[LETTERHEAD OF THE NAVIGATORS GROUP, INC.]





VIA EDGAR

Securities and Exchange Commission
Division of Corporation Finance
100 F Street, NE
Washington,  D.C. 20549
Attn: Mr. Jim B. Rosenberg
      Senior Assistant Chief Accountant

                                          January 6, 2006



        Re: The Navigators Group, Inc. (the "Company")
            Form 10-K for fiscal year ended December 31, 2004 (File No. 0-15886)

Dear Mr. Rosenberg:

     This letter is in response to the Division of Corporation Finance's comment
letter dated December 8, 2005, in which you requested additional information
based on your review of the Company's annual report on Form 10-K for the year
ended December 31, 2004 (the "2004 10-K"). The comments included in your letter
are repeated below, and our response immediately follows each comment.

     In connection with the filing of our responses to your comments, the
Company acknowledges that:

o    the Company is responsible for the adequacy and accuracy of the disclosure
     in the 2004 10-K;

o    staff comments or changes to disclosures in response to staff comments do
     not foreclose the Securities and Exchange Commission (the "Commission")
     from taking any action with respect to the 2004 10-K; and

o    the Company may not assert staff comments as a defense in any proceeding
     initiated by the Commission or any person under the federal securities laws
     of the United States.






Form 10-K for fiscal year ended December 31, 2004
- -------------------------------------------------

Management's Discussion and Analysis ("MD&A")
- ---------------------------------------------

Critical Accounting Policies, page 33
- -------------------------------------

1.   We note that you estimate impairment of reinsurance receivable in
     accounting for reinsurance. In particular, we noted that in 2003 you had a
     $27.6 million increase in the allowance for uncollectible reinsurance and
     that your reinsurance receivable increased from $350 million to $502
     million in 2004. Describe in disclosure-type format the circumstances
     giving rise to this increase in the allowance and how these circumstances
     impact your remaining asbestos exposures and related reinsurance receivable
     amounts.

     [Response]

          As stated on pages 16-17 of the 2004 10-K under the caption
     "Business-Loss Reserves," in January 2004, the Company's management was
     notified of an unexpectedly large settlement for an insured's asbestos
     claim and as a result undertook a review of the Company's asbestos-related
     exposure and related potential reinsurance recoveries, most of which arise
     out of business written during the mid-1980s. With respect to asbestos
     exposures, the review resulted in the Company increasing its gross and net
     loss reserves for asbestos in the 4th quarter of 2003 by $77.6 million and
     $31.6 million, respectively, as shown in the following table:

     (in millions)
     Gross loss reserves for asbestos                                $  77.6
                                                                     -------
     Recoverables under reinsurance contracts             $    71.7
     Less:    Reserve for uncollectible reinsurance       $   (25.7)
                                                          ----------
              Reinsurance recoverable, net of reserves               $  46.0
                                                                     -------
     Net loss reserves for asbestos                                  $  31.6
                                                                     =======

          With respect to its analysis of related potential reinsurance
     recoveries, the Company determined that the collectibility of $25.7 million
     of reinsurance coverage for its business with asbestos exposure was
     doubtful for a number of reasons, including in large part that certain
     reinsurers providing coverage for the Company in the mid-1980s had since
     become insolvent, were in run-off or otherwise were no longer active in the
     reinsurance business. Therefore, as stated on page 17 of the 2004 10-K, the
     Company recorded an allowance of $25.7 million for uncollectible
     reinsurance relating to asbestos exposure in the fourth quarter of 2003.
     The remaining $1.9 million increase in the allowance for uncollectible
     reinsurance in 2003 was the result of the Company's ongoing assessment of
     reinsurance recoverables on its then-current business.


          To the extent the Company incurs additional gross loss development for
     its historic asbestos exposure, the Company's allowance for uncollectible
     reinsurance would increase for the aforementioned reinsurers that are
     insolvent, in runoff or otherwise no longer active in the reinsurance
     business. The Company continues to believe that it will


                                        2




     be able to collect reinsurance on the remaining portion of its historic
     gross asbestos exposure. As noted on page 18 of the 2004 10-K, loss
     development on the Company's asbestos exposure was not significant in 2004
     and no material additional gross reserves, reinsurance recoverable or
     related allowance for uncollectible reinsurance on such exposure was
     recorded in 2004.

          As shown in the table on page 10 of the 2004 10-K under the caption
     "Business-Loss Reserves," the Company's overall gross loss reserves
     increased from $725 million in 2003 to $966 million in 2004, and
     reinsurance receivables increased from $350 million to $502 million. The
     2004 increase in gross losses relates primarily to incurred losses for
     events occurring in 2004 (see pages 10-11 of the 2004 10-K for a discussion
     of and a table showing losses recorded in 2004). With the recording of
     these losses, the Company assessed its reinsurance coverage, potential
     receivables, and the recoverability of the receivables. Losses incurred on
     business recently written are primarily covered by reinsurance agreements
     written by companies with whom the Company is currently doing reinsurance
     business and whose credit the Company continues to assess in the normal
     course of business. As a result, while 2004 reinsurance receivables
     increased in line with the increase in gross loss reserves, the Company did
     not need to make a significant increase in allowance for doubtful
     reinsurance recoveries based on its assessment of the individual reinsurers
     covering these losses.

