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) November 5, 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, NY10119	10019
(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 November 5, 2009, The Navigators Group, Inc. (the “Company”) issued a press release announcing its earnings for the third quarter of 2009.  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 November 5, 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/ Bruce J. Byrnes
	Name:	Bruce J. Byrnes
	Title:	Senior Vice President & General Counsel

Date: November 5, 2009

EXHIBIT INDEX

Exhibit No.	Exhibit
99.1	Third Quarter Earnings Press Release dated November 5, 2009.

EX-99.1

Exhibit 99.1

The Navigators Group, Inc.

CORPORATE NEWS

Navigators Reports Third Quarter Earnings

New York –November 5, 2009 - --The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $21.4 million, or $1.24 per diluted share, for the three months ended September 30, 2009 compared to net income of $1.0 million, or $0.06 per diluted share, for the comparable period in 2008.

The summary of results for the three months ended September 30, 2009 and 2008 were as follows:

($ in millions, except per share amounts)						Diluted earnings per share
	2009		2008			2009		2008
Net income	$	21.4	$	1.0		$	1.24	$	0.06
Less: Net realized gains / (losses)          after-tax		4.0		(3.6	)		0.23		(0.21	)
Operating earnings (1)	$	17.4	$	4.6		$	1.01	$	0.27

o   The results for the three months ended September 30, 2009 included after-tax net realized gains of $4.0 million, or $0.23 per diluted share, which included other-than-temporary impairment losses on investments of $0.4 million after-tax, or $0.02 per diluted share.

o   The results for the three months ended September 30, 2008 included $18.3 million, or $1.08 per diluted share, for after-tax net losses from Hurricanes Gustav and Ike. In addition, the results included net realized losses of $3.6 million, or $0.21 per diluted share, which included other-than-temporary impairment losses on investments of $3.1 million after-tax, or $0.18 per diluted share.

The summary of results for the nine months ended September 30, 2009 and 2008 were as follows:

($ in millions, except per share amounts)							Diluted earnings per share
	2009			2008			2009			2008
Net income	$	57.1		$	41.7		$	3.30		$	2.45
Less: Net realized gains / (losses)           after-tax		(2.8	)		(8.8	)		(0.16	)		(0.52	)
Operating earnings (1)	$	59.9		$	50.5		$	3.46		$	2.97

o   The results for the nine months ended September 30, 2009  included after-tax net realized losses of $2.8 million, or $0.16 per diluted share, which included other-than-temporary impairment losses on investments of $7.7 million after-tax, or $0.45 per diluted share.

News Release

November 5, 2009

Page 2

o   The results for the nine months ended September 30, 2008 included $18.3 million, or $1.08 per diluted share, for after-tax net losses from Hurricanes Gustav and Ike. In addition, the results included net realized losses of $8.8 million, or $0.52 per diluted share, which included other-than-temporary impairment losses on investments of $8.6 million after-tax, or $0.50 per diluted share.

o   For the three and nine months ended September 30, 2009, book value per share increased by 8% and 17%, respectively, to $47.78.

Gross written premiums and net written premiums for the three months ended September 30, 2009 were $245.2 million and $156.0 million, respectively, a decrease of 3.1% and an increase of 11.2% from the comparable 2008 periods.  Gross written premiums and net written premiums for the nine months ended September 30, 2009 were $793.2 million and $539.7 million, respectively, a decrease of 3.2% and an increase of 7.4% from the comparable 2008 periods.

