Navigators (NAVG) 8-K Navigators Reports First Quarter Earnings

Exhibit 99.1

The Navigators Group, Inc. CORPORATE NEWS

Navigators Reports First Quarter Earnings

New York – May 3, 2012 — The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $7.9 million, or $0.56 per diluted share, for the three months ended March 31, 2012 compared to a net loss of $7.9 million, or $0.50 per share, for the comparable period in 2011. Operating earnings were $6.8 million, or $0.48 per diluted share for the first quarter of 2012 compared to a deficit of $6.7 million, or $0.43 per share, for the comparable period in 2011.

Gross written premiums and net written premiums for the three months ended March 31, 2012 were $343.1 million and $243.0 million, respectively, an increase of 15.8% and 25.9% from the comparable period in 2011.

The combined loss and expense ratio for the three months ended March 31, 2012 was 99.8%, compared to 117.1% for the comparable period in 2011.

Stan Galanski, President and Chief Executive Officer, commented, “We are pleased to have generated profitable underwriting results in a quarter that was impacted by one of the largest ocean marine losses in history, which is now projected to be over $1 billion to the industry. Despite the magnitude of the loss, Navigators’ net impact was well within our corporate risk appetite. Absent Costa Concordia, our combined ratio would have been 96.4%. This loss highlights the magnitude of economic value at risk in the operation of a modern cruise ship, encompassing loss of life, personal injury, damage to the vessel and the cost to remove the wreck. More broadly, we continue to achieve meaningful premium growth from the investments made in expanding our underwriting team and products over the past three years and experienced positive renewal price change across most of our specialty niches. Loss emergence was favorable during the quarter and operating expenses were in line with our expectations.”

Stockholders’ equity was $818.2 million, or $58.44 per share, as of March 31, 2012 compared to $803.4 million, or $57.57 per share, as of December 31, 2011.

Net investment income for the three months ended March 31, 2012 was $11.3 million, which decreased 35.2% from the comparable period in 2011. Investment income was reduced by $4.5 million as a result of the settlement of our pending 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 2.0% for the three months ended March 31, 2012, compared to 3.3% for the comparable period in 2011. The effective tax rate on net investment income was 25.2% for the three months ended March 31, 2012, compared to 28.5% for the comparable period in 2011.

6 International Drive	Rye Brook, NY 10573
TEL (914) 933-6000	FAX (914) 934-2355

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May 3, 2012

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The Company’s investment portfolio mainly consists of fixed income securities with an average quality rating of “AA/Aa” as defined by Standard & Poor’s and Moody’s, respectively, and an average effective duration of 3.7 years as of March 31, 2012. As of March 31, 2012, net unrealized gains within our investment portfolio were $107.4 million, an increase of $13.8 million compared to December 31, 2011. There was $1.7 million of net realized gains including other-than-temporary impairment losses recognized in earnings for the three months ended March 31, 2012.

Consolidated net cash flow from operations for the three months ended March 31, 2012 was $16.4 million, compared to $13.3 million for the comparable period in 2011.

The Company will hold a conference call on Friday, May 4, 2012 starting at 8:30 a.m. ET to discuss the 2012 first 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=112108

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 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” 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

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May 3, 2012

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Financial Highlights

($ in thousands, except share and per share data)

(unaudited)

