NI Holdings, Inc. Reports Results for Fourth Quarter and Year Ended December 31, 2023
- Direct written premiums increased by 16.2% to $102.4 million in 2023 compared to the prior year quarter.
- Net earned premiums rose by 4.6% to $88.6 million in 2023 compared to the prior year quarter.
- Combined ratio improved to 85.9% for the year, showing better underwriting results across all segments.
- Net investment income surged to $10.5 million compared to $7.8 million in the previous year.
- Earnings per share increased to $0.32 for the quarter, indicating a positive shift towards profitability.
- The company repurchased 548,549 shares of common stock during the year, totaling $7.2 million.
- None.
Insights
The reported increase in direct written premiums by NI Holdings, Inc. is a strong indicator of the company's growth in the insurance sector. This metric is critical as it reflects the total amount of insurance policies sold before reinsurance, which can directly impact future earnings. The growth in premiums, particularly in the Non-Standard Auto and Private Passenger Auto segments, suggests that the company is expanding its market share or experiencing increased demand for its products.
An improved combined ratio, which is a key performance indicator in the insurance industry, signifies better underwriting discipline and profitability. The substantial decrease from the previous year points to effective cost control and possibly a more favorable claims environment. However, a full-year combined ratio of over 100% indicates that there are still areas where the company is paying out more in claims and expenses than it earns in premiums, which is not sustainable in the long term.
NI Holdings' strategic underwriting and rate adjustments appear to be paying off, as evidenced by the positive shift in their earnings per share (EPS). The EPS improvement from $0.04 to $0.32 for the quarter is noteworthy. However, the full-year loss per share of $0.26, while an improvement from the previous year's $2.49, warrants attention from investors. It is indicative of the challenges the company faced throughout the year, including the inflationary pressures that have affected reserve strengthening in certain segments.
The stock repurchase program, where the company bought back shares at an average price of $13.15, reflects management's confidence in the intrinsic value of the company. This action can often be interpreted as a positive signal to the market, potentially leading to increased investor confidence and support for the stock price.
The macroeconomic context, particularly the inflationary environment, has had a palpable influence on NI Holdings' operations. Inflation impacts loss costs and reserve requirements, as seen in the company's need for reserve strengthening. The increase in net investment income and gains, driven by higher fixed income reinvestment rates and favorable equity market conditions, also reflects broader economic trends, such as interest rate changes and stock market performance.
Looking forward, the company's ability to navigate inflationary pressures and adapt to economic conditions will be important for maintaining profitability and delivering returns to shareholders. The management's optimism about the future suggests they have strategies in place to mitigate these economic risks.
FARGO, N.D., March 15, 2024 (GLOBE NEWSWIRE) -- NI Holdings, Inc. (NASDAQ: NODK) announced today results for the year ended December 31, 2023.
Summary of Year-End 2023 Results
(All comparisons vs. year-end 2022, unless noted otherwise)
- Direct written premiums of
$102.4 million , up16.2% compared to the prior year quarter and full year direct written premiums of$418.4 million , up7.4% compared to prior year. Growth in both periods was driven by Non-Standard Auto and Private Passenger Auto. - Net earned premiums of
$88.6 million , up4.6% compared to prior year quarter and full year net earned premiums of$351.1 million , up7.0% compared to prior year. - Combined ratio of
85.9% , down 23.5 pts compared to the prior year quarter, driven by improved underwriting results across all segments. Combined ratio of103.4% for full year 2023 versus119.9% for the prior year, driven by lower catastrophe losses in Home and Farm and lower loss frequency in Private Passenger Auto, partially offset by reserve strengthening in the Non-Standard Auto and Commercial segments to address elevated loss costs due to the inflationary environment. - Net investment income of
$10.5 million for the year versus$7.8 million and net investment gain of$2.1 million versus net investment loss of$13.1 million , driven by higher fixed income reinvestment rates and more favorable equity market conditions, respectively. - Earnings per share of
$0.32 compared to$0.04 for the quarter, and loss per share of$0.26 compared to$2.49 for the year. - The Company repurchased 548,549 shares of common stock at an average price of
$13.15 per share for a total of$7.2 million during the year, excluding the effect from applicable excise taxes.
