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 2, 2013 — The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $13.9 million, or $0.97 per diluted share, for the three months ended March 31, 2013 compared to $7.9 million, or $0.56 per diluted share, for the comparable period in 2012. Operating earnings were $10.8 million, or $0.75 per diluted share, for the first quarter of 2013 compared to operating earnings of $6.8 million, or $0.48 per diluted share, for the comparable period in 2012.

Gross written premiums and net written premiums for the three months ended March 31, 2013 were $393.2 million and $269.5 million, respectively, an increase of 14.6% and 10.9% from the comparable period in 2012.

The combined loss and expense ratio for the three months ended March 31, 2013 was 97.9% compared to 99.8% for the comparable period in 2012.

Stan Galanski, President and Chief Executive Officer, commented, “We are pleased to report profitable underwriting results for the quarter, with improved profitability in our U.S. insurance business. We are experiencing positive rate movement across most of our product lines and are benefitting from the investments made in expanding our underwriting team over the past few years.”

Stockholders’ equity was $896.8 million, or $63.46 per share, as of March 31, 2013 compared to $879.5 million, or $62.61 per share, as of December 31, 2012.

Net investment income for the three months ended March 31, 2013 was $13.7 million, an increase of 21.3% from the comparable period in 2012. Net investment income for the three months ended March 31, 2012 was reduced by $4.5 million as a result of the settlement of our 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, net other-than-temporary impairment losses recognized in earnings, and for 2012 the $4.5 million in interest expense for the settlement of our dispute with Equitas, was 2.3% and 2.8% for the three months ended March 31, 2013 and 2012, respectively. The effective tax rate on net investment income was 28.5% for the three months ended March 31, 2013, compared to 25.2% for the comparable period in 2012.

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 4.0 years as of March 31, 2013. As of March 31, 2013, net unrealized gains within our investment portfolio were $100.6 million, a decrease of $2.8 million compared to December 31, 2012. There were $4.8 million of net realized gains including other-than-temporary impairment losses recognized in earnings for the three months ended March 31, 2013, compared to $1.7 million for the same period in 2012.

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

News Release

May 2, 2013

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Consolidated net cash flow from operations for the three months ended March 31, 2013 was $4.3 million, compared to $16.4 million for the comparable period in 2012.

The Company will hold a conference call on Friday, May 3, 2013 starting at 8:30 a.m. ET to discuss the 2013 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=127890

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.

The Navigators Group, Inc. logo is available athttp://www.globenewswire.com/newsroom/prs /?pkgid=7778

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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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Financial Highlights

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

(unaudited)

	Three Months Ended March 31,
	2013			2012			Change
Results of Operations
Gross written premiums	$	393,222		$	343,149			14.6	%
Net written premiums		269,452			243,045			10.9	%
Revenues:
Net earned premiums		202,328			183,119			10.5	%
Net investment income		13,657			11,258			21.3	%
Total other-than-temporary impairment losses		(42	)		(198	)		-78.8	%
Portion of loss recognized in other comprehensive income (before tax)		—			44			NM
Net other-than-temporary impairment losses recognized in earnings		(42	)		(154	)		-72.7	%
Net realized gains (losses)		4,814			1,842			NM
Other income		618			911			-32.1	%
Total revenues		221,375			196,976			12.4	%
Expenses:
Net losses and loss adjustment expenses		131,342			117,985			11.3	%
Commission expenses		26,555			29,450			-9.8	%
Other operating expenses		40,874			36,307			12.6	%
Interest expense		2,051			2,049			0.1	%
Total expenses		200,822			185,791			8.1	%
Income before income taxes		20,553			11,185			83.8	%
Income tax expense (benefit)		6,643			3,281			102.5	%
Net income (loss)	$	13,910		$	7,904			76.0	%
Per Share Data
Net income per common share:
Basic	$	0.99		$	0.57			74.7	%
Diluted	$	0.97		$	0.56			73.5	%
Average common shares outstanding:
Basic		14,085,821			13,979,442
Diluted		14,374,957			14,174,875
Underwriting Ratios
Loss Ratio		64.9	%		64.4	%
Expense Ratio		33.0	%		35.4	%
Combined Ratio		97.9	%		99.8	%
	March 31, 2013			Dec. 31, 2012
Balance Sheet Data
Stockholders’ equity	$	896,758		$	879,485			2.0	%
Book value per share	$	63.46		$	62.61			1.4	%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands, except share data)

