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Item 1A. Risk Factors

2026-03-06 compared with 2025-03-07 · 218 added, 182 removed, 345 unchanged (54% of the section changed)

An investment in the Company’s common

shares involves certain risks.

An investment in the Company’s common shares

involves certain risks.

The following is a discussion of material risks and uncertainties that may affect the Company’s business,

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Insurance Risks

Catastrophic or other significant natural

or man-made losses may negatively affect our financial condition and operating results.

Catastrophic or other significant natural or

man-made losses may negatively affect our financial condition and operating results.

As a property and casualty insurer, we are subject

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Note 3 “Summary of Significant Accounting Policies and Basis of Presentation” and Note 6 “Reinsurance.”

If actual losses exceed our loss and loss

adjustment expense reserves or if changes in the estimated level of loss and loss adjustment expense reserves are necessary as a result

of changes in the legal, regulatory, and economic environments in which we operate, our financial results could be materially and adversely

We maintain reserves to cover estimated unpaid losses and expenses necessary

to settle claims.

The reserves for losses and loss adjustment expenses that we have established are estimates of amounts needed to pay

reported and unreported claims and related expenses, based on facts and circumstances known to us at the time we established the reserves.

Reserves are actuarially projected based on historical claims information, industry statistics, anticipated trends, and other factors.

If actual losses exceed our loss and loss adjustment

expense reserves or if changes in the estimated level of loss and loss adjustment expense reserves are necessary as a result of changes

in the legal, regulatory, and economic environments in which we operate, our financial results could be materially and adversely affected.

We maintain reserves to cover estimated unpaid losses and expenses

necessary to settle claims.

The reserves for losses and loss adjustment expenses that we have established are estimates of amounts needed

to pay reported and unreported claims and related expenses, based on facts and circumstances known to us at the time we established the

Reserves are actuarially projected based on historical claims information, industry statistics, anticipated trends, and other

The process of estimating loss reserves involves a high degree of judgment and is subject to a number of variables.

While we believe that

our reserves for unpaid losses and loss adjustment expenses are appropriate, to the extent that such reserves prove to be inadequate or

excessive in the future, we would adjust them and recognize the change in earnings in the period the reserves are adjusted.

be no assurance that the estimates of such liabilities will not change in the future and any such adjustment could have a material impact

on our financial condition and results of operations.

For additional information, see Part II, Item 7, “Management’s Discussion

and Analysis of Financial Condition and Results of Operations,” “Losses and Loss Adjustment Expenses,” and Part II,

Item 8, Note 8 “Unpaid Losses and Loss Adjustment Expenses.”

It is possible that, among other things, past or future steps taken by

the federal government and the Federal Reserve to manage the U.S.

economy, including fiscal and monetary policy measures, could lead to

higher than anticipated levels of inflation, which generally leads to increased loss costs and other operating expenses.

believe that our reserves for unpaid losses and loss adjustment expenses are appropriate, to the extent that such reserves prove to be

inadequate or excessive in the future, we would adjust them and recognize the change in earnings in the period the reserves are adjusted.

There can be no assurance that the estimates of such liabilities will not change in the future and any such adjustment could have a material

impact on our financial condition and results of operations.

For additional information, see Part II, Item 7, “Management’s

Discussion and Analysis of Financial Condition and Results of Operations,” “Losses and Loss Adjustment Expenses,” and

Part II, Item 8, Note 8 “Unpaid Losses and Loss Adjustment Expenses.”

It is possible that, among other things, past or future steps taken

by the federal government and the Federal Reserve to manage the U.S.

economy, including fiscal and monetary policy measures, could lead

to higher than anticipated levels of inflation, which generally leads to increased loss costs and other operating expenses.

relatively high concentration in short tail lines of business limits the potential impact of this exposure long-term and allows us to

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could affect our ability to write new business or renew our existing business, which would lead to a decrease in revenue and net income.

Third-party rating agencies, such as AM Best,

periodically assess and rate the claims-paying ability of insurers based on criteria established by the rating agencies.

Ratings assigned

by AM Best are an important factor influencing the competitive position of insurance companies.

AM Best ratings, which are reviewed at

least annually, represent independent opinions of financial strength and ability to meet obligations to policyholders and are not directed

toward the protection of investors.

