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 2, 2012
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.) | ||
6 International Drive, Rye Brook, New York | 10573 | |||
(Address of Principal Executive Offices) | (Zip Code) |
Registrants 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:
¨ | 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
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 Exhibit 99.1 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, 2012, The Navigators Group, Inc. issued a press release announcing its earnings for the second quarter of 2012. This press release is attached hereto as Exhibit 99.1.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 2, 2012, the board of directors (the Board) of The Navigators Group, Inc. (the Company) appointed Saul Basch as an independent member of the Board, effective immediately. Mr. Basch began his career at Coopers & Lybrand with a concentration on insurance industry clients, ultimately acting as the Industry Leader and Senior Partner of the companys Metropolitan New York Insurance Practice. He joined HSB Group, Inc. in 1995, ultimately serving as Vice Chairman, Chief Financial Officer and Treasurer. Mr. Basch retired from active employment with HSB Group, Inc. in 2012.
Mr. Basch has been appointed to the Audit Committee and the Finance Committee of the Board.
A copy of the Companys press release, dated August 2, 2012, announcing Mr. Baschs appointment is attached hereto as Exhibit 99.2 and incorporated herein by reference.
Item 7.01. Regulation FD Disclosure
See Item 2.02, above.
Item 9.01. Financial Statements and Exhibits
(d) | Exhibits |
99.1 | Second Quarter Earnings Press Release dated August 2, 2012. | |
99.2 | Press Release dated August 2, 2012. |
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 and General Counsel |
Date: August 3, 2012
EXHIBIT INDEX
Exhibit No. |
Exhibit | |
99.1 | Second Quarter Earnings Press Release dated August 2, 2012. | |
99.2 | Press Release dated August 2, 2012. |
Exhibit 99.1
![]() |
The Navigators Group, Inc. |
CORPORATE NEWS
Navigators Reports Second Quarter Earnings
New York August 2, 2012 The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $14.9 million, or $1.05 per diluted share, for the three months ended June 30, 2012 compared to $9.5 million, or $0.60 per diluted share, for the comparable period in 2011. Operating earnings were $12.5 million, or $0.88 per diluted share, for the second quarter of 2012 compared to operating earnings of $8.0 million, or $0.51 per diluted share, for the comparable period in 2011.
For the six months ended June 30, 2012, the Company reported net income of $22.8 million, or $1.60 per diluted share, compared to $1.6 million, or $0.10 per diluted share, for the comparable period in 2011. Operating earnings were $19.3 million, or $1.35 per diluted share, for the six months ended June 30, 2012 compared to $1.2 million, or $0.08 per diluted share, for the comparable period in 2011.
Gross written premiums and net written premiums for the three months ended June 30, 2012 were $323.0 million and $190.3 million, respectively, an increase of 15.9% and 3.8% from the comparable period in 2011. Gross written premiums and net written premiums for the six months ended June 30, 2012 were $666.1 million and $433.3 million, respectively, an increase of 15.9% and 15.1% from the comparable period in 2011.
The combined loss and expense ratio for the three and six months ended June 30, 2012 were 98.1% and 99.0%, respectively, compared to 101.9% and 109.0% for the comparable periods in 2011.
Stan Galanski, President and Chief Executive Officer, commented, We are pleased to have produced profitable underwriting results and particularly with the performance of our Lloyds unit. Our underwriters continue to be highly selective and focused on identifying good opportunities in what are generally improving market conditions. We continue to invest in expanding our underwriting teams as well as our executive management.
Stockholders equity was $841.8 million, or $60.08 per share, as of June 30, 2012 compared to $803.4 million, or $57.57 per share, as of December 31, 2011.
Net investment income for the three and six months ended June 30, 2012 was $15.8 million and $27.0 million, respectively, a decrease of 9.5% and 22.3% from the comparable periods in 2011. Investment income for the six months ended June 30, 2012 was reduced by $4.5 million as a result of the settlement of a dispute with Equitas over foregone interest on amounts that were due on certain reinsurance contracts. The annualized pre-tax investment yield, excluding net realized gains and losses and net other-than-temporary impairment losses recognized in earnings, was 2.8% and 2.4% for the three and six months ended June 30, 2012, compared to 3.3% for each of the comparable periods in 2011. The effective tax rate on net investment income was 28.2% and 26.9% for the three and six months ended June 30, 2012, compared to 28.7% and 28.6% for the comparable periods in 2011.
6 International Drive | Rye Brook, NY 10573 | |||||||||
TEL (914) 933-6000 | FAX (914) 934-2355 |
News Release
August 2, 2012
Page 2
The Companys investment portfolio mainly consists of fixed income securities with an average quality rating of AA/Aa as defined by Standard & Poors and Moodys, respectively, and an average effective duration of 3.9 years as of June 30, 2012. As of June 30, 2012, net unrealized gains within our investment portfolio were $118.0 million, an increase of $24.3 million compared to December 31, 2011. There were $3.7 million and $5.4 million of net realized gains including other-than-temporary impairment losses recognized in earnings for the three and six months ended June 30, 2012, respectively, compared to $2.5 million and $0.8 million for the same periods in 2011.
Consolidated net cash flow from operations for the three and six months ended June 30, 2012 were $(1.3) million and $15.0 million, respectively, compared to $1.1 million and $14.4 million for the comparable periods in 2011.
The Company will hold a conference call on Friday, August 3, 2012 starting at 8:30 a.m. ET to discuss the 2012 second quarter results. The call will be available via live webcast on Navigators website (www.navg.com).
