Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 542

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1B
Chunk 542
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 based on facts and circumstances then known.
At the time of establishing our estimates, we recognize that our ultimate liability for losses and loss adjustment expenses may differ
from these estimates. We base our estimates of liabilities for unpaid losses and loss adjustment expenses on assumptions as to future
loss trends, expected claims severity, judicial theories of liability, and other factors. During the loss adjustment period, we may learn
additional facts regarding certain claims, and, consequently, it often becomes necessary for us to refine and adjust our estimates of
the liability. We reflect any adjustments to our liabilities for unpaid losses and loss adjustment expenses in our operating results in
the period in which we determine the need for a change in the estimates.

We maintain liabilities for unpaid losses and loss adjustment expenses
with respect to both reported and unreported claims. We establish these liabilities for the purpose of covering the ultimate costs of
settling all losses incurred through the reporting date, including investigation and litigation costs. We base the amount of our liability
for reported losses primarily upon a case-by-case evaluation of the type of risk involved, knowledge of the circumstances surrounding
each claim, and the insurance policy provisions relating to the type of loss our policyholder incurred. We determine the amount of our
liability for unreported losses and loss adjustment expenses on the basis of historical information by line of insurance. Inflation is
not explicitly selected in the loss reserve analysis. However, historical inflation is embedded in the estimated loss development factors.
We closely monitor our liabilities and update them periodically using new information on reported claims and a variety of statistical
techniques. We do not discount our liabilities for unpaid losses and loss adjustment expenses.

Reserve estimates can change over time because of unexpected changes
in assumptions related to our external environment and, to a lesser extent, assumptions as to our internal operations. Assumptions related
to our external environment include the potential impact of significant changes in tort law and the legal environment which may impact
liability exposure, the trends in judicial interpretations of insurance coverage and policy provisions, and the rate of loss cost inflation.
Internal assumptions include consistency in the recording of premium and loss data, consistency in the recording of claims, payment and
case reserving methodologies, accurate measurement of the impact of rate changes and changes in policy provisions, consistency in the
quality and characteristics of business written within a given line of business, and consistency in reinsurance coverage and collectability
of reinsured losses, among other items. To the extent we determine that underlying factors impacting our assumptions have changed, we