          Information on the Company's reinsurance recoverables and related
     collateral and rating agency rating of the 20 largest reinsurers of the
     Company is set forth in Note 7 on page F-28 of the Consolidated Financial
     Statements of the Company included in the 2004 10-K. As stated on page 18
     of the 2004 10-K under the caption "Business-Loss Reserves," management
     believes that its reserves for losses and loss adjustment expenses at
     December 31, 2004, were adequate to cover the ultimate cost of losses and
     loss adjustment expenses on reported and unreported claims.

          The Company will provide greater detail on its reinsurance receivable,
     particularly with respect to asbestos exposures, in its future Exchange Act
     periodic reports.

2.   Disclosures explaining the likelihood that materially different amounts
     would be reported under different conditions or using different assumptions
     are consistent with the objective of Management's Discussion and Analysis.
     Please provide us the following information in disclosure-type format for
     each of your lines of business for each period presented.

     o    In calculating your reserves, you determine a best estimate of your
          ultimate liability rather than establishing a range of loss estimates.
          Describe the actuarial methods used to initially project your ultimate
          liability, including assumptions used, and the nature of your review
          of statistical data and patterns by line of business to refine your
          projection model.

     o    It appears that subsequently you adjust this initial calculation for
          emerging trends in claim frequency and severity, litigation and
          economic and social developments


                                        3




          prior to finalizing your best estimate. Expand your disclosure to
          describe more specifically and quantify such adjustments to your best
          estimate.

     [Response]

          The process of establishing loss reserves is complex and imprecise as
     it must take into account many variables that are subject to the outcome of
     future events. As a result, informed subjective judgments as to our
     ultimate exposure to losses are an integral component of our loss reserving
     process.

          IBNR loss reserves are calculated by the Company's actuaries using
     several standard actuarial methodologies, including the paid and incurred
     loss development and the paid and incurred Bornheutter-Ferguson loss
     methods. Additional analyses, such as frequency/severity analyses, are
     performed for certain books of business.

          While an annual loss reserve study is conducted for each line of
     business, the timing of such studies varies throughout the year.
     Additionally, a review of the emergence of actual losses relative to
     expectations for each line of business is conducted each quarter. A
     separate analysis is also performed annually and updated quarterly of our
     asbestos and environmental liability exposures (Please refer to pages 16-18
     of the 2004 10-K for a discussion of asbestos and environmental
     liabilities).

          The actuarial methods generally utilize analysis of historical
     patterns of the development of paid and reported losses for each line of
     business by underwriting year. This process relies on the basic assumption
     that past experience, adjusted for the effects of current developments and
     likely trends, is an appropriate basis for predicting future outcomes. This
     basic assumption is particularly relevant for our marine and energy
     business written by our Insurance Companies and Lloyd's Operations where we
     generally rely on the substantial loss development data accumulated over
     many years to establish IBNR loss reserves for immature underwriting years.

          For certain long tail classes of business where anticipated loss
     experience is less predictable because of the small number of claims and/or
     erratic claim severity patterns, estimates are based on both expected
     losses and actual reported losses. These classes include our California
     contractors liability business and directors and officers liability
     business, among others. For these classes, we set ultimate losses for each
     underwriting year reflecting several factors, including our evaluation of
     loss trends and the current risk environment. The expected ultimate losses
     are adjusted as the underwriting year matures.

          While we have a significant amount of loss development data that is
     utilized by our actuaries to establish the IBNR loss reserves for our
     California contractors liability business, there have been significant
     changes relating to this product and its market that could affect the
     applicability of our data. For example, one factor that may affect reserves
     and claim frequency is legislation implemented in California, which
     generally provides consumers who experience construction defects a method
     other than litigation to obtain defect repairs. The legislation and its
     potential impact is discussed on page 15 of the 2004 10-K. Accordingly, our
     ultimate liability may exceed or be less than current estimates due to this
     variable, among others.


                                        4




          The professional liability business generates third-party claims,
     which also are longer tail in nature. The professional liability policies
     mostly provide coverage on a claims-made basis, whereby coverage is
     generally provided only for those claims that are made during the policy
     period. These claims often involve a lengthy litigation period after being
     reported. Our professional liability business is relatively immature, as we
     first began writing the business in late 2001. Accordingly, it will take
     some time to better understand the reserve trends on this business. Given
     the limited history of this business, the actuaries generally utilize
     industry data to initially establish IBNR loss reserves, which are
     subsequently adjusted based on actual and expected claim emergence as each
     underwriting year matures. Please see page 15 of the 2004 10-K for a
     discussion of reserves for the professional liability business.

          Using the aforementioned actuarial methods and different underlying
     assumptions, our actuaries produce a number of point estimates for each
     class of business. After reviewing the appropriateness of the underlying
     assumptions, management selects the carried reserve for each class of
     business. We do not calculate a range of loss reserve estimates. We believe
     that ranges may not be a true reflection of the potential volatility
     between carried loss reserves and the ultimate settlement amount of losses
     incurred prior to the balance sheet date. The numerous factors that
     contribute to the inherent uncertainty in the process of establishing loss
     reserves include: interpreting loss development activity, emerging economic
     and social trends, inflation, changes in the regulatory and judicial
     environment and changes in our operations, including changes in
     underwriting standards and claims handling procedures.

          In addition, we must consider the uncertain effects of industry-wide
     emerging or potential claims and coverage issues. These issues could have a
     negative effect on our loss reserves by either extending coverage beyond
     the original underwriting intent or by increasing the number or size of
     claims. Recent examples of emerging or potential industry-wide claims and
     coverage issues include increases in the number and size of directors and
     officers liability and errors and omissions liability claims arising out of
     investment banking practices and accounting and other corporate malfeasance
     and increases in the number and size of water damage claims related to
     remediation of mold conditions. As a result of issues such as these, it has
     become increasingly difficult to estimate ultimate claim costs on the basis
     of past experience, further complicating the already complex loss reserving
     process.

