Exhibit 99.1
The Navigators Group, Inc.
CORPORATE NEWS
Navigators Reports First Quarter Earnings
New York –April 29, 2009 - -- The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $12.0 million or $0.71 per share for the 2009 first quarter compared to net income of $23.3 million or $1.36 per share for the 2008 first quarter.
The first quarter summary of results was as follows:
| ($ in millions) | (Diluted earnings per share) | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Net income | $ | 12.0 | $ | 23.3 | $ | 0.71 | $ | 1.36 | ||||||||
| Less net realized capital gains / (losses) | (8.2 | ) | (0.0 | ) | (0.48 | ) | (0.00 | ) | ||||||||
| Operating earnings (1) | $ | 20.2 | $ | 23.3 | $ | 1.19 | $ | 1.36 | ||||||||
| o | The 2009 first quarter net realized capital losses include provisions for declines in market value which were considered to be other-than-temporary of $8.3 million for equity securities, of $1.8 million for asset-backed securities and of $0.6 million for corporate debt securities. The after-tax loss from such provisions was $7.0 million or $0.41 per share. The decision to record realized capital losses on such securities had no impact on the Company’s stockholders’ equity or book value per share, which increased by 3% during the first quarter to $42.07. |
(1) Operating earnings, or income excluding net realized gains (losses) net of tax, 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.
Gross written premium for the 2009 first quarter was $275.3 million, a decrease of 4.1% from the comparable 2008 period. Net written premium for the 2009 first quarter was $200.7 million, an increase of 6.9% from the comparable 2008 period.
The combined loss and expense ratio for the 2009 first quarter was 92.8% compared to 89.2% for the comparable 2008 period. The combined loss and expense ratio for the 2009 first quarter was favorably impacted by 3.5 loss ratio points for redundancies in prior period loss reserves compared to 8.8 loss points for the comparable 2008 period.
Navigators’ Chief Executive Officer Stan Galanski commented, “I am very pleased to report that our book value per share increased more than three percent during the first quarter despite the declining economic environment and turbulence in the financial markets. Net written premiums increased 6.9% and our combined ratio was 92.8%. We remain very well positioned to capitalize on the opportunities created by the current market conditions.”
News Release
April 29, 2009
Page 2
Net investment income for the 2009 first quarter was $18.7 million, a decrease of 0.5% from the comparable 2008 period. The pre-tax investment yield for the 2009 first quarter was 3.9%, compared to 4.2% for 2008 first quarter. The effective tax rates on net investment income were 24.9% for the 2009 first quarter compared to 26.4% for the comparable 2008 period.
The Company’s investment portfolio mainly consists of fixed income securities with an average quality rating of “AA/Aa” by Standard & Poor’s and Moody’s, respectively, and an average effective duration of 4.3 years at March 31, 2009. At March 31, 2009, net unrealized losses within our investment portfolio were $12.9 million, a decrease of $8.8 million for the quarter due to the recognition of $12.2 million of realized losses, and $3.4 million of net unrealized losses during the period.
Consolidated cash flow from operations for the 2009 first quarter was $42.9 million compared to $59.7 million for the comparable 2008 period.
During the 2009 first quarter, the Company did not purchase any shares of its common stock.
Stockholders’ equity was $712.5 million or $42.07 per share at March 31, 2009 compared to $689.3 million or $40.89 per share at December 31, 2008. Statutory surplus of Navigators Insurance Company was $568.0 million at March 31, 2009.
Effective in 2009, the Company has reclassified certain of its business lines, which has no effect on the segment classifications of the Insurance Company and Lloyd’s.
| o | The offshore energy business, formerly included in the “Marine and Energy” businesses of the Insurance Companies and Lloyd’s, is now included in the Insurance Companies’ and Lloyd’s “Property Casualty” businesses. |
| o | The marine lines within both the Insurance Company and Lloyd’s are now presented as “Marine” instead of “Marine and Energy,” since the energy business has now been reclassified to “Property Casualty.” |
| o | Engineering and construction, European Property and other run-off business, formerly included in the “Other” category of business within the Insurance Companies and Lloyd’s, are now included under “Property Casualty. |
| o | The “Middle Markets” business, formerly broken out separately in the Insurance Companies, is now included in the Insurance Companies’ “Property Casualty” business. |
Underwriting data for prior periods has been reclassified to reflect these changes.
