EX-99 3 a4449981ex99.txt EXHIBT 99.1 PRESS RELEASE Exhibit 99.1 Navigators' Net Income Up 66% NEW YORK--(BUSINESS WIRE)--Aug. 5, 2003--The Navigators Group, Inc. (NAVG/NASDAQ) reported net income increased 66% for the three months ended June 30, 2003 to $6,274,000 or $0.72 per share, compared to $3,774,000 or $0.43 per share reported for the same period in 2002. Included in these results were net realized capital gains of $0.06 per share and $0.01 per share for the three months ended June 30, 2003 and 2002, respectively. The combined loss and expense ratio for the second quarter of 2003 was 95.3%, compared to 98.9% for the same period in 2002. Total revenue increased 27% to $72,386,000 for the second quarter of 2003, compared to $56,920,000 for the same period during 2002. Gross written premium for the second quarter of 2003 was $141,192,000, an increase of 55% from the second quarter of 2002. Net written premium increased to $61,631,000, up 10%. Net investment income increased to $4,552,000, up 9%. Net income for the six month period ended June 30, 2003 was $11,108,000 or $1.27 per share, compared to $7,224,000 or $0.84 per share in 2002. Included in these results were net realized capital gains (losses) of $0.08 per share and $(0.01) per share for the six months ended June 30, 2003 and 2002, respectively. The combined loss and expense ratio for the first six months of 2003 was 95.9% compared to 98.1% for the same period in 2002. Total revenue increased 41% to $144,991,000 for the six months ended June 30, 2003 compared to $102,729,000 for the same period in 2002. Gross written premium for the first six months of 2003 was $315,894,000, an increase of 48% from the comparable period in 2002. Net written premium increased to $152,664,000, up 21%. Net investment income increased to $9,213,000, up 1%. Commenting on the results, Stanley A. Galanski, Chief Executive Officer, stated, "Each of our active businesses generated an underwriting profit, which is our primary objective. We continue to emphasize the importance of price adequacy over new business production and we are very encouraged by the level of rate increases attained in the second quarter over all product lines. While rate increases were largest in the professional liability and California casualty classes, ocean marine pricing continues to show positive rate change both in our insurance companies and at Lloyd's." "Navigators Marine & Energy Division had another strong quarter, with a relatively low level of loss activity and solid growth. Our Lloyd's operation, Syndicate 1221, made a meaningful contribution to our net income." Galanski continued, "Navigators Pro further solidified its market presence and continues to attain significant rate increases along with new business levels consistent with our expectations. Navigators Specialty achieved an underwriting profit for the quarter, executing its strategy of targeted rate increases while reducing policy count in its construction segment. Overall, the Company's cash flow from operations is very strong." The Navigators Group, Inc. is an international insurance holding company with insurance company operations, underwriting management companies, and operations at Lloyd's of London. Headquartered in New York City, Navigators has offices in major insurance centers in the United States and the United Kingdom. This press release may contain "forward looking statements" as defined in the Private Securities Litigation Act of 1995. We cannot assure that results which we anticipate will be achieved, since results may differ materially because of known and unknown risks and uncertainties which we face. Please refer to Navigators' most recent Forms 10-K and 10-Q for a description of Navigators' business and the important factors which may affect that business. Navigators undertakes no obligation to publicly update or revise any forward looking statement. THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES Financial Highlights (In thousands, except book value and net income per share) (All figures are on a GAAP basis) Three Months Ended Six Months Ended June 30, June 30, ------------------ ------------------- (Unaudited) (Unaudited) Financial Highlights 2003 2002 Change 2003 2002 Change ----------- ---- ---- ------ ---- ---- ------ Gross written premium $141,192 $90,945 55% $315,894 $212,861 48% Net written premium 61,631 56,094 10% 152,664 126,443 21% Revenues: Net earned premium 65,264 50,923 28% 131,578 90,772 45% Commission income 1,486 993 50% 2,725 2,094 30% Net investment income 4,552 4,162 9% 9,213 9,104 1% Net realized capital gains (losses) 669 201 233% 887 (92) NM Other income 415 641 -35% 588 851 -31% --------- -------- --------- --------- Total revenues 72,386 56,920 27% 144,991 102,729 41% --------- -------- --------- --------- Operating expenses: Net losses and loss adjustment expenses incurred 43,291 32,406 34% 87,331 56,189 55% Commission expense 8,876 10,328 -14% 19,503 17,986 8% Other operating expenses 12,237 8,983 36% 23,824 18,870 26% Interest expense 87 145 -40% 184 305 -40% --------- -------- --------- --------- Total operating expenses 64,491 51,862 24% 130,842 93,350 40% --------- -------- --------- --------- Income before income taxes 7,895 5,058 56% 14,149 9,379 51% --------- -------- --------- --------- Income tax expense 1,621 1,284 26% 3,041 2,155 41% --------- -------- --------- --------- Net income $6,274 $3,774 66% $11,108 $7,224 54% ========= ======== ========= ========= Per Share Data -------------- Net income per common share: Basic $0.74 $0.45 64% $1.31 $0.86 52% Diluted $0.72 $0.43 67% $1.27 $0.84 51% Average common shares outstanding: Basic 8,516 8,457 8,505 8,446 Diluted 8,757 8,677 8,741 8,617 Underwriting Ratios ------------ Loss Ratio 66.3% 63.6% 66.4% 61.9% Expense Ratio 29.0% 35.3% 29.5% 36.2% --------- -------- --------- --------- Combined Ratio 95.3% 98.9% 95.9% 98.1% June 30, December 31, Balance Sheet Data 2003 2002 ------------------ --------- --------- Stockholders' equity $187,131 $171,275 9% Book value per share 21.98 20.18 9% NM - not meaningful Note: Certain amounts for the prior period have been reclassified to conform to the presentation in the current period. CONTACT: The Navigators Group, Inc. Brad Wiley, 914-933-6025 www.navg.com