-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D+MhrEjmiPa/qgoSqRoPliO/nOA2rMAZwnSb5zZkQE8FR6HnfvI0+W71oLI7SBSw ssrzje+E4aeQRxGmQzcpXA== 0001157523-05-006885.txt : 20050802 0001157523-05-006885.hdr.sgml : 20050802 20050802171955 ACCESSION NUMBER: 0001157523-05-006885 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050802 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20050802 DATE AS OF CHANGE: 20050802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NAVIGATORS GROUP INC CENTRAL INDEX KEY: 0000793547 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 133138397 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15886 FILM NUMBER: 05992928 BUSINESS ADDRESS: STREET 1: ONE PENN PLAZA STREET 2: 55TH FL CITY: NEW YORK STATE: NY ZIP: 10119 BUSINESS PHONE: 2122442333 MAIL ADDRESS: STREET 1: ONE PENN PLAZA 55TH FL CITY: NEW YORK STATE: NY ZIP: 10119 8-K 1 a4943586.txt THE NAVIGATORS GROUP, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or15 (d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest reported event): August 2, 2005 The Navigators Group, Inc. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its chapter) DELAWARE 0-15886 13-3138397 - ------------------------------------------------------------------------------- (State of (Commission (I.R.S. Employer organization) File Number) Identification No.) One Penn Plaza, New York, NY 10119 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (914) 933-6025 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 (SEE General Instruction A.2. below): [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] 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 2, 2005, The Navigators Group, Inc. issued a press release announcing its earnings for the second quarter and six months ending June 30, 2005. This press release is attached hereto as Exhibit 99.1. SIGNATURE 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. (Registrant) /s/ Bradley D. Wiley -------------------------------- Name: Bradley D. Wiley Title: Senior Vice President, Financial Compliance Officer and Secretary Date: August 2, 2005 INDEX TO EXHIBITS Number Description - ------ ----------- 99.1 Second Quarter and Six Months Ending June 30, 2005 Earnings Release dated August 2, 2005. EX-99.1 2 a4943586ex991.txt EXHIBIT 99.1 Exhibit 99.1 Navigators Reports Record Earnings; Net Income Up 25% NEW YORK--(BUSINESS WIRE)--Aug. 2, 2005--The Navigators Group, Inc. (NAVG:NASDAQ) reported record quarterly net income of $11,280,000 for the 2005 second quarter compared to $9,037,000 for the 2004 second quarter, an increase of 25%. Net income per share was $0.88 for the 2005 second quarter compared to $0.71 for the 2004 second quarter based on diluted average shares outstanding of 12,853,000 and 12,647,000, respectively. The 2005 second quarter net income includes a net realized capital gain of $0.02 per share compared to a net realized capital loss of $0.01 per share in the 2004 second quarter. Gross written premium and net written premium for the 2005 second quarter were $190,133,000 and $93,257,000, respectively, increases of 18% and 27% from the comparable 2004 periods. The 2004 second quarter net written premium was net of approximately $7 million of ceded reinsurance premium for a quota share reinsurance treaty not renewed on March 31, 2005. Net income for the six month period ended June 30, 2005 was $20,979,000 or $1.64 per share, compared to $17,950,000 or $1.42 per share for the six month period ended June 30, 2004. Included in these results were net realized capital gains of $0.03 per share and $0.02 per share for the six months ended June 30, 2005 and 2004, respectively. Gross written premium and net written premium for the six month period ended June 30, 2005 were $407,129,000 and $210,347,000, respectively, increases