending December 31, 2023 (six months remaining) $ 195 2024 381 2025 346 2026 351 2027 356 Thereafter 509 Total undiscounted lease payments 2,138 Less: present value adjustment 219 Operating lease liability at June 30, 2023 $ 1,919 |
Common and Preferred Stock (Tab
Common and Preferred Stock (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of changes in the number of common stock shares outstanding | Changes in the number of common stock shares outstanding are as follows: Six Months Ended June 30, 2023 2022 Shares outstanding, beginning of period 21,076,255 21,219,808 Treasury shares repurchased through stock repurchase authorization (238,164 ) (111,244 ) Issuance of treasury shares for vesting of restricted stock units 47,887 101,292 Shares outstanding, end of period 20,885,978 21,209,856 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Compensation [Abstract] | |
Schedule of restricted stock outstanding | A summary of the Company’s outstanding and unearned RSUs is presented below: RSUs Weighted-Average Units outstanding and unearned at January 1, 2022 108,380 $ 16.86 RSUs granted during 2022 59,600 17.61 RSUs earned during 2022 (52,620 ) 17.39 Units outstanding and unearned at December 31, 2022 115,360 17.00 RSUs granted during 2023 85,000 13.76 RSUs earned during 2023 (53,780 ) 16.32 Units outstanding and unearned at June 30, 2023 146,580 15.37 |
Schedule of RSU activity | The following table shows the impact of RSU activity to the Company’s financial results: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 RSU compensation expense $ 257 $ 225 $ 559 $ 498 Income tax benefit (58 ) (51 ) (127 ) (113 ) RSU compensation expense, net of income taxes $ 199 $ 174 $ 432 $ 385 |
Schedule of performance stock outstanding | A summary of the Company’s outstanding PSUs is presented below: PSUs Weighted-Average Fair Value Per Share Units outstanding at January 1, 2022 190,600 $ 16.06 PSUs granted during 2022 (at target) 61,800 18.10 PSUs earned during 2022 (86,684 ) 15.21 Performance adjustment (1) 31,200 15.21 Forfeitures (6,916 ) 15.21 Units outstanding at December 31, 2022 190,000 17.00 PSUs granted during 2023 (at target) 87,400 13.85 PSUs earned during 2023 — — Performance adjustment (1) (63,600 ) 14.26 Forfeitures — — Units outstanding at June 30, 2023 213,800 16.53 (1) |
Schedule of PSU activity | The following table shows the impact of PSU activity to the Company’s financial results: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 PSU compensation expense $ 139 $ 262 $ 277 $ 523 Income tax benefit (32 ) (60 ) (63 ) (119 ) PSU compensation expense, net of income taxes $ 107 $ 202 $ 214 $ 404 |
Allowance for Expected Credit_2
Allowance for Expected Credit Losses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Allowance for Expected Credit Losses [Abstract] | |
Schedule of allowance for expected credit losses | As of and For the Three Months Ended Premiums Allowance for Balance, beginning of period $ 64,502 $ 445 Current period charge for expected credit losses 189 Write-offs of uncollectible premiums receivable 200 Balance, end of period $ 106,946 $ 434 As of and For the Six Months Ended Premiums Allowance for Balance, beginning of period $ 62,173 $ 425 Current period charge for expected credit losses 278 Write-offs of uncollectible premiums receivable 269 Balance, end of period $ 106,946 $ 434 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of revenue by insurance product line | Three Months Ended June 30, 2023 Private Non-Standard Home and Crop Commercial All Other Total Direct premiums earned $ 21,508 $ 21,744 $ 22,995 $ 17,526 $ 21,076 $ 1,313 $ 106,162 Assumed premiums earned — — — 501 — 326 827 Ceded premiums earned (965 ) (99 ) (2,580 ) (4,691 ) (4,435 ) (73 ) (12,843 ) Net premiums earned 20,543 21,645 20,415 13,336 16,641 1,566 94,146 Direct losses and loss adjustment expenses 18,455 14,139 18,414 12,702 29,685 1,754 95,149 Assumed losses and loss adjustment expenses — — — — — 67 67 Ceded losses and loss adjustment expenses 411 — (499 ) (4,492 ) (11,556 ) (1,574 ) (17,710 ) Net losses and loss adjustment expenses 18,866 14,139 17,915 8,210 18,129 247 77,506 Gross margin 1,677 7,506 2,500 5,126 (1,488 ) 1,319 16,640 Underwriting and general expenses 5,754 8,684 6,150 2,648 6,249 389 29,874 Underwriting gain (loss) (4,077 ) (1,178 ) (3,650 ) 2,478 (7,737 ) 930 (13,234 ) Fee and other income 239 499 (939 ) Net investment income 2,505 Net investment gains (losses) (174 ) Loss before income taxes (10,404 ) Income tax benefit (2,169 ) Net loss (8,235 ) Net loss attributable to non-controlling interest (113 ) Net loss attributable to NI Holdings, Inc. $ (8,122 ) Operating Ratios: Loss and loss adjustment expense ratio 91.8% 65.3% 87.8% 61.6% 108.9% 15.8% 82.3% Expense ratio 28.0% 40.1% 30.1% 19.9% 37.6% 24.8% 31.7% Combined ratio 119.8% 105.4% 117.9% 81.5% 146.5% 40.6% 114.0% Balances at June 30, 2023: Premiums and agents’ balances receivable $ 23,840 $ 10,322 $ 9,793 $ 44,951 $ 17,213 $ 827 $ 106,946 Deferred policy acquisition costs 5,785 8,871 7,974 2,832 8,198 464 34,124 Reinsurance recoverables on losses 727 — 4,691 3,114 42,635 2,341 53,508 Receivable from Federal Crop Insurance Corporation — — — 14,032 — — 14,032 Goodwill and other intangibles — 2,736 — — 14,278 — 17,014 Unpaid losses and loss adjustment expenses 31,935 52,866 30,503 11,603 96,390 8,741 232,038 Unearned premiums 35,317 28,067 48,690 27,193 43,066 3,017 185,350 Three Months Ended June 30, 2022 Private Non-Standard Home and Crop Commercial All Other Total Direct premiums earned $ 19,824 $ 15,577 $ 21,703 $ 17,709 $ 18,161 $ 1,277 $ 94,251 Assumed premiums earned — — — 491 — 1,200 1,691 Ceded premiums earned (559 ) (65 ) (1,748 ) (5,905 ) (3,130 ) (39 ) (11,446 ) Net premiums earned 19,265 15,512 19,955 12,295 15,031 2,438 84,496 Direct losses and loss adjustment expenses 16,866 4,133 62,188 13,237 13,081 1,165 110,670 Assumed losses and loss adjustment expenses — — — 244 — 1,291 1,535 Ceded losses and loss adjustment expenses (12 ) — (357 ) (3,151 ) (90 ) — (3,610 ) Net losses and loss adjustment expenses 16,854 4,133 61,831 10,330 12,991 2,456 108,595 Gross margin 2,411 11,379 (41,876 ) 1,965 2,040 (18 ) (24,099 ) Underwriting and general expenses 5,553 6,867 6,056 1,609 5,576 585 26,246 Underwriting gain (loss) (3,142 ) 4,512 (47,932 ) 356 (3,536 ) (603 ) (50,345 ) Fee and other income 254 415 4,766 Net investment income 2,015 Net investment gains (losses) (11,136 ) Loss before income taxes (59,051 ) Income tax benefit (12,415 ) Net loss (46,636 ) Net loss attributable to non-controlling interest (726 ) Net loss attributable to NI Holdings, Inc. $ (45,910 ) Operating Ratios: Loss and loss adjustment expense ratio 87.5% 26.6% 309.9% 84.0% 86.4% 100.7% 128.5% Expense ratio 28.8% 44.3% 30.3% 13.1% 37.1% 24.0% 31.1% Combined ratio 116.3% 70.9% 340.2% 97.1% 123.5% 124.7% 159.6% Balances at June 30, 2022: Premiums and agents’ balances receivable $ 21,287 $ 16,678 $ 10,468 $ 42,905 $ 16,175 $ 823 $ 108,336 Deferred policy acquisition costs 5,427 8,201 7,838 1,060 7,929 462 30,917 Reinsurance recoverables on losses 591 — 2,766 1,976 10,960 748 17,041 Goodwill and other intangibles — 2,786 — — 14,700 — 17,486 Unpaid losses and loss adjustment expenses 29,105 38,689 49,052 12,755 43,876 9,399 182,876 Unearned premiums 31,885 24,030 45,942 26,205 42,379 3,284 173,725 Payable to Federal