The Company will hold a conference call on Friday, May 1, 2009 starting at 8:30 a.m. ET to discuss the 2009 first quarter results. The call will be available via live webcast on Navigators’ website (www.navg.com) by clicking on the Earnings Webcast link under “News & Events.”
To participate by telephone, the domestic dial-in number is 888-680-0878 and the international dial-in is 617-213-4855. The access code is 78508745. Participants may pre-register for the call at www.theconferencingservice.com/prereg/key.process?key=P8LXA9EVA. Pre-registrants will be issued a pin number to use when dialing into the live call that will provide quick access by bypassing the operator upon connection.
News Release
April 29, 2009
Page 3
The Navigators Group, Inc. is an international specialty insurance holding company with insurance company operations, underwriting management companies, and operations at Lloyd’s 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”, “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: | Francis W. McDonnell Senior Vice President and Chief Financial Officer (914) 933-6270 fmcdonnell@navg.com www.navg.com |
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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Financial Highlights
($ in thousands, except per share data)
| Three Months Ended | ||||||||||||
| March 31, | ||||||||||||
| Financial Highlights | 2009 | 2008 | Change | |||||||||
| Gross written premium | $ | 275,259 | $ | 287,146 | -4 | % | ||||||
| Net written premium | 200,652 | 187,722 | 7 | % | ||||||||
| Revenues: | ||||||||||||
| Net earned premium | 164,946 | 155,740 | 6 | % | ||||||||
| Commission income | (20 | ) | 261 | NM | ||||||||
| Investment income | 18,743 | 18,838 | -1 | % | ||||||||
| Total other-than-temporary impairments | (26,871 | ) | - | NM | ||||||||
| Portion of loss recognized in OCI (before tax) | (16,171 | ) | - | NM | ||||||||
| Net impairment loss recognized in earnings | (10,700 | ) | - | NM | ||||||||
| Net realized capital gains (losses) on securites sold | (1,537 | ) | (76 | ) | NM | |||||||
| Other income (expense) | 163 | 11 | NM | |||||||||
| Total revenues | 171,595 | 174,774 | -2 | % | ||||||||
| Operating expenses: | ||||||||||||
| Net losses and loss adjustment | ||||||||||||
| expenses incurred | 100,247 | 88,420 | 13 | % | ||||||||
| Commission expense | 22,448 | 20,948 | 7 | % | ||||||||
| Other operating expenses | 30,535 | 29,756 | 3 | % | ||||||||
| Interest expense | 2,219 | 2,217 | 0 | % | ||||||||
| Total operating expenses | 155,449 | 141,341 | 10 | % | ||||||||
| Income before income taxes | 16,146 | 33,433 | -52 | % | ||||||||
| Income tax expense (benefit): | ||||||||||||
| Current | 6,750 | 10,306 | -35 | % | ||||||||
| Deferred | (2,604 | ) | (123 | ) | NM | |||||||
| Income tax expense (benefit) | 4,146 | 10,183 | -59 | % | ||||||||
| Net income | $ | 12,000 | $ | 23,250 | -48 | % | ||||||
| Per Share Data | ||||||||||||
| Net income per common share: | ||||||||||||
| Basic | $ | 0.71 | $ | 1.38 | -48 | % | ||||||
| Diluted | $ | 0.71 | $ | 1.36 | -48 | % | ||||||
| Average shares outstanding: | ||||||||||||
| Basic | 16,882 | 16,862 | ||||||||||
| Diluted | 17,002 | 17,052 | ||||||||||
| Underwriting Ratios | ||||||||||||
| Loss Ratio | 60.8 | % | 56.8 | % | ||||||||
| Expense Ratio | 32.0 | % | 32.4 | % | ||||||||
| Combined Ratio | 92.8 | % | 89.2 | % | ||||||||
| Balance Sheet Data | Mar. 31, | Dec. 31, | ||||||||||
| 2009 | 2008 | |||||||||||
| Stockholders' equity | $ | 712,454 | $ | 689,317 | 3 | % | ||||||
| Book value per share | $ | 42.07 | $ | 40.89 | 3 | % | ||||||
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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands)
| March 31, | December 31, | |||||||||||
| 2009 | 2008 | |||||||||||
| ASSETS | ||||||||||||
| Investments and cash: | ||||||||||||
| Fixed maturities, available-for-sale, at fair value | ||||||||||||