| Three Months Ended December 31, | Year Ended December 31, | ||||||
| Dollars in thousands, except per share data | 2023 | 2022 | Change | 2023 | 2022 | Change | |
| Direct written premiums | |||||||
| Net earned premiums | |||||||
| Loss and LAE ratio | (28.7 pts) | (20.1 pts) | |||||
| Expense ratio | 5.1 pts | 3.6 pts | |||||
| Combined ratio | (23.5 pts) | (16.5 pts) | |||||
| Net income (loss) attributable to NI Holdings | NM | ( | ( | NM | |||
| Return on average equity | 9.7 pts | ( | ( | 15.7 pts | |||
| Basic earnings (loss) per share | NM | ( | ( | NM | |||
| NM = not meaningful | |||||||
Management Commentary
“In the fourth quarter, we continued to see the impact of our underwriting actions and rate increases taken during the year, with not only improvement over the prior year, but also a return to underwriting profitability,” said Michael J. Alexander, President, and Chief Executive Officer. “Our improved results were driven by our Private Passenger Auto and Home and Farm segments, which benefited from favorable weather conditions and the significant underwriting and rate actions implemented during the year. We were able to balance this profitability with continued growth during the quarter, with all segments reporting higher year-over-year direct written premiums. Our high-quality investment portfolio once again positively contributed to our earnings, driven by higher reinvestment rates earned throughout the year in our fixed income portfolio.
“Throughout 2023, we made notable progress toward our goal of returning the company to profitability while improving our overall risk profile. Looking ahead, we remain confident in the outlook for our business and our ability to achieve appropriate returns for our shareholders into the future.”
Securities and Exchange Commission (SEC) Filings
The Company’s Annual Report on Form 10-K and latest financial supplement can be found on the Company’s website at www.niholdingsinc.com. The Company’s filings with the SEC can also be found at www.sec.gov.
About the Company
NI Holdings, Inc. is an insurance holding company. The company is a North Dakota business corporation that is the stock holding company of Nodak Insurance Company and became such in connection with the conversion of Nodak Mutual Insurance Company 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 Company were issued to Nodak Mutual Group, Inc., which then contributed the shares to NI Holdings in exchange for
Safe Harbor Statement
Some of the statements included in this news release, particularly those anticipating future financial performance, including investment performance and yields, business prospects, growth and operating strategies, the impact of pricing and underwriting changes on operating results, and similar matters, are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Actual results could vary materially. Factors that could cause actual results to vary materially include: our ability to maintain profitable operations, the adequacy of the loss and loss adjustment expense reserves, business and economic conditions, interest rates, competition from various insurance and other financial businesses, terrorism, the availability and cost of reinsurance, adverse and catastrophic weather events, including the impacts of climate change, legal and judicial developments, changes in regulatory requirements, our ability to integrate and manage successfully the insurance companies we may acquire from time to time, the impact of inflation on our operating results, and other risks we describe in the periodic reports we file with the Securities and Exchange Commission. You should not place undue reliance on any such forward-looking statements. We disclaim any obligation to update such statements or to announce publicly the results of any revisions that we may make to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to our Annual Report on Form 10-K, as filed with the SEC.
Investor Relations Contact:
Seth Daggett
Executive Vice President, Treasurer and Chief Financial Officer
701-298-4348
IR@nodakins.com
FAQ
What were NI Holdings, Inc.'s (NODK) direct written premiums for the year ended December 31, 2023?
How did NI Holdings, Inc. (NODK) perform in terms of net earned premiums in 2023?
What was the combined ratio for NI Holdings, Inc. (NODK) in 2023?
How did NI Holdings, Inc. (NODK) fare in terms of net investment income in 2023?
What was the earnings per share for NI Holdings, Inc. (NODK) in the quarter?
Did NI Holdings, Inc. (NODK) engage in share repurchases during the year?