Crop Insurance Corporation — — — 7,102 — — 7,102 Six Months Ended June 30, 2023 Private Non-Standard Home and Crop Commercial All Other Total Direct premiums earned $ 42,050 $ 42,716 $ 45,426 $ 17,516 $ 41,306 $ 2,622 $ 191,636 Assumed premiums earned — — — 501 — 902 1,403 Ceded premiums earned (1,853 ) (192 ) (5,021 ) (5,405 ) (8,648 ) (147 ) (21,266 ) Net premiums earned 40,197 42,524 40,405 12,612 32,658 3,377 171,773 Direct losses and loss adjustment expenses 34,080 31,177 27,937 12,032 59,007 1,777 166,010 Assumed losses and loss adjustment expenses — — — — — 157 157 Ceded losses and loss adjustment expenses 412 — (1,303 ) (4,596 ) (22,764 ) (1,585 ) (29,836 ) Net losses and loss adjustment expenses 34,492 31,177 26,634 7,436 36,243 349 136,331 Gross margin 5,705 11,347 13,771 5,176 (3,585 ) 3,028 35,442 Underwriting and general expenses 12,172 17,677 12,355 2,680 12,336 898 58,118 Underwriting gain (loss) (6,467 ) (6,330 ) 1,416 2,496 (15,921 ) 2,130 (22,676 ) Fee and other income 471 773 (5,859 ) Net investment income 4,744 Net investment gains (losses) 1,242 Loss before income taxes (15,917 ) Income tax benefit (3,182 ) Net loss (12,735 ) Net loss attributable to non-controlling interest (403 ) Net loss attributable to NI Holdings, Inc. $ (12,332 ) Operating Ratios: Loss and loss adjustment expense ratio 85.8% 73.3% 65.9% 59.0% 111.0% 10.3% 79.4% Expense ratio 30.3% 41.6% 30.6% 21.2% 37.8% 26.6% 33.8% Combined ratio 116.1% 114.9% 96.5% 80.2% 148.8% 36.9% 113.2% Six Months Ended June 30, 2022 Private Non-Standard Home and Crop Commercial All Other Total Direct premiums earned $ 39,125 $ 30,019 $ 42,882 $ 17,692 $ 35,391 $ 2,541 $ 167,650 Assumed premiums earned — — — 491 — 3,061 3,552 Ceded premiums earned (1,118 ) (129 ) (3,715 ) (5,901 ) (6,172 ) (84 ) (17,119 ) Net premiums earned 38,007 29,890 39,167 12,282 29,219 5,518 154,083 Direct losses and loss adjustment expenses 31,392 12,624 69,380 13,134 28,144 1,491 156,165 Assumed losses and loss adjustment expenses — — — 244 — 1,301 1,545 Ceded losses and loss adjustment expenses 173 — (709 ) (3,214 ) (5,136 ) (100 ) (8,986 ) Net losses and loss adjustment expenses 31,565 12,624 68,671 10,164 23,008 2,692 148,724 Gross margin 6,442 17,266 (29,504 ) 2,118 6,211 2,826 5,359 Underwriting and general expenses 11,321 12,958 12,029 1,057 10,912 1,373 49,650 Underwriting gain (loss) (4,879 ) 4,308 (41,533 ) 1,061 (4,701 ) 1,453 (44,291 ) Fee and other income 642 843 4,950 Net investment income 3,668 Net investment gains (losses) (16,664 ) Loss before income taxes (56,444 ) Income tax benefit (11,847 ) Net loss (44,597 ) Net loss attributable to non-controlling interest (596 ) Net loss attributable to NI Holdings, Inc. $ (44,001 ) Operating Ratios: Loss and loss adjustment expense ratio 83.1% 42.2% 175.3% 82.8% 78.7% 48.8% 96.5% Expense ratio 29.8% 43.4% 30.7% 8.6% 37.3% 24.9% 32.2% Combined ratio 112.8% 85.6% 206.0% 91.4% 116.1% 73.7% 128.7% |
Organization (Details)
Organization (Details) | 6 Months Ended |
Jun. 30, 2023 | |
Nodak Insurance [Member] | |
Organization (Details) [Line Items] | |
Ownership percentage | 100% |
Nodak Insurance [Member] | |
Organization (Details) [Line Items] | |
Percentage of shares exchanged | 55% |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Investments [Abstract] | ||
Fixed income securities with a fair value | $ 5,918 | $ 6,613 |
Investments (Details) - Schedul
Investments (Details) - Schedule of amortized cost and estimated fair value of income securities - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fixed income securities: | ||
Cost or Amortized Cost | $ 369,526 | $ 342,977 |
Gross Unrealized Gains | 260 | 233 |
Gross Unrealized Losses | (36,797) | (39,886) |
Fair Value | 332,989 | 303,324 |
U.S. Government and agencies [Member] | ||
Fixed income securities: | ||
Fair Value | 9,032 | 10,167 |
Obligations of states and political subdivisions [Member] | ||
Fixed income securities: | ||
Fair Value | 53,410 | 53,926 |
Corporate securities [Member] | ||
Fixed income securities: | ||
Fair Value | 135,866 | 121,159 |
Residential mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Fair Value | 56,772 | 47,493 |
Commercial mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Fair Value | 25,463 | 26,135 |
Asset-backed securities [Member] | ||
Fixed income securities: | ||
Fair Value | 48,351 | 40,725 |
Redeemable preferred stocks [Member] | ||
Fixed income securities: | ||
Fair Value | 4,095 | 3,719 |
Fixed income securities [Member] | U.S. Government and agencies [Member] | ||
Fixed income securities: | ||
Cost or Amortized Cost | 9,941 | 11,174 |
Allowance for Expected Credit Losses | ||
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (909) | (1,008) |
Fair Value | 9,032 | 10,167 |
Fixed income securities [Member] | Obligations of states and political subdivisions [Member] | ||
Fixed income securities: | ||
Cost or Amortized Cost | 58,753 | 60,342 |
Allowance for Expected Credit Losses | ||
Gross Unrealized Gains | 64 | 38 |
Gross Unrealized Losses | (5,407) | (6,454) |
Fair Value | 53,410 | 53,926 |
Fixed income securities [Member] | Corporate securities [Member] | ||
Fixed income securities: | ||
Cost or Amortized Cost | 150,137 | 136,837 |
Allowance for Expected Credit Losses | ||
Gross Unrealized Gains | 132 | 109 |
Gross Unrealized Losses | (14,403) | (15,787) |
Fair Value | 135,866 | 121,159 |
Fixed income securities [Member] | Residential mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Cost or Amortized Cost | 62,623 | 53,254 |
Allowance for Expected Credit Losses | ||
Gross Unrealized Gains | 35 | 85 |
Gross Unrealized Losses | (5,886) | (5,846) |
Fair Value | 56,772 | 47,493 |
Fixed income securities [Member] | Commercial mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Cost or Amortized Cost | 30,300 | 30,837 |
Allowance for Expected Credit Losses | ||
Gross Unrealized Gains | ||
Gross Unrealized Losses | (4,837) | (4,702) |
Fair Value | 25,463 | 26,135 |
Fixed income securities [Member] | Asset-backed securities [Member] | ||
Fixed income securities: | ||
Cost or Amortized Cost | 53,025 | 45,786 |
Allowance for Expected Credit Losses | ||
Gross Unrealized Gains | 29 | |
Gross Unrealized Losses | (4,703) | (5,061) |
Fair Value | 48,351 | 40,725 |
Fixed income securities [Member] | Redeemable preferred stocks [Member] | ||
Fixed income securities: | ||
Cost or Amortized Cost | 4,747 | 4,747 |
Allowance for Expected Credit Losses | ||
Gross Unrealized Gains | ||
Gross Unrealized Losses | (652) | (1,028) |
Fair Value | $ 4,095 | $ 3,719 |
Investments (Details) - Sched_2
Investments (Details) - Schedule of fixed maturities - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Due to mature: | ||
Amortized Cost, Due to mature One year or less | $ 12,199 | $ 10,130 |
Fair Value, Due to mature One year or less | 11,948 | 9,971 |
Amortized Cost, Due to mature After one year through five years | 79,650 | 81,879 |
Fair Value, Due to mature After one year through five years | 74,773 | 77,031 |
Amortized Cost, Due to mature After five years through ten years | 85,000 | 76,648 |
Fair Value, Due to mature After five years through ten years | 75,928 | 65,966 |
Amortized Cost, Due to mature After ten years | 41,982 | 39,696 |
Fair Value, Due to mature After ten years | 35,659 | 32,284 |
Amortized Cost, Due to mature Mortgage/asset-backed securities | 145,948 | 129,877 |