| (amortized cost: 2009, $1,689,179; 2008, $1,664,755) | $ | 1,676,826 | $ | 1,643,772 | ||||||||
| Equity securities, available-for-sale, at fair value (cost: 2009, $52,309; 2008, $52,523) | 51,735 | 51,802 | ||||||||||
| Short-term investments, at cost which approximates fair value | 206,223 | 220,684 | ||||||||||
| Cash | 16,644 | 1,457 | ||||||||||
| Total investments and cash | 1,951,428 | 1,917,715 | ||||||||||
| Premiums in course of collection | 201,891 | 170,522 | ||||||||||
| Commissions receivable | 313 | 319 | ||||||||||
| Prepaid reinsurance premiums | 167,272 | 188,874 | ||||||||||
| Reinsurance receivable on paid losses | 70,725 | 67,227 | ||||||||||
| Reinsurance receivable on unpaid losses and loss adjustment expenses | 851,703 | 853,793 | ||||||||||
| Net deferred income tax benefit | 53,908 | 54,736 | ||||||||||
| Deferred policy acquisition costs | 57,675 | 47,618 | ||||||||||
| Accrued investment income | 16,114 | 17,411 | ||||||||||
| Goodwill and other intangible assets | 6,532 | 6,622 | ||||||||||
| Other assets | 26,072 | 24,743 | ||||||||||
| Total assets | $ | 3,403,633 | $ | 3,349,580 | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Liabilities: | ||||||||||||
| Reserves for losses and loss adjustment expenses | $ | 1,879,895 | $ | 1,853,664 | ||||||||
| Unearned premium | 494,455 | 480,665 | ||||||||||
| Reinsurance balances payable | 129,296 | 140,319 | ||||||||||
| Senior notes | 123,825 | 123,794 | ||||||||||
| Federal income tax payable | 12,139 | 5,874 | ||||||||||
| Accounts payable and other liabilities | 51,569 | 55,947 | ||||||||||
| Total liabilities | 2,691,179 | 2,660,263 | ||||||||||
| Stockholders' equity: | ||||||||||||
| Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued | - | - | ||||||||||
| Common stock, $.10 par value, 50,000,000 shares authorized; issued and | ||||||||||||
| outstanding (Net of treasury shares) : 16,934,225 for 2009 and 16,856,073 for 2008 | 1,716 | 1,708 | ||||||||||
| Additional paid-in capital | 302,498 | 298,872 | ||||||||||
| Retained earnings | 418,776 | 406,776 | ||||||||||
| Treasury stock, at cost (224,754 shares for both 2009 and 2008) | (11,540 | ) | (11,540 | ) | ||||||||
| Accumulated other comprehensive income (loss) | 1,004 | (6,499 | ) | |||||||||
| Total stockholders' equity | 712,454 | 689,317 | ||||||||||
| Total liabilities and stockholders' equity | $ | 3,403,633 | $ | 3,349,580 | ||||||||
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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Comparative Premium Data
($ in thousands)
| Gross Written Premium: | First Quarter | |||||||||||
| Insurance Companies: | 2009 | 2008 | Change | |||||||||
| Marine | $ | 77,237 | $ | 71,485 | 8 | % | ||||||
| Property Casualty | 84,258 | 100,824 | -16 | % | ||||||||
| Professional Liability | 30,488 | 19,287 | 58 | % | ||||||||
| 191,983 | 191,596 | 0 | % | |||||||||
| Lloyd's Operations: | ||||||||||||
| Marine | 59,023 | 67,154 | -12 | % | ||||||||
| Property Casualty | 13,528 | 17,726 | -24 | % | ||||||||
| Professional Liability | 10,725 | 10,670 | 1 | % | ||||||||
| 83,276 | 95,550 | -13 | % | |||||||||
| Total | $ | 275,259 | $ | 287,146 | -4 | % | ||||||
| Net Written Premium: | First Quarter | |||||||||||
| Insurance Companies: | 2009 | 2008 | Change | |||||||||
| Marine | $ | 58,459 | 43,463 | 35 | % | |||||||
| Property Casualty | 59,976 | 69,114 | -13 | % | ||||||||
| Professional Liability | 18,647 | 11,733 | 59 | % | ||||||||
| 137,082 | 124,310 | 10 | % | |||||||||
| Lloyd's Operations: | ||||||||||||
| Marine | 49,974 | 48,910 | 2 | % | ||||||||
| Property Casualty | 7,595 | 7,710 | -1 | % | ||||||||
| Professional Liability | 6,001 | 6,792 | -12 | % | ||||||||
| 63,570 | 63,412 | 0 | % | |||||||||
| Total | $ | 200,652 | $ | 187,722 | 7 | % | ||||||
| Net Earned Premium: | First Quarter | |||||||||||
| Insurance Companies: | 2009 | 2008 | Change | |||||||||