	Three Months Ended March 31,
	2012			2011			Change
Results of Operations
Gross written premiums	$	343,149		$	296,283			15.8	%
Net written premiums		243,045			193,076			25.9	%
Revenues:
Net earned premiums		183,119			152,478			20.1	%
Net investment income		11,258			17,384			-35.2	%
Total other-than-temporary impairment losses		(198	)		(263	)		NM
Portion of loss recognized in other comprehensive income (before tax)		44			22			100	%
Net other-than-temporary impairment losses recognized in earnings		(154	)		(241	)		NM
Net realized gains (losses)		1,842			(1,389	)		NM
Other income		911			991			NM
Total revenues		196,976			169,223			16.4	%
Expenses:
Net losses and loss adjustment expenses		117,985			116,788			1.0	%
Commission expenses		29,450			26,200			12.4	%
Other operating expenses		36,307			36,575			-0.7	%
Interest expense		2,049			2,046			0.1	%
Total expenses		185,791			181,609			2.3	%
Income before income taxes		11,185			(12,386	)		NM
Income tax expense (benefit)		3,281			(4,493	)		NM
Net income (loss)	$	7,904		$	(7,893	)		NM
Per Share Data
Net income per common share:
Basic	$	0.57		$	(0.50	)		NM
Diluted	$	0.56		$	(0.50	)		NM
Average common shares outstanding:
Basic		13,979,442			15,738,693
Diluted		14,174,875			15,738,693
Underwriting Ratios
Loss Ratio		64.4	%		76.6	%
Expense Ratio		35.4	%		40.5	%
Combined Ratio		99.8	%		117.1	%
	March 31,			Dec 31,
	2012			2011
Balance Sheet Data
Stockholders’ equity	$	818,217		$	803,435			1.8	%
Book value per share	$	58.44		$	57.57			1.5	%

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May 3, 2012

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands, except share data)

	March 31, 2012			December 31, 2011
	(unaudited)
ASSETS
Investments and cash:
Fixed maturities, available-for-sale, at fair value (amortized cost: 2012, $1,863,076; 2011, $1,816,710)	$	1,943,563		$	1,888,069
Equity securities, available-for-sale, at fair value (cost: 2012, $75,479; 2011, $73,567)		102,400			95,849
Short-term investments, at cost which approximates fair value		202,977			122,220
Cash		45,508			127,360
Total investments and cash		2,294,448			2,233,498
Premiums receivable		344,397			255,725
Prepaid reinsurance premiums		172,216			164,162
Reinsurance recoverable on paid losses		51,694			43,791
Reinsurance recoverable on unpaid losses and loss adjustment expenses		856,720			845,445
Deferred policy acquisition costs		70,000			63,984
Accrued investment income		14,528			14,492
Goodwill and other intangible assets		7,009			6,869
Current income tax receivable, net		8,059			15,391
Other Assets		28,456			26,650
Total assets	$	3,847,527		$	3,670,007
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserves for losses and loss adjustment expenses	$	2,093,643		$	2,082,679
Unearned premiums		601,333			532,628
Reinsurance balances payable		130,664			108,699
Senior notes		114,312			114,276
Deferred income tax, net		2,706			6,291
Accounts payable and other liabilities		86,652			21,999
Total liabilities		3,029,310			2,866,572
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 17,513,557 shares for 2012 and 17,467,615 shares for 2011		1,750			1,746
Additional paid-in capital		323,030			322,133
Treasury stock, at cost (3,511,380 shares for 2012 and 2011)		(155,801	)		(155,801	)
Retained earnings		573,013			565,109
Accumulated other comprehensive income		76,225			70,248
Total stockholders’ equity		818,217			803,435
Total liabilities and stockholders’ equity	$	3,847,527		$	3,670,007

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Comparative Premium Data

($ in thousands)

	Three Months
	2012		2011		Change
Gross Written Premiums:
Insurance Companies:
Marine	$	61,865	$	70,348		-12.1	%
Property Casualty		155,919		112,888		38.1	%
Professional Liability		30,554		23,540		29.8	%
		248,338		206,776		20.1	%
Lloyd’s Operations:
Marine		62,330		61,155		1.9	%
Property Casualty		23,741		19,302		23.0	%
Professional Liability		8,740		9,050		-3.4	%
		94,811		89,507		5.9	%
Total	$	343,149	$	296,283		15.8	%

