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)	August 6, 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 August 6, 2009, The Navigators Group, Inc. (the “Company”) issued a press release announcing its earnings for the second quarter of 2009.  This press release is attached hereto as exhibit 99.1.

Item 9.01.     Financial Statements and Exhibits

(d)         Exhibits

99.1 Second Quarter Earnings Press Release dated August 6, 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: August 6, 2009

EXHIBIT INDEX

Exhibit No.	Exhibit
99.1	Second Quarter Earnings Press Release dated August 6, 2009.

EX-99.1

Exhibit 99.1

    The Navigators Group, Inc. CORPORATE NEWS

Navigators Reports Second Quarter Earnings

New York –August 6, 2009 --The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $23.7 million or $1.39 per share for the 2009 second quarter compared to net income of $17.4 million or $1.03 per share for the 2008 second quarter.

The second quarter summary of results was as follows:

	($ in millions)					(Diluted earnings per share)
	2009		2008			2009		2008
Net income	$	23.7	$	17.4		$	1.39	$	1.03
Less net realized capital gains / (losses)		1.4		(5.2	)		0.08		(0.31	)
Operating earnings (1)	$	22.3	$	22.6		$	1.31	$	1.34

o   The 2009 second quarter net realized capital gains include provisions for declines in market value which were considered to be other-than-temporary of $0.4 million for equity securities, and $0.1 million for asset-backed securities.  The after-tax loss from such provisions was $0.3 million or $0.02 per share.  The decision to record realized capital losses on such securities had no impact on the Company’s stockholders’ equity or book value per share, which increased by 5% during the second quarter to $44.12.

o   In April 2009, the Company repurchased $10.0 million aggregate principal amount of its issued and outstanding 7% senior notes from an unaffiliated noteholder on the open market for $7.0 million, which generated a $2.9 million pretax gain that is reflected in other income and added $0.11 to the second quarter earnings per share.  As a result of this transaction $115.0 million aggregate principal amount of notes remains issued and outstanding.  This reduction in the notes outstanding also reduced our interest expense by 3% compared to the second quarter of 2008.  This gain is excluded from the combined loss and expense ratio.

The six month summary of results was as follows:

	($ in millions)						(Diluted earnings per share)
	2009			2008			2009			2008
Net income	$	35.7		$	40.7		$	2.10		$	2.39
Less net realized capital gains / (losses)		(6.8	)		(5.2	)		(0.40	)		(0.31	)
Operating earnings (1)	$	42.5		$	45.9		$	2.50		$	2.70

o   The six month period ended June 30, 2009 net realized capital losses include provisions for declines in market value which were considered to be other-than-temporary of $8.7 million for equity

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August 6, 2009

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securities, of $1.9 million for asset-backed securities and of $0.6 million for corporate debt securities.  The after-tax loss from such provisions was $7.3 million or $0.43 per share.  The decision to record realized capital losses on such securities had no impact on the Company’s stockholders’ equity or book value per share, which increased by 8% during the six month period ended June 30, 2009 to $44.12.

Gross written premium and net written premium for the 2009 second quarter were $272.7 million and $183.0 million, respectively, a decrease of 2.3% and an increase of 5.0%, respectively, from the comparable 2008 period.  Gross written premium and net written premium for the six month period ended June 30, 2009 were $548.0 million and $383.7 million, respectively, a decrease of 3.2% and an  increase of 6.0%, respectively, from the comparable 2008 period.

The combined loss and expense ratios for the 2009 second quarter and six month period were 92.9% and 92.8%, respectively, compared to 90.4% and 89.8% for the comparable 2008 periods.  The combined loss and expense ratios for the 2009 second quarter and six month period were favorably impacted by 5.6 and 4.6 loss ratio points, respectively, for redundancies in prior period loss reserves.

Navigators’ Chief Executive Officer Stan Galanski commented, “We are very pleased with the second quarter results.  Strong operating performance and improved investment valuations enabled us to increase book value 5% during the quarter.  Our Directors and Officers Liability business grew significantly as we continue to benefit from market dislocation and a flight to quality.  Competitive market conditions, especially in E&S lines, constrained premium growth as we continue to refuse to chase growth at the expense of profitability.  The diversity of our portfolio of specialty lines businesses and our underwriting and financial discipline have served us well in this challenging economic environment.  We are well positioned to grow our businesses as the underwriting fundamentals improve.”