To participate by telephone, the domestic dial-in number is (800) 850-2903 and the international dial-in is (224) 357-2399. Participants may connect to the webcast at:
http://investor.shareholder.com/navg/eventdetail.cfm?eventid=115554
Operating earnings, or net income excluding after-tax net realized gains (losses) and net other-than-temporary impairment losses recognized in earnings, 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 Navigators Group, Inc. is an international specialty insurance holding company with insurance company operations, underwriting management companies, and operations at Lloyds 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. 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: | Ciro M. DeFalco |
Senior Vice President and Chief Financial Officer
(914) 933-6043
cdefalco@navg.com
www.navg.com
News Release
Page 3
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Financial Highlights
($ in thousands, except share and per share data)
(unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||
Results of Operations |
2012 | 2011 | Change | 2012 | 2011 | Change | ||||||||||||||||||
Gross written premiums |
$ | 322,987 | $ | 278,714 | 15.9 | % | $ | 666,136 | $ | 574,997 | 15.9 | % | ||||||||||||
Net written premiums |
190,252 | 183,363 | 3.8 | % | 433,297 | 376,439 | 15.1 | % | ||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Net earned premiums |
196,017 | 173,777 | 12.8 | % | 379,136 | 326,255 | 16.2 | % | ||||||||||||||||
Net investment income |
15,777 | 17,429 | -9.5 | % | 27,035 | 34,813 | -22.3 | % | ||||||||||||||||
Total other-than-temporary impairment losses |
(496 | ) | (833 | ) | -40.5 | % | (693 | ) | (1,096 | ) | -36.8 | % | ||||||||||||
Portion of loss recognized in other comprehensive income (before tax) |
| 301 | NM | 43 | 322 | -86.6 | % | |||||||||||||||||
|
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|
|
|
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|
|||||||||||||||||
Net other-than-temporary impairment losses recognized in earnings |
(496 | ) | (532 | ) | -6.8 | % | (650 | ) | (774 | ) | -16.0 | % | ||||||||||||
Net realized gains (losses) |
4,217 | 3,006 | 40.3 | % | 6,059 | 1,618 | NM | |||||||||||||||||
Other income |
387 | 573 | -32.5 | % | 1,298 | 1,564 | -17.0 | % | ||||||||||||||||
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|
|||||||||||||||||
Total revenues |
215,902 | 194,253 | 11.1 | % | 412,878 | 363,476 | 13.6 | % | ||||||||||||||||
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Expenses: |
||||||||||||||||||||||||
Net losses and loss adjustment expenses |
123,407 | 113,863 | 8.4 | % | 241,392 | 230,651 | 4.7 | % | ||||||||||||||||
Commission expenses |
29,503 | 28,030 | 5.3 | % | 58,953 | 54,230 | 8.7 | % | ||||||||||||||||
Other operating expenses |
39,819 | 35,777 | 11.3 | % | 76,126 | 72,352 | 5.2 | % | ||||||||||||||||
Interest expense |
2,049 | 2,047 | 0.1 | % | 4,098 | 4,093 | 0.1 | % | ||||||||||||||||
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|
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|
|||||||||||||||||
Total expenses |
194,778 | 179,717 | 8.4 | % | 380,569 | 361,326 | 5.3 | % | ||||||||||||||||
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|
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Income before income taxes |
21,124 | 14,536 | 45.3 | % | 32,309 | 2,150 | NM | |||||||||||||||||
Income tax expense (benefit) |
6,225 | 5,032 | 23.7 | % | 9,506 | 539 | NM | |||||||||||||||||
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Net income (loss) |
$ | 14,899 | $ | 9,504 | 56.8 | % | $ | 22,803 | $ | 1,611 | NM | |||||||||||||
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Per Share Data |
||||||||||||||||||||||||
Net income per common share: |
||||||||||||||||||||||||
Basic |
$ | 1.06 | $ | 0.62 | 71.6 | % | $ | 1.63 | $ | 0.10 | NM | |||||||||||||
Diluted |
$ | 1.05 | $ | 0.60 | 74.8 | % | $ | 1.60 | $ | 0.10 | NM | |||||||||||||
Average common shares outstanding: |
||||||||||||||||||||||||
Basic |
14,006,361 | 15,372,670 | 13,992,901 | 15,554,670 | ||||||||||||||||||||
Diluted |
14,208,759 | 15,725,850 | 14,245,947 | 15,943,804 | ||||||||||||||||||||
Underwriting Ratios |
||||||||||||||||||||||||
Loss Ratio |
63.0 | % | 65.5 | % | 63.7 | % | 70.7 | % | ||||||||||||||||
Expense Ratio |
35.1 | % | 36.4 | % | 35.3 | % | 38.3 | % | ||||||||||||||||
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Combined Ratio |
98.1 | % | 101.9 | % | 99.0 | % | 109.0 | % | ||||||||||||||||
Balance Sheet Data |
June 30, 2012 |
March 31, 2012 |
June 30, 2012 |
Dec. 31, 2011 |
||||||||||||||||||||
Stockholders equity |
$ | 841,808 | $ | 818,217 | 2.9 | % | $ | 841,808 | $ | 803,435 | 4.8 | % | ||||||||||||
Book value per share |
$ | 60.08 | $ | 58.44 | 2.8 | % | $ | 60.08 | $ | 57.57 | 4.4 | % |
News Release
Page 4
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands, except share data)
June 30, | December 31, | |||||||
2012 | 2011 | |||||||
(unaudited) | ||||||||
ASSETS |
| |||||||
Investments and cash: |
||||||||
Fixed maturities, available-for-sale, at fair value (amortized cost: 2012, $1,935,631; 2011, $1,816,710) |
