Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 254

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1A
Chunk 254
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 material impact
on our financial condition and results of operations. For additional information, see Part II, Item 7, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” “Losses and Loss Adjustment Expenses,” and Part II,
Item 8, Note 8 “Unpaid Losses and Loss Adjustment Expenses.”

15 

It is possible that, among other things, past or future steps taken by
the federal government and the Federal Reserve to manage the U.S. economy, including fiscal and monetary policy measures, could lead to
higher than anticipated levels of inflation, which generally leads to increased loss costs and other operating expenses. However, our
relatively high concentration in short tail lines of business limits the potential impact of this exposure long-term and allows us to
price for those increases in future policy periods.

Any downgrade in our financial strength rating
could affect our ability to write new business or renew our existing business, which would lead to a decrease in revenue and net income.

Third-party rating agencies, such as AM Best,
periodically assess and rate the claims-paying ability of insurers based on criteria established by the rating agencies. Ratings assigned
by AM Best are an important factor influencing the competitive position of insurance companies. AM Best ratings, which are reviewed at
least annually, represent independent opinions of financial strength and ability to meet obligations to policyholders and are not directed
toward the protection of investors. Therefore, our AM Best rating should not be relied upon as a basis for an investment decision to purchase
our common stock.

All of the Company’s insurance subsidiaries
hold a financial strength rating of “A” (Excellent) by AM Best, the third highest rating out of 15 rating classifications.
Our most recent rating by AM Best was affirmed on May 10, 2024. Financial strength ratings are used by agents, customers, lenders, and
other insurance carriers as a means of assessing the financial strength and quality of insurance companies. If our financial position
deteriorates, we may not maintain our favorable financial strength rating from AM Best. A downgrade of our rating could severely limit
or prevent us from writing desirable business or from renewing our existing business. In addition, a downgrade could negatively affect
our ability to implement our strategy because it could cause our current or potential agents to choose other more highly rated competitors
or reduce our ability to obtain reinsurance. For additional information, see Part I, Item 1, “Business” and “Financial
Strength.”

Our results may fluctuate