NI Holdings (NASDAQ: NODK) reported second-quarter 2026 net premiums earned of $65.0 million, down 10.9% year over year, while basic EPS improved to $0.01 from a loss of $0.57. Lower catastrophe losses and favorable prior-year reserve development helped reduce the combined ratio to 107.7%, although it remained above the underwriting break-even level.
Core financial results
Premium volume declined as NI Holdings continued exiting most of its Non-Standard Auto business and wrote less Private Passenger Auto business. Profitability improved substantially from the prior-year loss, supported by a lower loss and loss adjustment expense ratio and a shift from net investment losses to gains.
Dollar amounts are in millions except per-share figures.
| Metric | Q2 2026 | Q2 2025 | Year-over-year change |
|---|---|---|---|
| Gross premiums written | $107.191 | $111.828 | -4.1% |
| Net premiums earned | $65.017 | $73.005 | -10.9% |
| Loss and LAE ratio | 74.5% | 91.2% | -16.7 pts |
| Expense ratio | 33.2% | 33.9% | -0.7 pts |
| Combined ratio | 107.7% | 125.1% | -17.4 pts |
| Net investment income | $2.810 | $3.146 | -10.7% |
| Net investment gains (losses) | $2.063 | ($0.410) | NM |
| Net income (loss) | $0.146 | ($12.051) | NM |
| Basic EPS | $0.01 | ($0.57) | NM |
NM means the year-over-year percentage change was not meaningful.
The Non-Standard Auto exit reduced premiums while supporting loss performance
NI Holdings’ strategic withdrawal from most Non-Standard Auto business was the largest source of premium contraction, with gross premiums written in the segment falling 98.9%. At the same time, the reduced exposure led to lower losses, while favorable prior-year reserve development in the segment contrasted with unfavorable development one year earlier.
Growth in Crop and assumed catastrophe reinsurance premiums provided a partial offset to the auto declines.
| Business area | Gross premiums written change | Main disclosed driver |
|---|---|---|
| Non-Standard Auto | -98.9% | Continued exit from most of the segment |
| Private Passenger Auto | -8.0% | Lower renewals and new business in South Dakota and Nebraska, partly offset by North Dakota growth |
| Crop | +8.8% | Increased new business |
| All Other | +46.7% | Increased assumed premiums from catastrophe reinsurance programs |
The result was a clear trade-off: lower premium volume accompanied a meaningful reduction in the loss ratio. However, the 107.7% combined ratio shows that the underwriting business still generated more losses and expenses than earned premiums during the quarter.
Profitability and investment income
Pre-tax catastrophe losses totaled $15.0 million and remained below NI Holdings’ reinsurance retention. These losses added 23.1 percentage points to the quarterly loss and LAE ratio, compared with a 30.2-point impact in the prior-year quarter. The company described the prior-year catastrophe loss as $20.0 million pre-tax, net of reinsurance, along with $3.3 million of related reinstatement premiums.
Lower catastrophe losses, favorable Non-Standard Auto reserve development and improved Crop growing conditions drove the loss-ratio improvement. Higher non-catastrophe weather-related losses in the Home and Farm businesses partially offset those benefits.
Net investment income declined 10.7% to $2.8 million because of a lower average fixed-income portfolio balance. Reported earnings nevertheless benefited from $2.1 million of net investment gains, compared with a $0.4 million loss in the prior-year quarter. Quarterly return on average equity improved to 0.2% from negative 19.4%.
Management’s view
President and CEO Cindy Launer said the results supported the company’s decision to reduce Non-Standard Auto exposure. Management also highlighted momentum in North Dakota, contributions from the new assumed reinsurance business and growth in Crop, while acknowledging continued pressure from catastrophe and other weather-related losses.
Risks investors should monitor
- Catastrophe exposure remains significant. The quarter absorbed $15.0 million of pre-tax catastrophe losses below the company’s reinsurance retention, adding 23.1 points to the loss and LAE ratio.
- Non-catastrophe weather losses are another source of volatility. Higher weather-related losses in Home and Farm offset part of the improvement elsewhere.
- Premium volume remains under pressure. The Non-Standard Auto exit and lower Private Passenger Auto business pushed both gross written and net earned premiums lower, despite growth in Crop and assumed reinsurance.
- Part of the profit improvement came from reserve development and investment gains. Favorable prior-year reserve development and the shift to net investment gains supported the quarter’s results, while recurring net investment income declined.
Summary
NI Holdings’ second-quarter 2026 results showed improving loss performance despite lower premium volume. The Non-Standard Auto exit, lower catastrophe losses and favorable reserve development helped narrow underwriting pressure and return the company to a small profit, while Crop and assumed reinsurance partly offset auto-related contraction. The main items to monitor are whether the combined ratio can move below 100%, how weather losses develop and whether growing businesses can offset continued premium declines in auto.
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