| Marine | $ | 37,161 | 26,455 | 40 | % | |||||||
| Property Casualty | 65,412 | 71,718 | -9 | % | ||||||||
| Professional Liability | 17,717 | 14,073 | 26 | % | ||||||||
| 120,290 | 112,246 | 7 | % | |||||||||
| Lloyd's Operations: | ||||||||||||
| Marine | 31,175 | 28,793 | 8 | % | ||||||||
| Property Casualty | 7,923 | 8,742 | -9 | % | ||||||||
| Professional Liability | 5,558 | 5,959 | -7 | % | ||||||||
| 44,656 | 43,494 | 3 | % | |||||||||
| Total | $ | 164,946 | $ | 155,740 | 6 | % | ||||||
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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Three Months Ended
March 31, 2009
($ in thousands)
| Insurance | Lloyd's | |||||||||||||||
| Companies | Operations | Corporate | Total | |||||||||||||
| Gross written premium | $ | 191,983 | $ | 83,276 | $ | 275,259 | ||||||||||
| Net written premium | 137,082 | 63,570 | 200,652 | |||||||||||||
| Net earned premium | 120,290 | 44,656 | 164,946 | |||||||||||||
| Net losses and loss adjustment expenses | (70,153 | ) | (30,094 | ) | (100,247 | ) | ||||||||||
| Commission expense | (14,968 | ) | (7,480 | ) | (22,448 | ) | ||||||||||
| Other operating expenses | (24,560 | ) | (5,981 | ) | $ | 6 | (30,535 | ) | ||||||||
| Other income (expense) | 201 | (52 | ) | (6 | ) | 143 | ||||||||||
| Underwriting profit | 10,810 | 1,049 | - | 11,859 | ||||||||||||
| Investment income | 16,207 | 2,383 | 153 | 18,743 | ||||||||||||
| Net realized capital gains | (8,907 | ) | (3,330 | ) | (12,237 | ) | ||||||||||
| Interest expense | (2,219 | ) | (2,219 | ) | ||||||||||||
| Income (loss) before income tax | ||||||||||||||||
| expense (benefit) | 18,110 | 102 | (2,066 | ) | 16,146 | |||||||||||
| Income tax expense (benefit) | 4,533 | 336 | (723 | ) | 4,146 | |||||||||||
| Net income (loss) | $ | 13,577 | $ | (234 | ) | $ | (1,343 | ) | $ | 12,000 | ||||||
| Loss and loss expenses ratio | 58.3 | % | 67.4 | % | 60.8 | % | ||||||||||
| Commission expense ratio | 12.4 | % | 16.8 | % | 13.6 | % | ||||||||||
| Other operating expenses ratio (1) | 20.3 | % | 13.5 | % | 18.4 | % | ||||||||||
| Combined ratio | 91.0 | % | 97.7 | % | 92.8 | % | ||||||||||
(1) The other operating expenses ratio includes other income (expense).
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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Three Months Ended
March 31, 2008
($ in thousands)
| Insurance | Lloyd's | |||||||||||||||
| Companies | Operations | Corporate | Total | |||||||||||||
| Gross written premium | $ | 191,596 | $ | 95,550 | $ | 287,146 | ||||||||||
| Net written premium | 124,310 | 63,412 | 187,722 | |||||||||||||
| Net earned premium | 112,246 | 43,494 | 155,740 | |||||||||||||
| Net losses and loss adjustment expenses | (67,356 | ) | (21,064 | ) | (88,420 | ) | ||||||||||
| Commission expense | (12,948 | ) | (8,000 | ) | (20,948 | ) | ||||||||||
| Other operating expenses | (22,148 | ) | (7,608 | ) | (29,756 | ) | ||||||||||
| Other income (expense) | 258 | 14 | 272 | |||||||||||||
| Underwriting profit | 10,052 | 6,836 | 16,888 | |||||||||||||
| Investment income | 15,465 | 2,982 | $ | 391 | 18,838 | |||||||||||
| Net realized capital gains (losses) | (102 | ) | 26 | $ | - | (76 | ) | |||||||||
| Interest expense | (2,217 | ) | (2,217 | ) | ||||||||||||
| Income (loss) before income tax | ||||||||||||||||
| expense (benefit) | 25,415 | 9,844 | (1,826 | ) | 33,433 | |||||||||||
| Income tax expense (benefit) | 7,370 | 3,452 | (639 | ) | 10,183 | |||||||||||
| Net income (loss) | $ | 18,045 | $ | 6,392 | $ | (1,187 | ) | $ | 23,250 | |||||||
| Loss and loss expenses ratio | 60.0 | % | 48.4 | % | 56.8 | % | ||||||||||
| Commission expense ratio | 11.5 | % | 18.4 | % | 13.5 | % | ||||||||||
| Other operating expenses ratio (1) | 19.5 | % | 17.5 | % | 18.9 | % | ||||||||||
| Combined ratio | 91.0 | % | 84.3 | % | 89.2 | % | ||||||||||
(1) The other operating expenses ratio includes other income (expense).