Therefore, our AM Best rating should not be relied upon as a basis for an investment decision to purchase

our common stock.

Third-party rating agencies, such as AM Best, periodically

assess and rate the claims-paying ability of insurers based on criteria established by the rating agencies.

Ratings assigned by AM Best

are an important factor influencing the competitive position of insurance companies.

AM Best ratings, which are reviewed at least annually,

represent independent opinions of financial strength and ability to meet obligations to policyholders and are not directed toward the

protection of investors.

Therefore, our AM Best rating should not be relied upon as a basis for an investment decision to purchase our

common stock.

All of the Company’s insurance subsidiaries

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For additional information, see Part I, Item 1, “Business” and “Financial

Our results may fluctuate as a result of

many factors, including cyclical changes in the insurance industry, competition, and innovation and emerging technologies.

Our results may fluctuate as a result of many

factors, including cyclical changes in the insurance industry, competition, and innovation and emerging technologies.

The property and casualty insurance industry has

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the industry could also influence future growth and profit potential.

Innovation and emerging technologies continue

to greatly impact the insurance industry.

If we are unable to keep pace with the technological changes that our competitors implement,

we may not be able to attract and retain customers, adequately price risks, or operate as efficiently as our competitors.

emerging technologies in the automotive industry such as autonomous vehicles, driver-assistance and accident-avoidance features, sensor

technology, and other forms of automation may reduce the future need for, or decrease the future pricing of, our auto insurance products.

Innovation and emerging technologies, including

artificial intelligence, continue to greatly impact the insurance industry.

If we are unable to keep pace with the technological changes

that our competitors implement, we may not be able to attract and retain customers, adequately price risks, or operate as efficiently

as our competitors.

In addition, emerging technologies in the automotive industry such as autonomous vehicles, driver-assistance and

accident-avoidance features, sensor technology, and other forms of automation may reduce the future need for, or decrease the future

pricing of, our auto insurance products.

Our success depends primarily on our ability

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· adverse changes in claims experience, such as distracted driving or a more aggressive tort environment.

Under the federal crop insurance program, each

insurer is required to accept every application for multi-peril crop insurance that they receive, and the premiums and the policy terms

are set by the RMA, which is the federal government agency administering the federal crop insurance program.

Under the federal crop insurance program, each insurer

is required to accept every application for multi-peril crop insurance that they receive, and the premiums and the policy terms are set

by the RMA, which is the federal government agency administering the federal crop insurance program.

Accordingly, no policy underwriting

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to decline to issue the policy.

Volatility 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.

Volatility 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.

Unpredictable weather conditions and other events

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Additionally, international trade policies, including the imposition of tariffs between major

trading partners such as the United States and China, can create significant fluctuations in crop prices.

We are unable to predict the

ultimate result and duration of any tariff actions by the U.S.

trading partners such as the U.S.

and China, can create significant fluctuations in crop prices.

We are unable to predict the ultimate

result and duration of any tariff actions by the U.S.

government, or countermeasures that may be taken by other nations.

trade tensions and retaliatory tariffs may affect agricultural commodity prices and create additional market uncertainty in our crop insurance

In addition, the amount of multi-peril crop insurance business we retain is subject to the terms of the SRA and is dependent

on the actual direct loss ratio experience.

A significant decrease in crop prices and variability in the loss experience, whether caused

by weather events, trade policies, or other events, could have a material negative effect on our business and results of operations.

These trade tensions

and retaliatory tariffs may affect agricultural commodity prices and create additional market uncertainty in our crop insurance business.

In addition, the amount of multi-peril crop insurance business we retain is subject to the terms of the SRA and is dependent on the actual

direct loss ratio experience.

A significant decrease in crop prices and variability in the loss experience, whether caused by weather

events, trade policies, or other events, could have a material negative effect on our business and results of operations.

Our ability to manage our exposure to underwriting

risks depends on the availability and cost of reinsurance coverage.

We use reinsurance arrangements to manage the

amount of risk we retain, stabilize underwriting results, and increase underwriting capacity.

The availability and cost of reinsurance

are subject to current market conditions and may vary significantly over time.

Any decrease in the amount of reinsurance maintained will

increase our risk of loss.