Fair Value, Due to mature Mortgage/asset-backed securities | 130,586 | 114,353 |
Amortized Cost, Due to mature Redeemable preferred stocks | 4,747 | 4,747 |
Fair Value, Due to mature Redeemable preferred stocks | 4,095 | 3,719 |
Available-for-sale Securities, Debt Maturities, Amortized Cost | 369,526 | 342,977 |
Available-for-sale Securities, Debt Securities, Estimated Fair Value | $ 332,989 | $ 303,324 |
Investments (Details) - Sched_3
Investments (Details) - Schedule of gross unrealized loss - Fixed Maturities [Member] - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fixed income securities: | ||
Less than 12 months Fair Value | $ 53,102 | $ 185,804 |
Less than 12 months Unrealized Losses | (1,350) | (18,768) |
Greater than 12 months Fair Value | 252,832 | 99,552 |
Greater than 12 months Unrealized Losses | (35,447) | (21,118) |
Fair Value, Total | 305,934 | 285,356 |
Unrealized Losses, Total | (36,797) | (39,886) |
U.S. Government and agencies [Member] | ||
Fixed income securities: | ||
Less than 12 months Fair Value | 7,078 | |
Less than 12 months Unrealized Losses | (537) | |
Greater than 12 months Fair Value | 9,032 | 2,587 |
Greater than 12 months Unrealized Losses | (909) | (471) |
Fair Value, Total | 9,032 | 9,665 |
Unrealized Losses, Total | (909) | (1,008) |
Obligations of states and political subdivisions [Member] | ||
Fixed income securities: | ||
Less than 12 months Fair Value | 7,234 | 40,213 |
Less than 12 months Unrealized Losses | (431) | (3,554) |
Greater than 12 months Fair Value | 40,295 | 9,045 |
Greater than 12 months Unrealized Losses | (4,976) | (2,900) |
Fair Value, Total | 47,529 | 49,258 |
Unrealized Losses, Total | (5,407) | (6,454) |
Corporate securities [Member] | ||
Fixed income securities: | ||
Less than 12 months Fair Value | 17,414 | 76,645 |
Less than 12 months Unrealized Losses | (418) | (7,944) |
Greater than 12 months Fair Value | 108,662 | 39,683 |
Greater than 12 months Unrealized Losses | (13,985) | (7,843) |
Fair Value, Total | 126,076 | 116,328 |
Unrealized Losses, Total | (14,403) | (15,787) |
Residential mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Less than 12 months Fair Value | 14,358 | 21,017 |
Less than 12 months Unrealized Losses | (260) | (1,805) |
Greater than 12 months Fair Value | 32,757 | 18,519 |
Greater than 12 months Unrealized Losses | (5,626) | (4,041) |
Fair Value, Total | 47,115 | 39,536 |
Unrealized Losses, Total | (5,886) | (5,846) |
Commercial mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Less than 12 months Fair Value | 2,033 | 18,932 |
Less than 12 months Unrealized Losses | (56) | (2,674) |
Greater than 12 months Fair Value | 23,155 | 7,204 |
Greater than 12 months Unrealized Losses | (4,781) | (2,028) |
Fair Value, Total | 25,188 | 26,136 |
Unrealized Losses, Total | (4,837) | (4,702) |
Asset-backed securities [Member] | ||
Fixed income securities: | ||
Less than 12 months Fair Value | 12,063 | 18,904 |
Less than 12 months Unrealized Losses | (185) | (1,522) |
Greater than 12 months Fair Value | 34,836 | 21,809 |
Greater than 12 months Unrealized Losses | (4,518) | (3,539) |
Fair Value, Total | 46,899 | 40,713 |
Unrealized Losses, Total | (4,703) | (5,061) |
Redeemable preferred stocks [Member] | ||
Fixed income securities: | ||
Less than 12 months Fair Value | 3,015 | |
Less than 12 months Unrealized Losses | (732) | |
Greater than 12 months Fair Value | 4,095 | 705 |
Greater than 12 months Unrealized Losses | (652) | (296) |
Fair Value, Total | 4,095 | 3,720 |
Unrealized Losses, Total | $ (652) | $ (1,028) |
Investments (Details) - Sched_4
Investments (Details) - Schedule of Net Investment Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net Investment Income [Line Items] | ||||
Total gross investment income | $ 3,314 | $ 2,886 | $ 6,466 | $ 5,544 |
Investment expenses | 809 | 871 | 1,722 | 1,876 |
Net investment income | 2,505 | 2,015 | 4,744 | 3,668 |
Fixed Income Securities [Member] | ||||
Net Investment Income [Line Items] | ||||
Total gross investment income | 2,781 | 2,406 | 5,411 | 4,567 |
Equity Securities [Member] | ||||
Net Investment Income [Line Items] | ||||
Total gross investment income | 283 | 395 | 603 | 724 |
Real Estate [Member] | ||||
Net Investment Income [Line Items] | ||||
Total gross investment income | 156 | 75 | 306 | 241 |
Cash and Cash Equivalents [Member] | ||||
Net Investment Income [Line Items] | ||||
Total gross investment income | $ 94 | $ 10 | $ 146 | $ 12 |
Investments (Details) - Sched_5
Investments (Details) - Schedule of net investment gains (losses) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Gross realized gains: | ||||
Total gross realized gains | $ 357 | $ 1,201 | $ 13,088 | $ 2,320 |
Gross realized losses, excluding credit impairment losses: | ||||
Total gross realized losses, excluding credit impairment losses | (476) | (174) | (1,621) | (355) |
Net realized gains | (119) | 1,027 | 11,467 | 1,965 |
Change in net unrealized gains on equity securities | (55) | (12,163) | (10,225) | (18,629) |
Net investment gains (losses) | (174) | (11,136) | 1,242 | (16,664) |
Fixed Income Securities [Member] | ||||
Gross realized gains: | ||||
Total gross realized gains | 5 | 51 | ||
Gross realized losses, excluding credit impairment losses: | ||||
Total gross realized losses, excluding credit impairment losses | (188) | (110) | (487) | (113) |
Equity Securities [Member] | ||||
Gross realized gains: | ||||
Total gross realized gains | 357 | 1,196 | 13,088 | 2,269 |
Gross realized losses, excluding credit impairment losses: | ||||
Total gross realized losses, excluding credit impairment losses | $ (288) | $ (64) | $ (1,134) | $ (242) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Schedule of assets which are measured on a recurring basis - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fixed income securities: | ||
Total fixed income securities | $ 332,989 | $ 303,324 |
Equity securities: | ||
Total equity securities | 24,654 | 52,393 |
Cash equivalents | 34,004 | 27,255 |
Total assets at fair value | 391,647 | 382,972 |
Common stock [Member] | ||
Equity securities: | ||
Total equity securities | 22,807 | 50,699 |
Non-redeemable preferred stock [Member] | ||
Equity securities: | ||
Total equity securities | 1,847 | 1,694 |
U.S. Government and agencies [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 9,032 | 10,167 |
Obligations of states and political subdivisions [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 53,410 | 53,926 |
Corporate securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 135,866 | 121,159 |
Residential mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 56,772 | 47,493 |
Commercial mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 25,463 | 26,135 |
Asset-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 48,351 | 40,725 |
Redeemable preferred stock [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 4,095 | 3,719 |
Fair Value, Inputs, Level 1 [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Equity securities: | ||
Total equity securities | 24,654 | 52,393 |
Cash equivalents | 34,004 | 27,255 |
Total assets at fair value | 58,658 | 79,648 |
Fair Value, Inputs, Level 1 [Member] | Common stock [Member] | ||
Equity securities: | ||
Total equity securities | 22,807 | 50,699 |
Fair Value, Inputs, Level 1 [Member] | Non-redeemable preferred stock [Member] | ||
Equity securities: | ||