Net investment income for the 2009 second quarter and six month period was $18.7 million and $37.4 million, respectively, decreases of 0.4% and 0.5% from the comparable 2008 periods, respectively.  The pre-tax investment yields for the 2009 second quarter and six month period were 3.8% and 3.9%, respectively, compared to 4.1% and 4.2% for comparable 2008 periods. The effective tax rates on net investment income were 25.2% and 25.1% for the 2009 second quarter and six month period, respectively, compared to 25.4% and 25.9% for the comparable 2008 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 4.2 years at June 30, 2009.  At June 30, 2009, net unrealized gains within our investment portfolio were $7.8 million, an increase of $20.7 million, which was net of $2.1 million of realized gains.

Consolidated cash flow from operations for the 2009 second quarter and six month period was $26.6 million and $69.5 million, respectively, compared to $73.7 million and $133.4 million for the comparable 2008 periods.

During the 2009 second quarter, the Company did not purchase any shares of its common stock.

Stockholders’ equity was $747.8 million or $44.12 per share at June 30, 2009 compared to $689.3 million or $40.89 per share at December 31, 2008.  Statutory surplus of Navigators Insurance Company was $596.3 million at June 30, 2009.

Effective in 2009, the Company has reclassified certain of its business lines, which has no effect on the segment classifications of the Insurance Company and Lloyd's.

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August 6, 2009

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o   The offshore energy business, formerly included in the "Marine and Energy" businesses of the Insurance Companies and Lloyd’s, is now included in the Insurance Companies’ and Lloyd’s "Property Casualty" businesses. 

o   The marine lines within both the Insurance Company and Lloyd’s are now presented as "Marine" instead of "Marine and Energy," since the energy business has now been reclassified to "Property Casualty."

o   Engineering and construction, European Property and other run-off business, formerly included in the "Other" category of business within the Insurance Companies and Lloyd’s, are now included under "Property Casualty." 

o   The "Middle Markets" business, formerly broken out separately in the Insurance Companies, is now included in the Insurance Companies’ "Property Casualty" business. 

Underwriting data for prior periods has been reclassified to reflect these changes.

(1)   Operating earnings, or income excluding net realized gains (losses) net of tax, is a non-GAAP financial measure that is a common performance measurement for insurance companies.  We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.

The Company will hold a conference call on Friday, August 7, 2009 starting at 8:30 a.m. ET to discuss the 2009 second quarter 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 888-679-8018and the international dial-in is 617-213-4845. The access code is 13465283.  Participants may pre-register for the call at www.theconferencingservice.com/prereg/key.process?key=PAWWEG6W6.    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: Francis W. McDonnell Senior Vice President and Chief Financial Officer (914) 933-6270 fmcdonnell@navg.com www.navg.com

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Financial Highlights

($ in thousands, except per share data)

	Three Months Ended								Six Months Ended
	June 30,								June 30,
Financial Highlights	2009			2008			Change		2009			2008			Change
Gross written premium	$	272,729		$	279,213			-2%	$	547,988		$	566,359			-3%
Net written premium		183,007			174,287			5%		383,659			362,009			6%
Revenues:
Net earned premium		169,868			162,703			4%		334,814			318,443			5%
Commission income		55			467		NM			35			728			-95%
Investment income		18,656			18,731			0%		37,399			37,569			0%
Total other than temporary impairments		(1,876	)		(8,412	)	NM			(28,747	)		(8,412	)	NM
Portion of loss recognized in OCI (before tax)		(1,407	)		-		NM			(17,578	)		-		NM
Net impairment loss recognized in earnings		(469	)		(8,412	)	NM			(11,169	)		(8,412	)	NM
Net realized capital gains (losses) on securites sold		2,596			436		NM			1,059			360		NM
Other income (expense)		5,247			1,010			419%		5,410			1,021			430%
Total revenues		195,953			174,935			12%		367,548			349,709			5%
Operating expenses:
Net losses and loss adjustment
expenses incurred		100,728			91,889			10%		200,975			180,309			11%
Commission expense		26,278			23,490			12%		48,726			44,438			10%
Other operating expenses		33,019			33,237			-1%		63,554			62,993			1%
Interest expense		2,150			2,217			-3%		4,369			4,434			-1%
Total operating expenses		162,175			150,833			8%		317,624			292,174			9%
Income before income taxes		33,778			24,102			40%		49,924			57,535			-13%
Income tax expense (benefit):
Current		10,440			12,156			-14%		17,190			22,462			-23%
Deferred		(312	)		(5,475	)	NM			(2,916	)		(5,598	)	NM
Income tax expense (benefit)		10,128			6,681			52%		14,274			16,864			-15%
Net income	$	23,650		$	17,421			36%	$	35,650		$	40,671			-12%
Per Share Data
Net income per common share:
Basic	$	1.40		$	1.04			34%	$	2.11		$	2.42			-13%
Diluted	$	1.39		$	1.03			35%	$	2.10		$	2.39			-12%
Average shares outstanding:
Basic		16,938			16,773					16,910			16,817
Diluted		16,993			16,912					17,010			17,002
Underwriting Ratios
Loss Ratio		59.3%			56.5%					60.0%			56.6%
Expense Ratio		33.6%			33.9%					32.8%			33.2%
Combined Ratio		92.9%			90.4%					92.8%			89.8%
Balance Sheet Data	June 30,			Mar. 31,					June 30,			Dec. 31,
		2009			2009					2009			2008
Stockholders' equity	$	747,797		$	712,454			5%	$	747,797		$	689,317			8%
Book value per share	$	44.12		$	42.07			5%	$	44.12		$	40.89			8%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands)

