Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 1991

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 7
Chunk 1991
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 reserve estimation is also affected
by the volume of claims, the potential severity of individual claims, the determination of occurrence date for a claim, and reporting
lags (the time between the occurrence of the policyholder event and when it is actually reported to the insurer). Informed judgment is
applied throughout the process, including the application of various individual experiences and expertise to multiple sets of data and
analyses. We continually refine our estimates of unpaid losses and loss adjustment expenses in a regular ongoing process as historical
loss experience develops and additional claims are reported and settled. We consider all significant facts and circumstances known at
the time the liabilities for unpaid losses and loss adjustment expenses are established.

There is an inherent amount of uncertainty in the establishment
of liabilities for unpaid losses and loss adjustment expenses. This uncertainty is greatest in the current and most recent accident years
due to the more recent nature of the claims being reported and relatively small percentage of these claims that have been reported, investigated,
and adjusted by our claims staff. Therefore, the reserves carried in these more recent accident years are generally more conservative
than those carried for older accident years. As we have the opportunity to investigate and adjust the reported claims, both the case and
IBNR reserves are adjusted to more closely reflect the ultimate expected loss.

39 

Other factors that may have an impact on our case and IBNR reserves
include, but are not limited to, those described below.

Changes in liability law and public attitudes regarding damage
awards

Laws governing liability claims and judicial interpretations thereof
can change over time, which can expand the scope of coverage anticipated by insurers when initially establishing reserves for claims.
In addition, public attitudes regarding damage awards can result in judges and juries granting higher recoveries for damages than expected
by claims personnel when reserves are established. In addition, these changes can result in both increased claim frequency and severity
as both plaintiffs and their legal counsel perceive the opportunity for higher damage awards. Reserves established for claims that occurred
in prior years would not have anticipated these legal changes and, therefore, could prove to be inadequate for the ultimate losses paid
by the Company, causing us to experience adverse development and higher loss payments in future years.

Change in claims handling and/or setting case reserves

Changes in Company personnel and/or the approach to how claims are
reported, adjusted, and reserved may affect the reserves we establish. As discussed above, the setting of IBNR reserves is not an exact
science and involves the expert judgment of an actuary. One act