Total equity securities | 1,847 | 1,694 |
Fair Value, Inputs, Level 1 [Member] | U.S. Government and agencies [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 1 [Member] | Obligations of states and political subdivisions [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 1 [Member] | Corporate securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 1 [Member] | Residential mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 1 [Member] | Commercial mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 1 [Member] | Asset-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 1 [Member] | Redeemable preferred stock [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 332,989 | 303,324 |
Equity securities: | ||
Total equity securities | ||
Cash equivalents | ||
Total assets at fair value | 332,989 | 303,324 |
Fair Value, Inputs, Level 2 [Member] | Common stock [Member] | ||
Equity securities: | ||
Total equity securities | ||
Fair Value, Inputs, Level 2 [Member] | Non-redeemable preferred stock [Member] | ||
Equity securities: | ||
Total equity securities | ||
Fair Value, Inputs, Level 2 [Member] | U.S. Government and agencies [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 9,032 | 10,167 |
Fair Value, Inputs, Level 2 [Member] | Obligations of states and political subdivisions [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 53,410 | 53,926 |
Fair Value, Inputs, Level 2 [Member] | Corporate securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 135,866 | 121,159 |
Fair Value, Inputs, Level 2 [Member] | Residential mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 56,772 | 47,493 |
Fair Value, Inputs, Level 2 [Member] | Commercial mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 25,463 | 26,135 |
Fair Value, Inputs, Level 2 [Member] | Asset-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 48,351 | 40,725 |
Fair Value, Inputs, Level 2 [Member] | Redeemable preferred stock [Member] | ||
Fixed income securities: | ||
Total fixed income securities | 4,095 | 3,719 |
Fair Value, Inputs, Level 3 [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Equity securities: | ||
Total equity securities | ||
Cash equivalents | ||
Total assets at fair value | ||
Fair Value, Inputs, Level 3 [Member] | Common stock [Member] | ||
Equity securities: | ||
Total equity securities | ||
Fair Value, Inputs, Level 3 [Member] | Non-redeemable preferred stock [Member] | ||
Equity securities: | ||
Total equity securities | ||
Fair Value, Inputs, Level 3 [Member] | U.S. Government and agencies [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 3 [Member] | Obligations of states and political subdivisions [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 3 [Member] | Corporate securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 3 [Member] | Residential mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 3 [Member] | Commercial mortgage-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 3 [Member] | Asset-backed securities [Member] | ||
Fixed income securities: | ||
Total fixed income securities | ||
Fair Value, Inputs, Level 3 [Member] | Redeemable preferred stock [Member] | ||
Fixed income securities: | ||
Total fixed income securities |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Reinsurance (Details) [Line Items] | ||
Reinsurance retention policy, amount retained | $ 133,000 | $ 125,000 |
Reinsurance coverage excess amount | 20,000 | 15,000 |
Reinsurance risk excess of loss | 4,000 | 4,000 |
Excess property risks | 1,000 | 1,000 |
Reinsurance coverage property risk | 11,000 | 11,000 |
Reinsurance coverage excess of casualty risks | 1,000 | 1,000 |
Reinsurance coverage | 20,000 | 20,000 |
Excess amount per property | $ 5,000 | $ 5,000 |
Ceded reinsurance percentage | 100% | 100% |
Crop [Member] | ||
Reinsurance (Details) [Line Items] | ||
Net loss ratio percentage | 100% | 100% |
Multi-Peril Crop [Member] | ||
Reinsurance (Details) [Line Items] | ||
Net loss ratio percentage | 105% | 105% |
Reinsurance (Details) - Schedul
Reinsurance (Details) - Schedule of reconciliation of direct to net premiums on both a written and an earned basis - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Premiums Written [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Premiums Written, Direct premium | $ 144,250 | $ 144,962 | $ 234,806 | $ 220,495 |
Premiums Written, Assumed premium | 2,440 | 3,226 | 2,839 | 5,087 |
Premiums Written, Ceded premium | (20,439) | (20,175) | (28,898) | (25,835) |
Premiums Written, Net premiums | 126,251 | 128,013 | 208,747 | 199,747 |
Premiums Earned [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Premiums Written, Direct premium | 106,162 | 94,251 | 191,636 | 167,650 |
Premiums Written, Assumed premium | 827 | 1,691 | 1,403 | 3,552 |
Premiums Written, Ceded premium | (12,843) | (11,446) | (21,266) | (17,119) |
Premiums Written, Net premiums | $ 94,146 | $ 84,496 | $ 171,773 | $ 154,083 |
Reinsurance (Details) - Sched_2
Reinsurance (Details) - Schedule of reconciliation of direct to net losses and loss adjustment expenses - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Reinsurance Disclosures [Abstract] | ||||
Direct losses and loss adjustment expenses | $ 95,149 | $ 110,670 | $ 166,010 | $ 156,165 |
Assumed losses and loss adjustment expenses | 67 | 1,535 | 157 | 1,545 |
Ceded losses and loss adjustment expenses | (17,710) | (3,610) | (29,836) | (8,986) |
Net losses and loss adjustment expenses | $ 77,506 | $ 108,595 | $ 136,331 | $ 148,724 |
Reinsurance (Details) - Sched_3
Reinsurance (Details) - Schedule of pooling share percentages by insurance company | Jun. 30, 2023 |
Reinsurance (Details) - Schedule of pooling share percentages by insurance company [Line Items] | |
Pool Percentage | 100% |
Nodak Insurance Company [Member] | |
Reinsurance (Details) - Schedule of pooling share percentages by insurance company [Line Items] | |
Pool Percentage | 66% |
American West Insurance Company [Member] | |
Reinsurance (Details) - Schedule of pooling share percentages by insurance company [Line Items] | |
Pool Percentage | 7% |
Primero Insurance Company [Member] | |
Reinsurance (Details) - Schedule of pooling share percentages by insurance company [Line Items] | |
Pool Percentage | 3% |
Battle Creek Mutual Insurance Company [Member] | |
Reinsurance (Details) - Schedule of pooling share percentages by insurance company [Line Items] | |
Pool Percentage | 2% |
Direct Auto Insurance Company [Member] | |
Reinsurance (Details) - Schedule of pooling share percentages by insurance company [Line Items] | |
Pool Percentage | 13% |
Westminster American Insurance Company [Member] | |
Reinsurance (Details) - Schedule of pooling share percentages by insurance company [Line Items] | |
Pool Percentage | 9% |
Deferred Policy Acquisition C_3
Deferred Policy Acquisition Costs (Details) - Schedule of deferred policy acquisition costs and asset reconciliation - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Deferred Policy Acquisition Costs and Asset Reconciliation [Abstract] | ||||
Balance, beginning of period | $ 31,350 | $ 26,272 | $ 29,768 | $ 24,947 |
Deferral of policy acquisition costs | 23,353 | 20,889 | 43,523 | 37,837 |
Amortization of deferred policy acquisition costs | (20,579) | (16,244) | (39,167) | (31,867) |
Balance, end of period | $ 34,124 | $ 30,917 | $ 34,124 | $ 30,917 |
Unpaid Losses and Loss Adjust_3
Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Direct Auto and Westminster [Member] | ||
Unpaid Losses and Loss Adjustment Expenses (Details) [Line Items] | ||
Incurred reported losses and loss adjustment expenses | $ 9,477 | |
Battle Creek [Member] | ||
Unpaid Losses and Loss Adjustment Expenses (Details) [Line Items] | ||
Incurred reported losses and loss adjustment expenses | $ 8,490 |
Unpaid Losses and Loss Adjust_4
Unpaid Losses and Loss Adjustment Expenses (Details) - Schedule of activity in the liability for unpaid losses and loss adjustment expenses - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Balance, beginning of period: | ||
Liability for unpaid losses and loss adjustment expenses | $ 190,459 | $ 139,662 |
Reinsurance recoverables on losses | 37,575 | 21,200 |
Net balance, beginning of period | 152,884 | 118,462 |
Incurred related to: | ||
Current year | 126,854 | 157,214 |
Prior years | 9,477 | (8,490) |
Total incurred | 136,331 | 148,724 |
Paid related to: | ||
Current year | 50,010 | 59,634 |
Prior years | 60,675 | 41,717 |
Total paid | 110,685 | 101,351 |
Balance, end of period: | ||
Liability for unpaid losses and loss adjustment expenses | 232,038 | 182,876 |
Reinsurance recoverables on losses | 53,508 | 17,041 |
Net balance, end of period | $ 178,530 | $ 165,835 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Property and Equipment [Abstract] | ||||
Depreciation expense | $ 188 | $ 176 | $ 370 | $ 344 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Cost: | ||
Property and equipment, Gross cost | $ 21,816 | $ 21,213 |
Accumulated depreciation | (11,540) | (11,370) |
Total property and equipment, net | 10,276 | 9,843 |
Land [Member] | ||
Cost: | ||
Property and equipment, Gross cost | 1,403 | 1,403 |
Building and improvements [Member] | ||
Cost: | ||
Property and equipment, Gross cost | $ 14,491 | 14,271 |
Building and improvements [Member] | Minimum [Member] | ||
Cost: | ||
Estimated Useful Life | 10 years | |
Building and improvements [Member] | Maximum [Member] | ||
Cost: | ||
Estimated Useful Life | 43 years | |
Electronic data processing equipment [Member] | ||
Cost: | ||
Property and equipment, Gross cost | $ 1,637 | 1,310 |
Electronic data processing equipment [Member] | Minimum [Member] | ||
Cost: | ||
Estimated Useful Life | 5 years | |
Electronic data processing equipment [Member] | Maximum [Member] | ||
Cost: | ||
Estimated Useful Life | 7 years | |
Furniture and Fixtures [Member] | ||
Cost: | ||
Property and equipment, Gross cost | $ 2,968 | 2,919 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Cost: | ||
Estimated Useful Life | 5 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Cost: | ||
Estimated Useful Life | 7 years | |
Automobiles [Member] | ||
Cost: | ||
Property and equipment, Gross cost | $ 1,317 | $ 1,310 |
Automobiles [Member] | Minimum [Member] | ||
Cost: | ||
Estimated Useful Life | 2 years | |
Automobiles [Member] | Maximum [Member] | ||
Cost: | ||
Estimated Useful Life | 3 years |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 118 | $ 118 | $ 236 | $ 236 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles (Details) - Schedule of goodwill by segment - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill [Line Items] | ||
Goodwill | $ 9,384 | $ 9,384 |
Non-standard auto from acquisition of Primero [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 2,628 | 2,628 |
Commercial from acquisition of Westminster [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 6,756 | $ 6,756 |
Goodwill and Other Intangible_4
Goodwill and Other Intangibles (Details) - Schedule of other intangible assets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Subject to amortization: | ||
Gross Carrying Amount | $ 9,348 | $ 9,348 |
Accumulated Amortization | 1,718 | 1,482 |
Net | 7,630 | 7,866 |
Trade Names [Member] | ||
Subject to amortization: | ||
Gross Carrying Amount | 748 | 748 |
Accumulated Amortization | 415 | 365 |
Net | 333 | 383 |
Distribution Network [Member] | ||
Subject to amortization: | ||
Gross Carrying Amount | 6,700 | 6,700 |
Accumulated Amortization | 1,303 | 1,117 |
Net | 5,397 | 5,583 |
Subject to Amortization [Member] | ||
Subject to amortization: | ||
Gross Carrying Amount | 7,448 | 7,448 |
Accumulated Amortization | 1,718 | 1,482 |
Net | 5,730 | 5,966 |
Not Subject to Amortization State Insurance Licenses [Member] | ||
Subject to amortization: | ||
Gross Carrying Amount | 1,900 | 1,900 |
Accumulated Amortization | ||
Net | $ 1,900 | $ 1,900 |
Goodwill and Other Intangible_5
Goodwill and Other Intangibles (Details) - Schedule of amortization of other intangible assets with finite lives $ in Thousands | Jun. 30, 2023 USD ($) |
Schedule of Amortization of Other Intangible Assets with Finite Lives [Abstract] | |
2023 (six months remaining) | $ 219 |
2024 | 422 |
2025 | 422 |
2026 | 422 |
2027 | 422 |
Thereafter | 3,823 |
Total other intangible assets with finite lives | $ 5,730 |
Royalties, Dividends, and Aff_3
Royalties, Dividends, and Affiliations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Royalties, Dividends, and Affiliations (Details) [Line Items] | |||||
Payment of royalties | $ 442 | $ 405 | $ 799 | $ 744 | |
NDFB [Member] | |||||
Royalties, Dividends, and Affiliations (Details) [Line Items] | |||||
Royalty amounts payable accrued | $ 167 | $ 119 |
Royalties, Dividends, and Aff_4
Royalties, Dividends, and Affiliations (Details) - Schedule of impact of including battle creek in our consolidated balance sheets and statements of operations - Battle Creek [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | ||
Assets: | ||||||
Cash and cash equivalents | $ 4,321 | $ 4,321 | $ 5,008 | |||
Investments | 13,931 | 13,931 | 13,350 | |||
Premiums and agents’ balances receivable | 5,606 | 5,606 | 5,422 | |||
Deferred policy acquisition costs | 682 | 682 | 595 | |||
Reinsurance recoverables on losses | [1] | 12,641 | 12,641 | 12,597 | ||
Accrued investment income | 60 | 60 | 59 | |||
Income tax recoverable | 225 | |||||
Deferred income taxes | 800 | 800 | 780 | |||
Property and equipment | 313 | 313 | 319 | |||
Other assets | 61 | 61 | 52 | |||
Total assets | 38,415 | 38,415 | 38,407 | |||
Liabilities: | ||||||
Unpaid losses and loss adjustment expenses | 5,218 | 5,218 | 6,453 | |||
Unearned premiums | 3,698 | 3,698 | 2,959 | |||
Notes payable | [2] | 3,000 | 3,000 | 3,000 | ||
Pooling payable | [2] | 7,699 | 7,699 | 8,337 | ||
Reinsurance losses payable | [1] | 13,783 | 13,783 | 13,125 | ||
Accrued expenses and other liabilities | 3,083 | 3,083 | 2,303 | |||
Total liabilities | 36,481 | 36,481 | 36,177 | |||
Equity: | ||||||
Non-controlling interest | 1,934 | 1,934 | 2,230 | |||
Total equity | 1,934 | 1,934 | 2,230 | |||
Total liabilities and equity | 38,415 | 38,415 | $ 38,407 | |||
Revenues: | ||||||
Net premiums earned | 1,882 | $ 1,690 | 3,435 | $ 3,082 | ||
Fee and other income (expenses) | 7 | (2) | 17 | (7) | ||
Net investment income | 80 | 27 | 147 | 40 | ||
Total revenues | 1,969 | 1,715 | 3,599 | 3,115 | ||
Expenses: | ||||||
Losses and loss adjustment expenses | 1,550 | 2,171 | 2,727 | 2,974 | ||
Amortization of deferred policy acquisition costs | 411 | 325 | 783 | 637 | ||
Other underwriting and general expenses | 155 | 157 | 318 | 274 | ||
Total expenses | 2,116 | 2,653 | 3,828 | 3,885 | ||
Loss before income taxes | (147) | (938) | (229) | (770) | ||