The combined loss and expense ratios for the three and nine months ended September 30, 2009 were 95.9% and 93.9%, respectively, compared to 107.9% and 95.7% for the comparable 2008 periods.  The combined loss and expense ratios for the three and nine months ended September 30, 2009 were favorably impacted by 2.2 and 3.8 loss ratio points, respectively, due to redundancies in prior period loss reserves.  The combined loss and expense ratios for the three and nine months ended September 30, 2008  included 17.4 and 5.7 loss and expense ratio points, respectively, due to 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 emphasizes disciplined risk selection and pricing in what continues to be a challenging environment and we are pleased to have, once again, generated underwriting profit in our insurance companies and at Lloyd’s. As a specialty insurer, we focus on complex risks for which the quality of our underwriting and claims professionals make a meaningful difference. We experienced strong growth in our excess casualty, environmental and professional liability business as a result of the investments made in additional intellectual capital over the last twelve months. For other product lines, we have opted to reduce premium volume when market conditions appeared to be inconsistent with profitable underwriting results. We remain cautious as to the ultimate loss development for longer-tail lines and emphasize this in our reserving philosophy. Our book value per share increased 17% in 2009, including 8% in the third quarter, to reach an all-time high.”

Net investment income for the three and nine months ended September 30, 2009 was $19.1 million and $56.5 million, respectively, which were decreases of 1.1% and 0.7% from the comparable 2008 periods.  The annualized pre-tax investment yield, excluding net realized gains and losses, was 3.8% for both the three and nine months ended September 30, 2009, respectively, compared to 4.1% for both of the comparable 2008 periods.  The effective tax rates on net investment income were 25.2% and 25.1% for the three and nine months ended September 30, 2009, respectively, compared to 25.7% and 25.8% for the comparable 2008 periods.

The Company’s investment portfolio mainly consists of fixed income securities with an average quality rating of “AA/Aa” as defined by Standard & Poor’s and Moody’s, respectively, and an average effective duration of 4.3 years at September 30, 2009.  At September 30, 2009, net unrealized gains within our investment portfolio were $67.5 million, an increase of $59.7 million compared to June 30, 2009. There were $6.1 million of net realized gains for the three months ended September 30, 2009.

Consolidated cash flow from operations for the three and nine months ended September 30, 2009 was $35.7 million and $105.2 million, respectively, compared to $83.0 million and $216.4 million for the comparable 2008 periods.

Press Release
November 5, 2009

Page 3

During the three and nine months ended September 30, 2009, the Company did not repurchase any shares of its common stock.

Stockholders’ equity was $811.0 million, or $47.78 per share, at September 30, 2009 compared to $689.3 million, or $40.89 per share, at December 31, 2008.  The statutory surplus of Navigators Insurance Company was $630.0 million at September 30, 2009 compared to $581.2 million at December 31, 2008.

Effective in 2009, the Company has reclassified certain of its business lines which had no effect on the segment classifications of the Insurance Companies and Lloyd's Operations. Underwriting data for prior periods has been reclassified to reflect these changes.

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

(1)   Operating earnings, or net income excluding net realized gains (losses) after-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, November 6, 2009 starting at 8:30 a.m. ET to discuss the 2009 third 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 888-680-0892and the international dial-in is 617-213-4858. The access code is 77625623.  Participants may pre-register for the call at www.theconferencingservice.com/prereg/key.process?key=P79MRBUQV.  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.

News Release

November 5, 2009

Page 4

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.  Forward-looking statements are derived from information that we currently have and assumptions that we make. 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 reports on 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

News Release

Page 5

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Financial Highlights

($ in thousands, except per share data)

(unaudited)