$ | 2,024,429 | $ | 1,888,069 | ||||
Equity securities, available-for-sale, at fair value (cost: 2012, $74,457; 2011, $73,567) |
103,649 | 95,849 | ||||||
Short-term investments, at cost which approximates fair value |
161,983 | 122,220 | ||||||
Cash |
45,842 | 127,360 | ||||||
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|
|
|||||
Total investments and cash |
2,335,903 | 2,233,498 | ||||||
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|
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Premiums receivable |
372,379 | 255,725 | ||||||
Prepaid reinsurance premiums |
211,089 | 164,162 | ||||||
Reinsurance recoverable on paid losses |
37,431 | 43,791 | ||||||
Reinsurance recoverable on unpaid losses and loss adjustment expenses |
849,146 | 845,445 | ||||||
Deferred policy acquisition costs |
64,509 | 63,984 | ||||||
Accrued investment income |
14,079 | 14,492 | ||||||
Goodwill and other intangible assets |
6,925 | 6,869 | ||||||
Current income tax receivable, net |
13,032 | 15,391 | ||||||
Other Assets |
34,573 | 26,650 | ||||||
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|
|||||
Total assets |
$ | 3,939,066 | $ | 3,670,007 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
| |||||||
Liabilities: |
||||||||
Reserves for losses and loss adjustment expenses |
$ | 2,088,524 | $ | 2,082,679 | ||||
Unearned premiums |
633,920 | 532,628 | ||||||
Reinsurance balances payable |
144,078 | 108,699 | ||||||
Senior notes |
114,348 | 114,276 | ||||||
Deferred income tax, net |
3,120 | 6,291 | ||||||
Accounts payable and other liabilities |
113,268 | 21,999 | ||||||
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Total liabilities |
3,097,258 | 2,866,572 | ||||||
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|
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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 17,522,949 shares for 2012 and 17,467,615 shares for 2011 |
1,752 | 1,746 | ||||||
Additional paid-in capital |
324,956 | 322,133 | ||||||
Treasury stock, at cost (3,511,380 shares for 2012 and 2011) |
(155,801 | ) | (155,801 | ) | ||||
Retained earnings |
587,912 | 565,109 | ||||||
Accumulated other comprehensive income |
82,989 | 70,248 | ||||||
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|
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Total stockholders equity |
841,808 | 803,435 | ||||||
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Total liabilities and stockholders equity |
$ | 3,939,066 | $ | 3,670,007 | ||||
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News Release
Page 5
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Comparative Premium Data
($ in thousands)
Three Months | Six Months | |||||||||||||||||||||||
2012 | 2011 | Change | 2012 | 2011 | Change | |||||||||||||||||||
Gross Written Premiums: |
||||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||
Marine |
$ | 49,896 | $ | 58,323 | -14.4 | % | $ | 111,761 | $ | 128,671 | -13.1 | % | ||||||||||||
Property Casualty |
130,627 | 100,131 | 30.5 | % | 286,546 | 213,019 | 34.5 | % | ||||||||||||||||
Professional Liability |
33,541 | 28,313 | 18.5 | % | 64,095 | 51,853 | 23.6 | % | ||||||||||||||||
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214,064 | 186,767 | 14.6 | % | 462,402 | 393,543 | 17.5 | % | |||||||||||||||||
Lloyds Operations: |
||||||||||||||||||||||||
Marine |
46,482 | 39,451 | 17.8 | % | 108,812 | 100,606 | 8.2 | % | ||||||||||||||||
Property Casualty |
49,533 | 42,122 | 17.6 | % | 73,274 | 61,424 | 19.3 | % | ||||||||||||||||
Professional Liability |
12,908 | 10,374 | 24.4 | % | 21,648 | 19,424 | 11.4 | % | ||||||||||||||||
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108,923 | 91,947 | 18.5 | % | 203,734 | 181,454 | 12.3 | % | |||||||||||||||||
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Total |
$ | 322,987 | $ | 278,714 | 15.9 | % | $ | 666,136 | $ | 574,997 | 15.9 | % | ||||||||||||
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Three Months | Six Months | |||||||||||||||||||||||
2012 | 2011 | Change | 2012 | 2011 | Change | |||||||||||||||||||
Net Written Premiums: |
||||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||
Marine |
$ | 31,786 | $ | 41,802 | -24.0 | % | $ | 74,651 | $ | 96,020 | -22.3 | % | ||||||||||||
Property Casualty |
76,842 | 62,015 | 23.9 | % | 191,374 | 124,922 | 53.2 | % | ||||||||||||||||
Professional Liability |
25,437 | 19,387 | 31.2 | % | 49,290 | 33,002 | 49.4 | % | ||||||||||||||||
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134,065 | 123,204 | 8.8 | % | 315,315 | 253,944 | 24.2 | % | |||||||||||||||||
Lloyds Operations: |
||||||||||||||||||||||||
Marine |
33,025 | 32,042 | 3.1 | % | 81,550 | 81,713 | -0.2 | % | ||||||||||||||||
Property Casualty |
16,172 | 22,682 | -28.7 | % | 25,060 | 31,068 | -19.3 | % | ||||||||||||||||
Professional Liability |
6,990 | 5,435 | 28.6 | % | 11,372 | 9,714 | 17.1 | % | ||||||||||||||||
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|
|||||||||||||||||
56,187 | 60,159 | -6.6 | % | 117,982 | 122,495 | -3.7 | % | |||||||||||||||||
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|