	March 31, 2013			December 31, 2012
	(unaudited)
ASSETS
Investments and cash:
Fixed maturities, available-for-sale, at fair value (amortized cost: 2013, $2,001,865; 2012, $2,034,765)	$	2,078,003		$	2,121,833
Equity securities, available-for-sale, at fair value (cost: 2013, $92,017; 2012, $85,004)		116,482			101,297
Short-term investments, at cost which approximates fair value		129,475			153,788
Cash		58,576			45,336
Total investments and cash		2,382,536			2,422,254
Premiums receivable		400,397			320,182
Prepaid reinsurance premiums		232,776			221,015
Reinsurance recoverable on paid losses		51,955			49,282
Reinsurance recoverable on unpaid losses and loss adjustment expenses		872,290			880,139
Deferred policy acquisition costs		69,349			61,005
Accrued investment income		13,640			12,587
Goodwill and other intangible assets		6,785			7,093
Deferred income tax, net		4,049			3,216
Receivable for investments sold		9,334			4,310
Other assets		27,934			26,587
Total assets	$	4,071,045		$	4,007,670
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserves for losses and loss adjustment expenses	$	2,104,386		$	2,097,048
Unearned premiums		719,383			642,407
Reinsurance balances payable		165,113			165,813
Senior notes		114,462			114,424
Current income tax payable, net		7,078			2,133
Payable for investments purchased		20,905			58,345
Accounts payable and other liabilities		42,960			48,015
Total liabilities		3,174,287			3,128,185
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 17,641,357 shares for 2013 and 17,558,046 shares for 2012		1,763			1,755
Additional paid-in capital		331,932			329,452
Treasury stock, at cost (3,511,380 shares for 2013 and 2012)		(155,801	)		(155,801	)
Retained earnings		642,781			628,871
Accumulated other comprehensive income		76,083			75,208
Total stockholders’ equity		896,758			879,485
Total liabilities and stockholders’ equity	$	4,071,045		$	4,007,670

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Comparative Premium Data

($ in thousands)

	Three Months
	2013		2012		Change
Gross Written Premiums:
Insurance Companies:
Marine	$	50,847	$	61,865		-17.8	%
Property Casualty		218,964		155,919		40.4	%
Professional Liability		31,817		30,554		4.1	%
		301,628		248,338		21.5	%
Lloyd’s Operations:
Marine		53,644		61,775		-13.2	%
Property Casualty		25,058		24,296		3.1	%
Professional Liability		12,892		8,740		47.5	%
		91,594		94,811		-3.4	%
Total	$	393,222	$	343,149		14.6	%
	Three Months
	2013		2012		Change
Net Written Premiums:
Insurance Companies:
Marine	$	41,141	$	42,865		-4.0	%
Property Casualty		149,951		114,532		30.9	%
Professional Liability		25,227		23,853		5.8	%
		216,319		181,250		19.3	%
Lloyd’s Operations:
Marine		39,558		48,058		-17.7	%
Property Casualty		7,312		9,355		-21.8	%
Professional Liability		6,263		4,382		42.9	%
		53,133		61,795		-14.0	%
Total	$	269,452	$	243,045		10.9	%
	Three Months
	2013		2012		Change
Net Earned Premiums:
Insurance Companies:
Marine	$	36,725	$	35,275		4.1	%
Property Casualty		92,718		74,368		24.7	%
Professional Liability		24,888		21,905		13.6	%
		154,331		131,548		17.3	%
Lloyd’s Operations:
Marine		34,045		33,264		2.3	%
Property Casualty		7,879		14,502		-45.7	%
Professional Liability		6,073		3,805		59.6	%
		47,997		51,571		-6.9	%
Total	$	202,328	$	183,119		10.5	%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

March 31, 2013

($ in thousands)

	Insurance Companies			Lloyd’s Operations			Corporate (1)			Total
Gross written premiums	$	301,628		$	91,594		$	—		$	393,222
Net written premiums		216,319			53,133			—			269,452
Net earned premiums		154,331			47,997			—			202,328
Net losses and loss adjustment expenses		(106,985	)		(24,357	)		—			(131,342	)
Commission expenses		(18,517	)		(8,621	)		583			(26,555	)
Other operating expenses		(29,343	)		(11,531	)		—			(40,874	)
Other income (expense)		659			542			(583	)		618
Underwriting profit (loss)		145			4,030			—			4,175
Net investment income		11,951			1,702			4			13,657
Net realized gains (losses)		4,792			(20	)		0			4,772
Interest expense		—			—			(2,051	)		(2,051	)
Income (loss) before income taxes		16,888			5,712			(2,047	)		20,553
Income tax expense (benefit)		5,404			2,046			(807	)		6,643
Net income (loss)	$	11,484		$	3,666		$	(1,240	)	$	13,910
Losses and loss adjustment expenses ratio		69.3	%		50.7	%					64.9	%
Commission expense ratio		12.0	%		18.0	%					13.1	%
Other operating expense ratio(2)		18.6	%		22.9	%					19.9	%
Combined ratio		99.9	%		91.6	%					97.9	%

(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

Segment Information

Three Months Ended

March 31, 2012

($ in thousands)

	Insurance Companies			Lloyd’s 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	)		—			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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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($ in thousands)