	Three Months
	2012		2011		Change
Net Written Premiums:
Insurance Companies:
Marine	$	42,865	$	54,218		-20.9	%
Property Casualty		114,532		62,907		82.1	%
Professional Liability		23,853		13,615		75.2	%
		181,250		130,740		38.6	%
Lloyd’s Operations:
Marine		48,525		49,671		-2.3	%
Property Casualty		8,888		8,386		6.0	%
Professional Liability		4,382		4,279		2.4	%
		61,795		62,336		-0.9	%
Total	$	243,045	$	193,076		25.9	%

	Three Months
	2012		2011		Change
Net Earned Premiums:
Insurance Companies:
Marine	$	35,275	$	40,559		-13.0	%
Property Casualty		74,368		42,935		73.2	%
Professional Liability		21,905		15,326		42.9	%
		131,548		98,820		33.1	%
Lloyd’s Operations:
Marine		34,609		36,978		-6.4	%
Property Casualty		13,157		11,894		10.6	%
Professional Liability		3,805		4,786		-20.5	%
		51,571		53,658		-3.9	%
Total	$	183,119	$	152,478		20.1	%

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May 3, 2012

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

March 31, 2012

($ in thousands)

	Insurance			Lloyd’s
	Companies			Operations			Corporate (1)			Total
Gross written premiums	$	248,338		$	94,811		$	—		$	343,149
Net written premiums		181,250			61,795			—			243,045
Net earned premiums		131,548			51,571			—			183,119
Net losses and loss adjustment expenses		(91,177	)		(26,808	)		—			(117,985	)
Commission expenses		(19,301	)		(10,886	)		737			(29,450	)
Other operating expenses		(25,345	)		(10,962	)		—			(36,307	)
Other income (expense)		1,642			6			(737	)		911
Underwriting profit (loss)		(2,633	)		2,921			—			288
Net investment income		8,935			2,283			40			11,258
Net realized gains (losses)		1,875			(187	)		0			1,688
Interest expense		—			—			(2,049	)		(2,049	)
Income (loss) before income taxes		8,177			5,017			(2,009	)		11,185
Income tax expense (benefit)		2,258			1,726			(703	)		3,281
Net income (loss)	$	5,919		$	3,291		$	(1,306	)	$	7,904
Losses and loss adjustment expenses ratio		69.3	%		52.0	%					64.4	%
Commission expense ratio		14.7	%		21.1	%					16.1	%
Other operating expense ratio(2)		18.0	%		21.2	%					19.3	%
Combined ratio		102.0	%		94.3	%					99.8	%

(1) The Corporate segment includes intercompany eliminations.

(2) The Other operating expense ratio includes Other income (expense).

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May 3, 2012

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

March 31, 2011

($ in thousands)

	Insurance			Lloyd’s
	Companies			Operations			Corporate (1)			Total
Gross written premiums	$	206,776		$	89,507		$	—		$	296,283
Net written premiums		130,740			62,336			—			193,076
Net earned premiums		98,820			53,658			—			152,478
Net losses and loss adjustment expenses		(74,797	)		(41,991	)		—			(116,788	)
Commission expenses		(12,340	)		(14,407	)		547			(26,200	)
Other operating expenses		(26,799	)		(9,776	)		—			(36,575	)
Other income (expense)		1,691			(153	)		(547	)		991
Underwriting profit (loss)		(13,425	)		(12,669	)		—			(26,094	)
Net investment income		14,983			2,255			146			17,384
Net realized gains (losses)		(245	)		(1,385	)		—			(1,630	)
Interest expense		—			—			(2,046	)		(2,046	)
Income (loss) before income taxes		1,313			(11,799	)		(1,900	)		(12,386	)
Income tax expense (benefit)		228			(4,056	)		(665	)		(4,493	)
Net income (loss)	$	1,085		$	(7,743	)	$	(1,235	)	$	(7,893	)
Losses and loss adjustment expenses ratio		75.7	%		78.3	%					76.6	%
Commission expense ratio		12.5	%		26.8	%					17.2	%
Other operating expense ratio(2)		25.4	%		18.5	%					23.3	%
Combined ratio		113.6	%		123.6	%					117.1	%

(1) The Corporate segment includes intercompany eliminations.