          The future impact of the various factors described above that
     contribute to the uncertainty in the loss reserving process and of emerging
     or potential claims and coverage issues is extremely hard to predict and
     generally cannot be reliably quantified.

          Please refer to pages 10-13 of the 2004 10-K for a discussion of
     subsequent adjustments made to our loss reserves over the three-year period
     ended December 31, 2004. See also our response to question 3 below
     regarding the impact to changes in certain assumptions utilized to
     establish loss reserves.


                                        5




          The Company will provide greater detail on its loss methodology,
     including assumptions used and subsequent adjustments made to its loss
     reserves, in its future Exchange Act periodic reports.

3.   An objective of MD&A is to provide information about historical trends,
     such as claim severity and frequency, to facilitate investors'
     determination of the reasonably likely impact of these trends on future
     performance. Please avoid the use of the hypothetical 10% change in net
     loss reserves. Rather, quantify the impact of the reasonably likely change
     in gross loss reserves with separate disclosure quantifying the impact on
     reinsurance recoverable. Link this disclosure to your discussion of the
     historical and expected future impact of known trends in claim frequency
     and severity.

     [Response]

          The Company notes that it records as gross reserves the amount of
     losses to which it reasonably expects to have exposure and as net reserves
     that amount less what it reasonably expects to recover in reinsurance. As
     indicated in response to question 2 above, we review the loss reserves for
     each line of business we write as part of our overall analysis of loss
     reserves, taking into consideration the variety of trends that impact the
     ultimate settlement of claims in each particular line of business. The
     Company believes that the 10% variance information provided investors with
     a significant sensitivity analysis for a potential change in the Company's
     reasonable expectations, along the lines of the sensitivity analysis
     required with respect to market risk pursuant to Item 305 of Regulation
     S-K. However, in lieu of giving investors sensitivity analysis with respect
     to possible significant variances from the Company's expectations for net
     loss reserves, the Company will identify and discuss the impact of changes
     in significant assumptions utilized to establish loss reserves in future
     Exchange Act periodic reports as follows:

          Marine reserves for the Insurance Companies are established by product
     using the Company's own historical experience adjusted for the effects of
     current developments and likely trends. Estimates of the ultimate liability
     could be redundant or deficient if the Company's own experience is not
     appropriate for predicting future outcomes. For example, this could occur
     if claims take longer to report than expected. Gross and net losses would
     increase by approximately $27 million and $13 million, respectively, if, on
     average, losses take 10% longer to report than assumed for the marine
     business for reserves established at December 31, 2004.

          Specialty reserves are established using the Company's own experience
     and an industry based tail factor. Estimates of ultimate liability could be
     redundant or deficient if the Company's own experience is not sufficiently
     predictive or if the industry tail factor is not representative of our
     future loss development. A key assumption is the choice of tail factor for
     the construction liability book of business. This is dominated by
     construction defect exposure, which has undergone significant recent
     changes in underwriting, claims handling, legislation and liability
     environment. If the construction tail (after 10 years) is double our
     current expectations, then the gross and net losses would increase by
     approximately $20 million and $16 million, respectively, compared to
     construction liability reserves established at December 31, 2004.


                                        6




          Given the lack of sufficient historical experience, professional
     liability reserves are established using industry loss ratios and
     development patterns. The ultimate loss ratio for an underwriting year is
     initially set to an industry average level. Expected loss emergence is then
     calculated using industry average development patterns, and expected
     emergence is replaced by actual experience as it emerges. Estimates of
     ultimate liability could be redundant or deficient if the industry selected
     ultimate loss ratios are inappropriate or if the industry development
     pattern is not representative of our book of business. If the ultimate loss
     ratios for the professional liability business develop 10% higher than the
     industry ultimate loss ratios used by our actuaries, then gross and net
     loss reserves would increase by approximately $6 million and $2 million,
     respectively, compared to the professional liability loss reserves
     established at December 31, 2004.

          As noted above, the Company will provide disclosures regarding the
     impact of changes in significant assumptions utilized to establish loss
     reserves in its future Exchange Act periodic reports.

4.   You disclose that the Company estimates its premiums, losses and claim
     reserves based upon information received from agents, pools and syndicates
     ("cedants") and that a lag exists between premiums written and losses
     incurred and related agent or cedant reporting to you. If this poses a
     potential for a higher degree of uncertainty related to your estimate of
     assumed premiums, losses and claim reserves as compared to direct premiums,
     losses and claim reserves, please provide us in disclosure-type format a
     discussion relating to your critical accounting estimate of this
     uncertainty, including the risks associated with making estimates of
     premiums, losses and loss reserves and the effects and expected effects of
     this uncertainty on your financial position and results of operations.
     Also, provide in disclosure-type format the following information for each
     period presented:

     a.   The dollar amount of premiums, losses and loss reserves recorded based
          on information received from agents or cedants;

     b.   The estimated premium for policies written by agents but not yet
          reported to you and the methodology used for these estimates.

     c.   The time lag from when this information is reported to the agent or
          cedant to when this information is reported to you and whether, how
          and to what extent this time lag effects your estimates;

     d.   The amount of any backlog related to the processing of this
          information, whether the backlog has been reserved for in the
          financial statements and, if applicable, when the backlog will be
          resolved;

     e.   What process management performs to determine the accuracy and
          completeness of the information received from agents or cedants;

     f.   Whether management uses internally generated historical loss
          information to validate its existing reserves and/or as a means of
          noticing unusual trends in the information received from agents or
          cedants; and


                                        7




     g.   How management resolves disputes with agents or cedants and how often
          disputes occur.