	June 30,			December 31,
	2009			2008
ASSETS
Investments and cash:
Fixed maturities, available-for-sale, at fair value
(amortized cost: 2009, $1,752,828; 2008, $1,664,755)	$	1,754,770		$	1,643,772
Equity securities, available-for-sale, at fair value (cost: 2009, $41,944; 2008, $52,523)		47,781			51,802
Short-term investments, at cost which approximates fair value		191,616			220,684
Cash		14,401			1,457
Total investments and cash		2,008,568			1,917,715
Premiums in course of collection		210,815			170,522
Commissions receivable		313			319
Prepaid reinsurance premiums		166,539			188,874
Reinsurance receivable on paid losses		79,857			67,227
Reinsurance receivable on unpaid losses and loss adjustment expenses		875,809			853,793
Net deferred income tax asset		48,231			54,736
Deferred policy acquisition costs		60,032			47,618
Accrued investment income		17,397			17,411
Goodwill and other intangible assets		7,135			6,622
Other assets		25,407			24,743
Total assets	$	3,500,103		$	3,349,580
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Reserves for losses and loss adjustment expenses	$	1,942,976		$	1,853,664
Unearned premium		510,282			480,665
Reinsurance balances payable		125,167			140,319
Senior notes		113,949			123,794
Federal income tax payable		14,033			5,874
Payable for securities		11,075			-
Accounts payable and other liabilities		34,824			55,947
Total liabilities		2,752,306			2,660,263
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 (net of treasury shares) : 16,948,497 for 2009 and 16,856,073 for 2008		1,717			1,708
Additional paid-in capital		302,964			298,872
Retained earnings		442,426			406,776
Treasury stock, at cost (224,754 shares for both 2009 and 2008)		(11,540	)		(11,540	)
Accumulated other comprehensive income (loss)		12,230			(6,499	)
Total stockholders' equity		747,797			689,317
Total liabilities and stockholders' equity	$	3,500,103		$	3,349,580

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Comparative Premium Data

($ in thousands)