of 14% and 24% from the comparable 2004 periods. The combined loss and expense ratios for the 2005 second quarter and six month period were 91.6% and 91.3%, respectively, compared to 88.8% for both comparable 2004 periods. The 2005 second quarter net income includes a $0.05 per share benefit from the receipt of a $900,000 non-recurring profit commission from quota share reinsurers as a result of a subrogation recovery on aviation run-off business that was fully reinsured. The profit commission is recorded as a reduction to commission expense and reduced the combined loss and expense ratio for the 2005 second quarter by 1.0 expense ratio point. The combined loss and expense ratios for the 2004 second quarter and six month period were favorably impacted by 1.9 and 2.7 loss ratio points, respectively, for a redundancy of prior year loss reserves in our Lloyd's operations. Navigators' Chief Executive Officer, Stan Galanski, commented, "We are pleased with our 2005 year-to-date underwriting results. While rate levels have generally flattened for most of our specialty product lines, overall market conditions remain favorable. We believe in the ability of our seasoned underwriting teams to respond to profitable opportunities in their respective niches. Claims activity remains at a level that is consistent with our expectations, including minimal involvement from the July Gulf Coast hurricanes." Consolidated cash flow from operations for the 2005 second quarter and six month period ended June 30, 2005 was $50,716,000 and $115,906,000, respectively, compared to $66,427,000 and $93,160,000 for the comparable 2004 periods. The 2005 second quarter cash flow from operations includes approximately $8 million related to the subrogation recovery collected on behalf of quota share reinsurers which has been recorded as other liabilities on the balance sheet. Net investment income for the 2005 second quarter and six month period was $8,961,000 and $16,583,000, respectively, increases of 35% and 32% from the 2004 comparable periods. The pre-tax investment yields for the 2005 second quarter and six month period were 3.9% and 3.7%, respectively, compared to 3.6% and 3.5% for the comparable 2004 periods. Stockholders' equity was $352,073,000 or $27.55 per share at June 30, 2005 compared to $328,578,000 or $25.96 per share at December 31, 2004. Statutory surplus of Navigators Insurance Company was $244,346,000 at June 30, 2005. The Company will hold a conference call on Wednesday, August 3, 2005 starting at 8:30 a.m. ET to discuss the second quarter's results. To access the call domestically, please dial 1-800-299-8538 using confirmation code 88570645. Internationally, the call may be accessed by dialing 617-786-2902 using the same confirmation code. To listen via live audio webcast, please visit the Company's website (www.navg.com) at least ten minutes prior to the start of the call and click on the August 3rd Live Audio Webcast link. The webcast will also be available as a replay at the same location starting one hour after the call is finished. The Navigators Group, Inc. is an international insurance holding company with insurance company operations, underwriting management companies, and operations at Lloyd's of London. Headquartered in New York City, Navigators has offices in major insurance centers in the United States, the United Kingdom and Belgium. This press release may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Whenever used in this release, the words "estimate", "expect", "believe" or similar expressions are intended to identify such forward-looking statements. We cannot assure that results which we anticipate will be achieved, since results may differ materially because of known and unknown risks and uncertainties which we face. Please refer to