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Total |
$ | 190,252 | $ | 183,363 | 3.8 | % | $ | 433,297 | $ | 376,439 | 15.1 | % | ||||||||||||
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Three Months | Six Months | |||||||||||||||||||||||
2012 | 2011 | Change | 2012 | 2011 | Change | |||||||||||||||||||
Net Earned Premiums: |
||||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||
Marine |
$ | 35,535 | $ | 41,877 | -15.1 | % | $ | 70,810 | $ | 82,436 | -14.1 | % | ||||||||||||
Property Casualty |
82,175 | 55,351 | 48.5 | % | 156,543 | 98,286 | 59.3 | % | ||||||||||||||||
Professional Liability |
23,867 | 17,759 | 34.4 | % | 45,772 | 33,085 | 38.3 | % | ||||||||||||||||
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|||||||||||||||||
141,577 | 114,987 | 23.1 | % | 273,125 | 213,807 | 27.7 | % | |||||||||||||||||
Lloyds Operations: |
||||||||||||||||||||||||
Marine |
32,927 | 37,734 | -12.7 | % | 67,536 | 74,712 | -9.6 | % | ||||||||||||||||
Property Casualty |
16,617 | 16,259 | 2.2 | % | 29,774 | 28,153 | 5.8 | % | ||||||||||||||||
Professional Liability |
4,896 | 4,797 | 2.1 | % | 8,701 | 9,583 | -9.2 | % | ||||||||||||||||
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54,440 | 58,790 | -7.4 | % | 106,011 | 112,448 | -5.7 | % | |||||||||||||||||
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Total |
$ | 196,017 | $ | 173,777 | 12.8 | % | $ | 379,136 | $ | 326,255 | 16.2 | % | ||||||||||||
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News Release
Page 6
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Three Months Ended
June 30, 2012
($ in thousands)
Insurance | Lloyds | |||||||||||||||
Companies | Operations | Corporate (1) | Total | |||||||||||||
Gross written premiums |
$ | 214,064 | $ | 108,923 | $ | | $ | 322,987 | ||||||||
Net written premiums |
134,065 | 56,187 | | 190,252 | ||||||||||||
Net earned premiums |
141,577 | 54,440 | | 196,017 | ||||||||||||
Net losses and loss adjustment expenses |
(100,003 | ) | (23,404 | ) | | (123,407 | ) | |||||||||
Commission expenses |
(21,117 | ) | (8,938 | ) | 552 | (29,503 | ) | |||||||||
Other operating expenses |
(28,914 | ) | (10,905 | ) | | (39,819 | ) | |||||||||
Other income (expense) |
879 | 60 | (552 | ) | 387 | |||||||||||
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Underwriting profit (loss) |
(7,578 | ) | 11,253 | | 3,675 | |||||||||||
Net investment income |
13,286 | 2,454 | 37 | 15,777 | ||||||||||||
Net realized gains (losses) |
2,325 | 1,396 | | 3,721 | ||||||||||||
Interest expense |
| | (2,049 | ) | (2,049 | ) | ||||||||||
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Income (loss) before income taxes |
8,033 | 15,103 | (2,012 | ) | 21,124 | |||||||||||
Income tax expense (benefit) |
2,101 | 5,207 | (1,083 | ) | 6,225 | |||||||||||
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Net income (loss) |
$ | 5,932 | $ | 9,896 | $ | (929 | ) | $ | 14,899 | |||||||
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Losses and loss adjustment expenses ratio |
70.6 | % | 43.0 | % | 63.0 | % | ||||||||||
Commission expense ratio |
14.9 | % | 16.4 | % | 15.1 | % | ||||||||||
Other operating expense ratio (2) |
19.9 | % | 19.9 | % | 20.0 | % | ||||||||||
|
|
|
|
|
|
|||||||||||
Combined ratio |
105.4 | % | 79.3 | % | 98.1 | % | ||||||||||
|
|
|
|
|
|
(1) | The Corporate segment includes intercompany eliminations. |
(2) | The Other operating expense ratio includes Other income (expense). |
News Release
Page 7
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Three Months Ended
June 30, 2011
($ in thousands)
Insurance Companies |
Lloyds Operations |
Corporate (1) | Total | |||||||||||||
Gross written premiums |
$ | 186,767 | $ | 91,947 | $ | | $ | 278,714 | ||||||||
Net written premiums |
123,204 | 60,159 | | 183,363 | ||||||||||||
Net earned premiums |
114,987 | 58,790 | | 173,777 | ||||||||||||
Net losses and loss adjustment expenses |
(77,330 | ) | (36,533 | ) | | (113,863 | ) | |||||||||
Commission expenses |
(16,402 | ) | (12,042 | ) | 414 | (28,030 | ) | |||||||||
Other operating expenses |
(26,516 | ) | (9,261 | ) | | (35,777 | ) | |||||||||
Other income (expense) |
626 | 361 | (414 | ) | 573 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Underwriting profit (loss) |
(4,635 | ) | 1,315 | | (3,320 | ) | ||||||||||
Net investment income |
14,989 | 2,320 | 120 | 17,429 | ||||||||||||
Net realized gains (losses) |
3,100 | (798 | ) | 172 | 2,474 | |||||||||||
Interest expense |
| | (2,047 | ) | (2,047 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income taxes |
13,454 | 2,837 | (1,755 | ) | 14,536 | |||||||||||
Income tax expense (benefit) |
4,617 | 1,029 | (614 | ) | 5,032 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | 8,837 | $ | 1,808 | $ | (1,141 | ) | $ | 9,504 | |||||||
|
|
|
|
|
|
|
|
|||||||||
Losses and loss adjustment expenses ratio |
67.3 | % | 62.1 | % | 65.5 | % | ||||||||||
Commission expense ratio |
14.3 | % | 20.5 | % | 16.1 | % | ||||||||||
Other operating expense ratio (2) |
22.4 | % | 15.2 | % | 20.3 | % | ||||||||||
|
|
|
|
|
|
|||||||||||
Combined ratio |
104.0 | % | 97.8 | % | 101.9 | % | ||||||||||
