NODK

NI Holdings is a small, North Dakota-concentrated property & casualty insurer whose underwriting engine is broken. The 2025 10-K reports a 109.9% combined ratio and a $26.7M underwriting loss, driven in large part by $30.3M of net unfavorable prior-year reserve development — meaning reserves set in prior years proved materially too low. Reserve inadequacy is the single most important tell for an insurer's earnings quality, and the MD&A flags it explicitly. This is not a one-off: net income has been negative for four straight years (FY2022 -$53.1M, FY2023 -$5.48M, FY2024 -$6.06M, FY2025 -$10.4M), with FY2021's $8.4M profit the lone bright spot. ROE is -4.3% and worsening.

The top line is also contracting, not growing: revenue fell 12.3% to $285M as the company sheds business, and operating cash flow swung to -$15.3M. Notably, management continues paying $6.73M in dividends despite negative earnings and negative operating cash flow — that payout is being funded from the investment portfolio and reserves, not from profits, and is not durable if losses persist. The balance sheet is the one genuine strength: only $2.4M of long-term debt, $240M of equity, and $378M of total cash and investments, so solvency is not the near-term worry.