     [Response]

          Substantially all of our business is placed through agents and
     brokers.

          As stated in the Critical Accounting Policy entitled "Written and
     Unearned Premium" on page 34 of the 2004 10-K, "We must estimate the amount
     of written premium not yet reported based on judgments relative to current
     and historical trends of the business being written." Since the vast
     majority of the Company's gross written premium is primary or direct as
     opposed to assumed (89% direct in 2004, 88% in 2003 and 72% in 2002, as
     derived from the written premium table in Note 7 on page F-29 of the 2004
     10-K), the perceived delays in reporting assumed premium generally do not
     have a significant effect on the Company's financial statements, since we
     record estimates for both unreported direct and assumed premium. We also
     record the ceded portion of the estimated gross written premium and related
     acquisition costs. The earned gross, ceded and net premiums are calculated
     based on our earning methodology which is generally pro-rata over the
     policy periods. Losses are also recorded in relation to the earned premium.
     The estimate for losses incurred on the estimated premium is based on an
     actuarial calculation consistent with the methodology used to determine
     incurred but not reported loss reserves for reported premiums.

          A portion of the Company's premium is estimated for unreported
     premium, mostly for the marine business written by our UK Branch and
     Lloyd's Operations. We generally do not experience any significant backlog
     in processing premiums. Of the $696 million of gross written premium
     recorded in 2004, $104 million or 15% was estimated. The estimated premium
     was 15% and 11% of the gross written premium in 2003 and 2002,
     respectively. Such premium estimates are generally based on submission data
     received from brokers and agents and recorded when the insurance policy or
     reinsurance contract is bound and written. The estimates are regularly
     reviewed and updated taking into account the premium received to date
     versus the estimate and the age of the estimate. To the extent that the
     actual premium varies from the estimates, the difference, along with the
     related loss reserves and underwriting expenses, is recorded in current
     operations.

          The Company has not typically experienced significant disputes with
     its agents, brokers or cedants. However, should such a dispute arise, the
     Company would generally follow the dispute resolution requirements in the
     related contractual agreement.

          The Company will provide greater detail on its estimates for premiums,
     losses and claim reserves based upon information from agents and brokers in
     its future Exchange Act periodic reports.

5.   An objective of MD&A is to provide information about the quality and
     potential variability of earnings and cash flow to facilitate investors'
     determination of the likelihood that past performance is indicative of
     future performance. Please provide us in disclosure-type format a
     discussion of underlying reasons for the changes in


                                        8




     revenue and expenses associated with your investments. In particular,
     explain why your average yields have declined over the past three years.

     [Response]

          As stated on page 40 of the MD&A in the 2004 10-K, "net investment
     income increased 37.1% and 8.3% in 2004 and 2003, respectively, due to the
     increase in invested assets resulting from positive cash flow from
     operations and the $110.8 million of net proceeds from our 2003 common
     stock offering." Even though the investment income increased, average
     portfolio yields decreased each year. As stated in the third paragraph
     under the MD&A sub-caption "Liquidity and Capital Resources" on page 52 of
     the 2004 10-K, "the average yield of the portfolio, excluding net realized
     capital gains, was 3.54% in 2004, 3.79% in 2003 and 4.78% in 2002
     reflecting the prevailing interest rates during those years."

          The primary reason why average yields in the Company's investments
     declined during the three-year period is that market yields were decreasing
     through the first half of 2003 and then gradually started to rise as
     monetary policy began to tighten. During this period, the strong cash flow
     and net proceeds from the Company's October 2003 stock offering were being
     invested. Due to the lag between receiving funds and investing long term,
     short-term balances increased each year. Secondarily, the Company's
     investment strategy began to lean towards tax-exempt securities as the
     Company was exiting an AMT carry forward position. Generally, short term
     investments and tax exempt securities have lower pre-tax yields than the
     remainder of the Company's portfolio. These factors along with the
     reinvestment of maturities, calls and redemptions at the then prevailing
     interest rates, which were generally lower than the yields of such
     investments maturing, called or redeemed, resulted in decreases to the
     overall portfolio yield, but in-line with prevailing interest rates based
     on our portfolio mix.

          In its future Exchange Act periodic reports, the Company will provide
     greater detail on changes in average portfolio yields from year-to-year.

6.   Your insurance companies participate in a marine pool with three
     unaffiliated insurers. Please provide a discussion in disclosure-type
     format of known trends and uncertainties affecting the insurance pool and
     expected changes in the pool's loss experience. Include a quantification of
     the related impact on premium and operating results and a description of
     the basis upon which you determine pool participation (e.g., whether it is
     based on the relative volume of business ceded to the pool by each
     insurance company or an alternate participation arrangement).

