8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

_____________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported)                    October 27, 2008

The Navigators Group, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	0-15886	13-3138397
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

One Penn Plaza, New York, NY                                                                                                                                                                         & #160;                                                                                                   10119 

        (Address of Principal Executive Offices)                                                                                                                                                                        & #160;                                                                                      (Zip Code)

Registrant’s telephone number, including area code                                                                          (914) 934-8999

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.                                Results of Operations and Financial Condition

Item 7.01.                                Regulation FD Disclosure

The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition,” and Item 7.01, “Regulation FD Disclosure.”  This information, including the Exhibit attached hereto, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

On October 27, 2008, The Navigators Group, Inc. (the “Company”) issued a press release announcing its earnings for the third quarter of 2008.  This press release is attached hereto as exhibit 99.1.

Item 9.01.                                Financial Statements and Exhibits

(d)         Exhibits

99.1 Third Quarter Earnings Press Release dated October 27, 2008.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE NAVIGTORS GROUP, INC.
Date:  October 27, 2008	By:	/s/ Elliot S. Orol
		Name:  Elliot S. Orol
		Title:    Senior Vice President, General Counsel and Secretary

EXHIBIT INDEX

Exhibit No.                                Exhibit

99.1 Third Quarter Earnings Press Release dated October 27, 2008.

EX-99.1

Exhibit 99.1

The Navigators Group, Inc.

Navigators Reports Third Quarter Earnings

New York –October 27, 2008 - --The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $1,001,000 or $0.06 per share for the 2008 third quarter compared to net income of $25,033,000 or $1.47 per share for the 2007 third quarter.  The 2008 third quarter results include net realized capital losses of $5,516,000 or $0.21 per share and the 2007 third quarter results include net realized capital losses of $66,000 or $0.00 per share. The 2008 third quarter net realized capital losses include a provision of $4,747,000 for declines in the market value of securities which were considered to be other than temporary. The after-tax loss of such provision was $3,086,000 or $0.18 per share. The decision to record realized capital losses on such securities has no impact on the Company’s shareholders’ equity or book value per share.

The 2008 third quarter net income includes $18,255,000 or $1.08 per share for after-tax net losses from Hurricanes Gustav and Ike.

Net income for the nine month period ended September 30, 2008 was $41,672,000 or $2.45 per share, compared to $69,080,000 or $4.07 per share for the nine month period ended September 30, 2007.  The results for the nine months ended September 30, 2008 included a net realized capital loss of $0.52 per share and the results for the nine months ended September 30, 2007 included a net realized capital gain of $0.04 per share.

Gross written premium and net written premium for the 2008 third quarter were $252,943,000 and $140,318,000, respectively, an increase of 3% and a decrease of 12%, respectively, from the comparable 2007 period. Gross written premium and net written premium for the nine month period ended September 30, 2008 were $819,302,000 and $502,327,000, respectively, a decrease of less than 1% and an increase of 2%, respectively, from the comparable 2007 period.

The combined loss and expense ratios for the 2008 third quarter and nine month period were 107.9% and 95.7%, respectively, compared to 86.6% and 87.4% for the comparable 2007 periods.  The combined loss and expense ratios for the 2008 third quarter and nine month period were favorably impacted by 5.2 and 6.8 loss ratio points, respectively, for redundancies in prior period loss reserves.  Net paid loss ratios for the 2008 third quarter and nine month period were 38.4% and 33.5%, respectively, compared to 29.6% and 31.1% for the comparable 2007 periods.

The combined loss and expense ratios for the 2008 third quarter and nine month period were increased by an aggregate 17.4 and 5.7 loss and expense ratio points, respectively, for the net losses from Hurricanes Gustav and Ike.  Such net losses are inclusive of reinsurance recoveries and related costs for reinsurance reinstatement premiums.

Navigators’ Chief Executive Officer Stan Galanski commented, “Navigators is a major participant in offshore energy insurance, consequently, losses from Hurricanes Gustav and Ike adversely impacted what would have been another very solid quarter for the Company. Given the magnitude of damage to offshore oil platforms from Hurricane Ike, we are pleased that our projected losses are well contained within our reinsurance program and consistent with our stated objective of limiting catastrophe exposure to no more than one quarter’s earnings. Our Specialty and Pro business units continue to generate profitable

underwriting results despite marketplace challenges. In these unprecedented times of financial turmoil, our conservative investment philosophy and strong balance sheet have strategically positioned Navigators to serve our agents, brokers and policyholders.  We remain committed to underwriting discipline as we look to take advantage of any improving market conditions and other targeted opportunities to expand our business.”