Navigators' most recent Forms 10-K and 10-Q and its other filings with the Securities and Exchange Commission for a description of Navigators' business and the important factors which may affect that business. Navigators undertakes no obligation to publicly update or revise any forward-looking statement. THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES Financial Highlights ($'s in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, ---------------- ---------------- Financial Highlights 2005 2004 Change 2005 2004 Change - -------------------- -------- ------- ------ -------- ------- ------ Gross written premium $190,133 $161,626 18% $407,129 $357,577 14% Net written premium 93,257 73,689 27% 210,347 169,624 24% Revenues: Net earned premium 85,832 75,314 14% 163,370 149,489 9% Commission income 1,514 1,361 11% 2,784 2,488 12% Investment Income 8,961 6,625 35% 16,583 12,527 32% Net realized capital gains (losses) 416 (105) NM 583 317 84% Other income 470 266 NM 1,367 394 NM -------- -------- -------- -------- Total revenues 97,193 83,461 16% 184,687 165,215 12% -------- -------- -------- -------- Operating expenses: Net losses and loss adjustment expenses incurred 53,611 45,392 18% 99,832 89,144 12% Commission expense 9,242 10,040 -8% 18,846 21,068 -11% Other operating expenses 17,628 14,620 21% 35,072 28,052 25% -------- -------- -------- -------- Total operating expenses 80,481 70,052 15% 153,750 138,264 11% -------- -------- -------- -------- Income before income taxes 16,712 13,409 25% 30,937 26,951 15% -------- -------- -------- -------- Income tax expense (benefit): Current 8,069 4,951 63% 13,241 9,958 33% Deferred (2,637) (579) NM (3,283) (957) NM -------- -------- -------- -------- Income tax expense (benefit) 5,432 4,372 24% 9,958 9,001 11% -------- -------- -------- -------- Net income $ 11,280 $ 9,037 25% $ 20,979 $ 17,950 17% ======== ======== ======== ======== Per Share Data - -------------- Net income per common share: Basic $ 0.88 $ 0.72 23% $ 1.65 $ 1.43 15% Diluted $ 0.88 $ 0.71 23% $ 1.64 $ 1.42 16% Average shares outstanding: Basic 12,763 12,587 12,720 12,570 Diluted 12,853 12,647 12,815 12,671 Underwriting Ratios - ------------------- Loss Ratio 62.5% 60.2% 61.1% 59.6% Expense Ratio 29.1% 28.6% 30.2% 29.2% -------- -------- -------- -------- Combined Ratio 91.6% 88.8% 91.3% 88.8% Balance Sheet Data June 30, Dec. 31, - -------------------- 2005 2004 -------- -------- Stockholders' equity $352,073 $328,578 7% Book value per share $ 27.55 $ 25.96 6% THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ($'s in thousands) June 30, December 31, 2005 2004 ----------- ----------- ASSETS Investments and cash: Fixed maturities, available-for-sale, at fair value (amortized cost: 2005, $784,211; 2004, $713,049) $ 795,332 $ 722,434 Equity securities, available-for-sale, at fair value (cost: 2005, $18,869; 2004, $19,101) 20,453 21,170 Short-term investments, at cost which approximates fair value 130,474 96,653 Cash 18,784 14,676 ----------- ----------- Total investments and cash 965,043 854,933 ----------- ----------- Premiums in course of collection 178,864 176,720 Commissions receivable 3,903 3,062 Prepaid reinsurance premiums 152,798 130,761 Reinsurance receivable on paid losses 38,026 20,955 Reinsurance receivable on unpaid losses and loss adjustment expenses 506,542 502,329 Net deferred income tax benefit 20,569 17,348 Deferred policy acquisition costs 34,684 23,882 Accrued investment income 8,434 7,303 Goodwill 5,104 5,282 Other assets 13,905 14,103 ----------- ----------- Total assets $ 1,927,872 $ 1,756,678 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Reserves for losses and loss adjustment expenses $ 1,005,838 $ 966,117 Unearned premium 338,742 270,970 Reinsurance balances payable 160,695 143,427 Federal income tax payable 