Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 22

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1
Chunk 22
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A.Risk Factors

An investment in the Company’s common
shares involves certain risks. The following is a discussion of material risks and uncertainties that may affect the Company’s business,
financial condition, and future results.

Insurance Risks

Catastrophic or other significant natural
or man-made losses may negatively affect our financial condition and operating results.

As a property and casualty insurer, we are subject
to claims from catastrophes or other natural perils that may have a significant negative impact on our operating and financial results.
We have experienced catastrophe losses and can be expected to experience catastrophe losses in the future. Catastrophe losses can be caused
by various events, including snow storms, ice storms, freezing temperatures, tropical storms and hurricanes, earthquakes, tornadoes, wind,
hail, fires, and other natural or man-made disasters. In addition, longer-term natural catastrophe trends may be changing, and new types
of catastrophe losses may be developing due to climate change, a phenomenon that has been associated with extreme weather events linked
to rising temperatures, and includes effects on global weather patterns, greenhouse gases, sea, land and air temperatures, sea levels,
rain, hail and snow. Climate change may also impact insurability by impairing our ability to identify and quantify potential hazards that
will result in losses and offer our customers products at an affordable price. The frequency, number, and severity of these losses are
unpredictable. The extent of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected
by the event and the severity of the event. Our ability to effectively manage catastrophe risk is dependent, in part, on the reliance
of various catastrophe models, which may produce unreliable output as a result of inaccurate or incomplete data, along with the inherent
uncertainty of future frequency and severity of losses. The impact of changing climate conditions on the overall insurance industry may
also materially affect the availability and cost of reinsurance to us. Our investment portfolio is also subject to the effects of climate
change as economic shifts alter the return dynamic of long-term investments and reduce valuations.

We write a significant amount of business in North
Dakota. As a result, adverse developments from severe weather events in North Dakota would have a greater effect on our financial condition
and results of operations than if our business was less geographically concentrated. The incidence and severity of such events are inherently
unpredictable.

We attempt to reduce our exposure to catastrophe
losses through a disciplined underwriting and