Gross Written Premium:	Second Quarter						Six Months
Insurance Companies:	2009		2008		Change		2009		2008		Change
Marine	$	57,086	$	64,339		-11%	$	134,323	$	135,955		-1%
Property Casualty		94,567		107,180		-12%		178,825		207,873		-14%
Professional Liability		37,732		26,437		43%		68,220		45,724		49%
		189,385		197,956		-4%		381,368		389,552		-2%
Lloyd's Operations:
Marine		47,273		41,499		14%		106,296		108,653		-2%
Property Casualty		25,506		31,359		-19%		39,034		49,085		-20%
Professional Liability		10,565		8,399		26%		21,290		19,069		12%
		83,344		81,257		3%		166,620		176,807		-6%
Total	$	272,729	$	279,213		-2%	$	547,988	$	566,359		-3%
Net Written Premium:	Second Quarter						Six Months
Insurance Companies:		2009		2008	Change			2009		2008	Change
Marine	$	34,956		38,982		-10%	$	93,415		82,456		13%
Property Casualty		65,704		73,294		-10%		125,680		142,397		-12%
Professional Liability		21,699		15,906		36%		40,346		27,639		46%
		122,359		128,182		-5%		259,441		252,492		3%
Lloyd's Operations:
Marine		40,077		28,269		42%		90,051		77,179		17%
Property Casualty		15,070		12,755		18%		22,665		20,465		11%
Professional Liability		5,501		5,081		8%		11,502		11,873		-3%
		60,648		46,105		32%		124,218		109,517		13%
Total	$	183,007	$	174,287		5%	$	383,659	$	362,009		6%
Net Earned Premium:	Second Quarter						Six Months
Insurance Companies:		2009		2008	Change			2009		2008	Change
Marine	$	34,678		33,095		5%	$	71,839		59,564		21%
Property Casualty		63,068		69,951		-10%		128,480		141,655		-9%
Professional Liability		18,477		14,388		28%		36,194		28,461		27%
		116,223		117,434		-1%		236,513		229,680		3%
Lloyd's Operations:
Marine		37,038		31,328		18%		68,213		60,121		13%
Property Casualty		11,201		8,800		27%		19,124		17,542		9%
Professional Liability		5,406		5,141		5%		10,964		11,100		-1%
		53,645		45,269		19%		98,301		88,763		11%
Total	$	169,868	$	162,703		4%	$	334,814	$	318,443		5%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

June 30, 2009

($ in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	189,385		$	83,344					$	272,729
Net written premium		122,359			60,648						183,007
Net earned premium		116,223			53,645						169,868
Net losses and loss adjustment expenses		(68,843	)		(31,885	)					(100,728	)
Commission expense		(15,060	)		(11,218	)					(26,278	)
Other operating expenses		(26,906	)		(6,117	)	$	4			(33,019	)
Other income (expense)		1,655			651			2,996			5,302
Underwriting profit		7,069			5,076			3,000			15,145
Investment income		16,239			2,316			101			18,656
Net realized capital gains		2,210			(83	)					2,127
Interest expense								(2,150	)		(2,150	)
Income (loss) before income tax
expense (benefit)		25,518			7,309			951			33,778
Income tax expense (benefit)		7,171			2,624			333			10,128
Net income (loss)	$	18,347		$	4,685		$	618		$	23,650
Loss and loss expenses ratio		59.2%			59.4%						59.3%
Commission expense ratio		13.0%			20.9%						15.5%
Other operating expenses ratio (1)		21.7%			10.2%						18.1%
Combined ratio		93.9%			90.5%						92.9%
(1) The other operating expenses ratio includes other income (expense).

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

June 30, 2008

($ in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	197,956		$	81,257					$	279,213
Net written premium		128,182			46,105						174,287
Net earned premium		117,434			45,269						162,703
Net losses and loss adjustment expenses		(62,225	)		(29,664	)					(91,889	)
Commission expense		(14,723	)		(8,767	)					(23,490	)
Other operating expenses		(24,552	)		(8,685	)					(33,237	)
Other income (expense)		1,516			(39	)					1,477
Underwriting profit		17,450			(1,886	)					15,564
Investment income		15,593			2,871		$	267			18,731
Net realized capital gains (losses)		(8,053	)		77		$				(7,976	)
Interest expense								(2,217	)		(2,217	)
Income (loss) before income tax
expense (benefit)		24,990			1,062			(1,950	)		24,102
Income tax expense (benefit)		6,939			425			(683	)		6,681
Net income (loss)	$	18,051		$	637		$	(1,267	)	$	17,421
Loss and loss expenses ratio		53.0%			65.5%						56.5%
Commission expense ratio		12.5%			19.4%						14.4%
Other operating expenses ratio (1)		19.6%			19.3%						19.5%
Combined ratio		85.1%			104.2%						90.4%
(1) The other operating expenses ratio includes other income (expense).