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
Results of Operations	2009			2008			Change		2009			2008			Change
Gross written premiums	$	245,191		$	252,943			-3%	$	793,179		$	819,302			-3%
Net written premiums		156,001			140,318			11%		539,660			502,327			7%
Revenues:
Net earned premiums		171,271			154,040			11%		506,085			472,483			7%
Commission income		144			8		NM			179			736			-76%
Net investment income		19,110			19,322			-1%		56,509			56,891			-1%
Total other-than-temporary impairment losses		(22	)		(4,748	)	NM			(28,769	)		(13,160	)	NM
Portion of loss recognized in other comprehensive
income (before tax)		(525	)		-		NM			17,053			-		NM
Net other-than-temporary impairment losses
recognized in earnings		(547	)		(4,748	)	NM			(11,716	)		(13,160	)	NM
Net realized gains (losses)		6,682			(768	)	NM			7,741			(408	)	NM
Other income (expense)		1,097			(119	)	NM			6,507			902		NM
Total revenues		197,757			167,735			18%		565,305			517,444			9%
Expenses:
Net losses and loss adjustment expenses		107,591			113,269			-5%		308,566			293,578			5%
Commission expenses		22,852			22,357			2%		71,578			66,795			7%
Other operating expenses		35,018			30,601			14%		98,572			93,594			5%
Interest expense		2,042			2,218			-8%		6,411			6,652			-4%
Total expenses		167,503			168,445			-1%		485,127			460,619			5%
Income (loss) before income taxes		30,254			(710	)	NM			80,178			56,825			41%
Income tax expense (benefit)		8,822			(1,711	)	NM			23,096			15,153			52%
Net income	$	21,432		$	1,001		NM		$	57,082		$	41,672			37%
Per Share Data
Net income per common share:
Basic	$	1.26		$	0.06		NM		$	3.37		$	2.48			36%
Diluted	$	1.24		$	0.06		NM		$	3.30		$	2.45			35%
Average shares outstanding:
Basic		16,966			16,772					16,929			16,802
Diluted		17,334			16,927					17,277			16,980
Underwriting Ratios
Loss Ratio		62.8	%		73.5	%				61.0	%		62.1	%
Expense Ratio		33.1	%		34.4	%				32.9	%		33.6	%
Combined Ratio		95.9	%		107.9	%				93.9	%		95.7	%
Balance Sheet Data	Sept. 30,			June 30,					Sept. 30,			Dec. 31,
		2009			2009					2009			2008
Stockholders' equity	$	810,955		$	747,797			8%	$	810,955		$	689,317			18%
Book value per share	$	47.78		$	44.12			8%	$	47.78		$	40.89			17%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands)
	September 30,			December 31,
	2009			2008
	(unaudited)
ASSETS
Investments and cash:
Fixed maturities, available-for-sale, at fair value
(amortized cost: 2009, $1,823,107; 2008, $1,664,755)	$	1,877,786		$	1,643,772
Equity securities, available-for-sale, at fair value (cost: 2009, $45,178; 2008, $52,523)		57,949			51,802
Short-term investments, at cost which approximates fair value		136,935			220,684
Cash		21,692			1,457
Total investments and cash		2,094,362			1,917,715
Premiums receivable		189,378			170,522
Prepaid reinsurance premiums		163,248			188,874
Reinsurance recoverable on paid losses		93,287			67,227
Reinsurance recoverable on unpaid losses and loss adjustment expenses		818,397			853,793
Deferred income tax, net		25,233			54,736
Deferred policy acquisition costs		59,480			47,618
Accrued investment income		16,596			17,411
Goodwill and other intangible assets		7,010			6,622
Other assets		26,306			25,062
Total assets	$	3,493,297		$	3,349,580
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Reserves for losses and loss adjustment expenses	$	1,903,204		$	1,853,664
Unearned premiums		491,410			480,665
Reinsurance balances payable		111,494			140,319
Senior notes		113,979			123,794
Federal income taxes payable		6,563			5,874
Accounts payable and other liabilities		55,692			55,947
Total liabilities		2,682,342			2,660,263
Stockholders' equity:
Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued		-			-
Common stock, $.10 par value, authorized 50,000,000 shares,  issued 17,197,419 shares
as of September 2009 and 17,080,826 shares as of December 2008		1,720			1,708
Additional paid-in capital		304,000			298,872
Retained earnings		463,858			406,776
Treasury stock, at cost (224,754 shares for both 2009 and 2008)		(11,540	)		(11,540	)
Accumulated other comprehensive income (loss)		52,917			(6,499	)
Total stockholders' equity		810,955			689,317
Total liabilities and stockholders' equity	$	3,493,297		$	3,349,580

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Comparative Premium Data

($ in thousands)