(2) The Other operating expense ratio includes Other income (expense).

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($ in thousands)

	Three Months Ended March 31, 2012
	Net		Losses
	Earned		and LAE		Underwriting		Underwriting			Loss			Expense			Combined
	Premiums		Incurred		Expenses		Profit (Loss)			Ratio			Ratio			Ratio
Insurance Companies:
Marine	$	35,275	$	27,770	$	12,655	$	(5,150	)		78.7	%		35.9	%		114.6	%
Property Casualty		74,368		48,148		22,854		3,366			64.7	%		30.8	%		95.5	%
Professional Liability		21,905		15,259		7,495		(849	)		69.7	%		34.2	%		103.9	%
Total Insurance Companies		131,548		91,177		43,004		(2,633	)		69.3	%		32.7	%		102.0	%
Lloyd’s Operations:
Marine		34,609		21,558		14,682		(1,631	)		62.3	%		42.4	%		104.7	%
Property Casualty		13,157		4,048		5,059		4,050			30.8	%		38.4	%		69.2	%
Professional Liability		3,805		1,202		2,101		502			31.6	%		55.2	%		86.8	%
Total Lloyd’s		51,571		26,808		21,842		2,921			52.0	%		42.3	%		94.3	%
Total All	$	183,119	$	117,985	$	64,846	$	288			64.4	%		35.4	%		99.8	%
	Three Months Ended March 31, 2011
	Net		Losses
	Earned		and LAE		Underwriting		Underwriting			Loss			Expense			Combined
	Premiums		Incurred		Expenses		Profit (Loss)			Ratio			Ratio			Ratio
Insurance Companies:
Marine	$	40,559	$	27,998	$	13,798	$	(1,237	)		69.0	%		34.0	%		103.0	%
Property Casualty		42,935		35,934		17,598		(10,597	)		83.7	%		41.0	%		124.7	%
Professional Liability		15,326		10,865		6,052		(1,591	)		70.9	%		39.5	%		110.4	%
Total Insurance Companies		98,820		74,797		37,448		(13,425	)		75.7	%		37.9	%		113.6	%
Lloyd’s Operations:
Marine		36,978		24,890		14,778		(2,690	)		67.3	%		40.0	%		107.3	%
Property Casualty		11,894		9,283		7,112		(4,501	)		78.0	%		59.8	%		137.8	%
Professional Liability		4,786		7,818		2,446		(5,478	)		163.4	%		51.1	%		214.5	%
Total Lloyd’s		53,658		41,991		24,336		(12,669	)		78.3	%		45.3	%		123.6	%
Total All	$	152,478	$	116,788	$	61,784	$	(26,094	)		76.6	%		40.5	%		117.1	%

	Amounts						Loss Ratio
	March 31,			March 31,			March 31,			March 31,
	2012			2011			2012			2011
Net Incurred Loss Activity
For the Three Months Ended:
Insurance Companies:
Loss and LAE payments	$	93,652		$	66,693			71.2	%		67.5	%
Change in reserves		(2,475	)		8,104			-1.9	%		8.2	%
Net incurred loss and LAE		91,177			74,797			69.3	%		75.7	%
Lloyd’s Operations:
Loss and LAE payments		24,644			23,587			47.8	%		44.0	%
Change in reserves		2,164			18,404			4.2	%		34.3	%
Net incurred loss and LAE		26,808			41,991			52.0	%		78.3	%
Total
Loss and LAE payments		118,296			90,280			64.6	%		59.2	%
Change in reserves		(311	)		26,508			-0.2	%		17.4	%
Net incurred loss and LAE	$	117,985		$	116,788			64.4	%		76.6	%
	Amounts						Loss Ratio Impact
	March 31,			March 31,			March 31,			March 31,
	2012			2011			2012			2011
Impact of Prior Years Reserves
Favorable / (Unfavorable) Development
For the Three Months Ended:
Insurance Companies	$	2,716		$	(1,222	)		2.1	%		-1.2	%
Lloyd’s Operations		4,150			(2,211	)		8.0	%		-4.1	%
Total	$	6,866		$	(3,433	)		3.7	%		-2.3	%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Net Loss Data