8,046 5,614 Payable for securities purchased 6,452 3,027 Accounts payable and other liabilities 56,026 38,945 ----------- ----------- Total liabilities 1,575,799 1,428,100 ----------- ----------- Stockholders' equity: Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued - - Common stock, $.10 par value, 20,000,000 shares authorized for 2005 and 2004; issued and outstanding: 12,780,833 for 2005 and 12,657,160 for 2004 1,278 1,266 Additional paid-in capital 157,059 154,670 Retained earnings 184,316 163,337 Accumulated other comprehensive income 9,420 9,305 ----------- ----------- Total stockholders' equity 352,073 328,578 ----------- ----------- Total liabilities and stockholders' equity $ 1,927,872 $ 1,756,678 =========== =========== THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES Comparative Premium Data ($'s in thousands) Gross Written Premium: Second Quarter Six Months ---------------- ---------------- Insurance Companies: 2005 2004 Change 2005 2004 Change -------- ------- ------ -------- ------- ------ Marine $ 60,132 $ 51,573 17% $128,416 $110,999 16% Specialty 50,198 37,484 34% 93,147 71,714 30% Professional Liability 21,250 18,227 17% 39,180 33,260 18% Assumed from Lloyd's (930) 288 NM (805) 3,342 NM Other (includes run- off) 30 36 NM 30 122 NM -------- -------- -------- -------- 130,680 107,608 21% 259,968 219,437 18% Lloyd's Operations: Marine 47,189 47,793 -1% 121,120 128,757 -6% Professional Liability 1,587 - NM 1,587 - NM Other 9,771 6,515 50% 23,670 12,709 86% -------- -------- -------- -------- 58,547 54,308 8% 146,377 141,466 3% Intercompany elimination 906 (290) NM 784 (3,326) NM -------- -------- -------- -------- Total $190,133 $161,626 18% $407,129 $357,577 14% ======== ======== ======== ======== Net Written Premium: Second Quarter Six Months ---------------- ---------------- Insurance Companies: 2005 2004 Change 2005 2004 Change -------- ------- ------ -------- ------- ------ Marine $ 26,464 $ 20,384 30% $ 56,811 $ 45,642 24% Specialty 33,280 19,041 75% 69,678 39,552 76% Professional Liability 7,831 6,903 13% 14,510 12,376 17% Assumed from Lloyd's (922) 229 NM (796) 3,135 NM Other (includes run- off) 22 8 NM 53 5 NM -------- -------- -------- -------- 66,675 46,565 43% 140,256 100,710 39% Lloyd's Operations: Marine 22,730 23,978 -5% 62,790 63,038 0% Professional Liability 624 - NM 624 - NM Other 3,228 3,146 3% 6,677 5,876 14% -------- -------- -------- -------- 26,582 27,124 -2% 70,091 68,914 2% -------- -------- -------- -------- Total $ 93,257 $ 73,689 27% $210,347 $169,624 24% ======== ======== ======== ======== Net Earned Premium: Second Quarter Six Months ---------------- ---------------- Insurance Companies: 2005 2004 Change 2005 2004 Change -------- ------- ------ -------- ------- ------ Marine $ 23,330 $ 20,834 12% $ 43,209 $ 41,262 5% Specialty 29,442 21,365 38% 49,464 42,904 15% Professional Liability 6,990 4,697 49% 13,707 8,507 61% Assumed from Lloyd's (675) 4,878 NM 36 12,283 NM Other (includes run- off) 20 8 NM 54 8 NM -------- -------- -------- -------- 59,107 51,782 14% 106,470 104,964 1% Lloyd's Operations: Marine 25,563 22,325 15% 55,190 42,843 29% Professional Liability 166 - NM 166 - NM Other 996 1,207 -17% 1,544 1,682 -8% -------- -------- -------- -------- 26,725 23,532 14% 56,900 44,525 28% -------- -------- -------- -------- Total $ 85,832 $ 75,314 14% $163,370 $149,489 9% ======== ======== ======== ======== THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES Segment Information Quarter Ended June 30, 2005 ($'s in thousands) Insurance Lloyd's Navigators Parent & Companies Operations Agencies Other(1) Total --------------------------------------------------- Gross premium written $130,680 $ 58,547 $ 906 $190,133 Net premium written 66,675 26,582 - 93,257 Revenues: Net earned premium 59,107 