Organization and Summary of Significant Accounting Policies	3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]
Organization and Summary of Significant Accounting Policies	NOTE 1. ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unless the context requires otherwise, the terms “we,” “us,” “our” or “our Company” are used to mean The Navigators Group, Inc., a Delaware holding company established in 1982, and its subsidiaries. The term “Parent Company” is used to mean The Navigators Group, Inc. without its subsidiaries. Organization We are an international insurance company with a long-standing area of specialization in Marine insurance. We also offer Property and Casualty (“P&C”) insurance, primarily general liability coverage and umbrella & excess liability coverage to commercial enterprises through our Primary and Excess Casualty divisions. We have also developed niches in Professional Liability insurance, through our Directors & Officers (“D&O”) and Errors & Omissions (“E&O”) divisions, as well as assumed reinsurance products. We operate through various wholly-owned insurance and service companies. Our subsidiaries domiciled in the United States (“U.S.”) include two insurance companies, Navigators Insurance Company (“NIC”) and Navigators Specialty Insurance Company (“NSIC”), as well as our U.S. underwriting agency, Navigators Management Company (“NMC”). NIC includes a branch in the United Kingdom (“U.K.”). We also have operations domiciled in the U.K., Hong Kong and Europe. Navigators International Insurance Company Ltd. (“NIIC”), Navigators Management (U.K.) Ltd. (“NMUK”) and Navigators Underwriting Ltd. (“NUL”) are domiciled in the U.K. and NUL includes European branches. Navigators Underwriting Agency Ltd. (“NUAL”), a Lloyd’s of London (“Lloyd’s”) underwriting agency, manages and provides the capital, through Navigators Corporate Underwriters Ltd. (“NCUL”), for our Lloyd’s Syndicate 1221 (the “Syndicate”), and is also domiciled in the U.K. We control 100% of the Syndicate’s stamp capacity. We also control 100% of Navigators Holdings (Europe) NV, which has a 100% ownership interest in Bracht, Deckers & Mackelbert NV, an insurance underwriting agency organized under the laws of Belgium (“BDM”), Assurances Continentales – Continentale Verzekeringen NV, an insurance company licensed under the laws of Belgium (“ASCO”), and a wholly-owned subsidiary of ASCO, Canal Re S.A., a reinsurance company licensed under the laws of the Grand Duchy of Luxembourg (“Canal Re”). This group of three companies, which was acquired at the end of second quarter 2018, will be referred to as the “Navigators Insurance Companies of Europe Group” or “NICE Group.” On August 22, 2018, our Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with The Hartford Financial Services Group, Inc. (“The Hartford”). The Merger Agreement provides that, subject to the terms and conditions set forth therein, our Company will merge with an existing subsidiary of The Hartford, with our Company surviving as a wholly owned subsidiary of The Hartford (the “Merger”). The Merger Agreement provides for the automatic extension of the outside date from May 1, 2019 to July 1, 2019 to allow the parties additional time to satisfy a mutual condition to closing relating to the receipt of all required regulatory approvals. As of May 1, 2019, the completion of the Merger remained subject to the approval of the New York State Department of Financial Services (the “NYDFS”) and the automatic extension has been triggered. The Company and The Hartford continue to pursue a timely approval of the change in control application with the NYDFS in order to complete the Merger as promptly as possible. Refer to Note 2 Merger for further information. Basis of Presentation The Consolidated Balance Sheet at March 31, 2019 and the Consolidated Statements of Income (Loss), Comprehensive Income (Loss), Stockholders’ Equity and Cash Flows for the periods ended March 31, 2019 and 2018 are unaudited. The Balance Sheet at December 31, 2018 is derived from our audited Financial Statements. The accompanying Interim Consolidated Financial Statements reflect all adjustments, which, in the opinion of management, are necessary to fairly present the results of our Company for the interim periods presented on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. The preparation of these Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the Financial Statements and the reported revenues and expenses during the reporting periods. The results of operations for any interim period are not necessarily indicative of results for the full year. The Interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018. Income Taxes The Company’s effective income tax rate is dependent on many factors, including the nature of many amounts, the mix of revenues and expenses between U.S. and foreign entities that are subject to income taxes at differing rates in various jurisdictions and changes in foreign operating locations in response to Brexit. Our Effective Tax Rate for the quarter differs from the federal tax rate of 21% primarily due to an increase in the valuation allowance against our Continental European business, partially offset by an excess tax benefit related to the vesting of stock compensation at fair market value. New Accounting Standards Adopted in 2019 Leases Effective January 1, 2019, our Company adopted ASU 2016-02, “Leases (Topic 842)” which provides a new comprehensive model for lease accounting. Topic 842 was subsequently amended by ASU 2018-10, Codification Improvements to Topic 842, Leases; ASU 2018-11, Targeted Improvements; and ASU 2019-01, Codification Improvements. The new standard requires a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use (“ROU”) asset representing its right to use the underlying asset for the lease term. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard requires a modified retrospective transition approach, which is applied to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. We used an effective date of January 1, 2019 as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. We elected the “package of practical expedients,” which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. The new standard also provides practical expedients for an entity’s ongoing accounting. We currently do not have any leases with a term shorter than 12 months. We also elected the practical expedient to not separate lease and non-lease components for certain classes of leases. The adoption of the guidance resulted in the Company recognizing a ROU asset of $44.6 million and a lease liability of $53.6 million on the Consolidated Balance Sheet at March 31, 2019, with the difference attributable to contractual incentives contained within some of our leases as well as lease payment schedules that change over time resulting in deferred rent. The adoption of this guidance did not materially impact our results of operations, financial condition or liquidity. Callable Debt Securities Effective January 1, 2019, our Company adopted ASU 2017-08, “Premium Amortization on Purchased Callable Debt Securities” which shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. The adoption of this guidance did not impact our results of operations, financial condition or liquidity. Significant Accounting Policies There were no notable changes in our significant accounting policies subsequent to our Annual Report on Form 10-K for the year ended December 31, 2018.