($ in thousands)

	Case		IBNR
	Reserves		Reserves		Total
Net Loss Reserves, March 31, 2012:
Insurance Companies:
Marine	$	137,322	$	118,297	$	255,619
Property Casualty		171,977		303,766		475,743
Professional Liability		54,319		84,073		138,392
Total Insurance Companies		363,618		506,136		869,754
Lloyd’s Operations:
Marine		123,518		129,880		253,398
Property Casualty		29,853		22,159		52,012
Professional Liability		13,482		48,277		61,759
Total Lloyd’s Operations		166,853		200,316		367,169
Total Net Loss Reserves	$	530,471	$	706,452	$	1,236,923

	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
Lloyd’s 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 Lloyd’s Operations		168,905		196,100		365,005
Total Net Loss Reserves	$	539,592	$	697,642	$	1,237,234

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

March 31, 2012

As of March 31, 2012, the average quality of the investment portfolio as rated by S&P and Moody’s was AA/Aa with an average duration of 3.7 years. The Company does not own any collateralized debt obligations (CDO’s), collateralized loan obligations (CLO’s) or asset backed commercial paper.

As of March 31, 2012, the Company owned two asset-backed securities approximating $0.7 million with subprime mortgage exposures. The securities have an effective maturity of 1.6 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 5.6 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 March 31, 2012:

			Gross		Gross			Cost or		OTTI
	Fair		Unrealized		Unrealized			Amortized		Recognized
March 31, 2012	Value		Gains		(Losses)			Cost		in OCI
	($ in thousands)
Fixed maturities:
U.S. Government Treasury bonds,agency bonds and foreign government bonds	$	418,876	$	8,032	$	(856	)	$	411,700	$	—
States, municipalities and political Subdivisions		398,399		28,185		(156	)		370,370		—
Mortgage- and asset-backed securities:
Agency mortgage-backed securities		385,239		16,240		(7	)		369,006		—
Residential mortgage obligations		20,254		35		(2,009	)		22,228		(1,037	)
Asset-backed securities		49,077		874		(45	)		48,248		—
Commercial mortgage-backed securities		212,609		13,248		(76	)		199,437		—
Subtotal		667,179		30,397		(2,137	)		638,919		(1,037	)
Corporate bonds		459,109		17,945		(923	)		442,087		—
Total fixed maturities		1,943,563		84,559		(4,072	)		1,863,076		(1,037	)
Equity securities—common stocks		102,400		27,263		(342	)		75,479		—
Short-term investments		202,977		—		—			202,977		—
Cash		45,508		—		—			45,508		—
Total	$	2,294,448	$	111,822	$	(4,414	)	$	2,187,040	$	(1,037	)

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May 3, 2012

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

March 31, 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 March 31, 2012:

			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
	Value		Gains		(Losses)			Cost
Agency mortgage-backed securities:
GNMA	$	119,235	$	6,573	$	(2	)	$	112,664
FNMA		178,702		7,469		(5	)		171,238
FHLMC		87,302		2,198		—			85,104
Total	$	385,239	$	16,240	$	(7	)	$	369,006
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
	Value		Gains		(Losses)			Cost
Residential mortgage obligations:
Prime	$	13,011	$	11	$	(1,629	)	$	14,629
Alt-A		2,009		3		(375	)		2,381
Subprime		—		—		—			—
Non-US RMBS		5,234		21		(5	)		5,218
Total	$	20,254	$	35	$	(2,009	)	$	22,228