Executive Summary

Q4 delivered a sharp rebound: net income of $9.9M and basic EPS of $0.47, with a combined ratio of 80.0% (down 31 pts vs Q3), driven by strong Private Passenger Auto and Home & Farm underwriting and improved weather; Non-Standard Auto remained a drag due to reserve strengthening and unfavorable development .
Year-over-year, Q4 combined ratio rose modestly (80.0% vs 78.7%), with EPS lower than Q4’23 continuing ops ($0.47 vs $0.92), reflecting ongoing Non-Standard Auto headwinds despite improved investment income .
Net earned premiums fell 3.0% YoY to $71.8M; direct written premiums were down 7.9% YoY to $73.1M on Non-Standard Auto contraction; investment income strengthened (management cites +$2.9M YoY in Q4) .
Management is executing “aggressive strategic actions” to de-risk Non-Standard Auto and refocus on North Dakota core, expense management, and technology; leadership transition to CEO Seth Daggett in December adds execution clarity .

What Went Well and What Went Wrong

What Went Well
- Underwriting improvement: combined ratio fell to 80.0% in Q4, with “excellent underwriting results” in Private Passenger Auto and Home & Farm aided by better weather and the impact of rate/underwriting actions over the past two years .
- Strong investment backdrop: management highlighted a $2.9M YoY increase in Q4 net investment income; full-year NII rose 36.2% to $10.9M on higher reinvestment rates .
- Leadership clarity and strategic focus: sale of Westminster (Q2) and CEO transition (Dec 1) support a reset toward reduced earnings volatility and a long-term plan centered on people, technology, distribution, and expense control .
What Went Wrong
- Non-Standard Auto pressure persisted: Q4 results were “partially offset” by unfavorable prior-year reserve development and further current-year reserve strengthening in Non-Standard Auto .
- Premium softness where actions bite: Q4 direct written premiums declined 7.9% YoY to $73.1M, driven by Non-Standard Auto contraction (also a theme in prior quarters) .
- YoY metrics mixed: Q4 combined ratio was slightly worse YoY (80.0% vs 78.7%), and basic EPS was below the prior-year continuing-ops EPS ($0.47 vs $0.92), underscoring lingering headwinds even as sequential results improved sharply .

Financial Results

Sequential quarterly trend (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Direct Written Premiums ($USD Millions)	$118.472	$67.704	$73.084
Net Earned Premiums ($USD Millions)	$85.169	$83.270	$71.787
Loss & LAE Ratio (%)	81.4%	78.2%	45.8%
Expense Ratio (%)	32.3%	32.8%	34.2%
Combined Ratio (%)	113.7%	111.0%	80.0%
Net Income (Loss) Attributable ($USD Millions)	$(16.236)	$(2.705)	$9.848
Basic EPS ($)	$(0.77)	$(0.13)	$0.47

Year-over-year comparison (Q4 2023 vs Q4 2024)

Metric	Q4 2023	Q4 2024
Direct Written Premiums ($USD Millions)	$79.370	$73.084
Net Earned Premiums ($USD Millions)	$73.993	$71.787
Loss & LAE Ratio (%)	43.5%	45.8%
Expense Ratio (%)	35.2%	34.2%
Combined Ratio (%)	78.7%	80.0%
Net Income Attributable ($USD Millions)	$6.625	$9.848
Basic EPS ($)	$0.32	$0.47
Return on Average Equity (%)	32.3%	16.2%

Full-year context (select KPIs)

Metric	FY 2023	FY 2024
Net Earned Premiums ($USD Millions)	$292.117	$310.110
Combined Ratio (%)	97.0%	100.7%
Net Investment Income ($USD Millions)	—	$10.9 (↑36.2%)
Net Income (Loss) Attributable ($USD Millions)	$(5.476)	$(6.060)

Segment performance commentary (no numeric segment disclosure in release)

Segment	Q2 2024	Q3 2024	Q4 2024	Trend
Private Passenger Auto	Profitability improved; benefited from prior rate actions	Improved performance cited vs prior year	“Excellent underwriting results” in Q4	Improving
Home & Farm	Higher weather losses pressured results	Elevated non-cat weather losses in ND	Benefited from improved weather; strong results	Improving
Non-Standard Auto	Growth earlier (rate/new business) but reserve pressure persisted	Unfavorable prior-year development	Unfavorable development and reserve strengthening; aggressive actions underway	Under pressure

Notes:

Q2 results include the sale of Westminster American (closed in Q2) and associated loss on sale, which impacted bottom-line results .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue / Premiums	FY 2025	Not provided	Not provided	—
Combined Ratio / Margins	FY 2025	Not provided	Not provided	—
Operating Expenses	FY 2025	Not provided	Focus on expense management (no numeric)	—
Net Investment Income	FY 2025	Not provided	Positive backdrop noted qualitatively (no numeric)	—
Segment Guidance	FY 2025	Not provided	Non-Standard Auto strategic actions (no numeric)	—
Capital/Dividends	FY 2025	Not provided	Not discussed in Q4 materials	—

No quantitative guidance ranges were issued in the Q4 press release or 8-K; commentary emphasized strategic actions, expense focus, and long-term plan development .

