NI Holdings (NODK) risk factors, FY2024 10-K

Other

1. 01Catastrophic or other significant natural or man-made losses may negatively affect our financial condition and operating results
2. 02Any downgrade in our financial strength rating could affect our ability to write new business or renew our existing business, which would lead to a decrease in revenue and net income
3. 03Our results may fluctuate as a result of many factors, including cyclical changes in the insurance industry, competition, and innovation and emerging technologies
4. 04Our success depends primarily on our ability to underwrite risks effectively and price our insurance products appropriately
5. 05Volatility in crop prices and yields, as a result of weather conditions, trade policies, or other events, could adversely impact our financial condition and operating results
6. 06Our ability to manage our exposure to underwriting risks depends on the availability and cost of reinsurance coverage
7. 07If we cannot collect loss recoveries from our reinsurers in accordance with our reinsurance agreements, we may incur additional losses

Business and Operational Risks

1. 08The impact of a future pandemic, and related economic conditions, could materially affect our results of operations, financial position, and/or liquidity
2. 09We may not be able to grow our business if we cannot retain and expand our captive and independent agent relationships, we cannot provide competitive products for these agents to sell, and/or consumers seek other distribution methods offered by our competitors
3. 10Acquisitions could disrupt our business and harm our financial condition or results of operations
4. 11Our access to capital may be limited or may not be available on favorable terms
5. 12We may be unable to attract, retain or effectively manage the succession of key personnel
6. 13A failure in our operational systems or infrastructure, or those of our third-party service providers, including operational errors, could disrupt business, damage our reputation, and cause losses
7. 14Cyberattacks, security breaches, or similar events affecting the technologies and systems we rely on to operate our business and to maintain and protect sensitive Company and customer data could disrupt our operations, harm our reputation, and result in material losses

Regulatory Risks

1. 15A portion of our written premiums and net profits are generated from multi-peril crop insurance business, and the loss of such business as a result of a termination of or substantial changes to the federal crop insurance program could have an adverse effect on our revenues and net income
2. 16Our businesses are heavily regulated by the jurisdictions in which we conduct business and changes in regulation, including required participation in pools, premium surcharges, and higher tax rates, may reduce our profitability and limit our growth
3. 17We are subject to insurance industry laws and regulations, as well as claims and legal proceedings, which if determined unfavorably, could have a material adverse effect on our profitability
4. 18New or changes to existing accounting rules and standards could adversely impact our reported results of operations

Risks Related to Our Common Stock

1. 19Nodak Mutual Group’s majority control of our common stock will enable it to exercise voting control over most matters put to a vote of shareholders
2. 20Our status as an insurance holding company with no direct operations could adversely affect our ability to fund operations, execute future share repurchases, or meet potential future shareholder dividend and/or debt obligations
3. 21Statutory provisions and provisions of our Articles of Incorporation and Bylaws may discourage takeover attempts of NI Holdings that shareholders may believe are in their best interests

General Risks

1. 22Our investment portfolio is subject to credit and interest rate risk, and therefore our revenues and financial results may fluctuate with interest rates, investment results, equity market fluctuations, and developments in the capital markets
2. 23We may not be able to manage our growth effectively
3. 24We could be adversely affected by a future unexpected business interruption involving our office buildings, operational systems and infrastructure, key external vendors, and/or workforce