Reinsurance Ceded

9 Months Ended

Sep. 30, 2012

Reinsurance Ceded

Note 4. Reinsurance Ceded

The Company’s ceded earned premiums were $97.4 million and $85.5 million for the three months ended September 30, 2012 and 2011 and $283.4 million and $261.9 million for the nine months ended September 30, 2012 and 2011, respectively. The Company’s ceded incurred losses were $31.2 million and $39.8 million for the three months ended September 30, 2012 and 2011 and $154.4 million and $165.6 million for the nine months ended September 30, 2012 and 2011, respectively.

During the three months ended September 30, 2012, the Company recorded corrections to reinsurance treaty retentions from 2007 Marine occurrences. The claims in question had been settled and ceded amounts paid, however after discussion with reinsurers it was determined that two separate retentions should have been applied for each occurrence for Navigators Insurance Companies and Navigators Lloyds Syndicate. As a result, the amount of the losses retained in the current quarter increased by $5.3 million and the related reinstatement premiums paid were reduced by $1.9 million. The net pre-tax and after tax impact of these corrections was $3.4 million and $2.2 million, respectively.

The following table lists the Company’s 20 largest reinsurers measured by the amount of reinsurance recoverable for ceded losses and LAE and ceded unearned premium (constituting approximately 73.9% of the total recoverable), together with the reinsurance recoverable and collateral as of September 30, 2012, and the reinsurers’ ratings from the A.M. Best Company (“AMB”) or Standard & Poor’s (“S&P”):

	Reinsurance Recoverables
In thousands	Unearned Premium		Paid/Unpaid Losses		Total		Collateral Held(1)		AMB	S&P
Swiss Reinsurance America Corporation	$	5,017	$	91,035	$	96,052	$	7,152	A+	AA-
Munich Reinsurance America Inc.		10,356		85,215		95,571		1,235	A+	AA-
Transatlantic Reinsurance Company		17,445		72,832		90,277		12,848	A	A+
Everest Reinsurance Company		18,256		71,308		89,564		8,209	A+	A+
National Indemnity Company		41,244		34,388		75,632		22,746	A++	AA+
Partner Reinsurance Europe		10,053		36,191		46,244		19,814	A+	A+
Lloyd’s Syndicate #2003		8,622		33,044		41,666		10,232	A	A+
Allied World Reinsurance		9,500		20,987		30,487		4,085	A	A
Berkley Insurance Company		1,795		26,003		27,798		3,147	A+	A+
Tower Insurance Company		10,844		15,038		25,882		4,129	A-	NR
General Reinsurance Corporation		590		25,129		25,719		1,006	A++	AA+
Scor Global P&C SE		13,158		12,287		25,445		7,452	A	A+
Ace Property and Casualty Insurance Company		971		20,919		21,890		-	A+	AA-
Validus Reinsurance Ltd.		2,866		18,706		21,572		9,490	A	A
Scor Holding (Switzerland) AG		1,128		17,177		18,305		4,254	A	A+
Sirius America Insurance Company		75		18,086		18,161		2,455	A	A-
Platinum Underwriters Re		472		17,488		17,960		1,552	A	A-
Lloyd’s Syndicate #4000		2,657		14,177		16,834		2,254	A	A+
Munchener Ruckversicherungs-Gesellschaft		387		14,331		14,718		6,115	A+	AA-
AXIS Re Europe		3,563		10,904		14,467		2,083	A	A+
Top 20 Total	$	158,999	$	655,245	$	814,244	$	130,258
All Others		65,852		221,178		287,030		106,826
Total	$	224,851	$	876,423	$	1,101,274	$	237,084

(1)    -  Collateral includes letter of credit, balances payable and other balances held by the Company’s Insurance Companies and Lloyd’s Operations.