Gross Written Premiums:	Three Months							Nine Months
Insurance Companies:	2009		2008		Change			2009		2008		Change
Marine	$	53,129	$	53,247		0	%	$	187,452	$	189,202		-1	%
Property Casualty		93,302		103,180		-10	%		272,127		311,053		-13	%
Professional Liability		33,569		25,706		31	%		101,789		71,430		43	%
		180,000		182,133		-1	%		561,368		571,685		-2	%
Lloyd's Operations:
Marine		33,960		34,917		-3	%		140,256		143,570		-2	%
Property Casualty		20,024		25,586		-22	%		59,058		74,671		-21	%
Professional Liability		11,207		10,307		9	%		32,497		29,376		11	%
		65,191		70,810		-8	%		231,811		247,617		-6	%
Total	$	245,191	$	252,943		-3	%	$	793,179	$	819,302		-3	%
Net Written Premiums:	Three Months							Nine Months
Insurance Companies:		2009		2008	Change				2009		2008	Change
Marine	$	39,632	$	29,983		32	%	$	133,047	$	112,439		18	%
Property Casualty		57,567		61,131		-6	%		183,247		203,528		-10	%
Professional Liability		18,834		15,019		25	%		59,180		42,658		39	%
		116,033		106,133		9	%		375,474		358,625		5	%
Lloyd's Operations:
Marine		23,816		22,448		6	%		113,867		99,627		14	%
Property Casualty		11,116		5,682		96	%		33,781		26,147		29	%
Professional Liability		5,036		6,055		-17	%		16,538		17,928		-8	%
		39,968		34,185		17	%		164,186		143,702		14	%
Total	$	156,001	$	140,318		11	%	$	539,660	$	502,327		7	%
Net Earned Premiums:	Three Months							Nine Months
Insurance Companies:		2009		2008	Change				2009		2008	Change
Marine	$	42,620	$	34,091		25	%	$	114,459	$	93,655		22	%
Property Casualty		60,380		63,740		-5	%		188,860		205,395		-8	%
Professional Liability		19,804		14,616		35	%		55,998		43,077		30	%
		122,804		112,447		9	%		359,317		342,127		5	%
Lloyd's Operations:
Marine		33,945		31,132		9	%		102,158		91,253		12	%
Property Casualty		9,126		5,350		71	%		28,250		22,892		23	%
Professional Liability		5,396		5,111		6	%		16,360		16,211		1	%
		48,467		41,593		17	%		146,768		130,356		13	%
Total	$	171,271	$	154,040		11	%	$	506,085	$	472,483		7	%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

September 30, 2009

($ in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premiums	$	180,000		$	65,191		$	-		$	245,191
Net written premiums		116,033			39,968			-			156,001
Net earned premiums		122,804			48,467			-			171,271
Net losses and loss adjustment expenses		(75,838	)		(31,753	)		-			(107,591	)
Commission expenses		(15,346	)		(7,835	)		329			(22,852	)
Other operating expenses		(27,194	)		(7,835	)		-			(35,029	)
Other income (expense)		1,301			280			(329	)		1,252
Underwriting profit (loss)		5,727			1,324			-			7,051
Investment income		16,597			2,361			152			19,110
Net realized gains (losses)		5,710			425			-			6,135
Other operating expenses		-			-			11			11
Other income (expense)		-			-			(11	)		(11	)
Interest expense		-			-			(2,042	)		(2,042	)
Income (loss) before income taxes		28,034			4,110			(1,890	)		30,254
Income tax expense (benefit)		7,973			1,510			(661	)		8,822
Net income (loss)	$	20,061		$	2,600		$	(1,229	)	$	21,432
Loss and loss expenses ratio		61.8	%		65.5	%					62.8	%
Commission expense ratio		12.5	%		16.2	%					13.3	%
Other operating expenses ratio (1)		21.1	%		15.6	%					19.8	%
Combined ratio		95.4	%		97.3	%					95.9	%
(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

September 30, 2008

($ in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premiums	$	182,133		$	70,810		$	-		$	252,943
Net written premiums		106,133			34,185			-			140,318
Net earned premiums		112,447			41,593			-			154,040
Net losses and loss adjustment expenses		(78,346	)		(34,923	)		-			(113,269	)
Commission expenses		(13,823	)		(8,534	)		-			(22,357	)
Other operating expenses		(22,802	)		(7,799	)		-			(30,601	)
Other income (expense)		279			(390	)		-			(111	)
Underwriting profit (loss)		(2,245	)		(10,053	)		-			(12,298	)
Investment income		15,973			3,074			275			19,322
Net realized gains (losses)		(5,207	)		(309	)		-			(5,516	)
Interest expense		-			-			(2,218	)		(2,218	)
Income (loss) before income taxes		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).