Income tax expense (benefit) | (34) | (212) | 174 | (174) | ||
Net loss | $ (113) | $ (726) | $ (403) | $ (596) | ||
[1]Amount partly eliminated in consolidation.[2]Amount fully eliminated in consolidation. |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Benefit Plans (Details) [Line Items] | |||||
Company's total contributions to the 401(k) plan | $ 189 | $ 187 | $ 378 | $ 335 | |
Company's total contribution to the money purchase plan | 32 | 242 | 281 | 432 | |
Deferred compensation plan expenses | 76 | 23 | 98 | 127 | |
Debt from ESOP | $ 2,400 | $ 2,400 | |||
Percentage of ESOP in authorized shares | 1% | ||||
Per share price (in Dollars per share) | $ 10 | $ 10 | |||
Distribution of employee stock ownership plan shares | $ 83 | $ 101 | $ 164 | $ 210 | |
ESOP shares were released and allocated (in Shares) | 145,890 | 145,890 | |||
ESOP shares in suspense (in Shares) | 94,110 | ||||
Market price (in Dollars per share) | $ 14.85 | ||||
Fair value of unearned ESOP shares | $ 1,398 | $ 1,398 | |||
ESOP Loan [Member] | |||||
Benefit Plans (Details) [Line Items] | |||||
Debt term | 10 years | ||||
Interest rate | 2.79% | 2.79% |
Line of Credit (Details)
Line of Credit (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Line of credit with Wells Fargo | $ 5,000 | |
Interest rate | 3.25% | |
Outstanding amounts | ||
Line of credit expiration date | Mar. 31, 2024 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Battle Creek [Member] | |
Income Taxes (Details) [Line Items] | |
Operating loss carryforwards | $ 3,963 |
Westminster [Member] | |
Income Taxes (Details) [Line Items] | |
Operating loss carryforwards | $ 1,270 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of operating leases - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Operating Leases Abstract [Abstract] | ||||
Operating lease expense | $ 98 | $ 98 | $ 196 | $ 196 |
Other information on operating leases: | ||||
Operating cash outflow from operating leases | 103 | 69 | 204 | 137 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 247 | $ 247 | ||
Weighted average discount rate | 3.95% | 3.25% | 3.95% | 3.25% |
Weighted average remaining lease term in years | 5 years 9 months 18 days | 6 years 7 months 6 days | 5 years 9 months 18 days | 6 years 7 months 6 days |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of contractual maturities of our operating leases $ in Thousands | Dec. 31, 2022 USD ($) |
Schedule of Contractual Maturities of the Company's Lease Liabilities [Abstract] | |
2023 | $ 195 |
2024 | 381 |
2025 | 346 |
2026 | 351 |
2027 | 356 |
Thereafter | 509 |
Total undiscounted lease payments | 2,138 |
Less: present value adjustment | 219 |
Operating lease liability at June 30, 2023 | $ 1,919 |
Common and Preferred Stock (Det
Common and Preferred Stock (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 16, 2022 | May 09, 2022 | Aug. 11, 2021 | |
Common and Preferred Stock (Details) [Line Items] | ||||||||
Weighted average shares | 61,935 | 61,614 | ||||||
Stock repurchase program, authorized amount | $ 10,000,000 | $ 5,000,000 | ||||||
Shares repurchased | 238,164 | 111,244 | 54,223 | |||||
Repurchase shares | 214,937 | |||||||
Shares repurchased, value | $ 1,932,000 | $ 734,000 | ||||||
Excise tax | 1% | |||||||
Preferred stock, shares issued | 5,000,000 | 5,000,000 | ||||||
Common Stock [Member] | ||||||||
Common and Preferred Stock (Details) [Line Items] | ||||||||
Shares repurchased | 238,164 | |||||||
Shares repurchased, value | $ 3,223,000 | |||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 6,043,000 | $ 6,043,000 | ||||||
Additional Authorization [Member] | ||||||||
Common and Preferred Stock (Details) [Line Items] | ||||||||
Shares repurchased | 81,095 | |||||||
Common stock, shares issued | $ 1,554,000 | |||||||
Shares repurchased, value | $ 3,446,000 |
Common and Preferred Stock (D_2
Common and Preferred Stock (Details) - Schedule of changes in the number of common stock shares outstanding - shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Schedule Of Changes In The Number Of Common Stock Shares Outstanding Abstract | |||
Shares outstanding, beginning of period | 21,076,255 | 21,219,808 | 21,219,808 |
Treasury shares repurchased through stock repurchase authorization | (238,164) | (111,244) | (54,223) |
Issuance of treasury shares for vesting of restricted stock units | 47,887 | 101,292 | |
Shares outstanding, end of period | 20,885,978 | 21,209,856 | 21,076,255 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) shares | |
Share-Based Payment Arrangement [Member] | |
Share-Based Compensation (Details) [Line Items] | |
Share issued | shares | 1,000,000 |
Shares granted | shares | 100,000 |
Outstanding, aggregate intrinsic value | $ 1,000 |
Share-Based Payment Arrangement [Member] | Director [Member] | |
Share-Based Compensation (Details) [Line Items] | |
Share granted not exceed | $ 150 |
Restricted Stock [Member] | |
Share-Based Compensation (Details) [Line Items] | |
Percentage of RSU granted to employees per year | 20% |
Percentage of RSU granted to non-employee directors per year | 100% |
Total unrecognized compensation cost | $ 1,427 |
Total unrecognized compensation cost, weighted average period | 1 year 10 months 2 days |
Performance Shares [Member] | |
Share-Based Compensation (Details) [Line Items] | |
Total unrecognized compensation cost | $ 1,316 |
Total unrecognized compensation cost, weighted average period | 2 years 5 months 8 days |
Performance Shares [Member] | Minimum [Member] | |
Share-Based Compensation (Details) [Line Items] | |
Percentage of RSU granted to employees per year | 0% |
Performance Shares [Member] | Maximum [Member] | |
Share-Based Compensation (Details) [Line Items] | |
Percentage of RSU granted to employees per year | 150% |
Share-Based Compensation (Det_2
Share-Based Compensation (Details) - Schedule of restricted stock outstanding - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Weighted-Average Grant-Date Fair Value Per Share | ||
Share-Based Compensation (Details) - Schedule of restricted stock outstanding [Line Items] | ||
Units outstanding and unearned at beginning | $ 17 | $ 16.86 |
RSUs granted | 13.76 | 17.61 |
RSUs earned | 16.32 | 17.39 |
Units outstanding and unearned at ending | $ 15.37 | $ 17 |
Shares | ||
Share-Based Compensation (Details) - Schedule of restricted stock outstanding [Line Items] | ||
Units outstanding and unearned at beginning | 115,360 | 108,380 |
RSUs granted | 85,000 | 59,600 |
RSUs earned | (53,780) | (52,620) |
Units outstanding and unearned at ending | 146,580 | 115,360 |
Share-Based Compensation (Det_3
Share-Based Compensation (Details) - Schedule of RSU activity - Restricted Stock [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-Based Compensation (Details) - Schedule of RSU activity [Line Items] | ||||
RSU compensation expense | $ 257 | $ 225 | $ 559 | $ 498 |
Income tax benefit | (58) | (51) | (127) | (113) |
RSU compensation expense, net of income taxes | $ 199 | $ 174 | $ 432 | $ 385 |
Share-Based Compensation (Det_4
Share-Based Compensation (Details) - Schedule of performance stock outstanding - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | ||
Weighted-Average Grant-Date Fair Value Per Share | |||
Share-Based Compensation (Details) - Schedule of performance stock outstanding [Line Items] | |||
Units outstanding and unearned at beginning | $ 17 | $ 16.06 | |
