Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 720

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1C
Chunk 720
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 calculated by multiplying earned
premium for the given exposure period by a selected a priori (i.e. deductive) loss ratio. The resulting dollars are then multiplied by
the expected percentage of unpaid (or unreported) losses described above. This provides an estimate of future paid (or reported) losses
that is then added to actual paid (or incurred) loss data to produce the estimated ultimate loss.

Paid and Case Incurred Loss Development (Chain-Ladder) Method
- The Paid and Case Incurred Loss Development Method utilizes ratios of cumulative paid losses, case incurred losses, or paid loss adjustment
expenses at each age of development as a percent of the preceding development age. Selected ratios are then multiplied together to produce
a set of loss development factors which when applied to the most current data value, by accident period, develop the estimated ultimate
losses or loss adjustment expenses. Ultimate losses or loss adjustment expenses are then selected for each accident year from the various
methods employed.

Ratio of Paid Allocated Loss Adjustment Expenses to Paid Loss
Method - The Ratio of Paid Allocated Loss Adjustment Expenses to Paid Loss Method utilizes the ratio of paid allocated loss adjustment
expenses to paid losses and is similar to the Paid and Case Incurred Loss Development (Chain-Ladder) Method described above, except that
the data projected are the ratios of paid allocated loss adjustment expenses to paid losses. The projected ultimate ratio is then multiplied
by the selected ultimate losses, by accident year, to yield the ultimate allocated loss adjustment expenses. Allocated loss adjustment
expenses reserves are calculated by subtracting paid losses from ultimate allocated loss adjustment expenses.

The process of estimating loss reserves involves a high degree of
judgment and is subject to a number of variables. These variables can be affected by both internal and external events, such as changes
in claims handling procedures/staffing, inflation, weather, legal trends, and regulatory and legislative changes. The impact of many of
these items on ultimate costs for losses and loss adjustment expenses is difficult to estimate. Loss reserve estimation is also affected
by the volume of claims, the potential severity of individual claims, the determination of occurrence date for a claim, and reporting
lags (the time between the occurrence of the policyholder event and when it is actually reported to the insurer). Informed judgment is
applied throughout the process, including the application of various individual experiences and expertise to multiple sets of data and
analyses. We continually refine our estimates of unpaid losses and loss adjustment expenses in a regular ongoing process as historical