Earnings Call Themes & Trends

No earnings call transcript for Q4 2024 was available in the documents reviewed; themes below are synthesized from Q2–Q4 press releases.

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Rate/Underwriting Actions	Emphasized aggressive actions; ahead of industry; improving Personal Auto profitability	Two-year rate/underwriting actions cited as drivers of Q4 strength	Improving
Non-Standard Auto Reserves	Unfavorable prior-year development; profitability actions ongoing	Further current-year reserve strengthening and unfavorable development; aggressive strategic actions initiated	Persistent headwind
Weather/Severity	Q2/Q3 hit by non-cat weather in Home & Farm	Improved weather aided Q4; severity moderated in Private Passenger Auto	Improving
Investment Income	Higher reinvestment rates lifting NII in Q2/Q3	Q4 YoY NII +$2.9M; FY NII +36.2% to $10.9M	Positive
Strategic Portfolio Actions	Sale of Westminster closed in Q2	De-risking focus continues; long-term plan centered on ND core, tech, distribution, expenses	De-risking, focus sharpened
Leadership/Execution	CEO transition costs in Q3; interim leadership	New CEO effective Dec 1 with deep org ties	Execution clarity

Management Commentary

“We were pleased with our performance during the fourth quarter, particularly our Private Passenger Auto and Home and Farm segments, which benefited from improved weather and the aggressive rate and underwriting actions we’ve taken over the past two years.” — Seth Daggett, President & CEO .
“Our high-quality investment portfolio once again produced strong returns, resulting in a meaningful $2.9M year-over-year increase in net investment income.” .
“We continued to face challenging operating conditions in our Non-Standard Auto business, leading to another quarter of unfavorable reserve development… we began to execute aggressive strategic actions to address these issues.” .
“Looking ahead, we will refocus our efforts on development of a comprehensive long-term strategic plan centered around our strong and longstanding foundation in North Dakota… and a renewed focus on expense management initiatives.” .
On leadership transition: “It is an honor and privilege to have the opportunity to lead this outstanding organization… to create lasting value for our shareholders and a new chapter of sustained growth and success.” — Seth C. Daggett, on appointment effective Dec 1, 2024 .

Q&A Highlights

No Q4 2024 earnings call transcript was available in the materials reviewed; therefore, there are no Q&A themes or guidance clarifications to report from a call.

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue/premiums was unavailable at the time of this analysis due to data access limitations; as a result, we cannot provide vs-consensus comparisons for Q4. We will update once S&P Global estimates are accessible.
Implication: Given the magnitude of sequential combined ratio improvement (111.0% in Q3 to 80.0% in Q4) and positive net income swing, we would expect estimate revisions to converge upward for 2025 underwriting profitability assumptions, while Non-Standard Auto reserve uncertainty may temper the magnitude .

Key Takeaways for Investors

Underwriting inflection: Q4’s 80.0% combined ratio and $9.9M net income mark a material sequential improvement, signaling that pricing/underwriting and weather normalization are translating to earnings power .
Quality of recovery: Improvement is broad-based across Private Passenger Auto and Home & Farm; however, Non-Standard Auto remains the key overhang due to continued adverse development and reserve strengthening .
Investment tailwind: Higher reinvestment yields are boosting NII; FY NII rose 36.2% to $10.9M, offering a steady earnings support as underwriting normalizes .
Strategy and leadership: Portfolio de-risking (Westminster sale) and a CEO with deep company/region ties underpin a credible plan focused on expenses, tech, and distribution—watch for execution markers and any quantitative targets in 2025 .
Premium cadence: Q4 DWP decline (-7.9% YoY) reflects deliberate Non-Standard Auto actions; near-term top-line pressure is acceptable if margin repair progresses—monitor retention and new business mix .
Risk lens: The pace of reserve remediation in Non-Standard Auto remains the swing factor for 2025 earnings volatility; incremental disclosures on reserve reviews and pricing adequacy will be catalysts .
Trading setup: Absent consensus comps, the narrative skew is positive on sequential margin restoration; incremental updates on Non-Standard Auto actions and any quant guidance could drive the next leg.

Citations:

Q4 2024 press release and data table ; corresponding 8-K 2.02 furnishing .
Q3 2024 press release and data table ; corresponding 8-K .
Q2 2024 press release and data table .

NI Holdings, Inc. (NODK)·Q4 2024 Earnings Summary