NI Holdings, Inc. posted a second-quarter combined ratio of 125.1%, up from 113.7% a year earlier, as severe weather losses and reserve strengthening in non-standard auto weighed on results.

Direct written premiums fell 7.6% year-over-year to $109.5 million, driven largely by a 56.4% drop in non-standard auto. The decline reflects the company’s ongoing strategy to reduce exposure in the segment, offset in part by 8.1% growth in home and farm, supported by rate increases, higher insured values, and new business in North Dakota.

Net earned premiums declined 14.3% to $73.0 million. The loss and loss adjustment expense ratio rose to 91.2% from 81.4%, as the quarter included $20 million in catastrophe losses, net of reinsurance, stemming from a severe weather event in North Dakota that exceeded the company’s $20 million retention. The losses negatively impacted the quarterly loss ratio by more than 30 percentage points.

Expense ratio increased to 33.9% from 32.3%, pushing the combined ratio higher. Net loss from continuing operations widened to $12.1 million, or $0.57 per share, compared with $7.5 million, or $0.36 per share, a year ago.

Investment results offered some relief, with net investment income up 40.8% to $2.7 million, benefiting from higher reinvestment rates in the fixed income portfolio and increased realized gains.

President and CEO Seth Daggett (pictured) said the quarter’s performance was significantly impacted by the North Dakota catastrophe, particularly in home and farm. However, he pointed to favorable results in South Dakota and Nebraska as evidence that underwriting changes and geographic diversification are helping to mitigate concentrated risk.

The insurer continues to reduce its reliance on non-standard auto, a move aimed at improving long-term profitability amid reserve volatility in the segment. While catastrophe losses and unfavorable prior-year reserve development remain challenges, management expressed confidence in the company’s core underwriting operations and its investment portfolio’s ability to generate steady returns.

Year-to-date, the combined ratio stands at 110.3%, compared with 104.8% in the first half of 2024, with catastrophe losses reducing underwriting profitability across the period.