Organization and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Organization and Summary of Significant Accounting Policies

NOTE 1. ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unless the context requires otherwise, the terms “we,” “us,” “our” or “our Company” are used to mean The Navigators Group, Inc., a Delaware holding company established in 1982, and its subsidiaries. The term “Parent Company” is used to mean The Navigators Group, Inc. without its subsidiaries.

Organization

We are an international insurance company with a long-standing area of specialization in Marine insurance. We also offer Property and Casualty (“P&C”) insurance, primarily general liability coverage and umbrella & excess liability coverage to commercial enterprises through our Primary and Excess Casualty divisions. We have also developed niches in Professional Liability insurance, through our Directors & Officers (“D&O”) and Errors & Omissions (“E&O”) divisions, as well as assumed reinsurance products.

We operate through various wholly-owned insurance and service companies. Our subsidiaries domiciled in the United States (“U.S.”) include two insurance companies, Navigators Insurance Company (“NIC”) and Navigators Specialty Insurance Company (“NSIC”), as well as our U.S. underwriting agency, Navigators Management Company (“NMC”). NIC includes a branch in the United Kingdom (“U.K.”). We also have operations domiciled in the U.K., Hong Kong and Europe. Navigators International Insurance Company Ltd. (“NIIC”), Navigators Management (U.K.) Ltd. (“NMUK”) and Navigators Underwriting Ltd. (“NUL”) are domiciled in the U.K. and NUL includes European branches. Navigators Underwriting Agency Ltd. (“NUAL”), a Lloyd’s of London (“Lloyd’s”) underwriting agency, manages and provides the capital, through Navigators Corporate Underwriters Ltd. (“NCUL”), for our Lloyd’s Syndicate 1221 (the “Syndicate”), and is also domiciled in the U.K. We control 100% of the Syndicate’s stamp capacity. We also control 100% of Navigators Holdings (Europe) NV, which has a 100% ownership interest in Bracht, Deckers & Mackelbert NV, an insurance underwriting agency organized under the laws of Belgium (“BDM”), Assurances Continentales – Continentale Verzekeringen NV, an insurance company licensed under the laws of Belgium (“ASCO”), and a wholly-owned subsidiary of ASCO, Canal Re S.A., a reinsurance company licensed under the laws of the Grand Duchy of Luxembourg (“Canal Re”). This group of three companies, which was acquired at the end of second quarter 2018, will be referred to as the “Navigators Insurance Companies of Europe Group” or “NICE Group.”