PSUs granted during (at target) | 13.85 | 18.1 | |
PSUs earned during | 15.21 | ||
Performance adjustment | [1] | 14.26 | 15.21 |
Forfeitures | 15.21 | ||
Units outstanding and unearned at ending | $ 16.53 | $ 17 | |
PSUs | |||
Share-Based Compensation (Details) - Schedule of performance stock outstanding [Line Items] | |||
Units outstanding and unearned at beginning | 190,000 | 190,600 | |
PSUs granted during (at target) | 87,400 | 61,800 | |
PSUs earned during | (86,684) | ||
Performance adjustment | [1] | (63,600) | 31,200 |
Forfeitures | (6,916) | ||
Units outstanding and unearned at ending | 213,800 | 190,000 | |
[1]Represents the change in PSUs issued based upon the attainment of performance goals established by the Company. |
Share-Based Compensation (Det_5
Share-Based Compensation (Details) - Schedule of PSU activity - Performance Shares [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-Based Compensation (Details) - Schedule of PSU activity [Line Items] | ||||
PSU compensation expense | $ 139 | $ 262 | $ 277 | $ 523 |
Income tax benefit | (32) | (60) | (63) | (119) |
PSU compensation expense, net of income taxes | $ 107 | $ 202 | $ 214 | $ 404 |
Allowance for Expected Credit_3
Allowance for Expected Credit Losses (Details) - Schedule of allowance for expected credit losses - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
Premiums Receivable, Net of Allowance for Expected Credit Losses [Member] | ||
Allowance for Expected Credit Losses (Details) - Schedule of allowance for expected credit losses [Line Items] | ||
Balance, beginning of period | $ 64,502 | $ 62,173 |
Balance, end of period | 106,946 | 106,946 |
Allowance for Expected Credit Losses [Member] | ||
Allowance for Expected Credit Losses (Details) - Schedule of allowance for expected credit losses [Line Items] | ||
Balance, beginning of period | 445 | 425 |
Current period charge for expected credit losses | 189 | 278 |
Write-offs of uncollectible premiums receivable | 200 | 269 |
Balance, end of period | $ 434 | $ 434 |
Segment Information (Details)
Segment Information (Details) | Jun. 30, 2023 |
Segment Reporting [Abstract] | |
Revenues percent | 10% |
Segment Information (Details) -
Segment Information (Details) - Schedule of revenue by insurance product line - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Segment Information (Details) - Schedule of revenue by insurance product line [Line Items] | ||||||||
Direct premiums earned | $ 106,162 | $ 94,251 | $ 191,636 | $ 167,650 | ||||
Assumed premiums earned | 827 | 1,691 | 1,403 | 3,552 | ||||
Ceded premiums earned | (12,843) | (11,446) | (21,266) | (17,119) | ||||
Net premiums earned | 94,146 | 84,496 | 171,773 | 154,083 | ||||
Direct losses and loss adjustment expenses | 95,149 | 110,670 | 166,010 | 156,165 | ||||
Assumed losses and loss adjustment expenses | 67 | 1,535 | 157 | 1,545 | ||||
Ceded losses and loss adjustment expenses | (17,710) | (3,610) | (29,836) | (8,986) | ||||
Net losses and loss adjustment expenses | 77,506 | 108,595 | 136,331 | 148,724 | ||||
Gross margin | 16,640 | (24,099) | 35,442 | 5,359 | ||||
Underwriting and general expenses | 29,874 | 26,246 | 58,118 | 49,650 | ||||
Underwriting gain (loss) | (13,234) | (50,345) | (22,676) | (44,291) | ||||
Fee and other income | 499 | 415 | 773 | 843 | ||||
Net investment income | 2,505 | 2,015 | 4,744 | 3,668 | ||||
Net investment gains (losses) | (174) | (11,136) | 1,242 | (16,664) | ||||
Loss before income taxes | (10,404) | (59,051) | (15,917) | (56,444) | ||||
Income tax benefit | (2,169) | (12,415) | (3,182) | (11,847) | ||||
Net loss | (8,235) | (46,636) | (12,735) | (44,597) | ||||
Net loss attributable to non-controlling interest | (113) | (726) | (403) | (596) | ||||
Net loss attributable to NI Holdings, Inc. | $ (8,122) | $ (45,910) | $ (12,332) | $ (44,001) | ||||
Operating Ratios: | ||||||||
Loss and loss adjustment expense ratio | 82.30% | 128.50% | 79.40% | 96.50% | ||||
Expense ratio | 31.70% | 31.10% | 33.80% | 32.20% | ||||
Combined ratio | 114% | 159.60% | 113.20% | 128.70% | ||||
Premiums and agents’ balances receivable | $ 106,946 | $ 108,336 | $ 106,946 | $ 108,336 | $ 62,173 | |||
Deferred policy acquisition costs | 34,124 | 30,917 | 34,124 | 30,917 | $ 31,350 | 29,768 | $ 26,272 | $ 24,947 |
Reinsurance recoverables on losses | 53,508 | 17,041 | 53,508 | 17,041 | 37,575 | |||
Receivable from Federal Crop Insurance Corporation | 14,032 | 14,032 | 15,462 | |||||
Goodwill and other intangibles | 17,014 | 17,486 | 17,014 | 17,486 | 17,250 | |||
Unpaid losses and loss adjustment expenses | 232,038 | 182,876 | 232,038 | 182,876 | 190,459 | |||
Unearned premiums | 185,350 | 173,725 | 185,350 | 173,725 | $ 148,513 | |||
Payable to Federal Crop Insurance Corporation | 7,102 | 7,102 | ||||||
Private Passenger Auto [Member] | ||||||||
Segment Information (Details) - Schedule of revenue by insurance product line [Line Items] | ||||||||
Direct premiums earned | 21,508 | 19,824 | 42,050 | 39,125 | ||||
Assumed premiums earned | ||||||||
Ceded premiums earned | (965) | (559) | (1,853) | (1,118) | ||||
Net premiums earned | 20,543 | 19,265 | 40,197 | 38,007 | ||||
Direct losses and loss adjustment expenses | 18,455 | 16,866 | 34,080 | 31,392 | ||||
Assumed losses and loss adjustment expenses | ||||||||
Ceded losses and loss adjustment expenses | 411 | (12) | 412 | 173 | ||||
Net losses and loss adjustment expenses | 18,866 | 16,854 | 34,492 | 31,565 | ||||
Gross margin | 1,677 | 2,411 | 5,705 | 6,442 | ||||
Underwriting and general expenses | 5,754 | 5,553 | 12,172 | 11,321 | ||||
Underwriting gain (loss) | $ (4,077) | $ (3,142) | $ (6,467) | $ (4,879) | ||||
Operating Ratios: | ||||||||
Loss and loss adjustment expense ratio | 91.80% | 87.50% | 85.80% | 83.10% | ||||
Expense ratio | 28% | 28.80% | 30.30% | 29.80% | ||||
Combined ratio | 119.80% | 116.30% | 116.10% | 112.80% | ||||
Premiums and agents’ balances receivable | $ 23,840 | $ 21,287 | $ 23,840 | $ 21,287 | ||||
Deferred policy acquisition costs | 5,785 | 5,427 | 5,785 | 5,427 | ||||
Reinsurance recoverables on losses | 727 | 591 | 727 | 591 | ||||
Receivable from Federal Crop Insurance Corporation | ||||||||
Goodwill and other intangibles | ||||||||
Unpaid losses and loss adjustment expenses | 31,935 | 29,105 | 31,935 | 29,105 | ||||
Unearned premiums | 35,317 | 31,885 | 35,317 | 31,885 | ||||
Payable to Federal Crop Insurance Corporation | ||||||||
Non-Standard Auto [Member] | ||||||||
Segment Information (Details) - Schedule of revenue by insurance product line [Line Items] | ||||||||
Direct premiums earned | 21,744 | 15,577 | 42,716 | 30,019 | ||||
Assumed premiums earned | ||||||||
Ceded premiums earned | (99) | (65) | (192) | (129) | ||||
Net premiums earned | 21,645 | 15,512 | 42,524 | 29,890 | ||||
Direct losses and loss adjustment expenses | 14,139 | 4,133 | 31,177 | 12,624 | ||||
Assumed losses and loss adjustment expenses | ||||||||
Ceded losses and loss adjustment expenses | ||||||||
Net losses and loss adjustment expenses | 14,139 | 4,133 | 31,177 | 12,624 | ||||
Gross margin | 7,506 | 11,379 | 11,347 | 17,266 | ||||
Underwriting and general expenses | 8,684 | 6,867 | 17,677 | 12,958 | ||||
Underwriting gain (loss) | (1,178) | 4,512 | (6,330) | 4,308 | ||||
Fee and other income | 239 | 254 | 471 | 642 | ||||
Total | $ (939) | $ 4,766 | $ (5,859) | $ 4,950 | ||||
Operating Ratios: | ||||||||