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Six Months Ended

June 30, 2009

($ in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	381,368		$	166,620					$	547,988
Net written premium		259,441			124,218						383,659
Net earned premium		236,513			98,301						334,814
Net losses and loss adjustment expenses		(138,996	)		(61,979	)					(200,975	)
Commission expense		(30,028	)		(18,698	)					(48,726	)
Other operating expenses		(51,466	)		(12,098	)	$	10			(63,554	)
Other income (expense)		1,856			599			2,990			5,445
Underwriting profit		17,879			6,125			3,000			27,004
Investment income		32,446			4,699			254			37,399
Net realized capital gains		(6,697	)		(3,413	)					(10,110	)
Interest expense								(4,369	)		(4,369	)
Income (loss) before income tax
expense (benefit)		43,628			7,411			(1,115	)		49,924
Income tax expense (benefit)		11,704			2,960			(390	)		14,274
Net income (loss)	$	31,924		$	4,451		$	(725	)	$	35,650
Loss and loss expenses ratio		58.8%			63.0%						60.0%
Commission expense ratio		12.7%			19.0%						14.6%
Other operating expenses ratio (1)		21.0%			11.7%						18.2%
Combined ratio		92.5%			93.7%						92.8%
(1) The other operating expenses ratio includes other income (expense).

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Six Months Ended

June 30, 2008

($ in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premium	$	389,552		$	176,807					$	566,359
Net written premium		252,492			109,517						362,009
Net earned premium		229,680			88,763						318,443
Net losses and loss adjustment expenses		(129,581	)		(50,728	)					(180,309	)
Commission expense		(27,671	)		(16,767	)					(44,438	)
Other operating expenses		(46,700	)		(16,293	)					(62,993	)
Other income (expense)		1,774			(25	)					1,749
Underwriting profit		27,502			4,950						32,452
Investment income		31,058			5,853		$	658			37,569
Net realized capital gains (losses)		(8,155	)		103		$				(8,052	)
Interest expense								(4,434	)		(4,434	)
Income (loss) before income tax
expense (benefit)		50,405			10,906			(3,776	)		57,535
Income tax expense (benefit)		14,309			3,877			(1,322	)		16,864
Net income (loss)	$	36,096		$	7,029		$	(2,454	)	$	40,671
Loss and loss expenses ratio		56.4%			57.1%						56.6%
Commission expense ratio		12.0%			18.9%						14.0%
Other operating expenses ratio (1)		19.6%			18.4%						19.2%
Combined ratio		88.0%			94.4%						89.8%
(1) The other operating expenses ratio includes other income (expense).

News Release

Page 11

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($ in thousands)

	Three Months Ended June 30, 2009
	Net		Losses
	Earned		and LAE		Underwriting			Combined Ratio
Insurance Companies:	Premium		Incurred		Expenses			Loss			Expense			Total
Marine	$	34,678	$	25,238	$	10,904			72.8	%		31.4	%		104.2	%
Property Casualty		63,068		28,446		23,227			45.1	%		36.8	%		81.9	%
Professional Liability		18,477		15,159		6,180			82.0	%		33.4	%		115.4	%
		116,223		68,843		40,311			59.2	%		34.7	%		93.9	%
Lloyd's Operations		53,645		31,885		16,684			59.4	%		31.1	%		90.5	%
Total	$	169,868	$	100,728	$	56,995			59.3	%		33.6	%		92.9	%
	Three Months Ended June 30, 2008
	Net		Losses
	Earned		and LAE		Underwriting			Combined Ratio
Insurance Companies:	Premium		Incurred		Expenses			Loss			Expense			Total
Marine	$	33,095	$	13,976	$	10,092			42.2	%		30.5	%		72.7	%
Property Casualty		69,951		40,875		22,647			58.4	%		32.4	%		90.8	%
Professional Liability		14,388		7,374		5,020			51.3	%		34.9	%		86.2	%
		117,434		62,225		37,759			53.0	%		32.1	%		85.1	%
Lloyd's Operations		45,269		29,664		17,491			65.5	%		38.7	%		104.2	%
Total	$	162,703	$	91,889	$	55,250			56.5	%		33.9	%		90.4	%
			Amounts					Loss Ratio
Net Incurred Loss Activity			June 30,		June 30,			June 30,			June 30,
For the Three Months Ended:				2009		2008			2009			2008
Insurance Companies:
Loss and LAE payments			$	53,262	$	34,922			45.8	%		29.8	%
Change in reserves				15,581		27,303			13.4	%		23.2	%
Net incurred loss and LAE				68,843		62,225			59.2	%		53.0	%
Lloyd's Operations:
Loss and LAE payments				8,491		13,369			15.8	%		29.5	%
Change in reserves				23,394		16,295			43.6	%		36.0	%
Net incurred loss and LAE				31,885		29,664			59.4	%		65.5	%
Total
Loss and LAE payments				61,753		48,291			36.4	%		29.7	%
Change in reserves				38,975		43,598			22.9	%		26.8	%
Net incurred loss and LAE			$	100,728	$	91,889			59.3	%		56.5	%
Impact of Prior Years Reserves			Amounts					Loss Ratio Impact
Favorable / (Unfavorable) Development			June 30,		June 30,			June 30,			June 30,
For the Three Months Ended:				2009		2008			2009			2008
Insurance Companies			$	4,890	$	11,652			4.2	%		9.9	%
Lloyd's Operations				4,588		(1,072	)		8.6	%		-2.4	%
Total			$	9,478	$	10,580			5.6	%		6.5	%

