Executive Summary

Q2 2025 was materially impacted by a North Dakota catastrophe event that exceeded the company’s $20M reinsurance retention, driving a combined ratio of 125.1% and a net loss of $(12.1)m with basic EPS of $(0.57) .
Direct written premiums fell 7.6% YoY to $109.5m as Non-Standard Auto was intentionally scaled back (-56.4%), partially offset by Home & Farm growth (+8.1%) .
Net investment income rose 40.8% to $2.7m on higher reinvestment rates and realized gains, providing some offset to underwriting headwinds .
Post-quarter, the Board authorized a new ~$5m share repurchase, adding to ~$1.3m remaining from the prior plan, for ~$6.3m total capacity—an incremental capital return catalyst .
EPS and revenue consensus from S&P Global were unavailable for Q2; therefore, no beat/miss determination can be made. Estimates appear to be sparse for this micro-cap insurer, but the catastrophic loss spike would likely drive near-term estimate downward revisions .

What Went Well and What Went Wrong

What Went Well

Net investment income increased 40.8% to $2.7m, reflecting higher reinvestment rates and realized gains .
Geographic diversification efforts showed favorable weather-driven results in South Dakota and Nebraska, supporting underwriting changes taken in recent years .
Management reiterated confidence in the core business, highlighting progress on underwriting and distribution actions and the strategy to reduce earnings volatility over time .

What Went Wrong

A significant catastrophe event in North Dakota exceeded the $20M retention, adding $20.0m of pre-tax cat losses (net of reinsurance) and elevating the loss and LAE ratio by 30.2 points in Q2; combined ratio rose to 125.1% (vs 113.7% LY) .
Continued unfavorable prior-year reserve development in Non-Standard Auto and decreased net earned premiums in that segment further pressured underwriting results .
Direct written premiums declined 7.6% YoY as the strategic pullback in Non-Standard Auto (-56.4%) continued; while necessary to restore profitability, it reduces near-term top-line .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenues ($USD Millions)	$74.64*	$70.34*	$76.15*
Net Income - (IS) ($USD Millions)	$9.85	$6.46	$(12.05)
Diluted EPS - Continuing Operations ($USD)	$0.4510*	$0.3074*	$(0.5728)*
Net Income Margin %	13.32%*	9.04%*	(15.84%)*
Net Earned Premiums ($USD Millions)	$71.79	$67.50	$73.01
Direct Written Premiums ($USD Millions)	$73.08	$67.73	$109.52
Loss and LAE Ratio (%)	45.8%	57.1%	91.2%
Expense Ratio (%)	34.2%	37.3%	33.9%
Combined Ratio (%)	80.0%	94.4%	125.1%

Values with asterisks (*) retrieved from S&P Global.

Estimates vs Actuals (Q2 2025)	Actual	Consensus	Beat/Miss
Revenue ($USD Millions)	$76.15*	N/A	N/A
EPS (Primary/Diluted) ($USD)	$(0.57) / $(0.5728)*	N/A	N/A

Values with asterisks (*) retrieved from S&P Global. Consensus unavailable from S&P Global; third-party sites also show N/A for consensus .

Key KPIs	Q1 2025	Q2 2025
Non-Standard Auto DWP YoY change (%)	(58.8%)	(56.4%)
Home & Farm DWP YoY change (%)	+7.1%	+8.1%
Catastrophe Losses (pre-tax, net of reinsurance) ($USD Millions)	—	$20.0
Return on Average Equity (%)	10.4%	(19.4%)
Net Investment Income ($USD Millions)	$2.8	$2.7

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance (revenue, margins, OpEx, tax rate)	FY/Q2 2025	None disclosed	None disclosed	Maintained (no formal guidance)
Capital deployment – Share repurchase authorization	2025	~$1.3m remaining (prior 2022 plan)	New ~$5m authorization; total ~$6.3m capacity	New program authorized

No explicit segment or tax rate guidance provided in Q2 materials .

Earnings Call Themes & Trends

Public Q2 2025 transcript not available; themes drawn from company Q2 press release and prior quarter releases.

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Non-Standard Auto remediation	Ongoing unfavorable reserve development; aggressive actions to restore profitability	Further unfavorable prior-year development; continued deliberate premium pullback	Continuing remediation; near-term headwind
Catastrophe exposure and reinsurance	Favorable weather cited in Q1; focus on reducing earnings volatility	Significant ND catastrophe exceeding $20M retention; $20.0m cat losses	Elevated near-term cat impact; highlights retention risk
Geographic diversification	Targeted organic growth in ND/SD; improved weather outcomes	SD/NE favorable results offset ND event; validates diversification benefits	Positive progress; mixed due to ND event
Investment income/yield tailwinds	Higher fixed income reinvestment rates boosted NII	NII up 40.8% YoY to $2.7m	Supportive tailwind persists
Capital returns	No new program; operating focus	New ~$5m buyback authorization (total ~$6.3m capacity)	Incremental shareholder return
Leadership/talent	CEO transition and strategic plan emphasis	HR leadership appointment pre-Q2	Building organizational capabilities

Management Commentary

“The second quarter was negatively impacted by the catastrophe event in North Dakota, primarily in Home and Farm, offset by favorable weather conditions in South Dakota and Nebraska… the favorable results… demonstrate the impact of underwriting changes and geographic diversification we have undertaken in recent years.” — Seth Daggett, President & CEO .
“Our high-quality investment portfolio continued to provide positive returns… Although we faced a challenging quarter, including further unfavorable prior year reserve development in Non-Standard Auto, we remain confident in the strength of our core business…” .
Strategic continuity from prior quarters: focus on targeted organic growth in ND/SD, underwriting and distribution actions, and long-term plan to reduce earnings volatility and support consistent profitable growth .

Q&A Highlights

The company did not publish a Q2 2025 earnings call transcript in available sources; Q&A details are not accessible. Key areas likely addressed in investor interactions include catastrophe loss drivers and reinsurance retention, Non-Standard Auto reserve development and premium pullback trajectory, and ongoing expense and underwriting actions; however, without a transcript, no definitive Q&A quotes or clarifications can be provided .

Estimates Context

S&P Global consensus EPS and revenue estimates for Q2 2025 were not available; MarketBeat also displays “N/A” for consensus .
Actual revenue was ~$76.15m*, and EPS was $(0.57) (basic) per the press release and $(0.5728)* (diluted, continuing ops), but without consensus there is no beat/miss determination .
Given the scale of catastrophe losses ($20.0m) and the combined ratio spike to 125.1%, near-term Street estimates (where available) would reasonably be expected to reflect downward revisions to underwriting margins and EPS until cat impacts and Non-Standard Auto reserve trends normalize .