Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 36

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1
Chunk 36
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 and in the case of declines in credit
quality, payment defaults on our fixed income securities. Such conditions could give rise to significant realized and unrealized investment
losses or the impairment of securities. Potential higher interest rates could reduce the carrying value of our fixed income and short-term
investments, negatively impacting the Company’s carrying value in the short-term. Over the long-term, however, higher interest rates
would provide an incremental benefit to our net investment income as excess cash and the proceeds of maturing bonds are reinvested at
higher rates. We manage our exposure to interest rate increases by monitoring the duration within our investment portfolio and maintaining
maturities that minimize any forced sales within the portfolio. However, even with such monitoring efforts, we may be forced to sell securities
at a loss, which would adversely affect our results of operations.

We also invest a portion of our assets in equity
securities, which are subject to greater volatility in their investment returns than fixed income investments. Unlike fixed income securities,
the changes in the fair value of our equity securities are recognized in net income. General economic conditions, stock market volatility,
changes in tax laws, and many other factors beyond our control can adversely affect the value of these securities and potentially reduce
our net investment income and/or lead to net investment losses.

Any significant or long-running negative changes
in the fixed income or equity markets could have a material adverse effect on our financial condition, results of operations, or cash
flows. Our investment portfolio is also subject to credit and cash flow risk, including risks associated with our investments in asset-backed
and mortgage-backed securities. Because our investment portfolio is the largest component of our assets and a multiple of our shareholders’
equity, adverse changes in economic conditions could result in impairments that are material to our financial condition and operating
results. Such economic changes could arise from overall changes in the financial markets or specific changes to industries, companies,
or municipalities in which we maintain investment holdings. See Part II, Item 7A, “Quantitative and Qualitative Disclosures About
Market Risk.”

We may not be able to manage our growth effectively.

We intend to continue to grow our business in
the future, which could require additional capital, systems development, and skilled personnel. However, there are inherent risks associated
with this strategy, including the risks of unsuccessfully identifying profitable business opportunities, managing capital requirements,
expanding systems and internal controls, maintaining innovative products and technologies, allocating human capital resources, identifying
qualified employees and/or agents