Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 927

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 2
Chunk 927
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 higher net investment income. The year-over-year improvement in 2023 compared to 2022
was largely attributable to the significant catastrophe losses and significantly higher investment losses during 2022.

Return on Average Equity

For the year ended December 31, 2024, we had annualized return on
average equity, after non-controlling interest, of 2.8%, compared to annualized return on average equity, after non-controlling interest,
of 7.9% and (13.6)% for the years ended December 31, 2023 and 2022, respectively.

Average equity is calculated as the average between beginning and
ending equity, excluding non-controlling interest, for the period.

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Principal Revenue Items

Revenue is primarily derived from net premiums earned, net investment
income, and net investment gains (losses).

Gross and Net Premiums Written

Gross premiums written is equal to direct premiums
written and assumed premiums before the effect of ceded reinsurance. Gross premiums written are recognized upon sale of new insurance
contracts or renewal of existing contracts. Net premiums written is equal to gross premiums written less premiums ceded to reinsurers.

Premiums Earned

Premiums earned is the earned portion of net premiums written. Insurance
premiums on property and casualty policies are recognized in proportion to the underlying risk insured and are earned ratably over the
duration of the policies or, in the case of crop insurance, over the period of risk to the Company. At the end of each accounting period,
the portion of the premiums that is not yet earned is included in unearned premiums and is realized as revenue in subsequent periods over
the remaining term of the policy or period of risk. Our property and casualty policies, other than some of our auto lines and the non-standard
auto policies, typically have a term of twelve months.

Due to the nature of the crop planting and harvesting cycle and
the deadlines for filing and processing claims under the federal crop insurance program, insurance premiums for multi-peril crop insurance
are recognized and earned during the period of risk, which usually begins in spring and ends with harvest in the fall. Under the federal
crop insurance program, farmers must purchase crop insurance with respect to spring planted crops by March 15. By July 15, the farmer
must report the number of acres planted in each crop. On September 1, the insurer bills the farmer for the insurance premium, which is
due and payable by the farmer by October 1.