AM Best Affirms Credit Ratings of Members of Nodak Insurance Group and NI Holdings, Inc.

Rhea-AI Summary

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (ICR) of 'a+' for members of Nodak Insurance Group, alongside a 'bbb+' rating for NI Holdings, Inc. The outlook for these ratings is stable. Nodak’s strong balance sheet strength and operating performance were highlighted, with significant capitalization and consistent reserving trends. The group operates in 17 states, maintaining a neutral business profile while expanding geographically. Nodak’s enterprise risk management is deemed appropriate.

Positive

• Affirmation of A (Excellent) FSR and 'a+' ICR reflects strong balance sheet and operating performance.
• Strong risk-adjusted capitalization supports Nodak's financial stability.
• Nodak has consistently outperformed industry profitability metrics over five years.
• The group has expanded its operations to 17 states, indicating growth potential.

Negative

• Nodak reported its first underwriting loss in ten years due to weather-related impacts in 2021.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of members of Nodak Insurance Group (Nodak). Concurrently, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) of NI Holdings, Inc. (Fargo, ND) [NASDAQ: NODK], a publicly traded holding company. The outlook of these Credit Ratings (ratings) is stable. (See below for a full listing of companies and ratings.)

The ratings reflect Nodak’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

Nodak’s balance sheet strength is supported by its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), favorable net and gross underwriting leverage, consistent reserving trends, and access to capital markets as a part of a publicly traded organization (NI Holdings, Inc.). Each individual member of Nodak’s pool plays a role in the group’s business plan and contributes favorably to its risk-adjusted capitalization. The group’s strong operating performance is driven by five-year average profitability metrics, which outperform the composite, and is further supported by steady investment income. In 2021, Nodak continued to grow surplus and produce positive net income through the year, despite weather-related losses that drove its first underwriting loss in 10 years.

The ratings also reflect Nodak’s neutral business profile driven by its market position as a leader in personal lines, farm and crop insurance in North Dakota. The group continues to expand geographically and now operates in 17 states. Nodak’s ERM remains appropriate and in line with the group’s risk profile, with defined risk appetite and tolerances and extensive stress testing to mitigate weather-related losses.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed, with stable outlooks for the following members of the Nodak Insurance Group:

• American West Insurance Company
• Battle Creek Mutual Insurance Company
• Direct Auto Insurance Company
• Nodak Insurance Company
• Primero Insurance Company
• Westminster American Insurance Company

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220414005855/en/

Lauren Magro

Financial Analyst

+1 908 439 2200, ext. 5181

lauren.magro@ambest.com

Joseph Burtone

Director

+1 908 439 2200, ext. 5125

joseph.burtone@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Jim Peavy

Director, Communications

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

Source: AM Best

FAQ

What are the credit ratings for NODK as per the latest AM Best announcement?

AM Best affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of 'a+' for Nodak Insurance Group, with a 'bbb+' rating for NI Holdings, Inc.

What is the outlook for NODK's credit ratings?

The outlook for the credit ratings of Nodak Insurance Group and NI Holdings, Inc. is stable.

How does Nodak Insurance Group's balance sheet strength impact NODK?

Nodak's balance sheet strength is assessed as strongest, with high risk-adjusted capitalization contributing to its financial stability.

How many states does Nodak Insurance Group operate in?

Nodak Insurance Group operates in 17 states, indicating a broad market presence.

What factors contributed to Nodak's positive operating performance?

Nodak's strong operating performance is driven by five-year average profitability metrics that outperform the composite and steady investment income.