26,725 - 85,832 Commission income - 359 $ 11,431 (10,276) 1,514 Investment Income 7,485 1,454 1 21 8,961 Net realized capital gains / (losses) 681 (265) - - 416 Other income 209 1 260 - 470 -------- --------- --------- -------- -------- Total revenues 67,482 28,274 11,692 (10,255) 97,193 -------- --------- --------- -------- -------- Operating expenses: Net losses and loss adjustment expenses 38,682 14,929 - - 53,611 Commission expense 13,868 4,833 - (9,459) 9,242 Other operating expenses 2,009 4,310 11,163 146 17,628 -------- --------- --------- -------- -------- Total operating expenses 54,559 24,072 11,163 (9,313) 80,481 -------- --------- --------- -------- -------- Income (loss) before income tax expense (benefit) 12,923 4,202 529 (942) 16,712 Income tax expense (benefit) 4,045 1,471 245 (329) 5,432 -------- --------- --------- -------- -------- Net Income (loss) 8,878 2,731 284 (613) 11,280 ======== ========= ========= ======== ======== Loss and loss expenses ratio 65.4% 55.9% 62.5% Commission expense ratio 23.5% 18.2% 21.7% Other operating expense ratio 3.4% 16.1% 7.4% -------- --------- -------- Combined ratio 92.3% 90.2% 91.6% ======== ========= ======== Notes: (1)Includes inter-segment eliminations. THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES Segment Information Quarter Ended June 30, 2004 ($'s in thousands) Insurance Lloyd's Navigators Parent & Companies Operations Agencies Other(1) Total -------------------------------------------------- Gross premium written $107,608 $ 54,308 $ (290) $161,626 Net premium written 46,565 27,124 - 73,689 Revenues: Net earned premium 51,782 23,532 - 75,314 Commission income - 501 $ 8,155 (7,295) 1,361 Investment Income 5,829 791 - 5 6,625 Net realized capital gains / (losses) 176 (281) - - (105) Other income 74 5 187 - 266 -------- --------- --------- ------- -------- Total revenues 57,861 24,548 8,342 (7,290) 83,461 -------- --------- --------- ------- -------- Operating expenses: Net losses and loss adjustment expenses 32,558 12,834 - - 45,392 Commission expense 13,242 4,093 - (7,295) 10,040 Other operating expenses 989 3,193 9,093 1,345 14,620 -------- --------- --------- ------- -------- Total operating expenses 46,789 20,120 9,093 (5,950) 70,052 -------- --------- --------- ------- -------- Income (loss) before income tax expense (benefit) 11,072 4,428 (751) (1,340) 13,409 Income tax expense (benefit) 3,543 1,550 (252) (469) 4,372 -------- --------- --------- ------- -------- Net Income (loss) 7,529 2,878 (499) (871) 9,037 ======== ========= ========= ======= ======== Loss and loss expenses ratio 62.9% 54.5% 60.2% Commission expense ratio 25.6% 17.4% 23.0% Other operating expense ratio 1.9% 13.6% 5.6% -------- --------- -------- Combined ratio 90.4% 85.5% 88.8% ======== ========= ======== Notes: (1)Includes inter-segment eliminations. THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES Segment Information Six Months Ended June 30, 2005 ($'s in thousands) Insurance Lloyd's Navigators Parent & Companies Operations Agencies Other(1) Total --------------------------------------------------- Gross premium written $259,968 $ 146,377 $ 784 $407,129 Net premium written 140,256 70,091 - 210,347 Revenues: Net earned premium 106,470 56,900 - 163,370 Commission income - 627 $ 21,181 (19,024) 2,784 Investment Income 14,340 2,203 3 37 16,583 Net realized capital gains / (losses) 947 (364) - - 583 Other income 207 629 531 - 1,367 -------- --------- --------- -------- -------- Total revenues 121,964 59,995 21,715 (18,987) 184,687 -------- --------- --------- -------- -------- Operating expenses: Net losses and loss adjustment expenses 67,524 32,308 - - 99,832 Commission expense 26,454 9,714 - (17,322) 18,846 Other operating expenses 4,121 9,071 22,159 (279) 35,072 -------- --------- --------- -------- -------- Total