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Nine Months Ended

September 30, 2009

($ in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premiums	$	561,368		$	231,811		$	-		$	793,179
Net written premiums		375,474			164,186			-			539,660
Net earned premiums		359,317			146,768			-			506,085
Net losses and loss adjustment expenses		(214,834	)		(93,732	)		-			(308,566	)
Commission expenses		(45,374	)		(26,533	)		329			(71,578	)
Other operating expenses		(78,660	)		(19,933	)		-			(98,593	)
Other income (expense)		3,157			879			(329	)		3,707
Underwriting profit		23,606			7,449			-			31,055
Investment income		49,043			7,060			406			56,509
Net realized losses		(987	)		(2,988	)		-			(3,975	)
Other operating expenses		-			-			21			21
Other income (expense)		-			-			2,979			2,979
Interest expense		-			-			(6,411	)		(6,411	)
Income (loss) before income taxes		71,662			11,521			(3,005	)		80,178
Income tax expense (benefit)		19,677			4,470			(1,051	)		23,096
Net income (loss)	$	51,985		$	7,051		$	(1,954	)	$	57,082
Loss and loss expenses ratio		59.8	%		63.9	%					61.0	%
Commission expense ratio		12.6	%		18.1	%					14.1	%
Other operating expenses ratio (1)		21.0	%		13.0	%					18.8	%
Combined ratio		93.4	%		95.0	%					93.9	%
(1) The Other operating expenses ratio includes Other income (expense).

 

News Release

Page 11

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Nine Months Ended

September 30, 2008

($ in thousands)

	Insurance			Lloyd's
	Companies			Operations			Corporate			Total
Gross written premiums	$	571,685		$	247,617		$	-		$	819,302
Net written premiums		358,625			143,702			-			502,327
Net earned premiums		342,127			130,356			-			472,483
Net losses and loss adjustment expenses		(207,927	)		(85,651	)		-			(293,578	)
Commission expenses		(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 (loss)		25,257			(5,103	)		-			20,154
Investment income		47,031			8,927			933			56,891
Net realized gains (losses)		(13,362	)		(206	)		-			(13,568	)
Interest expense		-			-			(6,652	)		(6,652	)
Income (loss) before income taxes		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).

News Release

Page 12

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($ in thousands)

	Three Months Ended September 30, 2009
	Net			Losses
	Earned			and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premiums			Incurred		Expenses		Loss			Expense			Total
Marine	$	42,620		$	31,611	$	13,259		74.2	%		31.1	%		105.3	%
Property Casualty		60,380			23,881		21,330		39.6	%		35.3	%		74.9	%
Professional Liability		19,804			20,346		6,650		102.7	%		33.6	%		136.3	%
		122,804			75,838		41,239		61.8	%		33.6	%		95.4	%
Lloyd's Operations		48,467			31,753		15,390		65.5	%		31.8	%		97.3	%
Total	$	171,271		$	107,591	$	56,629		62.8	%		33.1	%		95.9	%
	Three Months Ended September 30, 2008
	Net			Losses
	Earned			and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premiums			Incurred		Expenses		Loss			Expense			Total
Marine	$	34,091		$	21,910	$	8,588		64.3	%		25.2	%		89.5	%
Property Casualty		63,740			48,426		22,574		76.0	%		35.4	%		111.4	%
Professional Liability		14,616			8,010		5,184		54.8	%		35.5	%		90.3	%
		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
Property Casualty	$	(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	%