     [Response]

          The Company notes that the experience of the marine pool business
     generally tracks the experience of the marine business of Navigators
     Insurance Company ("Navigators Insurance"). Pursuant to the marine pool
     agreement that was approved by the New York State Department of Insurance,
     the Navigators Agencies write marine business for the pool on policies
     issued by Navigators Insurance, and pool participation is recorded as
     reinsurance ceded in the Company's consolidated financial statements.
     Navigators Insurance cedes to each unaffiliated pool member its respective
     share of pool premiums and losses based on its percentage of pool
     participation as set forth in the pooling agreement. In 2004, Navigators
     Insurance had 80% of the pool and in 2005


                                        9




     that percentage increased to 85%. Any credit exposure that the Company has
     to pool members not paying their share of the pool's losses is included in
     the Company's estimate of reinsurance recoverables and its allowance for
     uncollectible reinsurance. As a result, the Company respectfully submits
     that all material information regarding the impact of the marine pool is
     included in the discussion of its marine business.

7.   Disclosure of the impact of known trends, demands, commitments and
     uncertainties on your liquidity and capital resources is consistent with
     the objectives of Management's Discussion and Analysis. We note that you do
     not discuss the impact of known trends in your cash flows or unexpected
     variations in the timing of claim payments on future liquidity and results
     of operations. This disclosure appears to be particularly important given
     the high degree of your reliance upon reinsurance to manage liquidity and
     capital resources and the claim severity inherent in your business. Please
     provide this information in disclosure-type format.

     [Response]

          The Company discusses and explains trends in its historic cash flow
     from operations under the MD&A sub-caption "Liquidity and Capital
     Resources" beginning on page 52 of the 2004 10-K. As stated on page 53 of
     the 2004 10-K, "we believe that the cash flow generated by the operating
     activities of our subsidiaries will provide sufficient resources for us to
     meet liquidity needs for the next twelve months. Beyond the next twelve
     months, cash flow available to us may be influenced by a variety of
     factors, including general economic conditions and conditions in the
     insurance and reinsurance markets, as well as fluctuations from year to
     year in claims experience." The issue of the risk to the Company associated
     with receipt of amounts it is owed under its reinsurance program is
     disclosed in the MD&A under the sub-caption "Risk Factors-Our reinsurers,
     including other participants in the marine pool, may not pay on losses in a
     timely fashion, or at all, which may increase our costs." Time lags do
     occur in the normal course of business between the time gross losses are
     paid by the Company and the time such gross losses are billed and collected
     from reinsurers.

          During 2004, 2003 and 2002, approximately 58%, 51% and 43%,
     respectively (as derived from the table of losses and loss adjustment
     expenses incurred in Note 7 on page F-29 of the 2004 10-K), of gross
     incurred losses of approximately $453 million, $427 million and $251
     million, respectively, were ceded to reinsurers under pro-rata and quota
     share treaties. Such recoverable amounts are anticipated to be billed and
     collected over the next several years as gross losses are paid by the
     Company.

          Generally, for pro-rata or quota share reinsurers, including pool
     participants, the Company issues quarterly settlement statements for
     premiums less commissions and paid loss activity, which are expected to be
     settled within 45 days after the quarter end. The Company has the ability
     to issue "cash calls" requiring such reinsurers to pay losses whenever paid
     loss activity ceded to a particular reinsurance treaty exceeds a
     predetermined amount (generally not more than $1 million) as set forth in
     the pro-rata treaty. For the Insurance Companies, cash calls must generally
     be paid within 15 business days. There is no specific settlement period for
     the Lloyd's Operations cash call provisions but such billings are generally
     paid within 30 days.


                                       10




          Generally, for excess of loss reinsurers the Company pays monthly or
     quarterly deposit premiums based on the estimated subject premiums over the
     contract period (usually one year) which are subsequently adjusted based on
     actual premiums determined after the expiration of the applicable
     reinsurance treaty. Paid losses subject to excess of loss recoveries are
     generally billed as they occur and are usually settled by reinsurers within
     15 business days for the Insurance Companies and 30 business days for the
     Lloyd's Operations.

          The Company sometimes withholds funds from reinsurers and may apply
     ceded loss billings against such funds in accordance with the applicable
     reinsurance agreements.

          The Company believes that it has adequately managed its cash flow
     requirements under such circumstances from its positive cash flows and the
     use of available short-term funds when applicable. However, there can be no
     assurances that the Company will be able to continue to adequately manage
     such recoveries in the future or that collection disputes or reinsurer
     insolvencies will not arise that could materially increase the collection
     time lags or result in recoverable write-offs causing additional incurred
     losses and liquidity constraints to the Company.

          At the time of the 2004 10-K, the Company was not aware of any
     particular negative trends in claims payment or cash flows that would have
     been likely to have a material impact on the Company. To the extent that
     the Company is aware of any unusual variation in claims payment timing that
     is reasonably likely or changes in known trends in cash flows (including
     from reinsurance recoveries) that could be material, it will include such
     information in its Liquidity and Capital Resources disclosure in its
     Exchange Act periodic reports going forward. For example, in its 2005 Form
     10-K, the Company will note that cash requirements for the payment of gross
     claims and related collections from reinsurers with respect to the 2005
     hurricanes could significantly impact its liquidity needs and will describe
     how it expects to fund these expenditures or any unusual expected capital
     expenditures (including through proceeds from its recent equity offering
     that were contributed to Navigators Insurance). The Company will also state
     whether or not in light of these trends or unusual events, it believes its
     future liquidity needs can be adequately met from its existing sources of
     funds.