|
|
|
|
|
|
(1) | The Corporate segment includes intercompany eliminations. |
(2) | The Other operating expense ratio includes Other income (expense). |
News Release
Page 8
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Six Months Ended
June 30, 2012
($ in thousands)
Insurance Companies |
Lloyds Operations |
Corporate (1) | Total | |||||||||||||
Gross written premiums |
$ | 462,402 | $ | 203,734 | $ | | $ | 666,136 | ||||||||
Net written premiums |
315,315 | 117,982 | | 433,297 | ||||||||||||
Net earned premiums |
273,125 | 106,011 | | 379,136 | ||||||||||||
Net losses and loss adjustment expenses |
(191,180 | ) | (50,212 | ) | | (241,392 | ) | |||||||||
Commission expenses |
(40,418 | ) | (19,824 | ) | 1,289 | (58,953 | ) | |||||||||
Other operating expenses |
(54,259 | ) | (21,867 | ) | | (76,126 | ) | |||||||||
Other income (expense) |
2,521 | 66 | (1,289 | ) | 1,298 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Underwriting profit (loss) |
(10,211 | ) | 14,174 | | 3,963 | |||||||||||
Net investment income |
22,221 | 4,737 | 77 | 27,035 | ||||||||||||
Net realized gains (losses) |
4,200 | 1,209 | | 5,409 | ||||||||||||
Interest expense |
| | (4,098 | ) | (4,098 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income taxes |
16,210 | 20,120 | (4,021 | ) | 32,309 | |||||||||||
Income tax expense (benefit) |
3,980 | 6,933 | (1,407 | ) | 9,506 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | 12,230 | $ | 13,187 | $ | (2,614 | ) | $ | 22,803 | |||||||
|
|
|
|
|
|
|
|
|||||||||
Losses and loss adjustment expenses ratio |
70.0 | % | 47.4 | % | 63.7 | % | ||||||||||
Commission expense ratio |
14.8 | % | 18.7 | % | 15.5 | % | ||||||||||
Other operating expense ratio (2) |
18.9 | % | 20.5 | % | 19.8 | % | ||||||||||
|
|
|
|
|
|
|||||||||||
Combined ratio |
103.7 | % | 86.6 | % | 99.0 | % | ||||||||||
|
|
|
|
|
|
(1) | The Corporate segment includes intercompany eliminations. |
(2) | The Other operating expense ratio includes Other income (expense). |
News Release
Page 9
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Six Months Ended
June 30, 2011
($ in thousands)
Insurance Companies |
Lloyds Operations |
Corporate (1) | Total | |||||||||||||
Gross written premiums |
$ | 393,543 | $ | 181,454 | $ | | $ | 574,997 | ||||||||
Net written premiums |
253,944 | 122,495 | | 376,439 | ||||||||||||
Net earned premiums |
213,807 | 112,448 | | 326,255 | ||||||||||||
Net losses and loss adjustment expenses |
(152,127 | ) | (78,524 | ) | | (230,651 | ) | |||||||||
Commission expenses |
(28,742 | ) | (26,449 | ) | 961 | (54,230 | ) | |||||||||
Other operating expenses |
(53,315 | ) | (19,037 | ) | | (72,352 | ) | |||||||||
Other income (expense) |
2,317 | 208 | (961 | ) | 1,564 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Underwriting profit (loss) |
(18,060 | ) | (11,354 | ) | | (29,414 | ) | |||||||||
Net investment income |
29,972 | 4,575 | 266 | 34,813 | ||||||||||||
Net realized gains (losses) |
2,855 | (2,183 | ) | 172 | 844 | |||||||||||
Interest expense |
| | (4,093 | ) | (4,093 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income taxes |
14,767 | (8,962 | ) | (3,655 | ) | 2,150 | ||||||||||
Income tax expense (benefit) |
4,845 | (3,027 | ) | (1,279 | ) | 539 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | 9,922 | $ | (5,935 | ) | $ | (2,376 | ) | $ | 1,611 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Losses and loss adjustment expenses ratio |
71.2 | % | 69.8 | % | 70.7 | % | ||||||||||
Commission expense ratio |
13.4 | % | 23.5 | % | 16.6 | % | ||||||||||
Other operating expense ratio (2) |
23.8 | % | 16.8 | % | 21.7 | % | ||||||||||
|
|
|
|
|
|
|||||||||||
Combined ratio |
108.4 | % | 110.1 | % | 109.0 | % | ||||||||||
|
|
|
|
|
|
(1) | The Corporate segment includes intercompany eliminations. |
(2) | The Other operating expense ratio includes Other income (expense). |
News Release
Page 10
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Underwriting Results
($ in thousands)
Three Months Ended June 30, 2012 | ||||||||||||||||||||||||||||
Net | Losses | |||||||||||||||||||||||||||
Earned | and LAE | Underwriting | Underwriting | Loss | Expense | Combined | ||||||||||||||||||||||
Premiums | Incurred | Expenses | Profit (Loss) | Ratio | Ratio | Ratio | ||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||||||
Marine |
$ | 35,535 | $ | 30,283 | $ | 13,516 | $ | (8,264 | ) | 85.2 | % | 38.1 | % | 123.3 | % | |||||||||||||
Property Casualty |
82,175 | 49,724 | 26,628 | 5,823 | 60.5 | % | 32.4 | % | 92.9 | % | ||||||||||||||||||
Professional Liability |
23,867 | 19,996 | 9,008 | (5,137 | ) | 83.8 | % | 37.7 | % | 121.5 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Insurance Companies |
141,577 | 100,003 | 49,152 | (7,578 | ) | 70.6 | % | 34.8 | % | 105.4 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Lloyds Operations: |
||||||||||||||||||||||||||||
Marine |
$ | 32,927 | $ | 12,730 | $ | 13,362 | $ | 6,835 | 38.7 | % | 40.5 | % | 79.2 | % | ||||||||||||||
Property Casualty |
16,617 | 7,724 | 4,612 | 4,281 | 46.5 | % | 27.7 | % | 74.2 | % | ||||||||||||||||||
Professional Liability |