We may be unable to maintain our desired reinsurance coverage or to obtain other reinsurance coverage in adequate

amounts and/or at favorable rates.

If we are unable to maintain appropriate reinsurance coverage, it may be difficult for us to manage

our underwriting risks and operate our business profitably.

We use reinsurance arrangements to manage the amount

of risk we retain, stabilize underwriting results, and increase underwriting capacity.

The availability and cost of reinsurance are subject

to current market conditions and may vary significantly over time.

Any decrease in the amount of reinsurance maintained will increase

our risk of loss.

We may be unable to maintain our desired reinsurance coverage or to obtain other reinsurance coverage in adequate amounts

and/or at favorable rates.

If we are unable to maintain appropriate reinsurance coverage, it may be difficult for us to manage our underwriting

risks and operate our business profitably.

For additional information, see Part II, Item 8, Note 6 “Reinsurance.”

If we cannot collect loss recoveries from

our reinsurers in accordance with our reinsurance agreements, we may incur additional losses.

If we cannot collect loss recoveries from our

reinsurers in accordance with our reinsurance agreements, we may incur additional losses.

Although reinsurance creates a contractual liability

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All of our significant reinsurance partners are rated “A-” (Excellent) or better

However, we remain subject to credit risk relating to our ability to collect these recoverables.

Our reinsurance recoveries

are also subject to the underlying losses meeting the qualifying conditions and specified limits within the respective contracts.

Additionally,

we are subject to the risk that reinsurers may dispute their obligations to pay our claims.

Our inability to collect a material recovery

from a reinsurer on a timely basis, or at all, could have a material adverse effect on our liquidity, operating results, and financial

by AM Best or “A+” or better by Standard & Poor’s.

However, we remain subject to credit risk relating to our ability

to collect these recoverables.

Our reinsurance recoveries are also subject to the underlying losses meeting the qualifying conditions

and specified limits within the respective contracts.

Additionally, we are subject to the risk that reinsurers may dispute their obligations

to pay our claims.

Our inability to collect a material recovery from a reinsurer on a timely basis, or at all, could have a material adverse

effect on our liquidity, operating results, and financial condition.

For additional information, see Part II, Item 8, Note 6 “Reinsurance.”

Business and Operational Risks

The impact of a future pandemic, and related economic conditions, could

materially affect our results of operations, financial position, and/or liquidity.

We face risks associated with pandemics, including the impact

of reduced economic activity and unemployment, government actions, and capital markets disruption.

These risks are unpredictable and difficult

to quantify, and could vary significantly depending on the extent and duration of the pandemic and related economic conditions, along

with potentially impacting each of our business segments and geographic markets differently.

The impact of a future pandemic, and related economic conditions,

could materially affect our results of operations, financial position, and/or liquidity.

We face risks associated with pandemics, including the impact of reduced

economic activity and unemployment, government actions, and capital markets disruption.

These risks are unpredictable and difficult to

quantify and could vary significantly depending on the extent and duration of the pandemic and related economic conditions, along with

potentially impacting each of our business segments and geographic markets differently.

Any future federal, state, and local government actions to address

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in real estate valuations, and/or declines in fixed income yields, along with increased volatility in our equity portfolio.

We 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.

Our ability to retain existing agents, and to

attract new agents, is essential to the continued growth of our business.

We 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.

Our ability to retain existing agents, and to attract

new agents, is essential to the continued growth of our business.

Nodak Insurance utilizes captive agents who only sell our Company’s

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· changes in strategy resulting in the sale of an acquired business which may result in a capital loss.

Our access to capital may be limited or may not be available on favorable

Our access to capital may be limited or may not be available on

favorable terms.

Our future capital requirements depend on many factors, including rating

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manage the succession of key personnel.

The success of our business is dependent, to a

large extent, on our ability to attract and retain key employees, in particular our senior officers and key management of our insurance

subsidiaries.

Our business may be adversely affected if labor market conditions make it difficult for us to retain or, if needed, replace

our current key officers with individuals having equivalent qualifications and experience at compensation levels competitive for our industry.

While we believe we offer competitive compensation and benefit arrangements, there can be no guarantee that we will be able to retain

our key employees.