News Release

Page 12

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($ in thousands)

	Six Months Ended June 30, 2009
	Net		Losses
	Earned		and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premium		Incurred		Expenses		Loss			Expense			Total
Marine	$	71,839	$	51,628	$	22,194		71.9	%		30.9	%		102.8	%
Property Casualty		128,480		56,450		44,312		43.9	%		34.5	%		78.4	%
Professional Liability		36,194		30,918		13,132		85.4	%		36.3	%		121.7	%
		236,513		138,996		79,638		58.8	%		33.7	%		92.5	%
Lloyd's Operations		98,301		61,979		30,197		63.0	%		30.7	%		93.7	%
Total	$	334,814	$	200,975	$	109,835		60.0	%		32.8	%		92.8	%
	Six Months Ended June 30, 2008
	Net		Losses
	Earned		and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premium		Incurred		Expenses		Loss			Expense			Total
Marine	$	59,564	$	36,298	$	19,301		60.9	%		32.4	%		93.3	%
Property Casualty		141,655		77,004		43,178		54.4	%		30.4	%		84.8	%
Professional Liability		28,461		16,279		10,118		57.2	%		35.6	%		92.8	%
		229,680		129,581		72,597		56.4	%		31.6	%		88.0	%
Lloyd's Operations		88,763		50,728		33,085		57.1	%		37.3	%		94.4	%
Total	$	318,443	$	180,309	$	105,682		56.6	%		33.2	%		89.8	%
			Amounts				Loss Ratio
Net Incurred Loss Activity			June 30,		June 30,		June 30,			June 30,
For the Six Months Ended:				2009		2008		2009			2008
Insurance Companies:
Loss and LAE payments			$	102,066	$	69,086		43.2	%		30.1	%
Change in reserves				36,930		60,495		15.6	%		26.3	%
Net incurred loss and LAE				138,996		129,581		58.8	%		56.4	%
Lloyd's Operations:
Loss and LAE payments				31,613		30,141		32.1	%		34.0	%
Change in reserves				30,366		20,587		30.9	%		23.1	%
Net incurred loss and LAE				61,979		50,728		63.0	%		57.1	%
Total
Loss and LAE payments				133,679		99,227		39.9	%		31.2	%
Change in reserves				67,296		81,082		20.1	%		25.4	%
Net incurred loss and LAE			$	200,975	$	180,309		60.0	%		56.6	%
Impact of Prior Years Reserves			Amounts				Loss Ratio Impact
Favorable / (Unfavorable) Development			June 30,		June 30,		June 30,			June 30,
For the Six Months Ended:				2009		2008		2009			2008
Insurance Companies			$	10,022	$	20,152		4.2	%		8.8	%
Lloyd's Operations				5,223		4,108		5.3	%		4.6	%
Total			$	15,245	$	24,260		4.6	%		7.6	%

News Release

Page 13

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Net Loss Data

($ in thousands)

	Case		IBNR
Net Loss Reserves, June 30, 2009	Reserves		Reserves		Total
Insurance Companies:
Marine	$	109,472	$	97,777	$	207,249
Property Casualty		120,666		360,070		480,736
Professional Liability		40,267		57,737		98,004
Total Insurance Companies		270,405		515,584		785,989
Lloyd's Operations:
Marine		104,252		89,553		193,805
Property Casualty		23,354		27,627		50,981
Professional Liability		7,843		28,549		36,392
Total Lloyd's Operations		135,449		145,729		281,178
Total Net Loss Reserves	$	405,854	$	661,313	$	1,067,167
	Case		IBNR
Net Loss Reserves, December 31, 2008:	Reserves		Reserves		Total
Insurance Companies:
Marine	$	96,244	$	96,995	$	193,239
Property Casualty		115,810		358,305		474,115
Professional Liability		22,913		58,793		81,706
Total Insurance Companies		234,967		514,093		749,060
Lloyd's Operations:
Marine		99,233		78,293		177,526
Property Casualty		26,218		16,386		42,604
Professional Liability		5,822		24,859		30,681
Total Lloyd's Operations		131,273		119,538		250,811
Total Net Loss Reserves	$	366,240	$	633,631	$	999,871

