NI Holdings slips to 2025 loss as nonstandard auto exit and cat losses hit results
NI Holdings has swung to a full-year 2025 loss as it continues to shrink its nonstandard auto book and absorb the impact of a historic North Dakota catastrophe loss.
For the year ended Dec. 31, 2025, NI Holdings posted a net loss from continuing operations of $10.4 million, or a loss of $0.50 per share, compared with earnings per share of $0.31 in 2024. In Q4, the company reported a loss per share of $0.15, versus EPS of $0.47 in the prior-year period.
The insurer also reported full-year direct written premiums of $289.8 million, down 15.3% from 2024. Fourth-quarter direct written premiums fell 26% year over year to $54.1 million. The declines in both periods were driven primarily by the company’s strategic decision to cut back in nonstandard auto, including exits from Illinois, South Dakota, and Arizona, partly offset by growth in its home and farm business in North Dakota, South Dakota, and Nebraska.
Net earned premiums dropped 18.9% in Q4 to $58.2 million and 12.7% for the full year to $270.7 million, reflecting the smaller auto book and the impact of reinsurance.
The company's combined ratio deteriorated sharply in Q4 to 109.6%, up 29.6 points from a year earlier, as unfavorable prior-year reserve development in nonstandard auto and lower net earned premiums in that segment hit results. The insurer also cited increased severity on liability claims and related current-year reserve strengthening in private passenger auto.
For full-year 2025, the combined ratio was 109.9%, 9.2 points worse than in 2024. Management pointed to unfavorable prior-year development on liability loss reserves and reduced net earned premiums in nonstandard auto as key drivers of the deterioration. The home and farm segment was further pressured by a Q2 catastrophe event in North Dakota that exceeded the company’s $20 million catastrophe retention and triggered reinstatement premiums, although weather in South Dakota and Nebraska was more benign.
The private passenger auto segment “continued to perform well overall,” according to the company, but still reflected higher liability severity and reserve strengthening, which contributed to the weaker combined ratio.
Net investment income rose 6.9% year over year to $11.7 million, supported by higher yields and a larger average fixed-income portfolio, partly offset by lower rates on cash and cash equivalents. Total revenues for 2025 were about $285.1 million, including $270.7 million of net premiums earned and $11.7 million of net investment income.
The 2025 results cap a transitional year in which NI Holdings accelerated its pullback from higher-volatility nonstandard auto, absorbed a major Midwestern catastrophe loss, and leaned more heavily on investment income to cushion underwriting volatility, while its core private passenger auto and home and farm books remain central to its strategy.
Looking at its peers, the company's 109.9% combined ratio for 2025 contrasts with several similarly sized US regional P&C carriers that have already moved back into the mid-90s range on underwriting profitability. Selective Insurance Group, for example, reported a 2025 combined ratio of 97.2%, an improvement of almost six points from 2024's 103%, alongside 5% growth in net premiums written to $4.87 billion.
Donegal Group, another Midwestern-focused regional carrier, posted a 2025 GAAP combined ratio of 95.4%, down from 98.6% a year earlier, with net premiums earned down only 1.7% to $921.2 million as it balanced modest top-line contraction with improved loss ratios and favorable prior-year development.
Even among smaller personal and commercial auto writers, underwriting performance has generally been tighter than NI’s. Safety Insurance Group, a New England carrier with a heavy personal auto and homeowners mix, reported a 2025 GAAP combined ratio of 98.8%, an improvement from 100.9% in 2024, helped by favorable prior-year reserve releases.
NI's near-110% combined ratio and double-digit premium contraction in 2025 placed it at the weaker end of the US regional P&C peer set. Peers such as Selective and Donegal are already operating closer to or below the industry's long-run "through-the-cycle" target of a mid-90s combined ratio, while NI is still working through reserve strengthening in auto, exposure reductions in nonstandard books, and the earnings drag from a large single-state catastrophe event.