8.   We note your disclosure of "underwriting results," a non-GAAP financial
     measure, excludes recurring items, which have occurred in prior periods and
     will reoccur in future periods. This non-GAAP financial measure is not
     described in Note 13, Segment Information. While the acceptability of a
     non-GAAP financial measure depends on all facts and circumstances, we do
     not believe that use of such a non-GAAP measure is appropriate. Exclusion
     of these amounts raises significant concern about management's assertions
     as to the usefulness of these measures for investors and the
     appropriateness of their presentation in accordance with Item 10 of
     Regulation S-K. Please refer to "Frequently Asked Questions Regarding the
     Use of Non-GAAP Financial Measures" on our website at
     www.sec.gov/divisions/corpfin/faqs/nongaapfaq.htm that we issued on June
     13, 2003. Please tell us how your disclosure complies with Item 10 of
     Regulation S-K for the non-GAAP financial measures used within your filing.


                                       11




     [Response]

          As stated in Note 13, Segment Information, beginning on page F-36 of
     the 2004 10-K, "all segments are evaluated based on their GAAP underwriting
     or operating results, which are prepared using the accounting policies
     described in the summary of significant accounting policies in Note 1
     included herein. The Insurance Companies and the Lloyd's Operations are
     measured taking into account net premiums earned, incurred losses and loss
     expenses, commission expense and other underwriting expenses." Since
     'underwriting results' is the measure by which management evaluates its
     Insurance Companies and Lloyd's Operations segments, it should not be
     considered a non-GAAP measure under the SEC's Final Rule relating to this
     matter.

          While the dollar amount of the underwriting results is not
     specifically disclosed in Note 13 to the 2004 10-K, such underwriting
     results were expressed in ratio format in the tabular information. In
     addition, the dollar amount of the underwriting results can be derived from
     information presented in Note 13.

          The Company will specifically disclose the dollar amount of the
     underwriting results in the tabular information presented in the segment
     note along with the related underwriting ratios in its future Exchange Act
     periodic reports.

Note 1. Organization and Summary of Significant Accounting Policies
- -------------------------------------------------------------------

Lloyd's Syndicate, page F-10
- ----------------------------

9.   Please provide in disclosure-type format a more detailed description of
     your participation rights, including their duration, any restrictions and
     your obligations upon termination of these rights. Explain to us your
     accounting for Lloyd's Syndicate 1221 transactions as follows:

     o    Refer us to the technical guidance upon which you based accounting for
          your participation in Lloyd's Syndicate 1221, including the basis for
          your revenue and expense recognition relating to RITC risk transfers
          between accident years.

     o    Given the difference between the recorded liability and ultimate
          liability estimated at the RITC date and the related cost to reinsure
          outstanding claims, clarify why you recorded no gain or loss on these
          RITC transactions.

     o    Quantify the impact on operating results of retrocession of the
          syndicate's reinsurance to Navigators Insurance Company for each
          period presented.

     o    Tell us how you accounted for participant distributions associated
          with these RITC transactions.

     [Response]

          As stated on page 5 of the 2004 10-K under the caption
     "Business-General," the Company participates in the marine and related
     insurance lines of the Lloyd's market through a wholly owned subsidiary,
     Navigators Underwriting Agency, Ltd, which manages Lloyd's Syndicate 1221.
     Our wholly owned subsidiaries which are also Lloyd's corporate members,
     Millennium Underwriting Ltd and Navigators Corporate Underwriters Ltd,
     provided 97.4% of Syndicate 1221's capacity for the 2004


                                       12




     underwriting year. The capacity is provided through contractual agreements
     for a particular underwriting year.

          The Managing Agent's Agreement is the contractual arrangement pursuant
     to which Navigators Underwriting Agency, Ltd has been appointed as the
     managing agent of Syndicate 1221. This agreement sets forth certain rights
     and obligations of the managing agent and participating corporate members
     in Syndicate 1221. The amount of participation by each corporate member in
     the total capacity of Syndicate 1221 for a particular year of account is
     set forth in the Corporate Member's Syndicate List for that particular year
     of account, prepared in accordance with the terms of the Managing Agent's
     Agreement.

          Pursuant to Lloyd's Syndicate Pre-Emption Byelaw, as a corporate
     member participating in Syndicate 1221, each of Millennium Underwriting Ltd
     and Navigators Corporate Underwriters Ltd is entitled to participate in
     each subsequent year of account of Syndicate 1221 to the same proportional
     extent as such corporate member participated in the prior year of account
     of Syndicate 1221. However, the Syndicate Pre-Emption Byelaw does not
     obligate either Millennium Underwriting Ltd or Navigators Corporate
     Underwriters Ltd to participate in any subsequent year of account of
     Syndicate 1221.

          The Lloyd's Syndicate Accounting Bulletin No. 18 of 1994 states that
     "Every year of account of a syndicate shall be kept open for not less than
     three years from the beginning of that year of account." The Managing
     Agent's Agreement states that "Profits of the Underwriting in respect of a
     year of account shall not be distributed until that year of account is
     closed."

          The Syndicate Account Byelaws define reinsurance-to-close ("RITC") as
     "an agreement under which the underwriting members who are members of a
     syndicate for a year of account agree with the underwriting members who
     constitute that or another syndicate for the later year of account that the
     reinsuring members will discharge or procure the discharge of, or indemnify
     the reinsured members against all known and unknown liabilities of the
     reinsured members arising out of insurance business underwritten through
     that syndicate and allocated to the closed year of account in consideration
     of a premium."

          Closing an underwriting year is a common administrative and settlement
     mechanism at Lloyd's as further explained in paragraph 6.64 of the AICPA's
     Audit and Accounting Guide: Property and Liability Insurance Companies-May
     2004 ("AICPA P&L Ins. Guide").