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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Underwriting Results
($ in thousands)
| Three Months Ended March 31, 2009 | ||||||||||||||||||||||||
| Net | Losses | |||||||||||||||||||||||
| Earned | and LAE | Underwriting | Combined Ratio | |||||||||||||||||||||
| Insurance Companies: | Premium | Incurred | Expenses | Loss | Expense | Total | ||||||||||||||||||
| Marine | $ | 37,161 | $ | 26,390 | $ | 11,622 | 71.0 | % | 31.3 | % | 102.3 | % | ||||||||||||
| Property Casualty | 65,412 | 28,004 | 20,753 | 42.8 | % | 31.7 | % | 74.5 | % | |||||||||||||||
| Professional Liability | 17,717 | 15,759 | 6,952 | 89.0 | % | 39.2 | % | 128.2 | % | |||||||||||||||
| 120,290 | 70,153 | 39,327 | 58.3 | % | 32.7 | % | 91.0 | % | ||||||||||||||||
| Lloyd's Operations | 44,656 | 30,094 | 13,513 | 67.4 | % | 30.3 | % | 97.7 | % | |||||||||||||||
| Total | $ | 164,946 | $ | 100,247 | $ | 52,840 | 60.8 | % | 32.0 | % | 92.8 | % | ||||||||||||
| Three Months Ended March 31, 2008 | ||||||||||||||||||||||||
| Net | Losses | |||||||||||||||||||||||
| Earned | and LAE | Underwriting | Combined Ratio | |||||||||||||||||||||
| Insurance Companies: | Premium | Incurred | Expenses | Loss | Expense | Total | ||||||||||||||||||
| Marine | $ | 26,455 | $ | 22,313 | $ | 9,169 | 84.3 | % | 34.7 | % | 119.0 | % | ||||||||||||
| Property Casualty | 71,718 | 36,138 | 20,571 | 50.4 | % | 28.7 | % | 79.1 | % | |||||||||||||||
| Professional Liability | 14,073 | 8,905 | 5,098 | 63.3 | % | 36.2 | % | 99.5 | % | |||||||||||||||
| 112,246 | 67,356 | 34,838 | 60.0 | % | 31.0 | % | 91.0 | % | ||||||||||||||||
| Lloyd's Operations | 43,494 | 21,064 | 15,594 | 48.4 | % | 35.9 | % | 84.3 | % | |||||||||||||||
| Total | $ | 155,740 | $ | 88,420 | $ | 50,432 | 56.8 | % | 32.4 | % | 89.2 | % | ||||||||||||
| Amounts | Loss Ratio | |||||||||||||||
| Net Incurred Loss Activity | March 31, | March 31, | March 31, | March 31, | ||||||||||||
| For the Three Months Ended: | 2009 | 2008 | 2009 | 2008 | ||||||||||||
| Insurance Companies: | ||||||||||||||||
| Loss and LAE payments | $ | 48,804 | $ | 34,164 | 40.6 | % | 30.4 | % | ||||||||
| Change in reserves | 21,349 | 33,192 | 17.7 | % | 29.6 | % | ||||||||||
| Net incurred loss and LAE | 70,153 | 67,356 | 58.3 | % | 60.0 | % | ||||||||||
| Lloyd's Operations: | ||||||||||||||||
| Loss and LAE payments | 23,122 | 16,771 | 51.8 | % | 38.6 | % | ||||||||||
| Change in reserves | 6,972 | 4,293 | 15.6 | % | 9.8 | % | ||||||||||
| Net incurred loss and LAE | 30,094 | 21,064 | 67.4 | % | 48.4 | % | ||||||||||
| Total | ||||||||||||||||
| Loss and LAE payments | 71,926 | 50,935 | 43.6 | % | 32.7 | % | ||||||||||
| Change in reserves | 28,321 | 37,485 | 17.2 | % | 24.1 | % | ||||||||||
| Net incurred loss and LAE | $ | 100,247 | $ | 88,420 | 60.8 | % | 56.8 | % | ||||||||
| Impact of Prior Years Reserves | Amounts | Loss Ratio Impact | ||||||||||||||
| Favorable / (Unfavorable) Development | March 31, | March 31, | March 31, | March 31, | ||||||||||||
| For the Three Months Ended: | 2009 | 2008 | 2009 | 2008 | ||||||||||||