4,896 | 2,950 | 1,809 | 137 | 60.3 | % | 36.9 | % | 97.2 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Lloyds |
54,440 | 23,404 | 19,783 | 11,253 | 43.0 | % | 36.3 | % | 79.3 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total All |
$ | 196,017 | $ | 123,407 | $ | 68,935 | $ | 3,675 | 63.0 | % | 35.1 | % | 98.1 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Three Months Ended June 30, 2011 | ||||||||||||||||||||||||||||
Net | Losses | |||||||||||||||||||||||||||
Earned | and LAE | Underwriting | Underwriting | Loss | Expense | Combined | ||||||||||||||||||||||
Premiums | Incurred | Expenses | Profit (Loss) | Ratio | Ratio | Ratio | ||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||||||
Marine |
$ | 41,877 | $ | 26,808 | $ | 15,082 | $ | (13 | ) | 64.0 | % | 36.0 | % | 100.0 | % | |||||||||||||
Property Casualty |
55,351 | 38,429 | 20,458 | (3,536 | ) | 69.4 | % | 37.0 | % | 106.4 | % | |||||||||||||||||
Professional Liability |
17,759 | 12,093 | 6,752 | (1,086 | ) | 68.1 | % | 38.0 | % | 106.1 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Insurance Companies |
114,987 | 77,330 | 42,292 | (4,635 | ) | 67.3 | % | 36.7 | % | 104.0 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Lloyds Operations: |
||||||||||||||||||||||||||||
Marine |
37,734 | 25,532 | 14,574 | (2,372 | ) | 67.7 | % | 38.6 | % | 106.3 | % | |||||||||||||||||
Property Casualty |
16,259 | 6,097 | 4,606 | 5,556 | 37.5 | % | 28.3 | % | 65.8 | % | ||||||||||||||||||
Professional Liability |
4,797 | 4,904 | 1,762 | (1,869 | ) | 102.2 | % | 36.8 | % | 139.0 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Lloyds |
58,790 | 36,533 | 20,942 | 1,315 | 62.1 | % | 35.7 | % | 97.8 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total All |
$ | 173,777 | $ | 113,863 | $ | 63,234 | $ | (3,320 | ) | 65.5 | % | 36.4 | % | 101.9 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts | Loss Ratio | |||||||||||||||
Net Incurred Loss Activity | June 30, | June 30, | June 30, | June 30, | ||||||||||||
For the Three Months Ended: | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Insurance Companies: |
||||||||||||||||
Loss and LAE payments |
$ | 90,311 | $ | 77,278 | 63.8 | % | 67.3 | % | ||||||||
Change in reserves |
9,692 | 52 | 6.8 | % | 0.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net incurred loss and LAE |
100,003 | 77,330 | 70.6 | % | 67.3 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Lloyds Operations: |
||||||||||||||||
Loss and LAE payments |
$ | 30,641 | 26,646 | 56.3 | % | 45.3 | % | |||||||||
Change in reserves |
(7,237 | ) | 9,887 | -13.3 | % | 16.8 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net incurred loss and LAE |
23,404 | 36,533 | 43.0 | % | 62.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
||||||||||||||||
Loss and LAE payments |
120,952 | 103,924 | 61.7 | % | 59.8 | % | ||||||||||
Change in reserves |
2,455 | 9,939 | 1.3 | % | 5.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net incurred loss and LAE |
$ | 123,407 | $ | 113,863 | 63.0 | % | 65.5 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
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: | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Insurance Companies |
$ | (626 | ) | $ | 137 | -0.4 | % | 0.1 | % | |||||||
Lloyds Operations |
5,998 | (952 | ) | 11.0 | % | -1.6 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 5,372 | $ | (815 | ) | 2.7 | % | -0.5 | % | |||||||
|
|
|
|
|
|
|
|
News Release
Page 11
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Underwriting Results
($ in thousands)
Six Months Ended June 30, 2012 | ||||||||||||||||||||||||||||
Net Earned Premiums |
Losses and LAE Incurred |
Underwriting Expenses |
Underwriting Profit (Loss) |
Loss Ratio |
Expense Ratio |
Combined Ratio |
||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||||||
Marine |
$ | 70,810 | $ | 58,053 | $ | 26,171 | $ | (13,414 | ) | 82.0 | % | 36.9 | % | 118.9 | % | |||||||||||||
Property Casualty |
156,543 | 97,872 | 49,482 | 9,189 | 62.5 | % | 31.6 | % | 94.1 | % | ||||||||||||||||||
Professional Liability |
45,772 | 35,255 | 16,503 | (5,986 | ) | 77.0 | % | 36.1 | % | 113.1 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Insurance Companies |
273,125 | 191,180 | 92,156 | (10,211 | ) | 70.0 | % | 33.7 | % | 103.7 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Lloyds Operations: |
||||||||||||||||||||||||||||
Marine |
67,536 | 34,288 | 28,044 | 5,204 | 50.8 | % | 41.5 | % | 92.3 | % | ||||||||||||||||||
Property Casualty |
29,774 | 11,772 | 9,671 | 8,331 | 39.5 | % | 32.5 | % | 72.0 | % | ||||||||||||||||||
Professional Liability |
8,701 | 4,152 | 3,910 | 639 | 47.7 | % | 45.0 | % | 92.7 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Lloyds |
106,011 | 50,212 | 41,625 | 14,174 | 47.4 | % | 39.2 | % | 86.6 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total All |
$ | 379,136 | $ | 241,392 | $ | 133,781 | $ | 3,963 | 63.7 | % | 35.3 | % | 99.0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Six Months Ended June 30, 2011 | ||||||||||||||||||||||||||||
Net Earned Premiums |
Losses and LAE Incurred |
Underwriting Expenses |