There is significant competition from within the property and casualty insurance industry and from businesses outside

the industry for those in key management positions, as well as others possessing highly specialized knowledge in areas such as actuarial,

accounting, information technology, and data and analytics.

In addition, our employment and other agreements with our key officers do

not include non-compete covenants or non-solicitation provisions because they are unenforceable under North Dakota law.

If we are not

able to successfully attract, retain, and motivate our employees, our business, financial results, and reputation could be materially

and adversely affected.

The success of our business is dependent, to a large

extent, on our ability to attract and retain key employees, in particular our senior officers and key management of our insurance subsidiaries.

Our business may be adversely affected if labor market conditions make it difficult for us to retain or, if needed, replace our current

key officers with individuals having equivalent qualifications and experience at compensation levels competitive for our industry.

we believe we offer competitive compensation and benefit arrangements, there can be no guarantee that we will be able to retain our key

There is significant competition from within the property and casualty insurance industry and from businesses outside the industry

for those in key management positions, as well as others possessing highly specialized knowledge in areas such as actuarial, accounting,

information technology, and data and analytics.

In addition, our employment and other agreements with our key officers do not include

non-compete covenants or non-solicitation provisions because they are unenforceable under North Dakota law.

If we are not able to successfully

attract, retain, and motivate our employees, our business, financial results, and reputation could be materially and adversely affected.

A 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

Our operations rely on the secure processing,

storage, and transmission of confidential information, including in our computer systems and networks and those of third-party service

We rely heavily on our operating systems in connection with issuing policies, paying claims, and providing the information

we need to conduct our business.

We also rely on the operating systems of AFBIS in connection with various processes with respect to our

crop lines of business.

Our business depends on effective information security and systems, and we place significant reliance on the integrity

and timeliness of the data our information systems process to support our business.

A breakdown or disruption of any of these systems

could materially adversely affect our ability to conduct our business and our results of operations.

Our operations rely on the secure processing, storage,

and transmission of confidential information, including in our computer systems and networks and those of third-party service providers.

We rely heavily on our operating systems in connection with issuing policies, paying claims, and providing the information we need to

conduct our business.

We also rely on the operating systems of AFBIS in connection with various processes with respect to our crop lines

Our business depends on effective information security and systems, and we place significant reliance on the integrity and

timeliness of the data our information systems process to support our business.

A breakdown or disruption of any of these systems could

materially adversely affect our ability to conduct our business and our results of operations.

We are exposed to many other types of operational

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breakdown or failure, either as a result of human error or intentional sabotage or fraudulent manipulation of our operations or systems.

Cyberattacks, 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.

Cyberattacks, 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.

We have implemented administrative and technical

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impact on our business, financial condition or results of operations.

Strategic decisions may not achieve their intended benefits, may

be based on incomplete or inaccurate information, or may not be implemented in a timely manner, which could adversely affect our results

of operations.

From time to time, we evaluate and adjust our business strategies in

response to changes in market conditions, underwriting results, competitive dynamics, regulatory developments, and other factors.

example, we recently determined to cease writing new policies and non-renew existing policies in our Non-Standard Auto segment.

decisions such as these are based on information, estimates, and assumptions available to us at the time they are made.

However, such

information may prove to be inaccurate or incomplete, and the anticipated benefits of these actions, such as improved underwriting performance,

reduced volatility, or more efficient capital allocation, may not be realized as expected, or at all.

In addition, there can be significant timing and execution risks associated

with strategic changes.

Our decision-making and implementation processes may take longer than anticipated, or we may not identify needed

changes on a timely basis.

While we evaluate and execute strategic adjustments, our business operations may experience disruption, our

relationships with agents, policyholders, or reinsurers may be adversely affected, and our overall financial results may be negatively

Furthermore, no longer writing a line of business may result in short-term declines in premium volume, increased expense ratios,

or other unforeseen consequences that could negatively impact our results of operations and financial condition.

Regulatory Risks

A 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.

A 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.

In 2025, 2024, and 2023, our direct premiums written

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losses would increase and purchases of multi-peril crop insurance could experience a significant decline nationwide and in our market

Such changes could have an adverse effect on our revenues and income.

Such changes could have an adverse effect on our results of operations and financial condition.