News Release

Page 14

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

June 30, 2009

($ in thousands)

At June 30, 2009, the average quality of the investment portfolio as rated by S&P and Moody’s was AA/Aa with an average duration of 4.2 years.  All of the Company’s mortgage-backed and asset-backed securities are rated AAA/Aaa by S&P and Moody’s except for 64 securities approximating $50.8 million. The Company does not own any collateralized debt obligations (CDO’s), collateralized loan obligations (CLO’s) or asset backed commercial paper.

At June 30, 2009, the Company owned two asset-backed securities approximating $0.1 million with subprime mortgage exposures.  The securities have an effective maturity of 1.5 years.  In addition, the Company owned a total of five collateralized mortgage obligations and asset-backed securities approximating $1.3 million classified as Alt-A which is a credit category between prime and subprime. They have an effective maturity of 5.3 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 June 30, 2009:

June 30, 2009	Fair Value		Gross Unrealized Gains		Gross Unrealized (Losses)			OTTI Recognized in OCI			Cost or Amortized Cost
	($ in thousands)
Fixed maturities:
U.S. Government Treasury Bonds, agency bonds and foreign government bonds	$	402,071	$	11,555	$	(249	)	$	-		$	390,765
States, municipalities and political subdivisions		642,861		18,069		(3,719	)		-			628,511
Mortgage- and asset-backed securities
Mortgage-backed securities		309,097		11,607		(170	)		-			297,660
Collateralized mortgage obligations		43,230		-		(1,359	)		(17,505	)		62,094
Asset-backed securities		24,773		721		(197	)		(73	)		24,322
Commercial mortgage-backed securities		96,417		119		(16,763	)		-			113,061
Subtotal		473,517		12,447		(18,489	)		(17,578	)		497,137
Corporate bonds		236,321		6,184		(6,278	)		-			236,415
Total fixed maturities		1,754,770		48,255		(28,735	)		(17,578	)		1,752,828
Equity securities - common stocks		47,781		6,103		(266	)		-			41,944
Cash		14,401		-		-			-			14,401
Short-term investments		191,616		-		-			-			191,616
Total	$	2,008,568	$	54,358	$	(29,001	)	$	(17,578	)	$	2,000,789

News Release

Page 15

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

June 30, 2009

($ 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 June 30, 2009:

Mortgage-backed securities:	Fair Value		Gross Unrealilzed Gains		Gross Unrealized (Losses)			Cost or Amortized Cost
GNMA	$	38,508	$	978	$	(1	)	$	37,531
FNMA		197,285		7,973		(1080	)		189,420
FHLMC		73,304		2,656		(61	)		70,709
Prime		-		-		-			-
Alt-A		-		-		-			-
Subprime		-		-		-			-
Total	$	309,097	$	11,607	$	(170	)	$	297,660

Collateralized mortgage obligations:	Fair Value		Gross Unrealized Gains		Gross Unrealized (Losses)			Cost or Amortized Cost
GNMA	$	-	$	-	$	-		$	-
FNMA		-		-		-			-
FHLMC		-		-		-			-
Prime		42,386		-		(18,337	)		60,723
Alt-A		844		-		(527	)		1,371
Subprime		-		-		-			-
Total	$	43,230	$	-	$	(18,864	)	$	62,094

Asset-backed securities:	Fair Value		Gross Unrealized Gains		Gross Unrealized (Losses)			Cost or Amortized Cost
GNMA	$	-	$	-	$	-		$	-
FNMA		-		-		-			-
FHLMC		-		-		-			-
Prime		24,184		721		(147	)		23,610
Alt-A		450		-		(59	)		509
Subprime		139		-		(64	)		203
Total	$	24,773	$	721	$	(270	)	$	24,322