| Insurance Companies | $ | 5,132 | $ | 8,500 | 4.3 | % | 7.6 | % | ||||||||
| Lloyd's Operations | 635 | 5,180 | 1.4 | % | 11.9 | % | ||||||||||
| Total | $ | 5,767 | $ | 13,680 | 3.5 | % | 8.8 | % | ||||||||
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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Loss Data
($ in thousands)
| Case | IBNR | |||||||||||
| Net Loss Reserves, March 31, 2009: | Reserves | Reserves | Total | |||||||||
| Insurance Companies: | ||||||||||||
| Marine | $ | 106,949 | $ | 96,636 | $ | 203,585 | ||||||
| Property Casualty | 116,354 | 359,035 | 475,389 | |||||||||
| Professional Liability | 32,443 | 58,992 | 91,435 | |||||||||
| Total Insurance Companies | 255,746 | 514,663 | 770,409 | |||||||||
| Lloyd's Operations: | ||||||||||||
| Marine | 97,211 | 83,218 | 180,429 | |||||||||
| Property Casualty | 21,788 | 23,438 | 45,226 | |||||||||
| Professional Liability | 6,416 | 25,712 | 32,128 | |||||||||
| Total Lloyd's Operations | 125,415 | 132,368 | 257,783 | |||||||||
| Total Net Loss Reserves | $ | 381,161 | $ | 647,031 | $ | 1,028,192 | ||||||
| Case | IBNR | |||||||||||
| Net Loss Reserves, December 31, 2008: | Reserves | Reserves | Total | |||||||||
| Insurance Companies: | ||||||||||||
| Marine | $ | 96,244 | $ | 96,995 | $ | 193,239 | ||||||
| Property Casualty | 115,810 | 358,305 | 474,115 | |||||||||
| Professional Liability | 22,913 | 58,793 | 81,706 | |||||||||
| Total Insurance Companies | 234,967 | 514,093 | 749,060 | |||||||||
| Lloyd's Operations: | ||||||||||||
| Marine | 99,233 | 78,293 | 177,526 | |||||||||
| Property Casualty | 26,218 | 16,386 | 42,604 | |||||||||
| Professional Liability | 5,822 | 24,859 | 30,681 | |||||||||
| Total Lloyd's Operations | 131,273 | 119,538 | 250,811 | |||||||||
| Total Net Loss Reserves | $ | 366,240 | $ | 633,631 | $ | 999,871 | ||||||
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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Investment Data
March 31, 2009
($ in thousands)
At March 31, 2009, the average quality of the investment portfolio as rated by S&P and Moody's was AA/Aa with an average duration of 4.3 years. All of the Company's mortgage-backed and asset-backed securities are rated AAA/Aaa by S&P and Moody's except for 40 securities approximating $30.8 million. The Company does not own any collateralized debt obligations (CDO's), collateralized loan obligations (CLO's) or asset backed commercial paper.
At March 31, 2009, the Company owned two asset-backed securities approximating $0.2 million with subprime mortgage exposures. The securities have an effective maturity of 1.7 years. In addition, the Company owned a total of five collateralized mortgage obligations and asset-backed securities approximating $1.5 million classified as Alt-A which is a credit category between prime and subprime. They have an effective maturity of 5.2 years. Such subprime and Alt-A categories are as defined by S&P. The Company is receiving principal and/or interest payments on all these securities and believes such amounts are fully collectible.