Net investment income for the 2008 third quarter and nine month period was $19,322,000 and $56,891,000, respectively, increases of 8% and 11% from the comparable 2007 periods.  The pre-tax investment yields for the 2008 third quarter and nine month period were 4.1% and 4.1%, respectively, compared to 4.3% and 4.4% for the comparable 2007 periods. The effective tax rates on net investment income were 25.7% and 25.8% for the 2008 third quarter and nine month period, respectively, compared to 27.5% and 28.0% for the comparable 2007 periods.

The Company’s investment portfolio mainly consists of high quality fixed income securities with an average quality rating of “AA/Aa” by Standard & Poor’s and Moody’s, respectively, and an average effective duration of 4.3 years at September 30, 2008.

Consolidated cash flow from operations for the 2008 third quarter and nine month period was $82,965,000 and $216,365,000 respectively, compared to $119,669,000 and $231,336,000 for the comparable 2007 periods.

During the 2008 third quarter, the Company repurchased 38,728 shares of its common stock at an average cost of $44.51 per share, for an aggregate amount of $1,724,000.  At September 30, 2008 there is approximately $18.5 million in remaining capacity from the $30 million stock repurchase program approved in October 2007.

Stockholders’ equity was $655,561,000 or $39.07 per share at September 30, 2008 compared to $662,106,000 or $39.24 per share at December 31, 2007.  Statutory surplus of Navigators Insurance Company was $591,856,000 at September 30, 2008.

The Company will hold a conference call on Tuesday, October 28, 2008 starting at 8:30 a.m. ET to discuss the 2008 third quarter’s results.  The call will be available via live webcast on Navigators’ website (www.navg.com) by clicking on the Earnings Webcast link.

To participate by telephone, the domestic dial-in number is 888-679-8033and the international dial-in is 617-213-4846. The access code is 68614616.  Participants may pre-register for the call at www.theconferencingservice.com/prereg/key.process?key=P7E4UG3MW.  Pre-registrants will be issued a pin number to use when dialing into the live call that will provide quick access by bypassing the operator upon connection.

The webcast will be available for replay on the "News & Events" page of Navigators' website.

The Navigators Group, Inc. is an international specialty insurance holding company with insurance company operations, underwriting management companies, and operations at Lloyd’s of London.  Headquartered in New York, Navigators has offices in major insurance centers in the United States, the United Kingdom and Continental Europe.

This press release may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995.  Whenever used in this release, the words “estimate”, “expect”, “believe” or similar expressions are intended to identify such forward-looking statements.  We cannot assure that results that we anticipate will be achieved, since results may differ materially because of known and unknown risks and uncertainties that we face.   Please refer to Navigators’ most recent Forms 10-K and 10-Q and its other filings with the Securities and Exchange Commission for a description of Navigators’ business and the important factors that may affect that business.  Navigators undertakes no obligation to publicly update or revise any forward-looking statement.

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Financial Highlights

($'s in thousands, except per share data)

	Three Months Ended									Nine Months Ended
	September 30,									September 30,
Financial Highlights	2008			2007			Change			2008			2007			Change
Gross written premium	$	252,943		$	245,961			3	%	$	819,302		$	823,371			0	%
Net written premium		140,318			159,102			-12	%		502,327			493,471			2	%
Revenues:
Net earned premium		154,040			156,038			-1	%		472,483			440,701			7	%
Commission income		8			117			-93	%		736			1,011			-27	%
Investment income		19,322			17,930			8	%		56,891			51,476			11	%
Net realized capital gains (losses)		(5,516	)		(66	)	NM				(13,568	)		975		NM
Other income (expense)		(119	)		298		NM				902			(26	)	NM
Total revenues		167,735			174,317			-4	%		517,444			494,137			5	%
Operating expenses:
Net losses and loss adjustment
expenses incurred		113,269			88,019			29	%		293,578			248,950			18	%
Commission expense		22,357			19,676			14	%		66,795			54,425			23	%
Other operating expenses		30,601			27,902			10	%		93,594			82,799			13	%
Interest expense		2,218			2,216			0	%		6,652			6,646			0	%
Total operating expenses		168,445			137,813			22	%		460,619			392,820			17	%
Income before income taxes		(710	)		36,504			-102	%		56,825			101,317			-44	%
Income tax expense (benefit):
Current		2,069			11,520			-82	%		24,531			34,301			-28	%
Deferred		(3,780	)		(49	)	NM				(9,378	)		(2,064	)	NM
Income tax expense (benefit)		(1,711	)		11,471			-115	%		15,153			32,237			-53	%
Net income	$	1,001		$	25,033			-96	%	$	41,672		$	69,080			-40	%
Per Share Data
Net income per common share:
Basic	$	0.06		$	1.49			-96	%	$	2.48		$	4.11			-40	%
Diluted	$	0.06		$	1.47			-96	%	$	2.45		$	4.07			-40	%
Average shares outstanding:
Basic		16,772			16,843						16,802			16,796
Diluted		16,927			16,996						16,980			16,967
Underwriting Ratios
Loss Ratio		73.5	%		56.4	%					62.1	%		56.5	%
Expense Ratio		34.4	%		30.2	%					33.6	%		30.9	%
Combined Ratio		107.9	%		86.6	%					95.7	%		87.4	%
Balance Sheet Data										Sept. 30,			Dec. 31,
										2008			2007
Stockholders' equity										$	655,561		$	662,106			-1	%
Book value per share										$	39.07		$	39.24			0	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($'s in thousands)

	September 30,			December 31,
	2008			2007
ASSETS
Investments and cash:
Fixed maturities, available-for-sale, at fair value
(amortized cost: 2008, $1,673,013; 2007, $1,508,489)	$	1,625,686		$	1,522,320
Equity securities, available-for-sale, at fair value (cost: 2008, $71,835; 2007, $65,492)		68,637			67,240
Short-term investments, at cost which approximates fair value		178,569			170,685
Cash		23,298			7,056
Total investments and cash		1,896,190			1,767,301
Premiums in course of collection		172,285			163,081
Commissions receivable		148			2,381
Prepaid reinsurance premiums		189,093			188,961
Reinsurance receivable on paid losses		60,110			94,818
Reinsurance receivable on unpaid losses and loss adjustment expenses		865,288			801,461
Net deferred income tax benefit		60,155			29,249
Deferred policy acquisition costs		51,852			51,895
Accrued investment income		17,172			15,605
Goodwill and other intangible assets		7,513			8,084
Other assets		20,778			20,935
Total assets	$	3,340,584		$	3,143,771
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Reserves for losses and loss adjustment expenses	$	1,847,694		$	1,648,764
Unearned premium		496,852			469,481
Reinsurance balances payable		149,061			161,829
Senior notes		123,762			123,673
Federal income tax payable		7,417			10,868
Payable for securities purchased		2,608			-
Accounts payable and other liabilities		57,629			67,050
Total liabilities		2,685,023			2,481,665
Stockholders' equity:
Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued		-			-
Common stock, $.10 par value, 50,000,000 shares authorized for 9/30/08 and 12/30/07;
issued and outstanding: 16,778,692 (net of treasury stock) at 9/30/08 and 16,873,094 at 12/31/07		1,700			1,687
Additional paid-in capital		296,477			291,616
Retained earnings		396,756			355,084
Treasury stock, at cost (224,754 shares at 9/30/08)		(11,540	)		-
Accumulated other comprehensive income (loss)		(27,832	)		13,719
Total stockholders' equity		655,561			662,106
Total liabilities and stockholders' equity	$	3,340,584		$	3,143,771

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Comparative Premium Data

($'s in thousands)

Gross Written Premium:	Third Quarter								Nine Months
Insurance Companies:	2008			2007		Change			2008			2007		Change
Marine & Energy	$	69,796		$	56,630		23	%	$	230,327		$	214,086		8	%
Specialty		77,427			87,985		-12	%		240,322			268,800		-11	%
Professional Liability		25,706			24,546		5	%		71,430			69,379		3	%
Middle Markets		7,727			7,642		1	%		23,485			20,583		14	%
Property/Other		1,477			1,255		18	%		6,121			12,644		-52	%
		182,133			178,058		2	%		571,685			585,492		-2	%
Lloyd's Operations:
Marine		52,718			50,060		5	%		187,543			183,661		2	%
Professional Liability		10,307			9,639		7	%		29,376			25,651		15	%
Property/Other		7,785			8,204		-5	%		30,698			28,567		7	%
		70,810			67,903		4	%		247,617			237,879		4	%
Total	$	252,943		$	245,961		3	%	$	819,302		$	823,371		0	%
Net Written Premium:	Third Quarter								Nine Months
Insurance Companies:	2008			2007		Change			2008			2007		Change
M&E before Hurr. Reinstatements	$	38,421		$	25,606		50	%	$	133,215		$	108,570		23	%
Hurricane Reinstatements		(5,778	)		-	NM				(5,778	)		-	NM
Marine & Energy		32,643			25,606		27	%		127,437			108,570		17	%
Specialty		52,094			62,905		-17	%		164,036			179,980		-9	%
Professional Liability		15,019			14,447		4	%		42,658			41,406		3	%
Middle Markets		5,216			5,536		-6	%		18,994			14,129		34	%
Property/Other		1,161			1,183		-2	%		5,500			11,713		-53	%
		106,133			109,677		-3	%		358,625			355,798		1	%
Lloyd's Operations:
Marine before Hurr. Reinstatements		32,265			37,373		-14	%		123,064			109,899		12	%
Hurricane Reinstatements		(6,806	)		-	NM				(6,806	)		-	NM
Marine		25,459			37,373		-32	%		116,258			109,899		6	%
Professional Liability		6,055			8,692		-30	%		17,928			18,201		-1	%
Property/Other		2,671			3,360		-21	%		9,516			9,573		-1	%
		34,185			49,425		-31	%		143,702			137,673		4	%
Total	$	140,318		$	159,102		-12	%	$	502,327		$	493,471		2	%
Net Earned Premium:	Third Quarter								Nine Months
Insurance Companies:	2008			2007		Change			2008			2007		Change
M&E before Hurr. Reinstatements	$	41,981		$	30,204		39	%	$	111,663		$	97,699		14	%
Hurricane Reinstatements		(5,778	)		-	NM				(5,778	)		-	NM
Marine & Energy		36,203			30,204		20	%		105,885			97,699		8	%
Specialty		55,309			58,321		-5	%		168,552			161,742		4	%
Professional Liability		14,616			14,184		3	%		43,077			40,555		6	%
Middle Markets		4,488			4,475		0	%		16,921			13,584		25	%
Property/Other		1,831			1,876		-2	%		7,692			7,027		9	%
		112,447			109,060		3	%		342,127			320,607		7	%
Lloyd's Operations:
Marine before Hurr. Reinstatements		39,991			41,607		-4	%		111,086			103,953		7	%
Hurricane Reinstatements		(6,806	)		-	NM				(6,806	)		-	NM
Marine		33,185			41,607		-20	%		104,280			103,953		0	%
Professional Liability		5,111			4,587		11	%		16,211			9,498		71	%
Property/Other		3,297			784		321	%		9,865			6,643		49	%
		41,593			46,978		-11	%		130,356			120,094		9	%
Total	$	154,040		$	156,038		-1	%	$	472,483		$	440,701		7	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

September 30, 2008

($'s in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	182,133		$	70,810					$	252,943
Net written premium		106,133			34,185						140,318
Net earned premium		112,447			41,593						154,040
Net losses and loss adjustment expenses		(78,346	)		(34,923	)					(113,269	)
Commission expense		(13,823	)		(8,534	)					(22,357	)
Other operating expenses		(22,802	)		(7,799	)					(30,601	)
Other income (expense)		279			(390	)					(111	)
Underwriting profit		(2,245	)		(10,053	)					(12,298	)
Investment income		15,973			3,074		$	275			19,322
Net realized capital gains		(5,207	)		(309	)		-			(5,516	)
Interest expense		-			-			(2,218	)		(2,218	)
Income (loss) before income tax
expense (benefit)		8,521			(7,288	)		(1,943	)		(710	)
Income tax expense (benefit)		1,458			(2,489	)		(680	)		(1,711	)
Net income (loss)	$	7,063		$	(4,799	)	$	(1,263	)	$	1,001
Loss and loss expenses ratio		69.7	%		84.0	%					73.5	%
Commission expense ratio		12.3	%		20.5	%					14.5	%
Other operating expenses ratio (1)		20.0	%		19.7	%					19.9	%
Combined ratio		102.0	%		124.2	%					107.9	%
(1) The other operating expenses ratio includes other income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

September 30, 2007

($'s in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	178,058		$	67,903					$	245,961
Net written premium		109,677			49,425						159,102
Net earned premium		109,060			46,978						156,038
Net losses and loss adjustment expenses		(59,816	)		(28,203	)					(88,019	)
Commission expense		(13,086	)		(6,590	)					(19,676	)
Other operating expenses		(21,157	)		(6,745	)					(27,902	)
Other income (expense)		304			111						415
Underwriting profit		15,305			5,551						20,856
Investment income		14,816			2,609		$	505			17,930
Net realized capital gains (losses)		41			(107	)		-			(66	)
Interest expense		-			-			(2,216	)		(2,216	)
Income (loss) before income tax
expense (benefit)		30,162			8,053			(1,711	)		36,504
Income tax expense (benefit)		9,193			2,877			(599	)		11,471
Net income (loss)	$	20,969		$	5,176		$	(1,112	)	$	25,033
Loss and loss expenses ratio		54.8	%		60.0	%					56.4	%
Commission expense ratio		12.0	%		14.0	%					12.6	%
Other operating expenses ratio (1)		19.1	%		14.1	%					17.6	%
Combined ratio		85.9	%		88.1	%					86.6	%

(1) The other operating expenses ratio includes other income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Nine Months Ended

September 30, 2008

($'s in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	571,685		$	247,617					$	819,302
Net written premium		358,625			143,702						502,327
Net earned premium		342,127			130,356						472,483
Net losses and loss adjustment expenses		(207,927	)		(85,651	)					(293,578	)
Commission expense		(41,494	)		(25,301	)					(66,795	)
Other operating expenses		(69,502	)		(24,092	)					(93,594	)
Other income (expense)		2,053			(415	)					1,638
Underwriting profit		25,257			(5,103	)					20,154
Investment income		47,031			8,927		$	933			56,891
Net realized capital gains		(13,362	)		(206	)		-			(13,568	)
Interest expense		-			-			(6,652	)		(6,652	)
Income (loss) before income tax
expense (benefit)		58,926			3,618			(5,719	)		56,825
Income tax expense (benefit)		15,767			1,388			(2,002	)		15,153
Net income (loss)	$	43,159		$	2,230		$	(3,717	)	$	41,672
Loss and loss expenses ratio		60.8	%		65.7	%					62.1	%
Commission expense ratio		12.1	%		19.4	%					14.1	%
Other operating expenses ratio (1)		19.7	%		18.8	%					19.5	%
Combined ratio		92.6	%		103.9	%					95.7	%
(1) The other operating expenses ratio includes other income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Nine Months Ended

September 30, 2007

($'s in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	585,492		$	237,879					$	823,371
Net written premium		355,798			137,673						493,471
Net earned premium		320,607			120,094						440,701
Net losses and loss adjustment expenses		(184,881	)		(64,069	)					(248,950	)
Commission expense		(38,072	)		(16,353	)					(54,425	)
Other operating expenses		(60,983	)		(21,816	)					(82,799	)
Other income (expense)		889			96						985
Underwriting profit		37,560			17,952						55,512
Investment income		42,910			7,167		$	1,399			51,476
Net realized capital gains / (losses)		1,118			(143	)		-			975
Interest expense		-			-			(6,646	)		(6,646	)
Income (loss) before income tax
expense		81,588			24,976			(5,247	)		101,317
Income tax expense (benefit)		25,267			8,806			(1,836	)		32,237
Net income (loss)	$	56,321		$	16,170		$	(3,411	)	$	69,080
Loss and loss expenses ratio		57.7	%		53.3	%					56.5	%
Commission expense ratio		11.9	%		13.6	%					12.3	%
Other operating expense ratio (1)		18.7	%		18.1	%					18.6	%
Combined ratio		88.3	%		85.0	%					87.4	%
(1) The other operating expense ratio is adjusted to include commission and other income/(expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($'s in thousands)

	Three Months Ended September 30, 2008
	Net			Losses
	Earned			and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premium			Incurred		Expenses		Loss			Expense			Total
Marine & Energy	$	36,203		$	34,657	$	11,927		95.7	%		32.9	%		128.6	%
Specialty		55,309			32,699		15,947		59.1	%		28.8	%		87.9	%
Professional Liability		14,616			8,010		5,184		54.8	%		35.5	%		90.3	%
Middle Markets		4,488			2,299		2,476		51.2	%		55.2	%		106.4	%
Property/Other		1,831			681		812		37.2	%		44.3	%		81.5	%
		112,447			78,346		36,346		69.7	%		32.3	%		102.0	%
Lloyd's Operations		41,593			34,923		16,723		84.0	%		40.2	%		124.2	%
Total	$	154,040		$	113,269	$	53,069		73.5	%		34.4	%		107.9	%
	Effect of Hurricanes Gustav and Ike on the Three Months Ended Sept. 30, 2008
Marine	$	(5,778	)	$	9,103	$	-		34.9	%		4.5	%		39.4	%
Lloyd's Operations		(6,806	)		6,397		-		25.0	%		5.7	%		30.7	%
Total	$	(12,584	)	$	15,500	$	-		14.9	%		2.5	%		17.4	%
	Three Months Ended September 30, 2007
	Net			Losses
	Earned			and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premium			Incurred		Expenses		Loss			Expense			Total
Marine & Energy	$	30,204		$	19,600	$	10,439		64.9	%		34.6	%		99.5	%
Specialty		58,321			28,127		15,769		48.2	%		27.0	%		75.2	%
Professional Liability		14,184			8,764		5,217		61.8	%		36.8	%		98.6	%
Middle Markets		4,475			2,026		1,569		45.3	%		35.1	%		80.4	%
Property/Other		1,876			1,299		945		69.2	%		50.4	%		119.6	%
		109,060			59,816		33,939		54.8	%		31.1	%		85.9	%
Lloyd's Operations		46,978			28,203		13,224		60.0	%		28.1	%		88.1	%
Total	$	156,038		$	88,019	$	47,163		56.4	%		30.2	%		86.6	%
				Amounts				Loss Ratio
Net Incurred Loss Activity				Sept. 30,		Sept. 30,		Sept. 30,			Sept. 30,
For the Three Months Ended:				2008		2007		2008			2007
Insurance Companies:
Loss and LAE payments				$	36,929	$	31,233		32.8	%		28.6	%
Change in reserves					41,417		28,583		36.9	%		26.2	%
Net incurred loss and LAE					78,346		59,816		69.7	%		54.8	%
Lloyd's Operations:
Loss and LAE payments					22,320		14,961		53.7	%		31.8	%
Change in reserves					12,603		13,242		30.3	%		28.2	%
Net incurred loss and LAE					34,923		28,203		84.0	%		60.0	%
Total
Loss and LAE payments					59,249		46,194		38.4	%		29.6	%
Change in reserves					54,020		41,825		35.1	%		26.8	%
Net incurred loss and LAE				$	113,269	$	88,019		73.5	%		56.4	%
Impact of Prior Years Reserves				Amounts				Loss Ratio Impact
Favorable / (Unfavorable) Development				Sept. 30,		Sept. 30,		Sept. 30,			Sept. 30,
For the Three Months Ended:				2008		2007		2008			2007
Insurance Companies				$	5,600	$	10,980		5.0	%		10.1	%
Lloyd's Operations					2,420		1,187		5.8	%		2.5	%
Total				$	8,020	$	12,167		5.2	%		7.8	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($'s in thousands)

	Nine Months Ended September 30,2008
	Net			Losses
	Earned			and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premium			Incurred		Expenses		Loss			Expense			Total
Marine & Energy	$	105,885		$	76,525	$	35,183		72.3	%		33.2	%		105.5	%
Specialty		168,552			95,793		48,130		56.8	%		28.6	%		85.4	%
Professional Liability		43,077			24,289		15,302		56.4	%		35.5	%		91.9	%
Middle Markets		16,921			10,302		7,216		60.9	%		42.6	%		103.5	%
Property/Other		7,692			1,018		3,112		13.2	%		40.5	%		53.7	%
		342,127			207,927		108,943		60.8	%		31.8	%		92.6	%
Lloyd's Operations		130,356			85,651		49,808		65.7	%		38.2	%		103.9	%
Total	$	472,483		$	293,578	$	158,751		62.1	%		33.6	%		95.7	%
	Effect of Hurricanes Gustav and Ike on the Nine Months Ended Sept. 30, 2008
Marine	$	(5,778	)	$	9,103	$	-		11.9	%		1.7	%		13.6	%
Lloyd's Operations		(6,806	)		6,397		-		7.9	%		1.9	%		9.8	%
Total	$	(12,584	)	$	15,500	$	-		4.8	%		0.9	%		5.7	%
	Nine Months Ended September 30,2007
	Net			Losses
	Earned			and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premium			Incurred		Expenses		Loss			Expense			Total
Marine & Energy	$	97,699		$	57,835	$	30,553		59.2	%		31.3	%		90.5	%
Specialty		161,742			88,415		44,964		54.7	%		27.8	%		82.5	%
Professional Liability		40,555			24,989		14,870		61.6	%		36.6	%		98.2	%
Middle Markets		13,584			6,811		4,905		50.1	%		36.1	%		86.2	%
Property/Other		7,027			6,831		2,874		97.2	%		40.9	%		138.1	%
		320,607			184,881		98,166		57.7	%		30.6	%		88.3	%
Lloyd's Operations		120,094			64,069		38,073		53.3	%		31.7	%		85.0	%
Total	$	440,701		$	248,950	$	136,239		56.5	%		30.9	%		87.4	%
				Amounts				Loss Ratio
Net Incurred Loss Activity				Sept. 30,		Sept. 30,		Sept. 30,			Sept. 30,
For the Nine Months Ended:				2008		2007		2008			2007
Insurance Companies:
Loss and LAE payments				$	106,015	$	91,643		31.0	%		28.6	%
Change in reserves					101,912		93,238		29.8	%		29.1	%
Net incurred loss and LAE					207,927		184,881		60.8	%		57.7	%
Lloyd's Operations:
Loss and LAE payments					52,461		45,426		40.2	%		37.8	%
Change in reserves					33,190		18,643		25.5	%		15.5	%
Net incurred loss and LAE					85,651		64,069		65.7	%		53.3	%
Total
Loss and LAE payments					158,476		137,069		33.5	%		31.1	%
Change in reserves					135,102		111,881		28.6	%		25.4	%
Net incurred loss and LAE				$	293,578	$	248,950		62.1	%		56.5	%
Impact of Prior Years Reserves				Amounts				Loss Ratio Impact
Favorable / (Unfavorable) Development				Sept. 30,		Sept. 30,		Sept. 30,			Sept. 30,
For the Nine Months Ended:				2008		2007		2008			2007
Insurance Companies				$	25,752	$	22,171		7.5	%		6.9	%
Lloyd's Operations					6,528		7,413		5.0	%		6.2	%
Total				$	32,280	$	29,584		6.8	%		6.7	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Net Loss Data

($'s in thousands)

	Case		IBNR
Net Loss Reserves, September 30, 2008:	Reserves		Reserves		Total
Insurance Companies:
Marine & Energy	$	116,141	$	118,442	$	234,583
Specialty		67,193		307,877		375,070
Professional Liability		23,457		58,701		82,158
Middle Markets		12,784		11,988		24,772
Property/Other		11,372		9,638		21,010
Total Insurance Companies		230,947		506,646		737,593
Lloyd's Operations:
Marine		108,165		97,167		205,332
Other		12,744		26,737		39,481
Total Lloyd's Operations		120,909		123,904		244,813
Total Net Loss Reserves	$	351,856	$	630,550	$	982,406
	Case		IBNR
Net Loss Reserves, December 31, 2007:	Reserves		Reserves		Total
Insurance Companies:
Marine & Energy	$	93,467	$	103,500	$	196,967
Specialty		53,276		268,484		321,760
Professional Liability		20,335		50,584		70,919
Middle Markets		11,469		10,329		21,798
Property/Other		12,790		11,447		24,237
Total Insurance Companies		191,337		444,344		635,681
Lloyd's Operations:
Marine		89,957		93,069		183,026
Other		7,485		21,111		28,596
Total Lloyd's Operations		97,442		114,180		211,622
Total Net Loss Reserves	$	288,779	$	558,524	$	847,303

Professional Liability

Reported Claims or Notices of Potential Claims

Related to Subprime Exposure

September 30, 2008

($'s in thousands)

The following table sets forth claims data and other information related to subprime exposure for our professional liability business. Our management believes that its reserves for losses and loss adjustment expenses are adequate to cover the ultimate costs for such loss contingencies related to subprime exposure for our professional liability business.

	Number		Average		Average		Average
	of		Gross		Net		Excess
	Claims (1)		Limit		Limit (2)		Attachment
Primary:
D&O Securities/Other Claims		1	$	1,000	$	650		-
Excess:
D&O Securities Claims		4		7,500		4,500	$	37,500
D&O Side A Securities Claims		2		5,000		3,500		137,500
Other Claims		2		10,000		5,500		35,000
Subtotal/Average		8		7,500		4,500
Total		9	$	6,778	$	4,072

(1)   Claims data for professional liability policies written by the Insurance Companies.  There are no reported claims or notices of potential claims reported for the Lloyd’s Operations.  All policies are claims made.  Defense costs are inside the limits of liability.  There was one new reported claim/ notice of potential claim reported for the nine months ended September 30, 2008.

(2)   Amounts are net of reinsurance.

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

September 30, 2008

($'s in thousands)

At September 30, 2008, the average quality of the investment portfolio as rated by S&P and Moody’s was AA/Aa with an average duration of 4.3 years.  All of the Company’s mortgage-backed and asset-backed securities are rated AAA/Aaa by S&P and Moody’s except for ten securities approximating $6.1 million, which are all rated investment grade.  The Company does not own any collateralized debt obligations (CDO’s), collateralized loan obligations (CLO’s) or asset backed commercial paper.

At September 30, 2008, the Company owned two asset-backed securities approximating $0.3 million with subprime mortgage exposures.  The securities are rated AAA/Aaa and have an effective maturity of 1.0 years.  In addition, the Company owned a total of eleven collateralized mortgage obligations and asset-backed securities approximating $13.3 million classified as Alt-A which is a credit category between prime and subprime.  All the Alt-A bonds are rated AAA/Aaa, except for one security approximating $0.3 million, which is rated investment grade. They have an effective maturity of 2.1 years.  Such subprime and Alt-A categories are as defined by S&P.  The Company is receiving principal and/or interest payments on all these securities and believes such amounts are fully collectible.

The following table sets forth our cash and investments at September 30, 2008:

			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
	Value		Gains		(Losses)			Cost
Fixed maturities:
U.S. Government Treasury and Agency
Bonds and foreign government bonds	$	337,382	$	7,994	$	(237	)	$	329,625
States, municipalities and political
subdivisions		594,104		2,366		(14,082	)		605,820
Mortgage- and asset-backed securities:
Mortgage-backed securities		281,184		1,904		(1,285	)		280,565
Collateralized mortgage obligations		76,910		-		(17,493	)		94,403
Asset-backed securities		41,795		63		(695	)		42,427
Commercial mortgage-backed securities		102,139		-		(11,623	)		113,762
Subtotal		502,028		1,967		(31,096	)		531,157
Corporate bonds		192,172		796		(15,035	)		206,411
Total fixed maturities		1,625,686		13,123		(60,450	)		1,673,013
Equity securities - common stocks		68,637		3,580		(6,778	)		71,835
Cash		23,298		-		-			23,298
Short-term investments		178,569		-		-			178,569
Total	$	1,896,190	$	16,703	$	(67,228	)	$	1,946,715

The Navigators Group, Inc. and Subsidiaries

Investment Data

September 30, 2008

($'s in thousands)

The following three tables set forth our mortgage-backed securities, collateralized mortgage obligations, and asset-backed securities by those issued by FNMA and FHLMC and the quality category (prime, Alt-A and subprime) for all other such investments at September 30, 2008:

			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
Mortgage-backed securities:	Value		Gains		(Losses)			Cost
GNMA	$	39,524	$	229	$	(439	)	$	39,734
FNMA		174,376		1,243		(573	)		173,706
FHLMC		67,284		432		(273	)		67,125
Prime		-		-		-			-
Alt-A		-		-		-			-
Subprime		-		-		-			-
Total	$	281,184	$	1,904	$	(1,285	)	$	280,565
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
Collateralized mortgage obligations:	Value		Gains		(Losses)			Cost
GNMA	$	-	$	-	$	-		$	-
FNMA		-		-		-			-
FHLMC		-		-		-			-
Prime		-		-		-			-
Alt-A		64,557		-		(12,533	)		77,090
Subprime		12,353		-		(4,960	)		17,313
Total	$	76,910	$	-	$	(17,493	)	$	94,403
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
Asset-backed securities:	Value		Gains		(Losses)			Cost
GNMA	$	-	$	-	$	-		$	-
FNMA		-		-		-			-
FHLMC		-		-		-			-
Prime		40,569		63		(612	)		41,118
Alt-A		950		-		(24	)		974
Subprime		276		-		(59	)		335
Total	$	41,795	$	63	$	(695	)	$	42,427

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

September 30, 2008

($'s in thousands)

The Company owns securities credit enhanced by financial guarantors.  The following two tables set forth the amount of credit enhanced securities in the fixed maturities portfolio at September 30, 2008, identify the amount insured by each financial guarantor and identify the average underlying credit rating of such credit enhanced securities.

										Average
			Gross		Gross			Cost or		Underlying
	Fair		Unrealized		Unrealized			Amortized		Credit
Fixed maturities:	Value		Gains		(Losses)			Cost		Rating
Credit enhanced securities:
States, municipalities and political
subdivisions	$	324,445	$	1,252	$	(8,251	)	$	331,444
Mortgage & asset-backed securities		7,607		-		(321	)		7,928
Corporate bonds		1,605		7		(40	)		1,638
Total	$	333,657	$	1,259	$	(8,612	)	$	341,010
Financial guarantors:
AMBAC		64,290		235		(2,423	)		66,478		A	+
Assured Guaranty LTD		3,808		-		(114	)		3,922		A
FGIC		55,397		157		(855	)		56,095	AA-
Financial Security Assurance		86,881		450		(1,773	)		88,204		A	+
MBIA		110,031		391		(3,012	)		112,652	AA-
Radian Group, Inc		5,413		26		(144	)		5,531		A
XL Capital		7,837		-		(291	)		8,128		A	+
Total	$	333,657	$	1,259	$	(8,612	)	$	341,010	AA-

The average underlying credit rating by bond insurer of the insured securities rated by S&P or Moody’s if such securities did not have the credit enhancing insurance is included in the “Underlying Credit Rating” column in the above table.  This average rating includes $11 million of prerefunded municipal bonds which have an implied rating of AAA but are not otherwise rated by S&P or Moody’s.  Such average ratings exclude a total of 32 credit enhanced securities approximating $21 million that do not have an underlying rating consisting of 16 municipal bonds approximating $12 million, 14 asset-backed securities approximating $8 million and 2 corporate bonds approximating $1 million.

The Navigators Group, Inc.

Frank McDonnell, (914) 933-6270

Senior Vice President and Chief Financial Officer

fmcdonnell@navg.com

www.navg.com