Underwriting Profit (Loss) |
Loss Ratio |
Expense Ratio |
Combined Ratio |
||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||||||
Marine |
$ | 82,436 | $ | 54,806 | $ | 28,880 | $ | (1,250 | ) | 66.5 | % | 35.0 | % | 101.5 | % | |||||||||||||
Property Casualty |
98,286 | 74,364 | 38,056 | (14,134 | ) | 75.7 | % | 38.7 | % | 114.4 | % | |||||||||||||||||
Professional Liability |
33,085 | 22,957 | 12,804 | (2,676 | ) | 69.4 | % | 38.7 | % | 108.1 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Insurance Companies |
213,807 | 152,127 | 79,740 | (18,060 | ) | 71.2 | % | 37.2 | % | 108.4 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Lloyds Operations: |
||||||||||||||||||||||||||||
Marine |
74,712 | 50,422 | 29,352 | (5,062 | ) | 67.5 | % | 39.3 | % | 106.8 | % | |||||||||||||||||
Property Casualty |
28,153 | 15,379 | 11,718 | 1,056 | 54.6 | % | 41.6 | % | 96.2 | % | ||||||||||||||||||
Professional Liability |
9,583 | 12,723 | 4,208 | (7,348 | ) | 132.8 | % | 43.9 | % | 176.7 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Lloyds |
112,448 | 78,524 | 45,278 | (11,354 | ) | 69.8 | % | 40.3 | % | 110.1 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total All |
$ | 326,255 | $ | 230,651 | $ | 125,018 | $ | (29,414 | ) | 70.7 | % | 38.3 | % | 109.0 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts | Loss Ratio | |||||||||||||||
Net Incurred Loss Activity | June 30, | June 30, | June 30, | June 30, | ||||||||||||
For the Six Months Ended: | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Insurance Companies: |
||||||||||||||||
Loss and LAE payments |
$ | 183,963 | $ | 143,971 | 67.4 | % | 67.4 | % | ||||||||
Change in reserves |
7,217 | 8,156 | 2.6 | % | 3.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net incurred loss and LAE |
191,180 | 152,127 | 70.0 | % | 71.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Lloyds Operations: |
||||||||||||||||
Loss and LAE payments |
55,285 | 48,658 | 52.2 | % | 43.2 | % | ||||||||||
Change in reserves |
(5,073 | ) | 29,866 | -4.8 | % | 26.6 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net incurred loss and LAE |
50,212 | 78,524 | 47.4 | % | 69.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
||||||||||||||||
Loss and LAE payments |
239,248 | 192,629 | 63.1 | % | 59.0 | % | ||||||||||
Change in reserves |
2,144 | 38,022 | 0.6 | % | 11.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net incurred loss and LAE |
$ | 241,392 | $ | 230,651 | 63.7 | % | 70.7 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
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: | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Insurance Companies |
$ | 2,090 | $ | (1,085 | ) | 0.8 | % | -0.5 | % | |||||||
Lloyds Operations |
10,148 | (3,163 | ) | 9.6 | % | -2.8 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 12,238 | $ | (4,248 | ) | 3.2 | % | -1.3 | % | |||||||
|
|
|
|
|
|
|
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News Release
Page 12
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Loss Data
($ in thousands)
Case | IBNR | |||||||||||
Reserves | Reserves | Total | ||||||||||
Net Loss Reserves, June 30, 2012: |
||||||||||||
Insurance Companies: |
||||||||||||
Marine |
$ | 145,716 | $ | 114,672 | $ | 260,388 | ||||||
Property Casualty |
177,971 | 304,875 | 482,846 | |||||||||
Professional Liability |
53,184 | 83,028 | 136,212 | |||||||||
|
|
|
|
|
|
|||||||
Total Insurance Companies |
376,871 | 502,575 | 879,446 | |||||||||
|
|
|
|
|
|
|||||||
Lloyds Operations: |
||||||||||||
Marine |
122,804 | 116,820 | 239,624 | |||||||||
Property Casualty |
30,282 | 27,951 | 58,233 | |||||||||
Professional Liability |
15,439 | 46,636 | 62,075 | |||||||||
|
|
|
|
|
|
|||||||
Total Lloyds Operations |
168,525 | 191,407 | 359,932 | |||||||||
|
|
|
|
|
|
|||||||
Total Net Loss Reserves |
$ | 545,396 | $ | 693,982 | $ | 1,239,378 | ||||||
|
|
|
|
|
|
|||||||
Case | IBNR | |||||||||||
Reserves | Reserves | Total | ||||||||||
Net Loss Reserves, December 31, 2011: |
||||||||||||
Insurance Companies: |
||||||||||||
Marine |
$ | 127,912 | $ | 121,875 | $ | 249,787 | ||||||
Property Casualty |
185,822 | 296,177 | 481,999 | |||||||||
Professional Liability |
56,953 | 83,490 | 140,443 | |||||||||
|
|
|
|
|
|
|||||||
Total Insurance Companies |
370,687 | 501,542 | 872,229 | |||||||||
|
|
|
|
|
|
|||||||
Lloyds Operations: |
||||||||||||
Marine |
117,448 | 123,136 | 240,584 | |||||||||
Property Casualty |
37,877 | 25,846 | 63,723 | |||||||||
Professional Liability |
13,580 | 47,118 | 60,698 | |||||||||
|
|
|
|
|
|
|||||||
Total Lloyds Operations |
168,905 | 196,100 | 365,005 | |||||||||
|
|
|
|
|
|
|||||||
Total Net Loss Reserves |
$ | 539,592 | $ | 697,642 | $ | 1,237,234 | ||||||
|
|
|
|
|
|
News Release
Page 13
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Investment Data
June 30, 2012
As of June 30, 2012, the average quality of the investment portfolio as rated by S&P and Moodys was AA/Aa with an average duration of 3.9 years. The Company does not own any collateralized debt obligations (CDOs), collateralized loan obligations (CLOs) or asset backed commercial paper.
