NI Holdings, Inc. Files Results for First Quarter Ended March 31, 2020
The Company reported a 16.4 percent increase in net earned premiums for the three months ended
Dollars in thousands, except earnings per share (unaudited)
|Q1 2020||Q1 2019||Change|
|Net income (loss) attributable to NI Holdings||-126.0%|
|Direct written premiums (1)||+13.2%|
|Net earned premiums||+16.4%|
|Loss and LAE ratio (2)||51.8%||51.9%||-0.1 pts|
|Expense ratio (3)||34.3%||33.1%||+1.2 pts|
|Combined ratio (4)||86.1%||85.0%||+1.1 pts|
|Return on average equity||-4.7%||19.6%||-24.3 pts|
|Basic earnings per share||-
|(1) Direct written premiums is a non-GAAP financial measure, representing the amount of insurance premiums purchased by policyholders during the period.|
|(2) Loss and LAE ratio is a non-GAAP financial measure. It equals losses and loss adjustment expenses, divided by net premiums earned.|
|(3) Expense ratio is a non-GAAP financial measure. It equals amortization of deferred policy acquisition costs and other underwriting and general expenses, divided by net premiums earned.|
|(4) Combined ratio is a non-GAAP financial measure. It equals losses and loss adjustment expenses, amortization of deferred policy acquisition costs, and other underwriting and general expenses, divided by net premiums earned.|
First quarter highlights included:
- Net loss of
$3,587versus net income of $13,773prior year. Underwriting gain of $8,191versus $7,578prior year.
- Reported combined ratio of 86.1% for the quarter.
- Growth in direct written premiums of 13.2% due to Westminster commercial business.
- After-tax decline of
$12,588in net unrealized gain in our equity securities portfolio versus $5,767increase prior year. Earnings per share impact of - $0.83.
"With a combined ratio on our underwriting results of 86.1% and 13% growth in direct written premiums, we are pleased with the start to the new year," said
"However, as we are faced with this unprecedented time, we want to express our thanks to the health care personnel and other essential workers who are fighting this pandemic on the frontlines. Within our organization, our focus has been on the health and well-being of our employees and clients. Our business continuity plan was implemented seamlessly so that our focus could quickly turn back to the business of helping our agents and clients."
"Net premium earned increased 16% from a year ago, driven by the new commercial business in Westminster. Our private passenger auto, home and farm, and all other segments also experienced growth. Our non-standard auto segment was challenged by the emerging economic implications from the COVID-19 pandemic in both the
"Our combined ratio improved in our home and farm segment, where weather-related events were fewer compared to last year. Our non-standard auto combined ratio also improved, due to the pricing and underwriting actions taken to address the recent profitability concerns. Our private passenger auto combined ratio was consistent year-over-year."
"With the acquisition of Westminster, we have split our commercial segment out from the all other segment. The combined ratio was elevated this quarter, due to acquisition expenses and modest unfavorable development. While we anticipate that the combined ratio will improve, the COVID-19 pandemic is also impacting this segment as certain states are mandating that companies waive certain fees, require companies to offer renewals on all business, and defer premium payments for collection at a later date. This has the potential to cause elevated combined ratios as expenses are likely to increase and the potential for uncollectible premiums also increases."
"The COVID-19 pandemic and related economic implications impacted our first quarter results, primarily through the fair values of our equity securities portfolio. The decline in net unrealized gains in our equity portfolio was
"COVID-19 has started to impact our businesses. We have experienced less sales activity, particularly in our non-standard auto segment. We anticipate that the frequency of auto claims will decrease in the second quarter as people are driving less, although actual projections are difficult to determine. None of our writing states of
Shareholders' equity decreased
Earnings Conference Call
The Company will not hold an earnings conference call for first quarter 2020. Our Quarterly Report on Form 10-Q as filed with the
Non-GAAP Financial Measures
About the Company
NI Holdings’ financial statements are the consolidated financial results of
Safe Harbor Statement
Some of the statements included in this news release, particularly those anticipating future financial performance, business prospects, growth and operating strategies, and similar matters, are forward-looking statements within the meaning of the
For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our
Investor Relations Contacts:
Executive Vice President and Chief Financial Officer
Vice President, Finance
Source: NI Holdings, Inc.