          As excerpted from paragraph 6.64 of the AICPA P&L Ins. Guide, Lloyd's
     syndicates report the amounts of premiums, claims, and expenses recorded in
     an underwriting account for a particular year to the assuming companies
     that participate in the syndicates. The syndicates generally keep accounts
     open for three years. Traditionally, three years have been necessary to
     report substantially all premiums associated with an underwriting year and
     to report most related claims, although claims


                                       13




     may remain unsettled after the account is closed. A Lloyd's syndicate
     typically closes an underwriting account by reinsuring outstanding claims
     on that account with the participants for the next underwriting year. The
     ceding syndicate pays the assuming syndicate an amount based on the
     unearned premiums and outstanding claims in the underwriting account at the
     date of the assumption and distributes the remaining balance to its
     participants. Please refer to our discussion starting on page 46 in the
     MD&A section of the 2004 10-K.

          An underwriting year which is being closed will have a gain or loss
     following the RITC calculation. When a gain occurs, the syndicate members
     for the year being closed will retain the funds constituting the gain which
     are recorded in its books and records. In the situation where an
     underwriting year results in a loss, the syndicate members for the year
     being closed must supplement the funds being transferred in the RITC to the
     extent of the loss which is recorded in its books and records.

          Consistent with EITF 00-1 as incorporated by FIN 46 and as stated on
     page 47 in the MD&A section of the 2004 10-K, the Company's participation
     in Lloyd's Syndicate 1221 is represented by and recorded as our
     proportionate share of the underlying assets and liabilities and results of
     operations of the Syndicate since (a) the Company holds an undivided
     interest in each asset, (b) the Company is proportionately liable for each
     liability and (c) Syndicate 1221 is not a separate legal entity. Under
     these circumstances and in accordance with the above literature, the
     Company records its proportionate share of Syndicate 1221's assets and
     liabilities in its balance sheet and its share of Syndicate 1221's results
     of operations in its income statement. The RITC amounts described in our
     2004 10-K represents the transfer of the assets and liabilities from the
     participants of a closing underwriting year to the participants of the next
     underwriting year.

          Consistent with SFAS 60 and guidance provided in Paragraph 6.66 of the
     AICPA P&L Ins. Guide, the Company uses the periodic method of accounting to
     record activity related to premium, losses and expenses as described in
     Note 1 starting on page F-9 of our 2004 10-K under the headings Premium
     Revenues, Deferred Policy Acquisition Costs and Reserves for Losses and
     Loss Adjustment Expenses. An excerpt from Paragraph 6.66 of the AICPA P&L
     Ins. Guide states that premiums are recognized as revenue over the policy
     term, and claims, including an estimate of claims incurred but not
     reported, are recognized as they occur. The periodic method is consistent
     with current practice for primary insurance and domestic reinsurance for
     which sufficient information is available to reasonably estimate and
     recognize earned premiums and related claims. (Refer to FASB Statement No.
     60.)

          Since the recorded liability estimated at the RITC date includes all
     reported claims and an estimate for incurred but not reported claims and
     there is no discounting of the claims, the recorded liability is the
     estimated ultimate liability, therefore no gain or loss is recorded on the
     RITC transaction.

          The pre-tax gain on the business assumed from Syndicate 1221 by
     Navigators Insurance was $3.8 million for 2004, $1.2 million for 2003 and
     $0.3 million for 2002.


                                       14




Note 7. Reinsurance, page F-30
- ------------------------------

10.  Please provide in disclosure-type format all disclosure required by
     paragraph 27 of SFAS 113 and paragraph 15A of SFAS 107.

     [Response]

          SFAS 113, paragraph 27 states that all insurance companies shall
     disclose the following in their financial statements:

     27a. The nature, purpose, and effect of ceded reinsurance transactions on
     the enterprise's operations. (Ceding companies also shall disclose the fact
     that the insurer is not relieved of its primary obligation to the
     policyholder in a reinsurance transaction. Footnote 8 to paragraph 27a
     states that, as indicated in paragraph 16, the amount of recoveries
     recognized under reinsurance contracts also must be disclosed by the
     reporting enterprise if not reported separately in the statement of
     earnings.

          Page 7 of the 2004 10-K under the caption "Business-Reinsurance Ceded"
     states the following:

          "We utilize reinsurance principally to reduce our exposure on
          individual risks, to protect against catastrophic losses, to maintain
          desired ratios of net written premium to statutory surplus and to
          stabilize loss ratios and underwriting results. The purchase of
          reinsurance does not discharge us, the original issuer, from our
          primary liability to the policyholder. We are required to pay the
          losses even if the reinsurer fails to meet its obligations under the
          reinsurance agreement."

          Similar wording is also included in the first two paragraphs of Note 7
     on page F-27 of the Notes to Consolidated Financial Statements in the 2004
     10-K. In the losses and loss adjustment table in Note 7 on page F-29 of the
     Notes to Consolidated Financial Statements of the 2004 10-K, the Company
     shows the losses and loss adjustment expenses ceded for 2004, 2003 and
     2002.

     27b. For short duration contracts, premiums from direct business,
     reinsurance assumed, and reinsurance ceded, on both a written and an earned
     basis; for long duration contracts, ....

          On page F-29 of the Notes to Consolidated Financial Statements in the
     2004 10-K, the Company shows, in table form, written and earned premium on
     a direct, assumed and ceded basis for short duration contracts. The Company
     does not have any long duration contracts so this portion of SFAS 113,
     paragraph 27, does not apply.