As of June 30, 2012, the Company owned two asset-backed securities approximating $0.7 million with subprime mortgage exposures. The securities have an effective maturity of 1.5 years. In addition, the Company owned a total of seven collateralized mortgage obligations and asset-backed securities approximating $2.0 million classified as Alt-A which is a credit category between prime and subprime. They have an effective maturity of 5.5 years. Such subprime and Alt-A categories are as defined by S&P. The Company is receiving principal and/or interest payments on all these securities and believes such amounts are fully collectible.
The following table sets forth our cash and investments as of June 30, 2012:
Gross | Gross | Cost or | OTTI | |||||||||||||||||
Fair | Unrealized | Unrealized | Amortized | Recognized | ||||||||||||||||
June 30, 2012 |
Value | Gains | (Losses) | Cost | in OCI | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Fixed maturities: |
||||||||||||||||||||
U.S.Treasury bonds, agency bonds and foreign government bonds |
$ | 454,523 | $ | 10,330 | $ | (160 | ) | $ | 444,353 | $ | | |||||||||
States, municipalities and political subdivisions |
426,218 | 29,960 | (115 | ) | 396,373 | | ||||||||||||||
Mortgage- and asset-backed securities: |
||||||||||||||||||||
Agency mortgage-backed securities |
398,310 | 17,393 | (44 | ) | 380,961 | | ||||||||||||||
Residential mortgage obligations |
37,805 | 44 | (1,651 | ) | 39,412 | (887 | ) | |||||||||||||
Asset-backed securities |
54,416 | 933 | (33 | ) | 53,516 | | ||||||||||||||
Commercial mortgage-backed securities |
209,273 | 14,456 | (55 | ) | 194,872 | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Subtotal |
699,804 | 32,826 | (1,783 | ) | 668,761 | (887 | ) | |||||||||||||
Corporate bonds |
443,884 | 18,519 | (779 | ) | 426,144 | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total fixed maturities |
2,024,429 | 91,635 | (2,837 | ) | 1,935,631 | (887 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity securitiescommon stocks |
103,649 | 29,709 | (517 | ) | 74,457 | | ||||||||||||||
Short-term investments |
161,983 | | | 161,983 | | |||||||||||||||
Cash |
45,842 | | | 45,842 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 2,335,903 | $ | 121,344 | $ | (3,354 | ) | $ | 2,217,913 | $ | (887 | ) | ||||||||
|
|
|
|
|
|
|
|
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News Release
Page 14
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Investment Data
June 30, 2012
($ in thousands)
The following tables set forth our agency mortgage-backed securities and residential mortgage obligations, categorized by those issued by GNMA, FNMA and FHLMC and the quality category (prime, Alt-A and subprime) for all other such investments at June 30, 2012:
Gross | Gross | Cost or | ||||||||||||||
Fair | Unrealized | Unrealized | Amortized | |||||||||||||
Value | Gains | (Losses) | Cost | |||||||||||||
Agency mortgage-backed securities: |
||||||||||||||||
GNMA |
$ | 112,901 | $ | 6,673 | $ | (44 | ) | $ | 106,272 | |||||||
FNMA |
214,172 | 8,589 | | 205,583 | ||||||||||||
FHLMC |
71,237 | 2,131 | | 69,106 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 398,310 | $ | 17,393 | $ | (44 | ) | $ | 380,961 | |||||||
|
|
|
|
|
|
|
|
|||||||||
Gross | Gross | Cost or | ||||||||||||||
Fair | Unrealized | Unrealized | Amortized | |||||||||||||
Value | Gains | (Losses) | Cost | |||||||||||||
Residential mortgage obligations: |
||||||||||||||||
Prime |
$ | 12,537 | $ | 23 | $ | (1,251 | ) | $ | 13,765 | |||||||
Alt-A |
1,975 | | (340 | ) | 2,315 | |||||||||||
Subprime |
| | | | ||||||||||||
Non-US RMBS |
23,293 | 21 | (60 | ) | 23,332 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 37,805 | $ | 44 | $ | (1,651 | ) | $ | 39,412 | |||||||
|
|
|
|
|
|
|
|
Exhibit 99.2
The Navigators Group, Inc.
CORPORATE NEWS
Navigators Appoints Basch to Board of Directors
NEW YORK, August 2, 2012 (BUSINESS WIRE)The Navigators Group, Inc. (NASDAQ:NAVG) today announced the appointment of Saul L. Basch to its Board of Directors.
We are very pleased to announce the addition of Saul Basch to our Board of Directors, said Stanley A. Galanski, President and Chief Executive Officer. Sauls track record of accomplishment and demonstrated financial expertise in both public accounting and as a finance executive in the specialty insurance industry will be of tremendous value to our Board and our Company as we continue to pursue profitable growth.
Mr. Basch began his career at Coopers & Lybrand with a concentration on insurance industry clients, ultimately acting as the Industry Leader and Senior Partner of the companys Metropolitan New York Insurance Practice. He joined HSB Group, Inc. in 1995, ultimately serving as Vice Chairman, Chief Financial Officer and Treasurer. Mr. Basch retired from active employment with HSB Group, Inc. in 2012. He is a graduate of State University of New York at Albany and is a Certified Public Accountant.
The Navigators Group, Inc. is an international specialty insurance holding company with insurance company operations, underwriting management companies, and operations at Lloyds of London. Headquartered in New York City, 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, may, will, intend, continue 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
Media Inquires:
Taha Ebrahimi
914-933-6209
tebrahimi@navg.com
www.navg.com