Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 12

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1
Chunk 12
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 additional information, see Part II, Item 7, “Critical
Accounting Policies” and Part II, Item 8, Note 8 “Unpaid Losses and Loss Adjustment Expenses.”

Investments

The majority of funds available for investments are deployed in
a widely diversified portfolio of high quality, liquid taxable U.S. government, tax-exempt and taxable U.S. municipal, taxable corporate,
and U.S. agency mortgage-backed bonds. We regularly monitor the effective duration of our fixed income investments, and our investment
purchases and sales are executed with the objective of having adequate funds available to satisfy our insurance and other obligations.
Generally, the expected principal and 

9 

interest payments produced by our fixed income portfolio adequately fund the estimated runoff of
the Company’s insurance reserves. The substantial amount by which the fair value of the fixed income portfolio exceeds the value
of the net insurance liabilities, as well as the positive cash flow from newly sold policies and the large amount of high-quality liquid
bonds, contribute to the Company’s ability to fund claim payments without having to sell illiquid assets or access its credit facilities.

We also invest a much smaller percentage of the portfolio in private
placement debt offerings and equity securities, which have the potential for higher returns but also involve varying degrees of risk,
including higher volatility and/or less liquidity.

The Investment Committee of NI Holdings’ Board of Directors
reviews and approves the Company’s investment policy periodically. The investment portfolio is managed by Conning, Inc.

For additional information, see Part II, Item 7, “Critical
Accounting Policies” and Part II, Item 8, Note 4 “Investments.”

Financial Strength

Ratings are an important factor in assessing the
Company’s competitive position in the insurance industry. The Company is reviewed regularly by the independent rating agency AM
Best, who assigns a financial strength rating to the Company, which reflects its assessment of an insurer’s ability to meet its
financial obligations to policyholders. An insurer’s financial strength rating is one of the primary factors evaluated by those
in the market to purchase insurance. A poor rating indicates that there is an increased likelihood that the insurer could become insolvent
and therefore not able to fulfill its obligations under the insurance policies it issues. This rating can also affect an insurer’s
level of written premiums, the lines of business it can write, and, for insurers like us that are also public registrants, the market
value of its securities.

All of the Company’s insurance subsidiaries
and affiliate companies