Loss and loss adjustment expense ratio | 65.30% | 26.60% | 73.30% | 42.20% | ||||
Expense ratio | 40.10% | 44.30% | 41.60% | 43.40% | ||||
Combined ratio | 105.40% | 70.90% | 114.90% | 85.60% | ||||
Premiums and agents’ balances receivable | $ 10,322 | $ 16,678 | $ 10,322 | $ 16,678 | ||||
Deferred policy acquisition costs | 8,871 | 8,201 | 8,871 | 8,201 | ||||
Reinsurance recoverables on losses | ||||||||
Receivable from Federal Crop Insurance Corporation | ||||||||
Goodwill and other intangibles | 2,736 | 2,786 | 2,736 | 2,786 | ||||
Unpaid losses and loss adjustment expenses | 52,866 | 38,689 | 52,866 | 38,689 | ||||
Unearned premiums | 28,067 | 24,030 | 28,067 | 24,030 | ||||
Payable to Federal Crop Insurance Corporation | ||||||||
Home and Farm [Member] | ||||||||
Segment Information (Details) - Schedule of revenue by insurance product line [Line Items] | ||||||||
Direct premiums earned | 22,995 | 21,703 | 45,426 | 42,882 | ||||
Assumed premiums earned | ||||||||
Ceded premiums earned | (2,580) | (1,748) | (5,021) | (3,715) | ||||
Net premiums earned | 20,415 | 19,955 | 40,405 | 39,167 | ||||
Direct losses and loss adjustment expenses | 18,414 | 62,188 | 27,937 | 69,380 | ||||
Assumed losses and loss adjustment expenses | ||||||||
Ceded losses and loss adjustment expenses | (499) | (357) | (1,303) | (709) | ||||
Net losses and loss adjustment expenses | 17,915 | 61,831 | 26,634 | 68,671 | ||||
Gross margin | 2,500 | (41,876) | 13,771 | (29,504) | ||||
Underwriting and general expenses | 6,150 | 6,056 | 12,355 | 12,029 | ||||
Underwriting gain (loss) | $ (3,650) | $ (47,932) | $ 1,416 | $ (41,533) | ||||
Operating Ratios: | ||||||||
Loss and loss adjustment expense ratio | 87.80% | 309.90% | 65.90% | 175.30% | ||||
Expense ratio | 30.10% | 30.30% | 30.60% | 30.70% | ||||
Combined ratio | 117.90% | 340.20% | 96.50% | 206% | ||||
Premiums and agents’ balances receivable | $ 9,793 | $ 10,468 | $ 9,793 | $ 10,468 | ||||
Deferred policy acquisition costs | 7,974 | 7,838 | 7,974 | 7,838 | ||||
Reinsurance recoverables on losses | 4,691 | 2,766 | 4,691 | 2,766 | ||||
Receivable from Federal Crop Insurance Corporation | ||||||||
Goodwill and other intangibles | ||||||||
Unpaid losses and loss adjustment expenses | 30,503 | 49,052 | 30,503 | 49,052 | ||||
Unearned premiums | 48,690 | 45,942 | 48,690 | 45,942 | ||||
Payable to Federal Crop Insurance Corporation | ||||||||
Crop [Member] | ||||||||
Segment Information (Details) - Schedule of revenue by insurance product line [Line Items] | ||||||||
Direct premiums earned | 17,526 | 17,709 | 17,516 | 17,692 | ||||
Assumed premiums earned | 501 | 491 | 501 | 491 | ||||
Ceded premiums earned | (4,691) | (5,905) | (5,405) | (5,901) | ||||
Net premiums earned | 13,336 | 12,295 | 12,612 | 12,282 | ||||
Direct losses and loss adjustment expenses | 12,702 | 13,237 | 12,032 | 13,134 | ||||
Assumed losses and loss adjustment expenses | 244 | 244 | ||||||
Ceded losses and loss adjustment expenses | (4,492) | (3,151) | (4,596) | (3,214) | ||||
Net losses and loss adjustment expenses | 8,210 | 10,330 | 7,436 | 10,164 | ||||
Gross margin | 5,126 | 1,965 | 5,176 | 2,118 | ||||
Underwriting and general expenses | 2,648 | 1,609 | 2,680 | 1,057 | ||||
Underwriting gain (loss) | $ 2,478 | $ 356 | $ 2,496 | $ 1,061 | ||||
Operating Ratios: | ||||||||
Loss and loss adjustment expense ratio | 61.60% | 84% | 59% | 82.80% | ||||
Expense ratio | 19.90% | 13.10% | 21.20% | 8.60% | ||||
Combined ratio | 81.50% | 97.10% | 80.20% | 91.40% | ||||
Premiums and agents’ balances receivable | $ 44,951 | $ 42,905 | $ 44,951 | $ 42,905 | ||||
Deferred policy acquisition costs | 2,832 | 1,060 | 2,832 | 1,060 | ||||
Reinsurance recoverables on losses | 3,114 | 1,976 | 3,114 | 1,976 | ||||
Receivable from Federal Crop Insurance Corporation | 14,032 | 14,032 | ||||||
Goodwill and other intangibles | ||||||||
Unpaid losses and loss adjustment expenses | 11,603 | 12,755 | 11,603 | 12,755 | ||||
Unearned premiums | 27,193 | 26,205 | 27,193 | 26,205 | ||||
Payable to Federal Crop Insurance Corporation | 7,102 | 7,102 | ||||||
Commercial [Member] | ||||||||
Segment Information (Details) - Schedule of revenue by insurance product line [Line Items] | ||||||||
Direct premiums earned | 21,076 | 18,161 | 41,306 | 35,391 | ||||
Assumed premiums earned | ||||||||
Ceded premiums earned | (4,435) | (3,130) | (8,648) | (6,172) | ||||
Net premiums earned | 16,641 | 15,031 | 32,658 | 29,219 | ||||
Direct losses and loss adjustment expenses | 29,685 | 13,081 | 59,007 | 28,144 | ||||
Assumed losses and loss adjustment expenses | ||||||||
Ceded losses and loss adjustment expenses | (11,556) | (90) | (22,764) | (5,136) | ||||
Net losses and loss adjustment expenses | 18,129 | 12,991 | 36,243 | 23,008 | ||||
Gross margin | (1,488) | 2,040 | (3,585) | 6,211 | ||||
Underwriting and general expenses | 6,249 | 5,576 | 12,336 | 10,912 | ||||
Underwriting gain (loss) | $ (7,737) | $ (3,536) | $ (15,921) | $ (4,701) | ||||
Operating Ratios: | ||||||||
Loss and loss adjustment expense ratio | 108.90% | 86.40% | 111% | 78.70% | ||||
Expense ratio | 37.60% | 37.10% | 37.80% | 37.30% | ||||
Combined ratio | 146.50% | 123.50% | 148.80% | 116.10% | ||||
Premiums and agents’ balances receivable | $ 17,213 | $ 16,175 | $ 17,213 | $ 16,175 | ||||
Deferred policy acquisition costs | 8,198 | 7,929 | 8,198 | 7,929 | ||||
Reinsurance recoverables on losses | 42,635 | 10,960 | 42,635 | 10,960 | ||||
Receivable from Federal Crop Insurance Corporation | ||||||||
Goodwill and other intangibles | 14,278 | 14,700 | 14,278 | 14,700 | ||||
Unpaid losses and loss adjustment expenses | 96,390 | 43,876 | 96,390 | 43,876 | ||||
Unearned premiums | 43,066 | 42,379 | 43,066 | 42,379 | ||||
Payable to Federal Crop Insurance Corporation | ||||||||
All Other [Member] | ||||||||
Segment Information (Details) - Schedule of revenue by insurance product line [Line Items] | ||||||||
Direct premiums earned | 1,313 | 1,277 | 2,622 | 2,541 | ||||
Assumed premiums earned | 326 | 1,200 | 902 | 3,061 | ||||
Ceded premiums earned | (73) | (39) | (147) | (84) | ||||
Net premiums earned | 1,566 | 2,438 | 3,377 | 5,518 | ||||
Direct losses and loss adjustment expenses | 1,754 | 1,165 | 1,777 | 1,491 | ||||
Assumed losses and loss adjustment expenses | 67 | 1,291 | 157 | 1,301 | ||||
Ceded losses and loss adjustment expenses | (1,574) | (1,585) | (100) | |||||
Net losses and loss adjustment expenses | 247 | 2,456 | 349 | 2,692 | ||||
Gross margin | 1,319 | (18) | 3,028 | 2,826 | ||||
Underwriting and general expenses | 389 | 585 | 898 | 1,373 | ||||
Underwriting gain (loss) | $ 930 | $ (603) | $ 2,130 | $ 1,453 | ||||
Operating Ratios: | ||||||||
Loss and loss adjustment expense ratio | 15.80% | 100.70% | 10.30% | 48.80% | ||||
Expense ratio | 24.80% | 24% | 26.60% | 24.90% | ||||
Combined ratio | 40.60% | 124.70% | 36.90% | 73.70% | ||||
Premiums and agents’ balances receivable | $ 827 | $ 823 | $ 827 | $ 823 | ||||
Deferred policy acquisition costs | 464 | 462 | 464 | 462 | ||||
Reinsurance recoverables on losses | 2,341 | 748 | 2,341 | 748 | ||||
Receivable from Federal Crop Insurance Corporation | ||||||||
Goodwill and other intangibles | ||||||||
Unpaid losses and loss adjustment expenses | 8,741 | 9,399 | 8,741 | 9,399 | ||||
Unearned premiums | $ 3,017 | 3,284 | $ 3,017 | 3,284 | ||||
Payable to Federal Crop Insurance Corporation |