Our businesses are heavily regulated by the

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federal corporate income taxes, could be enacted or changed and could have a material adverse impact on us.

We 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.

We 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.

We are subject to extensive supervision and regulation

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our ability to operate our business.

Federal laws and regulations, and

the influence of international laws and regulations, may have adverse

Federal laws and regulations, and the influence of international laws and regulations, may have adverse

effects on our business, potentially including a change from a state-based system of regulation to a system of federal regulation, the

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may seek large or indeterminate amounts of damages, including punitive and treble damages, which may remain unknown for substantial periods

New or changes to existing accounting rules and standards could adversely

impact our reported results of operations.

Our consolidated financial statements are prepared in accordance with accounting

principles generally accepted in the United States of America (“GAAP”), as promulgated by the Financial Accounting Standards

Board (“FASB”), subject to the accounting-related rules and interpretations of the SEC.

New accounting rules or changes in

accounting standards or how they apply to our business may impact our reported financial condition or results of operations, and could

cause increased volatility in reported earnings, which could affect the trading price of our common stock or our credit ratings.

New or changes to existing accounting rules and standards could

adversely impact our reported results of operations.

Our consolidated financial statements are prepared in accordance with

accounting principles generally accepted in the United States of America (“GAAP”), as promulgated by the Financial Accounting

Standards Board (“FASB”), subject to the accounting-related rules and interpretations of the SEC.

New accounting rules or

changes in accounting standards or how they apply to our business may impact our reported financial condition or results of operations,

and could cause increased volatility in reported earnings, which could affect the trading price of our common stock or our credit ratings.

Risks Related to Our Common Stock

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its voting control to defeat a shareholder nominee for election to the Board of Directors of NI Holdings.

In addition, certain provisions of our Articles

of Incorporation, such as the prohibition of cumulative voting for the election of directors and the prohibition on any person or group

acquiring and having the right to vote in excess of 10% of our outstanding stock without the prior approval of the Board of Directors

will make removal of the Company’s management difficult.

Our 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

In addition, certain provisions of our Articles of

Incorporation, such as the prohibition of cumulative voting for the election of directors and the prohibition on any person or group acquiring

and having the right to vote in excess of 10% of our outstanding stock without the prior approval of the Board of Directors will make

removal of the Company’s management difficult.

Our 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.

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from our subsidiaries, or other sources of capital.

The payment of dividends by our subsidiaries are restricted by North Dakota’s

The payment of

dividends by our subsidiaries are restricted by North Dakota’s

insurance law.

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results could be adversely affected.

Statutory 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.

Statutory 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.

We are subject to provisions of North Dakota corporate

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that the transaction would be detrimental to policyholders.

Our Articles of Incorporation and Bylaws also

contain provisions that may discourage a change in control.

These provisions may serve to entrench management and may discourage a takeover

attempt that shareholders may consider to be in their best interest or in which they would receive a substantial premium over the current

market price.

These provisions may make it extremely difficult for any one person, entity, or group of affiliated persons or entities

to acquire voting control of NI Holdings, with the result that it may be

extremely difficult to bring about a change in the Board of

Directors or management.

Some of these provisions also may perpetuate present management because of the additional time required to cause

a change in the control of the Board of Directors.

Other provisions make it difficult for shareholders owning less than a majority of

the voting stock to be able to elect even a single director.

Our Articles of Incorporation and Bylaws also contain

provisions that may discourage a change in control.

These provisions may serve to entrench management and may discourage a takeover attempt

that shareholders may consider to be in their best interest or in which they would receive a substantial premium over the current market

These provisions may make it extremely difficult for any one person, entity, or group of affiliated persons or entities to acquire

voting control of NI Holdings, with the result that it may be extremely difficult to bring about a change in the Board of Directors or

Some of these provisions also may perpetuate present management because of the additional time required to cause a change

in the control of the Board of Directors.

Other provisions make it difficult for shareholders owning less than a majority of the voting

stock to be able to elect even a single director.

General Risks

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market fluctuations, and developments in the capital markets.

Investment income is an important component of

our net income and overall profitability.

We invest premiums received from policyholders and other available cash to generate investment

income and capital appreciation, while also maintaining sufficient liquidity to pay claims and operating expenses.