	Amounts				Loss Ratio
Net Incurred Loss Activity	Sept. 30,		Sept. 30,		Sept. 30,			Sept. 30,
For the Three Months Ended:		2009		2008		2009			2008
Insurance Companies:
Loss and LAE payments	$	69,215	$	36,929		56.4	%		32.8	%
Change in reserves		6,623		41,417		5.4	%		36.9	%
Net incurred loss and LAE		75,838		78,346		61.8	%		69.7	%
Lloyd's Operations:
Loss and LAE payments		20,736		22,320		42.8	%		53.7	%
Change in reserves		11,017		12,603		22.7	%		30.3	%
Net incurred loss and LAE		31,753		34,923		65.5	%		84.0	%
Total
Loss and LAE payments		89,951		59,249		52.5	%		38.4	%
Change in reserves		17,640		54,020		10.3	%		35.1	%
Net incurred loss and LAE	$	107,591	$	113,269		62.8	%		73.5	%
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:		2009		2008		2009			2008
Insurance Companies	$	3,220	$	5,600		2.6	%		5.0	%
Lloyd's Operations		630		2,420		1.3	%		5.8	%
Total	$	3,850	$	8,020		2.2	%		5.2	%

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Page 13

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($ in thousands)

	Nine Months Ended September 30, 2009
	Net			Losses
	Earned			and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premiums			Incurred		Expenses		Loss			Expense			Total
Marine	$	114,459		$	83,239	$	35,453		72.7	%		31.0	%		103.7	%
Property Casualty		188,860			80,331		65,642		42.5	%		34.8	%		77.3	%
Professional Liability		55,998			51,264		19,782		91.5	%		35.3	%		126.8	%
		359,317			214,834		120,877		59.8	%		33.6	%		93.4	%
Lloyd's Operations		146,768			93,732		45,587		63.9	%		31.1	%		95.0	%
Total	$	506,085		$	308,566	$	166,464		61.0	%		32.9	%		93.9	%
	Nine Months Ended September 30, 2008
	Net			Losses
	Earned			and LAE		Underwriting		Combined Ratio
Insurance Companies:	Premiums			Incurred		Expenses		Loss			Expense			Total
Marine	$	93,655		$	58,208	$	27,890		62.2	%		29.8	%		92.0	%
Property Casualty		205,395			125,430		65,751		61.1	%		32.0	%		93.1	%
Professional Liability		43,077			24,289		15,302		56.4	%		35.5	%		91.9	%
		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
Property Casualty	$	(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	%

	Amounts				Loss Ratio
Net Incurred Loss Activity	Sept. 30,		Sept. 30,		Sept. 30,			Sept. 30,
For the Nine Months Ended:		2009		2008		2009			2008
Insurance Companies:
Loss and LAE payments	$	171,282	$	106,015		47.7	%		31.0	%
Change in reserves		43,552		101,912		12.1	%		29.8	%
Net incurred loss and LAE		214,834		207,927		59.8	%		60.8	%
Lloyd's Operations:
Loss and LAE payments		52,348		52,461		35.7	%		40.2	%
Change in reserves		41,384		33,190		28.2	%		25.5	%
Net incurred loss and LAE		93,732		85,651		63.9	%		65.7	%
Total
Loss and LAE payments		223,630		158,476		44.2	%		33.5	%
Change in reserves		84,936		135,102		16.8	%		28.6	%
Net incurred loss and LAE	$	308,566	$	293,578		61.0	%		62.1	%
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:		2009		2008		2009			2008
Insurance Companies	$	13,242	$	25,752		3.7	%		7.5	%
Lloyd's Operations		5,853		6,528		4.0	%		5.0	%
Total	$	19,095	$	32,280		3.8	%		6.8	%

News Release

Page 14

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Net Loss Data

($ in thousands)