The following table sets forth our cash and investments at March 31, 2009:
| March 31, 2009 | Fair Value | Gross Unrealized Gains | Gross Unrealized (Losses) | OTTI Recognized in OCI | Cost or Amortized Cost | |||||||||||||||
| ($ in thousands) | ||||||||||||||||||||
| Fixed maturities: | ||||||||||||||||||||
| U.S. Government Treasury Bonds, | ||||||||||||||||||||
| agency bonds and foreign government bonds | $ | 398,268 | $ | 19,757 | $ | (25 | ) | $ | - | $ | 378,536 | |||||||||
| States, municipalities and political | ||||||||||||||||||||
| subdivisions | 610,021 | 19,116 | (4,230 | ) | - | 595,135 | ||||||||||||||
| Mortgage- and asset-backed securities: | ||||||||||||||||||||
| Mortgage-backed securities | 314,432 | 14,055 | (1 | ) | - | 300,378 | ||||||||||||||
| Collateralized mortgage obligations | 43,167 | - | (7,188 | ) | (16,103 | ) | 66,458 | |||||||||||||
| Asset-backed securities | 29,826 | 273 | (785 | ) | (68 | ) | 30,406 | |||||||||||||
| Commercial mortgage-backed securities | 89,648 | 15 | (23,511 | ) | - | 113,144 | ||||||||||||||
| Subtotal | 477,073 | 14,343 | (31,485 | ) | (16,171 | ) | 510,386 | |||||||||||||
| Corporate bonds. | 191,464 | 2,259 | (15,917 | ) | - | 205,122 | ||||||||||||||
| Total fixed maturities | 1,676,826 | 55,475 | (51,657 | ) | (16,171 | ) | 1,689,179 | |||||||||||||
| Equity securities - common stocks | 51,735 | 609 | (1,183 | ) | - | 52,309 | ||||||||||||||
| Cash | 16,644 | - | - | - | 16,644 | |||||||||||||||
| Short-term investments | 206,223 | - | - | - | 206,223 | |||||||||||||||
| Total | $ | 1,951,428 | $ | 56,084 | $ | (52,840 | ) | $ | (16,171 | ) | $ | 1,964,355 | ||||||||
News Release
Page 12
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Investment Data
March 31, 2009
($ in thousands)
The following three tables set forth our mortgage-backed securities, collateralized mortgage obligations, and asset-backed securities by those issued by FNMA and FHLMC and the quality category (prime, Alt-A and subprime) for all other such investments at March 31, 2009:
| Mortgage-backed securities: | Fair Value | Gross Unrealized Gains | Gross Unrealized (Losses) | Cost or Amortized Cost | ||||||||||||
| GNMA | $ | 41,227 | $ | 1,424 | $ | - | $ | 39,803 | ||||||||
| FNMA | 202,042 | 9,235 | (1) | 192,808 | ||||||||||||
| FHLMC | 71,163 | 3,396 | - | 67,767 | ||||||||||||
| Prime | - | - | - | - | ||||||||||||
| Alt-A | - | - | - | - | ||||||||||||
| Subprime | - | - | - | - | ||||||||||||
| Total | $ | 314,432 | $ | 14,055 | $ | (1) | $ | 300,378 | ||||||||
| Collateralized mortgage obligations: | Fair Value | Gross Unrealized Gains | Gross Unrealized (Losses) | Cost or Amortized Cost | ||||||||||||
| GNMA | $ | - | $ | - | $ | - | $ | - | ||||||||
| FNMA | - | - | - | - | ||||||||||||
| FHLMC | - | - | - | - | ||||||||||||
| Prime | 42,250 | - | (22,772 | ) | 65,022 | |||||||||||
| Alt-A | 917 | - | (519 | ) | 1,436 | |||||||||||
| Subprime | - | - | - | - | ||||||||||||
| Total | $ | 314,432 | $ | - | $ | (23,291 | ) | $ | 66,458 | |||||||
| Asset-backed securities: | Fair Value | Gross Unrealized Gains | Gross Unrealized (Losses) | Cost or Amortized Cost | ||||||||||||
| GNMA | $ | - | $ | - | $ | - | $ | - | ||||||||
| FNMA | - | - | - | - | ||||||||||||
| FHLMC | - | - | - | - | ||||||||||||
| Prime | 29,117 | 273 | (648 | ) | 29,492 | |||||||||||
| Alt-A | 545 | - | (136 | ) | 681 | |||||||||||
| Subprime | 164 | - | (69 | ) | 233 | |||||||||||
| Total | $ | 29,826 | $ | 273 | $ | (853 | ) | $ | 30,406 | |||||||