On August 22, 2018, our Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with The Hartford Financial Services Group, Inc. (“The Hartford”). The Merger Agreement provides that, subject to the terms and conditions set forth therein, our Company will merge with an existing subsidiary of The Hartford, with our Company surviving as a wholly owned subsidiary of The Hartford (the “Merger”). The Merger Agreement provides for the automatic extension of the outside date from May 1, 2019 to July 1, 2019 to allow the parties additional time to satisfy a mutual condition to closing relating to the receipt of all required regulatory approvals. As of May 1, 2019, the completion of the Merger remained subject to the approval of the New York State Department of Financial Services (the “NYDFS”) and the automatic extension has been triggered. The Company and The Hartford continue to pursue a timely approval of the change in control application with the NYDFS in order to complete the Merger as promptly as possible. Refer to Note 2 Merger for further information.

Basis of Presentation

The Consolidated Balance Sheet at March 31, 2019 and the Consolidated Statements of Income (Loss), Comprehensive Income (Loss), Stockholders’ Equity and Cash Flows for the periods ended March 31, 2019 and 2018 are unaudited. The Balance Sheet at December 31, 2018 is derived from our audited Financial Statements. The accompanying Interim Consolidated Financial Statements reflect all adjustments, which, in the opinion of management, are necessary to fairly present the results of our Company for the interim periods presented on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated in consolidation. The preparation of these Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the Financial Statements and the reported revenues and expenses during the reporting periods. The results of operations for any interim period are not necessarily indicative of results for the full year. The Interim Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018.

Income Taxes

The Company’s effective income tax rate is dependent on many factors, including the nature of many amounts, the mix of revenues and expenses between U.S. and foreign entities that are subject to income taxes at differing rates in various jurisdictions and changes in foreign operating locations in response to Brexit. Our Effective Tax Rate for the quarter differs from the federal tax rate of 21% primarily due to an increase in the valuation allowance against our Continental European business, partially offset by an excess tax benefit related to the vesting of stock compensation at fair market value.

New Accounting Standards Adopted in 2019

Leases

Effective January 1, 2019, our Company adopted ASU 2016-02, “Leases (Topic 842)” which provides a new comprehensive model for lease accounting. Topic 842 was subsequently amended by ASU 2018-10, Codification Improvements to Topic 842, Leases; ASU 2018-11, Targeted Improvements; and ASU 2019-01, Codification Improvements. The new standard requires a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use (“ROU”) asset representing its right to use the underlying asset for the lease term. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The new standard requires a modified retrospective transition approach, which is applied to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. We used an effective date of January 1, 2019 as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.

The new standard provides a number of optional practical expedients in transition. We elected the “package of practical expedients,” which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. The new standard also provides practical expedients for an entity’s ongoing accounting. We currently do not have any leases with a term shorter than 12 months. We also elected the practical expedient to not separate lease and non-lease components for certain classes of leases.

The adoption of the guidance resulted in the Company recognizing a ROU asset of $44.6 million and a lease liability of $53.6 million on the Consolidated Balance Sheet at March 31, 2019, with the difference attributable to contractual incentives contained within some of our leases as well as lease payment schedules that change over time resulting in deferred rent. The adoption of this guidance did not materially impact our results of operations, financial condition or liquidity.

Callable Debt Securities

Effective January 1, 2019, our Company adopted ASU 2017-08, “Premium Amortization on Purchased Callable Debt Securities” which shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. The adoption of this guidance did not impact our results of operations, financial condition or liquidity.

Significant Accounting Policies

There were no notable changes in our significant accounting policies subsequent to our Annual Report on Form 10-K for the year ended December 31, 2018.