     27c. Methods used for income recognition on reinsurance contracts.

          In Note 1 on page F-12 of the Notes to Consolidated Financial
     Statements in the 2004 10-K under the caption "Reinsurance


                                       15




     Ceded", the Company states that "Reinsurance ceded, which transfers risk
     and the related premiums, commissions and losses incurred to the reinsurer,
     is reflected as reductions of the respective income and expense accounts."

          SFAS 107, paragraph 15A requires that certain information be disclosed
     about each significant concentration of credit risk. The two significant
     areas of concentration of credit risk that affect us are investments from a
     particular issuer and reinsurance recoverables from a particular reinsurer.
     The Company believes that the following described disclosures satisfy the
     requirements of SFAS 107, paragraphs 15A(a), 15A(b) and 15A(c). Disclosures
     under paragraph 15A(d) are not applicable as the Company does not utilize
     master netting arrangements.

          Investments are discussed beginning on page 18 of the 2004 10-K under
     the caption "Business-Investments." This discussion includes a description
     of investment guidelines and shows the investments broken down by category.
     The Company also describes its procedure for determining any other-
     than-temporary impairments in the portfolio and provides an aging of our
     unrealized losses by category and rating. In Note 2 beginning on page F-15
     of the Notes to Consolidated Financial Statements in the 2004 10-K, the
     Company's investment portfolio by category is shown, and its procedures for
     determining other-than-temporary impairments, age of unrealized losses by
     category and maturity information are disclosed.

          Reinsurance recoverables are discussed beginning on page 7 and a table
     of the 20 largest reinsurers is provided in the 2004 10-K on page 8 under
     the caption "Business-Reinsurance Ceded". The table shows the amount
     recoverable, financial rating and amount of collateral held for each
     reinsurer. Reinsurance recoverables are again discussed and the table by
     reinsurer is again provided in Note 7 beginning on page F-27 of the Notes
     to Consolidated Financial Statements in the 2004 10-K. The collateral
     maintained is described as letters of credit, ceded balances payable and
     other balances held by the Company.

11.  Please provide in disclosure-type format a detailed explanation of your
     accounting for the 2003 commutation of all reinsurance obligations and
     liabilities of Trenwick to Navigators, including why no gain or loss was
     recorded on this transaction.

     [Response]

          The statement on page F-30 in Note 7 of the Notes to Consolidated
     Financial Statements in the 2004 10-K that "no gain or loss was recorded on
     the commutation" referred only to the commutation between Navigators
     Insurance and Somerset Insurance Ltd. (which obligations were fully
     collateralized and commuted back at 100% of their recorded value). The
     Trenwick commutation is described in detail in Note 7 of the 2003 Form 10-K
     of the Company. While the Trenwick commutation did result in a small loss,
     as stated in Note 7 to the Consolidated Financial Statements included in
     the 2003 Form 10-K of the Company, the results of the commutation did not
     have a material impact on the Company's operating results. Given this lack
     of material impact, the Company did not repeat the detailed discussion of
     the Trenwick commutation and its accounting in the 2004 10-K. In its
     disclosure regarding the Trenwick commutation in the 2005 10-K, the Company
     will use language similar to the language that appeared in Note 7 to its
     Consolidated Financial Statements in its 2003 Form 10-K.


                                       16




Note 12. Commitments and Contingencies, page F-36
- -------------------------------------------------

12.  We note that the Council of Lloyd's can assess up to 3% of your
     underwriting capacity for Syndicate 1221 in any one year as a Central Fund
     contribution, which appears to be material to your net income, and that it
     may further increase such assessments to fund a second tier of Central Fund
     assets. Please explain why you have not provided disclosures of the
     contingency related to the assessments in MD&A and/or in your financial
     statements in accordance with FAS 5 and, as applicable, SOP 97-3.

     [Response]

          The Company has discussed the risk of an assessment from the Council
     of Lloyd's in the MD&A sub-caption "Risk Factors-Continued or increased
     premium levies by Lloyd's for the Lloyd's Central Fund and cash calls for
     trust fund deposits or a significant downgrade of Lloyd's A.M. Best rating
     could materially and adversely affect us," on pages 58-59 of the 2004 10-K
     and in the discussion under the caption "Business-Regulation" on page 27 of
     the 2004 10-K. The Company did not believe that the assessment was likely
     in the foreseeable future and therefore did not include additional
     contingency disclosure in the notes to its Consolidated Financial
     Statements for the year ended December 31, 2004. However, to acknowledge
     that a Lloyd's assessment is possible regardless of the Company's belief,
     in the future the Company will include disclosure of the maximum possible
     assessment based on its then current capacity in its MD&A and financial
     statements. For example, based on the Company's 2004 capacity at Lloyd's of
     (pound)150 million, the December 31, 2004 exchange rate of (pound)1 equals
     $1.92 and assuming the maximum 3% assessment was made by the Council of
     Lloyd's, the Company would be assessed approximately $8.6 million.


                                       17




     We welcome the opportunity to discuss any of the information included
herein should you desire. If you have any questions or comments concerning this
response letter, please contact the undersigned at 914-933-6025 (phone),
914-933-6033 (fax) or bwiley@navg.com.



                                          Sincerely yours,



                                          /s/ Bradley D. Wiley
                                          ----------------------
                                          Bradley D. Wiley
                                          Senior Vice President,
                                          Financial Compliance
                                          Officer and Secretary




                                       18