Company: NODK
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001174947-25-000721
Chunk: 135

Company: NI Holdings, Inc.
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 8
Chunk 135
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 by earned premium
growth in our other segments, higher net investment income, and lower frequency of large loss experience in the Home and Farm segment.

Income Tax Expense

We recorded income tax expense of $1,289 for the three months ended
March 31, 2025, compared to income tax expense of $1,898 for the three months ended March 31, 2024. Our effective tax rate for the first
quarter of 2025 was 16.6% compared to an effective tax rate of 21.5% for the first quarter of 2024. The current quarter effective tax
rate was impacted by a change in our valuation allowance against deferred income tax assets.

Net Income

For the three months ended March 31, 2025, we had net income of $6,460
compared to net income of $6,935 for the three months ended March 31, 2024. This change was attributable to the higher underwriting loss
in the Non-Standard Auto segment, and less favorable market conditions for equity investments, partially offset by earned premium growth
in our other segments, higher net investment income, and lower frequency of large loss experience in the Home and Farm segment, and reductions
in income tax expense.

Return on Average Equity

For the three months ended March 31, 2025, we had annualized return
on average equity of 10.4% compared to 12.1% for the three months ended March 31, 2024.

Average equity is calculated as the average between beginning and ending
equity for the period.

Critical Accounting Policies

The preparation of financial statements in accordance with GAAP requires
both the use of estimates and judgment relative to the application of appropriate accounting policies. We are required to make estimates
and assumptions in certain circumstances that affect amounts reported in the unaudited consolidated financial statements and related footnotes.
We evaluate these estimates and assumptions on an ongoing basis based on historical developments, market conditions, industry trends,
and other information that we believe to be reasonable under the circumstances. There can be no assurance that actual results will conform
to these estimates and assumptions or that reported results of operations will not be materially and adversely affected by the need to
make accounting adjustments to reflect changes in these estimates and assumptions from time to time. Our critical accounting policies
are more fully described in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations”
presented in our 2024