Changes in interest

rates and credit quality may result in fluctuations in the income derived from, the valuation of, and in the case of declines in credit

quality, payment defaults on our fixed income securities.

Such conditions could give rise to significant realized and unrealized investment

losses or the impairment of securities.

Potential higher interest rates could reduce the carrying value of our fixed income and short-term

investments, negatively impacting the Company’s carrying value in the short-term.

Over the long-term, however, higher interest rates

would provide an incremental benefit to our net investment income as excess cash and the proceeds of maturing bonds are reinvested at

higher rates.

We manage our exposure to interest rate increases by monitoring the duration within our investment portfolio and maintaining

maturities that minimize any forced sales within the portfolio.

However, even with such monitoring efforts, we may be forced to sell securities

at a loss, which would adversely affect our results of operations.

Investment income is an important component of our

net income and overall profitability.

We invest premiums received from policyholders and other available cash to generate investment income

and capital appreciation, while also maintaining sufficient liquidity to pay claims and operating expenses.

Changes in interest rates

and credit quality may result in fluctuations in the income derived from, the valuation of, and in the case of declines in credit quality,

payment defaults on our fixed income securities.

Such conditions could give rise to significant realized and unrealized investment losses

or the impairment of securities.

Potential higher interest rates could reduce the carrying value of our fixed income and short-term investments,

negatively impacting the Company’s carrying value in the short-term.

Over the long-term, however, higher interest rates would provide

an incremental benefit to our net investment income as excess cash and the proceeds of maturing bonds are reinvested at higher rates.

We manage our exposure to interest rate increases by monitoring the duration within our investment portfolio and maintaining maturities

that minimize any forced sales within the portfolio.

However, even with such monitoring efforts, we may be forced to sell securities at

a loss, which would adversely affect our results of operations.

We also invest a portion of our assets in equity

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We may not be able to manage our growth effectively.

We intend to continue to grow our business in

the future, which could require additional capital, systems development, and skilled personnel.

We intend to continue to grow our business in the

future, which could require additional capital, systems development, and skilled personnel.

However, there are inherent risks associated

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adverse effect on our business, financial condition, and results of operations.

We could be adversely affected by a future

unexpected business interruption involving our office buildings, operational systems and infrastructure, key external vendors, and/or

Our business operations could be substantially

interrupted by flooding, snow, ice, wind, and other weather-related incidents, or from fire, pandemics, power loss, telecommunications

failures, terrorism, or other such events.

Our business continuity plans may not sufficiently remediate all risks associated with future

significant business interruptions.

Any damage caused by such a failure or loss may cause interruptions in our business operations that

may adversely affect our service levels and business.

We could be adversely affected by a future unexpected

business interruption involving our office buildings, operational systems and infrastructure, key external vendors, and/or workforce.

Our business operations could be substantially interrupted

by flooding, snow, ice, wind, and other weather-related incidents, or from fire, pandemics, power loss, telecommunications failures, terrorism,

or other such events.

Our business continuity plans may not sufficiently remediate all risks associated with future significant business

interruptions.

Any damage caused by such a failure or loss may cause interruptions in our business operations that may adversely affect

our service levels and business.

Trade policies, including tariffs, could adversely impact our financial

condition and operating results.

We maintain reserves to cover estimated unpaid losses and expenses

necessary to settle claims.

The reserves for losses and loss adjustment expenses that we have established are estimates of amounts needed

to pay reported and unreported claims and related expenses, based on facts and circumstances known to us at the time we established the

Reserves are actuarially projected based on historical claims information, industry statistics, anticipated trends, and other

Changes in U.S.

trade policy, including changes in tariffs, could have a material adverse impact on our business, financial condition,

and results of operations.

The imposition of new tariffs or increases in existing tariffs on goods imported from other countries could

result in increased costs for raw materials, components, or finished goods and adversely impact loss severity.

In addition, tariffs or

other trade restrictions may lead to continuing uncertainty and volatility in U.S.

and global financial and economic conditions and commodity

markets, declining consumer confidence, significant inflation, and diminished expectations for the economy.

Such conditions could have

a material adverse impact on our business, results of operations and cash flows.

We are unable to predict the ultimate result and duration

of any tariff actions by the U.S.

government or countermeasures that may be taken by other nations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors