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)      February 17, 2009

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	10119
(Address of Principal Executive Offices)	(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 February 17, 2009, The Navigators Group, Inc. issued a press release announcing its earnings for the fourth quarter of 2008.  This press release is attached hereto as exhibit 99.1.

Item 9.01.           Financial Statements and Exhibits

(d)         Exhibits

99.1 Fourth Quarter Earnings Press Release dated February 17, 2009.

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 NAVIGATORS GROUP, INC.
By:	/s/ Emily B. Miner
	Name:  Emily B. Miner
	Title:    Secretary

Date:                      February 17, 2009

EXHIBIT INDEX

Exhibit No.	Exhibit
99.1	Fourth Quarter Earnings Press Release dated February 17, 2009.

EX-99.1

Exhibit 99.1

                                                                                                          

The Navigators Group, Inc.

CORPORATE NEWS

Navigators Reports Fourth Quarter Earnings

New York –February 17, 2009 - --The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $10.0 million or $0.59 per share for the 2008 fourth quarter compared to net income of $26.5 million or $1.55 per share for the 2007 fourth quarter.

The fourth quarter summary of results was as follows:

	($ in millions)					(Diluted earnings per share)
	2008			2007		2008			2007
Net income	$	10.0		$	26.5	$	0.59		$	1.55
Less net realized capital gains / (losses)		(16.1	)		0.7		(0.95	)		0.04
Operating earnings	$	26.1		$	25.8	$	1.54		$	1.51

o   The 2008 fourth quarter net realized capital losses include provisions for declines in market value which were considered to be other than temporary of $16.0 million for equity securities and of $7.9 million for asset-backed securities.  The after-tax loss of such provisions was $15.5 million or $0.91 per share.  The decision to record realized capital losses on such securities had no impact on the Company’s shareholders’ equity or book value per share, which increased by 5% during the fourth quarter to $40.89.

o   During the 2008 fourth quarter the Company increased its gross loss estimates for Hurricanes Gustav and Ike by $10 million to $114 million, which reduced net income by $0.8 million or $0.05 per share.  The combined loss and expense ratio for the 2008 fourth quarter was increased by an aggregate 0.8 loss and expense ratio points for such losses and are inclusive of reinsurance recoveries and related costs for reinsurance reinstatement premiums.

The full year summary of results was as follows:

	($ in millions)					(Diluted earnings per share)
	2008			2007		2008			2007
Net income	$	51.7		$	95.6	$	3.04		$	5.62
Less net realized capital gains / (losses)		(24.9	)		1.3		(1.46	)		0.08
Operating earnings	$	76.6		$	94.3	$	4.50		$	5.54

o   During the 2008 twelve month period the Company recorded gross loss estimates for Hurricanes Gustav and Ike of $114 million, which reduced net income by $19.1 million or $1.12 per share.  The combined loss and expense ratio for the 2008 twelve month period was increased by an aggregate 4.3

loss and expense ratio points for such losses and are inclusive of reinsurance recoveries and related costs for reinsurance reinstatement premiums.

Gross written premium and net written premium for the 2008 fourth quarter were $265.6 million and $159.3 million, respectively, increases of 7.4% and 4.6%, respectively, from the comparable 2007 period. Gross written premium and net written premium for the twelve month period ended December 31, 2008 were $1,084.9 million and $661.6 million, respectively, increases of 1.3% and 2.4%, respectively, from the comparable 2007 period.

The combined loss and expense ratios for the 2008 fourth quarter and twelve month period were 88.9% and 93.8%, respectively, compared to 87.7% and 87.5% for the comparable 2007 periods.  The combined loss and expense ratios for the 2008 fourth quarter and twelve month period were favorably impacted by 10.8 and 7.9 loss ratio points, respectively, for redundancies in prior period loss reserves.

Navigators’ Chief Executive Officer Stan Galanski commented, “Our underwriting results for the fourth quarter were very solid with a combined ratio of 88.9%, and our reserve position remains strong.  We were able to achieve premium growth despite the impact to our casualty writings from the construction slowdown, because our marine and professional liability business grew in response to pricing improvement in both lines. Despite extraordinary investment management challenges and the impact of a significant hurricane in 2008, we were able to grow book value by 4%, generate $245 million of cash flow and continue our geographic and product line expansion by adding to our underwriting specialist teams. We believe Navigators is well positioned to respond to opportunities in the current dynamic environment.”

Net investment income for the 2008 fourth quarter and twelve month period was $19.7 million and $76.6 million, respectively, increases of 2.5% and 8.3% from the comparable 2007 periods.  The pre-tax investment yields for the 2008 fourth quarter and twelve month period were 4.2% and 4.1%, respectively, compared to 4.4% for both of the comparable 2007 periods. The effective tax rates on net investment income were 25.3% and 25.7% for the 2008 fourth quarter and twelve month period, respectively, compared to 27.0% and 27.8% for the comparable 2007 periods.

The Company’s investment portfolio mainly consists of 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 December 31, 2008.  At December 31, 2008, net unrealized losses within our investment portfolio were $21.7 million, a decrease of $28.8 million for the quarter due to the recognition of $24.7 million of realized losses due to the impairments, and $4.1 million of net unrealized gains during the period.

Consolidated cash flow from operations for the 2008 fourth quarter and twelve month period was $28.9 million and $245.3 million respectively, compared to $53.3 million and $284.6 million for the comparable 2007 periods.

During the 2008 fourth quarter, the Company did not purchase any shares of its common stock.

Stockholders’ equity was $689.3 million or $40.89 per share at December 31, 2008 compared to $662.1 million or $39.24 per share at December 31, 2007.  Statutory surplus of Navigators Insurance Company was $581.2 million at December 31, 2008.

The Company will hold a conference call on Wednesday, February 18, 2009 starting at 8:30 a.m. ET to discuss the 2008 fourth quarter’s results.  The call will be available via live webcast on Navigators’ website (www.navg.com) by clicking on the Earnings Webcast link under "News & Events".

To participate by telephone, the domestic dial-in number is 888-680-0860and the international dial-in is 617-213-4852. The access code is 99950154.  Participants may pre-register for the call at www.theconferencingservice.com/prereg/key.process?key=PLAPYFWMY.  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 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.

Contact: Frank McDonnell

Senior Vice President and Chief Financial Officer

(914) 933-6270

fmcdonnell@navg.com

www.navg.com

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Financial Highlights

($ in thousands, except per share data)

	Three Months Ended									Twelve Months Ended
	December 31,									December 31,
Financial Highlights	2008			2007			Change			2008			2007			Change
Gross written premium	$	265,620		$	247,336			7	%	$	1,084,922		$	1,070,707			1	%
Net written premium		159,288			152,325			5	%		661,615			645,796			2	%
Revenues:
Net earned premium		171,493			161,276			6	%		643,976			601,977			7	%
Commission income		269			725			-63	%		1,005			1,736			-42	%
Investment income		19,663			19,186			2	%		76,554			70,662			8	%
Net realized capital gains (losses)		(24,731	)		1,031		NM				(38,299	)		2,006		NM
Other income (expense)		(472	)		304		NM				430			278			54	%
Total revenues		166,222			182,522			-9	%		683,666			676,659			1	%
Operating expenses:
Net losses and loss adjustment
expenses incurred		99,553			91,642			9	%		393,131			340,592			15	%
Commission expense		22,990			23,188			-1	%		89,785			77,613			16	%
Other operating expenses		29,554			27,610			7	%		123,148			110,409			12	%
Interest expense		2,219			2,217			0	%		8,871			8,863			0	%
Total operating expenses		154,316			144,657			7	%		614,935			537,477			14	%
Income before income taxes		11,906			37,865			-69	%		68,731			139,182			-51	%
Income tax expense (benefit):
Current		9,030			13,662			-34	%		33,561			47,963			-30	%
Deferred		(7,144	)		(2,337	)	NM				(16,522	)		(4,401	)	NM
Income tax expense (benefit)		1,886			11,325			-83	%		17,039			43,562			-61	%
Net income	$	10,020		$	26,540			-62	%	$	51,692		$	95,620			-46	%
Per Share Data
Net income per common share:
Basic	$	0.60		$	1.57			-62	%	$	3.08		$	5.69			-46	%
Diluted	$	0.59		$	1.55			-62	%	$	3.04		$	5.62			-46	%
Average shares outstanding:
Basic		16,801			16,863						16,802			16,812
Diluted		16,971			17,078						16,992			17,005
Underwriting Ratios
Loss Ratio		58.1	%		56.8	%					61.0	%		56.6	%
Expense Ratio		30.8	%		30.9	%					32.8	%		30.9	%
Combined Ratio		88.9	%		87.7	%					93.8	%		87.5	%
Balance Sheet Data	Dec. 31,			Sept. 30,						Dec. 31,			Dec. 31,
	2008			2008						2008			2007
Stockholders' equity	$	689,317		$	655,561			5	%	$	689,317		$	662,106			4	%
Book value per share	$	40.89		$	39.07			5	%	$	40.89		$	39.24			4	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands)

	December 31,			December 31,
	2008			2007
ASSETS
Investments and cash:
Fixed maturities, available-for-sale, at fair value
(amortized cost: 2008, $1,664,755; 2007, $1,508,489)	$	1,643,772		$	1,522,320
Equity securities, available-for-sale, at fair value (cost: 2008, $52,523; 2007, $65,492)		51,802			67,240
Short-term investments, at cost which approximates fair value		220,684			170,685
Cash		1,457			7,056
Total investments and cash		1,917,715			1,767,301
Premiums in course of collection		170,522			163,081
Commissions receivable		319			2,381
Prepaid reinsurance premiums		188,874			188,961
Reinsurance receivable on paid losses		67,227			94,818
Reinsurance receivable on unpaid losses and loss adjustment expenses		853,793			801,461
Net deferred income tax benefit		54,736			29,249
Deferred policy acquisition costs		47,618			51,895
Accrued investment income		17,411			15,605
Goodwill and other intangible assets		6,622			8,084
Other assets		24,743			20,935
Total assets	$	3,349,580		$	3,143,771
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Reserves for losses and loss adjustment expenses	$	1,853,664			1,648,764
Unearned premium		480,665			469,481
Reinsurance balances payable		140,319			161,829
Senior notes		123,794			123,673
Federal income tax payable		5,874			10,868
Accounts payable and other liabilities		55,947			67,050
Total liabilities		2,660,263			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; issued and
outstanding: 16,856,073 for 2008 (net of treasury shares) and 16,873,094 for 2007		1,708			1,687
Additional paid-in capital		298,872			291,616
Retained earnings		406,776			355,084
Treasury stock, at cost (224,754 shares at 12/31/08)		(11,540	)		-
Accumulated other comprehensive income (loss)		(6,499	)		13,719
Total stockholders' equity		689,317			662,106
Total liabilities and stockholders' equity	$	3,349,580		$	3,143,771

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Comparative Premium Data

($ in thousands)

Gross Written Premium:	Fourth Quarter								Twelve Months
Insurance Companies:	2008			2007		Change			2008			2007		Change
Marine & Energy	$	74,739		$	64,715		15	%	$	305,066		$	278,801		9	%
Specialty		71,524			86,723		-18	%		311,846			355,523		-12	%
Professional Liability		37,618			30,177		25	%		109,048			99,556		10	%
Middle Markets		6,610			5,287		25	%		30,095			25,870		16	%
Property/Other		14			1,952		-99	%		6,135			14,596		-58	%
		190,505			188,854		1	%		762,190			774,346		-2	%
Lloyd's Operations:
Marine		56,155			41,555		35	%		243,698			225,216		8	%
Professional Liability		9,496			8,630		10	%		38,872			34,281		13	%
Property/Other		9,464			8,297		14	%		40,162			36,864		9	%
		75,115			58,482		28	%		322,732			296,361		9	%
Total	$	265,620		$	247,336		7	%	$	1,084,922		$	1,070,707		1	%
Net Written Premium:	Fourth Quarter								Twelve Months
Insurance Companies:	2008			2007		Change			2008			2007		Change
M&E before Hurr. Reinstatements	$	43,054		$	33,247		29	%	$	176,269		$	141,817		24	%
Hurricane Reinstatements		(1,436	)		-	NM				(7,214	)		-	NM
Marine & Energy		41,618			33,247		25	%		169,055			141,817		19	%
Specialty		45,835			62,589		-27	%		209,871			242,569		-13	%
Professional Liability		21,139			17,711		19	%		63,797			59,117		8	%
Middle Markets		5,564			6,735		-17	%		24,558			20,864		18	%
Property/Other		(93	)		1,938	NM				5,407			13,651		-60	%
		114,063			122,220		-7	%		472,688			478,018		-1	%
Lloyd's Operations:
Marine before Hurr. Reinstatements		35,541			21,531		65	%		158,605			131,430		21	%
Hurricane Reinstatements		1,842			-	NM				(4,964	)		-	NM
Marine		37,383			21,531		74	%		153,641			131,430		17	%
Professional Liability		5,476			5,148		6	%		23,404			23,349		0	%
Property/Other		2,366			3,426		-31	%		11,882			12,999		-9	%
		45,225			30,105		50	%		188,927			167,778		13	%
Total	$	159,288		$	152,325		5	%	$	661,615		$	645,796		2	%
Net Earned Premium:	Fourth Quarter								Twelve Months
Insurance Companies:	2008			2007		Change			2008			2007		Change
M&E before Hurr. Reinstatements	$	48,980		$	37,918		29	%	$	160,643		$	135,617		18	%
Hurricane Reinstatements		(1,436	)		-	NM				(7,214	)		-	NM
Marine & Energy		47,544			37,918		25	%		153,429			135,617		13	%
Specialty		52,170			61,982		-16	%		220,722			223,724		-1	%
Professional Liability		14,239			14,594		-2	%		57,316			55,149		4	%
Middle Markets		5,771			6,607		-13	%		22,692			20,191		12	%
Property/Other		1,447			1,748		-17	%		9,139			8,775		4	%
		121,171			122,849		-1	%		463,298			443,456		4	%
Lloyd's Operations:
Marine before Hurr. Reinstatements		40,030			28,490		41	%		151,116			132,443		14	%
Hurricane Reinstatements		1,842			-	NM				(4,964	)		-	NM
Marine		41,872			28,490		47	%		146,152			132,443		10	%
Professional Liability		5,697			8,161		-30	%		21,908			17,659		24	%
Property/Other		2,753			1,776		55	%		12,618			8,419		50	%
		50,322			38,427		31	%		180,678			158,521		14	%
Total	$	171,493		$	161,276		6	%	$	643,976		$	601,977		7	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

December 31, 2008

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	190,505		$	75,115					$	265,620
Net written premium		114,063			45,225						159,288
Net earned premium		121,171			50,322						171,493
Net losses and loss adjustment expenses		(67,840	)		(31,713	)					(99,553	)
Commission expense		(14,258	)		(8,732	)					(22,990	)
Other operating expenses		(22,795	)		(6,869	)	$	110			(29,554	)
Other income (expense)		92			(185	)		(110	)		(203	)
Underwriting profit		16,370			2,823			-			19,193
Investment income		16,513			2,728			422			19,663
Net realized capital gains (losses)		(24,460	)		(271	)		-			(24,731	)
Interest expense		-			-			(2,219	)		(2,219	)
Income (loss) before income tax
expense (benefit)		8,423			5,280			(1,797	)		11,906
Income tax expense (benefit)		634			1,881			(629	)		1,886
Net income (loss)	$	7,789		$	3,399		$	(1,168	)	$	10,020
Loss and loss expenses ratio		56.0	%		63.0	%					58.1	%
Commission expense ratio		11.8	%		17.4	%					13.4	%
Other operating expenses ratio (1)		18.7	%		14.0	%					17.4	%
Combined ratio		86.5	%		94.4	%					88.9	%
(1) The other operating expenses ratio includes other income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

December 31, 2007

($ in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	188,854		$	58,482					$	247,336
Net written premium		122,220			30,105						152,325
Net earned premium		122,849			38,427						161,276
Net losses and loss adjustment expenses		(71,771	)		(19,871	)					(91,642	)
Commission expense		(14,418	)		(8,770	)					(23,188	)
Other operating expenses		(20,070	)		(7,540	)					(27,610	)
Other income (expense)		621			408						1,029
Underwriting profit		17,211			2,654						19,865
Investment income		15,351			3,357		$	478			19,186
Net realized capital gains (losses)		855			176			-			1,031
Interest expense		0.00			-			(2,217	)		(2,217	)
Income (loss) before income tax
expense (benefit)		33,417			6,187			(1,739	)		37,865
Income tax expense (benefit)		9,794			2,140			(609	)		11,325
Net income (loss)	$	23,623		$	4,047		$	(1,130	)	$	26,540
Loss and loss expenses ratio		58.4	%		51.7	%					56.8	%
Commission expense ratio		11.7	%		22.8	%					14.4	%
Other operating expenses ratio (1)		15.8	%		18.6	%					16.5	%
Combined ratio		85.9	%		93.1	%					87.7	%
(1) The other operating expenses ratio includes other income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Twelve Months Ended

December 31, 2008

($ in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	762,190		$	322,732					$	1,084,922
Net written premium		472,688			188,927						661,615
Net earned premium		463,298			180,678						643,976
Net losses and loss adjustment expenses		(275,767	)		(117,364	)					(393,131	)
Commission expense		(55,752	)		(34,033	)					(89,785	)
Other operating expenses		(92,297	)		(30,961	)	$	110			(123,148	)
Other income (expense)		2,145			(600	)		(110	)		1,435
Underwriting profit (loss)		41,627			(2,280	)		-			39,347
Investment income		63,544			11,655			1,355			76,554
Net realized capital gains (losses)		(37,822	)		(477	)		-			(38,299	)
Interest expense		-			-			(8,871	)		(8,871	)
Income (loss) before income tax
expense (benefit)		67,349			8,898			(7,516	)		68,731
Income tax expense (benefit)		16,401			3,269			(2,631	)		17,039
Net income (loss)	$	50,948		$	5,629		$	(4,885	)	$	51,692
Loss and loss expenses ratio		59.5	%		65.0	%					61.0	%
Commission expense ratio		12.0	%		18.8	%					13.9	%
Other operating expenses ratio (1)		19.5	%		17.5	%					18.9	%
Combined ratio		91.0	%		101.3	%					93.8	%
(1) The other operating expenses ratio includes other income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Twelve Months Ended

December 31, 2007

($ in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	774,346		$	296,361					$	1,070,707
Net written premium		478,018			167,778						645,796
Net earned premium		443,456			158,521						601,977
Net losses and loss adjustment expenses		(256,652	)		(83,940	)					(340,592	)
Commission expense		(52,490	)		(25,123	)					(77,613	)
Other operating expenses		(81,053	)		(29,356	)					(110,409	)
Other income (expense)		1,510			504						2,014
Underwriting profit		54,771			20,606						75,377
Investment income		58,261			10,524		$	1,877			70,662
Net realized capital gains (losses)		1,973			33			-			2,006
Interest expense		-			-			(8,863	)		(8,863	)
Income (loss) before income tax
expense		115,005			31,163			(6,986	)		139,182
Income tax expense (benefit)		35,061			10,946			(2,445	)		43,562
Net income (loss)	$	79,944		$	20,217		$	(4,541	)	$	95,620
Loss and loss expenses ratio		57.9	%		53.0	%					56.6	%
Commission expense ratio		11.8	%		15.8	%					12.9	%
Other operating expense ratio (1)		17.9	%		18.2	%					18.0	%
Combined ratio		87.6	%		87.0	%					87.5	%
(1) The other operating expense ratio is adjusted to include commission and other income/(expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($ in thousands)

	Three Months Ended December 31, 2008
	Net			Losses
	Earned			and LAE			Underwriting		Combined Ratio
Insurance Companies:	Premium			Incurred			Expenses		Loss			Expense			Total
Marine & Energy	$	47,544		$	27,081		$	13,197		57.0	%		27.8	%		84.8	%
Specialty		52,170			24,055			16,296		46.1	%		31.2	%		77.3	%
Professional Liability		14,239			8,922			5,109		62.7	%		35.9	%		98.6	%
Middle Markets		5,771			6,823			1,762		118.2	%		30.5	%		148.7	%
Property/Other		1,447			959			597		66.3	%		41.3	%		107.6	%
		121,171			67,840			36,961		56.0	%		30.5	%		86.5	%
Lloyd's Operations		50,322			31,713			15,786		63.0	%		31.4	%		94.4	%
Total	$	171,493		$	99,553		$	52,747		58.1	%		30.8	%		88.9	%
	Effect of Hurricanes Gustav & Ike on the Three Months Ended Dec. 31, 2008
Marine & Energy	$	(1,436	)	$	(26	)	$	-		1.6	%		0.8	%		2.4	%
Lloyd's Operations		1,842			1,695			-		1.1	%		-1.2	%		-0.1	%
Total	$	406		$	1,669		$	-		0.8	%		0.0	%		0.8	%
	Three Months Ended December 31, 2007
	Net			Losses
	Earned			and LAE			Underwriting		Combined Ratio
Insurance Companies:	Premium			Incurred			Expenses		Loss			Expense			Total
Marine & Energy	$	37,918		$	20,973		$	11,833		55.3	%		31.2	%		86.5	%
Specialty		61,982			37,140			14,820		59.9	%		23.9	%		83.8	%
Professional Liability		14,594			7,613			4,776		52.2	%		32.6	%		84.8	%
Middle Markets		6,607			3,854			1,517		58.3	%		23.0	%		81.3	%
Property/Other		1,748			2,191			921		125.3	%		52.7	%		178.0	%
		122,849			71,771			33,867		58.4	%		27.5	%		85.9	%
Lloyd's Operations		38,427			19,871			15,902		51.7	%		41.4	%		93.1	%
Total	$	161,276		$	91,642		$	49,769		56.8	%		30.9	%		87.7	%
				Amounts					Loss Ratio
Net Incurred Loss Activity				Dec. 31,			Dec. 31,		Dec. 31,			Dec. 31,
For the Three Months Ended:				2008			2007		2008			2007
Insurance Companies:
Loss and LAE payments				$	56,373		$	40,434		46.5	%		32.9	%
Change in reserves					11,467			31,337		9.5	%		25.5	%
Net incurred loss and LAE					67,840			71,771		56.0	%		58.4	%
Lloyd's Operations:
Loss and LAE payments					25,714			11,901		51.1	%		31.0	%
Change in reserves					5,999			7,970		11.9	%		20.7	%
Net incurred loss and LAE					31,713			19,871		63.0	%		51.7	%
Total
Loss and LAE payments					82,087			52,335		47.9	%		32.5	%
Change in reserves					17,466			39,307		10.2	%		24.3	%
Net incurred loss and LAE				$	99,553		$	91,642		58.1	%		56.8	%
Impact of Prior Years Reserves				Amounts					Loss Ratio Impact
Favorable / (Unfavorable) Development				Dec. 31,			Dec. 31,		Dec. 31,			Dec. 31,
For the Three Months Ended:				2008			2007		2008			2007
Insurance Companies				$	16,170		$	11,625		13.3	%		9.5	%
Lloyd's Operations					2,296			5,800		4.6	%		15.1	%
Total				$	18,466		$	17,425		10.8	%		10.8	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($ in thousands)

	Twelve Months Ended December 31, 2008
	Net			Losses
	Earned			and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premium			Incurred		Expenses		Loss			Expense			Total
Marine & Energy	$	153,429		$	103,606	$	48,380		67.5	%		31.5	%		99.0	%
Specialty		220,722			119,847		64,427		54.3	%		29.2	%		83.5	%
Professional Liability		57,316			33,211		20,410		57.9	%		35.6	%		93.5	%
Middle Markets		22,692			17,125		8,977		75.5	%		39.6	%		115.1	%
Property/Other		9,139			1,978		3,710		21.6	%		40.6	%		62.2	%
		463,298			275,767		145,904		59.5	%		31.5	%		91.0	%
Lloyd's Operations		180,678			117,364		65,594		65.0	%		36.3	%		101.3	%
Total	$	643,976		$	393,131	$	211,498		61.0	%		32.8	%		93.8	%
	Effect of Hurricanes Gustav & Ike on the Twelve Months Ended Dec. 31, 2008
Marine & Energy	$	(7,214	)	$	9,077	$	-		8.7	%		1.4	%		10.1	%
Lloyd's Operations		(4,964	)		8,092		-		6.1	%		1.0	%		7.1	%
Total	$	(12,178	)	$	17,169	$	-		3.7	%		0.6	%		4.3	%
	Twelve Months Ended December 31, 2007
	Net			Losses
	Earned			and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premium			Incurred		Expenses		Loss			Expense			Total
Marine & Energy	$	135,617		$	78,808	$	42,386		58.1	%		31.3	%		89.4	%
Specialty		223,724			125,555		59,784		56.1	%		26.7	%		82.8	%
Professional Liability		55,149			32,602		19,646		59.1	%		35.6	%		94.7	%
Middle Markets		20,191			10,665		6,422		52.8	%		31.8	%		84.6	%
Property/Other		8,775			9,022		3,795		102.8	%		43.3	%		146.1	%
		443,456			256,652		132,033		57.9	%		29.7	%		87.6	%
Lloyd's Operations		158,521			83,940		53,975		53.0	%		34.0	%		87.0	%
Total	$	601,977		$	340,592	$	186,008		56.6	%		30.9	%		87.5	%
				Amounts				Loss Ratio
Net Incurred Loss Activity				Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,
For the Twelve Months Ended:				2008		2007		2008			2007
Insurance Companies:
Loss and LAE payments				$	162,389	$	132,077		35.1	%		29.8	%
Change in reserves					113,378		124,575		24.4	%		28.1	%
Net incurred loss and LAE					275,767		256,652		59.5	%		57.9	%
Lloyd's Operations:
Loss and LAE payments					78,175		57,327		43.3	%		36.2	%
Change in reserves					39,189		26,613		21.7	%		16.8	%
Net incurred loss and LAE					117,364		83,940		65.0	%		53.0	%
Total
Loss and LAE payments					240,564		189,404		37.3	%		31.5	%
Change in reserves					152,567		151,188		23.7	%		25.1	%
Net incurred loss and LAE				$	393,131	$	340,592		61.0	%		56.6	%
Impact of Prior Years Reserves				Amounts				Loss Ratio Impact
Favorable / (Unfavorable) Development				Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,
For the Twelve Months Ended:				2008		2007		2008			2007
Insurance Companies				$	41,922	$	33,796		9.0	%		7.6	%
Lloyd's Operations					8,824		13,213		4.9	%		8.3	%
Total				$	50,746	$	47,009		7.9	%		7.8	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Net Loss Data

($ in thousands)

	Case		IBNR
Net Loss Reserves, December 31, 2008:	Reserves		Reserves		Total
Insurance Companies:
Marine & Energy	$	118,263	$	115,713	$	233,976
Specialty		71,098		312,655		383,753
Professional Liability		22,913		58,793		81,706
Middle Markets		11,983		16,627		28,610
Property/Other		10,710		10,305		21,015
Total Insurance Companies		234,967		514,093		749,060
Lloyd's Operations:
Marine		117,232		89,698		206,930
Other		14,041		29,840		43,881
Total Lloyd's Operations		131,273		119,538		250,811
Total Net Loss Reserves	$	366,240	$	633,631	$	999,871
	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

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

December 31, 2008

($ in thousands)

At December 31, 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 33 securities approximating $28.3 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 December 31, 2008, the Company owned two asset-backed securities approximating $0.2 million with subprime mortgage exposures.  The securities are rated investment grade and have an effective maturity of 1.8 years.  In addition, the Company owned a total of eleven collateralized mortgage obligations and asset-backed securities approximating $9.2 million classified as Alt-A which is a credit category between prime and subprime. All the the Alt-A bonds are rated investment grade. They have an effective maturity of 4.4 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 December 31, 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	$	361,656	$	25,741		$	(145	)	$	336,060
States, municipalities and political
subdivisions		614,609		12,568			(8,036	)		610,077
Mortgage- and asset-backed securities:
Mortgage-backed securities		299,775		10,930	#		(26	)		288,871
Collateralized mortgage obligations		56,743		-			(27,119	)		83,862
Asset-backed securities		29,436		5			(1,289	)		30,720
Commercial mortgage-backed securities		92,684		-			(20,350	)		113,034
Subtotal		478,638		10,935			(48,784	)		516,487
Corporate bonds		188,869		1,398			(14,660	)		202,131
Total fixed maturities		1,643,772		50,642			(71,625	)		1,664,755
Equity securities - common stocks		51,802		1,266			(1,987	)		52,523
Cash		1,457		-			-			1,457
Short-term investments		220,684		-			-			220,684
Total	$	1,917,715	$	51,908		$	(73,612	)	$	1,939,419

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

December 31, 2008

($ 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 December 31, 2008:

	Fair		Unrealized		Unrealized			Amortized
Mortgage-backed securities:	Value		Gains		(Losses)			Cost
GNMA	$	42,258	$	1,043	$	(5	)	$	41,220
FNMA		189,232		6,848		(21	)		182,405
FHLMC		68,285		3,039		-			65,246
Prime		-		-		-			-
Alt-A		-		-		-			-
Subprime		-		-		-			-
Total	$	299,775	$	10,930	$	(26	)	$	288,871
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
Collateralized mortgage obligations:	Value		Gains		(Losses)			Cost
GNMA	$	-	$	-	$	-		$	-
FNMA		-		-		-			-
FHLMC		-		-		-			-
Prime		48,329		-		(25,043	)		73,372
Alt-A		8,414		-		(2,076	)		10,490
Subprime		-		-		-			-
Total	$	56,743	$	-	$	(27,119	)	$	83,862
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
Asset-backed securities:	Value		Gains		(Losses)			Cost
GNMA	$	-	$	-	$	-		$	-
FNMA		-		-		-			-
FHLMC		-		-		-			-
Prime		28,421		5		(1,178	)		29,594
Alt-A		793		-		(25	)		818
Subprime		222		-		(86	)		308
Total	$	29,436	$	5	$	(1,289	)	$	30,720