operating expenses 98,099 51,093 22,159 (17,601) 153,750 -------- --------- --------- -------- -------- Income (loss) before income tax expense (benefit) 23,865 8,902 (444) (1,386) 30,937 Income tax expense (benefit) 7,444 3,116 (117) (485) 9,958 -------- --------- --------- -------- -------- Net Income (loss) $ 16,421 $ 5,786 $ (327) $ (901) $ 20,979 ======== ========= ========= ======== ======== Loss and loss expenses ratio 63.4% 56.8% 61.1% Commission expense ratio 24.8% 17.1% 22.1% Other operating expense ratio 3.9% 15.9% 8.1% -------- --------- -------- Combined ratio 92.1% 89.8% 91.3% ======== ========= ======== Notes: (1)Includes inter-segment eliminations. THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES Segment Information Six Months Ended June 30, 2004 ($'s in thousands) Insurance Lloyd's Navigators Parent & Companies Operations Agencies Other (1) Total --------------------------------------------------- Gross premium written $219,437 $ 141,466 $ (3,326) $357,577 Net premium written 100,710 68,914 - 169,624 Revenues: Net earned premium 104,964 44,525 - 149,489 Commission income - 563 $ 16,087 (14,162) 2,488 Investment Income 11,313 1,195 3 16 12,527 Net realized capital gains 381 (64) - - 317 Other income 13 9 372 - 394 -------- --------- --------- -------- -------- Total revenues 116,671 46,228 16,462 (14,146) 165,215 -------- --------- --------- -------- -------- Operating expenses: Net losses and loss adjustment expenses 65,268 23,876 - - 89,144 Commission expense 27,387 7,843 - (14,162) 21,068 Other operating expenses 2,187 6,229 17,698 1,938 28,052 -------- --------- --------- -------- -------- Total operating expenses 94,842 37,948 17,698 (12,224) 138,264 -------- --------- --------- -------- -------- Income (loss) before income tax expense (benefit) 21,829 8,280 (1,236) (1,922) 26,951 Income tax expense (benefit) 7,021 2,898 (392) (526) 9,001 -------- --------- --------- -------- -------- Net Income (loss) $ 14,808 $ 5,382 $ (844) $ (1,396) $ 17,950 ======== ========= ========= ======== ======== Loss and loss expenses ratio 62.2% 53.6% 59.6% Commission expense ratio 26.1% 17.6% 23.6% Other operating expense ratio 2.1% 14.0% 5.6% -------- --------- -------- Combined ratio 90.4% 85.2% 88.8% ======== ========= ======== Notes: (1)Includes inter-segment eliminations. THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES Underwriting Results ($'s in thousands) Three Months Ended June 30, 2005 ------------------------------------------------- Net Losses Combined Ratio Earned and LAE Underwriting ------------------ Insurance Companies: Premium Incurred Expenses Loss Expense Total ------------------------------------------------- Marine $23,330 $15,868 $5,592 68.0% 24.0% 92.0% Specialty 29,442 18,922 8,901 64.3% 30.2% 94.5% Professional Liability 6,990 5,031 1,926 72.0% 27.6% 99.6% Assumed from Lloyd's (675) (888) (16) NM NM NM Other (includes run- off) 20 (251) (526) NM NM NM ------------------------------------------------- 59,107 38,682 15,877 65.4% 26.9% 92.3% Lloyd's Operations 26,725 14,929 9,143 55.9% 34.3% 90.2% ------------------------------------------------- Total $85,832 $53,611 $25,020 62.5% 29.1% 91.6% ================================================= Three Months Ended June 30, 2004 ------------------------------------------------- Net Losses Combined Ratio Earned and LAE Underwriting ------------------ Insurance Companies: Premium Incurred Expenses Loss Expense Total ------------------------------------------------- Marine $20,834 $12,423 $5,660 59.6% 27.2% 86.8% Specialty 21,365 14,485 5,877 67.8% 27.5% 95.3% Professional Liability 4,697 2,832 969 60.3% 20.6% 80.9% Assumed from Lloyd's 4,878 2,728 1,723 55.9% 35.3% 91.2% Other (includes run- off) 8 90 2 NM NM NM ------------------------------------------------- 