	Case		IBNR
Net Loss Reserves, September 30, 2009:	Reserves		Reserves		Total
Insurance Companies:
Marine	$	106,888	$	104,007	$	210,895
Property Casualty		127,427		348,055		475,482
Professional Liability		41,326		64,909		106,235
Total Insurance Companies		275,641		516,971		792,612
Lloyd's Operations:
Marine		105,102		94,621		199,723
Property Casualty		26,065		26,525		52,590
Professional Liability		8,419		31,463		39,882
Total Lloyd's Operations		139,586		152,609		292,195
Total Net Loss Reserves	$	415,227	$	669,580	$	1,084,807
	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 15

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

September 30, 2009

($ in thousands)

At September 30, 2009, the average quality of the company’s investment portfolio as rated by S&P and Moody’s was AA and Aa, respectively, with an average duration of 4.3 years.  The Company does not own any collateralized debt obligations (CDO’s), collateralized loan obligations (CLO’s) or asset-backed commercial paper.

At September 30, 2009, the Company owned two asset-backed securities approximating $0.1 million with subprime mortgage exposures.  These securities have an effective maturity of 1.3 years.  In addition, the Company owned a total of four collateralized mortgage obligations and asset-backed securities approximating $0.9 million classified as Alt-A which is a credit category between prime and subprime. These securities have an effective maturity of 7.6 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, 2009:

September 30, 2009	Fair Value		Gross Unrealized Gains		Gross Unrealized (Losses)			Cost or Amortized Cost		OTTI Recognized in OCI
	($ in thousands)
Fixed maturities:
U.S. Government Treasury bonds,
agency bonds and foreign government bonds	$	514,158	$	10,855	$	(54	)	$	503,357	$	-
States, municipalities and political
subdivisions		679,417		37,072		(570	)		642,915		-
Mortgage- and asset-backed securities
Mortgage-backed securities		308,515		15,142		(10	)		293,383		-
Collateralized mortgage obligations		46,126		-		(12,120	)		58,246		(9,818	)
Asset-backed securities		20,088		793		(119	)		19,414		(48	)
Commercial mortgage-backed securities		106,459		584		(6,458	)		112,333		-
Subtotal		481,188		16,519		(18,707	)		483,376		(9,866	)
Corporate bonds		203,023		10,166		(602	)		193,459		-
Total fixed maturities		1,877,786		74,612		(19,933	)		1,823,107		(9,866	)
Equity securities - common stocks		57,949		12,843		(72	)		45,178		-
Cash		21,692		-		-			21,692		-
Short-term investments		136,935		-		-			136,935		-
Total	$	2,094,362	$	87,455	$	(20,005	)	$	2,026,912	$	(9,866	)

News Release

Page 16

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

September 30, 2009

($ in thousands)

The following four tables set forth our mortgage-backed securities, collateralized mortgage obligations, asset-backed securities and commercial mortgage-backed securities by those issued by GNMA, FNMA and FHLMC and the quality category (prime, Alt-A and subprime) for all other such investments at September 30, 2009:

			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
Mortgage-backed securities:	Value		Gains		(Losses)			Cost
GNMA	$	46,725	$	1,485	$	(9	)	$	45,249
FNMA		191,824		10,332		(1	)		181,493
FHLMC		69,966		3,325		-			66,641
Total	$	308,515	$	15,142	$	(10	)	$	293,383
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
Collateralized mortgage obligations:	Value		Gains		(Losses)			Cost
Prime	$	45,192	$	-	$	(11,736	)	$	56,928
Alt-A		934		-		(384	)		1,318
Subprime		-		-		-			-
Total	$	46,126	$	-	$	(12,120	)	$	58,246
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
Asset-backed securities:	Value		Gains		(Losses)			Cost
Prime	$	19,956	$	793	$	(70	)	$	19,233
Alt-A		-		-		-			-
Subprime		132		-		(49	)		181
Total	$	20,088	$	793	$	(119	)	$	19,414
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
Commercial mortgage-backed securities:	Value		Gains		(Losses)			Cost
Prime	$	106,459	$	584	$	(6,458	)	$	112,333
Alt-A		-		-		-			-
Subprime		-		-		-			-
Total	$	106,459	$	584	$	(6,458	)	$	112,333