51,782 32,558 14,231 62.9% 27.5% 90.4% Lloyd's Operations 23,532 12,834 7,286 54.5% 31.0% 85.5% ================================================= Total $75,314 $45,392 $21,517 60.2% 28.6% 88.8% ================================================= THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES Underwriting Results ($'s in thousands) Six Months Ended June 30, 2005 --------------------------------------------------- Net Losses Combined Ratio Insurance Earned and LAE Underwriting ------------------- Companies: Premium Incurred Expenses Loss Expense Total --------------------------------------------------- Marine $43,209 $28,611 $11,112 66.2% 25.7% 91.9% Specialty 49,464 30,455 15,751 61.6% 31.8% 93.4% Professional Liability 13,707 9,471 3,927 69.1% 28.7% 97.8% Assumed from Lloyd's 36 (315) 306 NM NM NM Other (includes run-off) 54 (698) (521) NM NM NM --------------------------------------------------- 106,470 67,524 30,575 63.4% 28.7% 92.1% Lloyd's Operations 56,900 32,308 18,785 56.8% 33.0% 89.8% --------------------------------------------------- Total $163,370 $99,832 $49,360 61.1% 30.2% 91.3% =================================================== Six Months Ended June 30, 2004 --------------------------------------------------- Net Losses Combined Ratio Insurance Earned and LAE Underwriting ------------------- Companies: Premium Incurred Expenses Loss Expense Total --------------------------------------------------- Marine $41,262 $24,469 $11,258 59.3% 27.3% 86.6% Specialty 42,904 28,802 12,845 67.1% 30.0% 97.1% Professional Liability 8,507 5,131 1,744 60.3% 20.5% 80.8% Assumed from Lloyd's 12,283 6,945 3,722 56.5% 30.3% 86.8% Other (includes run-off) 8 (79) 5 NM NM NM --------------------------------------------------- 104,964 65,268 29,574 62.2% 28.2% 90.4% Lloyd's Operations 44,525 23,876 14,072 53.6% 31.6% 85.2% --------------------------------------------------- Total $149,489 $89,144 $43,646 59.6% 29.2% 88.8% =================================================== THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES Net Loss Reserves ($'s in thousands) 6/30/2005 12/31/2004 ------------ ------------ Insurance Companies: Marine $ 137,852 $ 130,439 Specialty 167,846 150,347 Professional Liability 27,227 19,001 Assumed from Lloyd's Operations 32,119 37,790 Other (primarily run-off business) 20,849 22,512 ------------ ------------ Total Insurance Companies 385,893 360,089 ------------ ------------ Lloyd's Operations: Marine 109,529 99,565 Other 3,874 4,134 ------------ ------------ Total Lloyd's Operations 113,403 103,699 ------------ ------------ Total net loss reserves $ 499,296 $ 463,788 ============ ============ Total net case loss reserves $ 200,978 $ 189,746 Total net IBNR loss reserves 298,318 274,042 ------------ ------------ Total net loss reserves $ 499,296 $ 463,788 ============ ============ Asbestos & Environmental Claim Data ($'s in thousands) Six Months Ended June 30, 2005 Asbestos Environmental Total ------------- ------------- ------------- Gross of Reinsurance Beginning reserve $ 78,421 $ 7,513 $ 85,934 Incurred loss & LAE 306 3,493 3,799 Calendar year payments 3,984 2,114 6,098 ------------ ------------ ------------ Ending reserves $ 74,743 $ 8,892 $ 83,635 ============ ============ ============ Net of Reinsurance Beginning reserve $ 31,394 $ 1,494 $ 32,888 Incurred loss & LAE 237 1,038 1,275 Calendar year payments 1,440 1,022 2,462 ------------ ------------ ------------ Ending reserves $ 30,191 $ 1,510 $ 31,701 ============ ============ ============ Outstanding Claim Count 136 105 241 ============ ============ ============ CONTACT: The Navigators Group, Inc. Paul J. Malvasio Executive Vice President and Chief Financial Officer 914-933-6088 pmalvasio@navg.com www.navg.com -----END PRIVACY-ENHANCED MESSAGE-----