	Three Months Ended March 31, 2013
	Net		Losses
	Earned		and LAE		Underwriting		Underwriting			Loss			Expense			Combined
	Premiums		Incurred		Expenses		Profit (Loss)			Ratio			Ratio			Ratio
Insurance Companies:
Marine	$	36,725	$	23,385	$	12,828	$	512			63.7	%		34.9	%		98.6	%
Property Casualty		92,718		61,238		26,642		4,838			66.0	%		28.8	%		94.8	%
Professional Liability		24,888		22,362		7,731		(5,205	)		89.9	%		31.0	%		120.9	%
Total Insurance Companies		154,331		106,985		47,201		145			69.3	%		30.6	%		99.9	%
Lloyd’s Operations:
Marine		34,045		18,837		13,270		1,938			55.3	%		39.0	%		94.3	%
Property Casualty		7,879		751		4,320		2,808			9.5	%		54.9	%		64.4	%
Professional Liability		6,073		4,769		2,020		(716	)		78.5	%		33.3	%		111.8	%
Total Lloyd’s		47,997		24,357		19,610		4,030			50.7	%		40.9	%		91.6	%
Total All	$	202,328	$	131,342	$	66,811	$	4,175			64.9	%		33.0	%		97.9	%
	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		33,264		21,558		14,682		(2,976	)		64.8	%		44.1	%		108.9	%
Property Casualty		14,502		4,048		5,059		5,395			27.9	%		34.9	%		62.8	%
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	%

	Amounts						Loss Ratio
Net Incurred Loss Activity	Mar. 31,			Mar. 31,			Mar. 31,			Mar. 31,
For the Three Months Ended:	2013			2012			2013			2012
Insurance Companies:
Loss and LAE payments	$	79,904		$	93,652			51.8	%		71.2	%
Change in reserves		27,081			(2,475	)		17.5	%		-1.9	%
Net incurred loss and LAE		106,985			91,177			69.3	%		69.3	%
Lloyd’s Operations:
Loss and LAE payments		30,462			24,644			63.4	%		47.8	%
Change in reserves		(6,105	)		2,164			-12.7	%		4.2	%
Net incurred loss and LAE		24,357			26,808			50.7	%		52.0	%
Total
Loss and LAE payments		110,366			118,296			54.5	%		64.6	%
Change in reserves		20,976			(311	)		10.4	%		-0.2	%
Net incurred loss and LAE	$	131,342		$	117,985			64.9	%		64.4	%
Impact of Prior Years Reserves	Amounts						Loss Ratio Impact
Favorable / (Unfavorable) Development	Mar. 31,			Mar. 31,			Mar. 31,			Mar. 31,
For the Three Months Ended:	2013			2012			2013			2012
Insurance Companies	$	(7,730	)	$	2,716			-3.8	%		1.5	%
Lloyd’s Operations		3,647			4,150			1.8	%		2.2	%
Total	$	(4,083	)	$	6,866			-2.0	%		3.7	%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Net Loss Data

($ in thousands)

	Case		IBNR
Net Loss Reserves, March 31, 2013:	Reserves		Reserves		Total
Insurance Companies:
Marine	$	134,550	$	120,674	$	255,224
Property Casualty		216,211		294,205		510,416
Professional Liability		65,272		82,367		147,639
Total Insurance Companies		416,033		497,246		913,279
Lloyd’s Operations:
Marine		124,780		92,504		217,284
Property Casualty		26,307		22,895		49,202
Professional Liability		12,764		39,567		52,331
Total Lloyd’s Operations		163,851		154,966		318,817
Total Net Loss Reserves	$	579,884	$	652,212	$	1,232,096
	Case		IBNR
Net Loss Reserves, December 31, 2012	Reserves		Reserves		Total
Insurance Companies:
Marine	$	137,934	$	114,236	$	252,170
Property Casualty		204,988		290,455		495,443
Professional Liability		54,092		84,493		138,585
Total Insurance Companies		397,014		489,184		886,198
Lloyd’s Operations:
Marine		125,884		95,122		221,006
Property Casualty		27,903		28,463		56,366
Professional Liability		14,694		38,645		53,339
Total Lloyd’s Operations		168,481		162,230		330,711
Total Net Loss Reserves	$	565,495	$	651,414	$	1,216,909

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

March 31, 2013

As of March 31, 2013, the average quality of the investment portfolio as rated by S&P and Moody’s was AA/Aa with an average duration of 4.0 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, 2013, the Company owned two asset-backed securities approximating $0.7 million with subprime mortgage exposures. The securities have an effective maturity of 3.0 years. In addition, the Company owned a total of seven collateralized mortgage obligations and asset-backed securities approximating $2.1 million classified as Alt-A which is a credit category between prime and subprime. They have an effective maturity of 6.1 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, 2013:

			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
March 31, 2013	Value		Gains		(Losses)			Cost
	($ in thousands)
Fixed maturities:
U.S.Treasury bonds, agency bonds and foreign government bonds	$	531,463	$	7,988	$	(31	)	$	523,506
States, municipalities and political subdivisions		449,387		17,619		(1,744	)		433,512
Mortgage- and asset-backed securities:
Agency mortgage-backed securities		346,829		11,842		(640	)		335,627
Residential mortgage obligations		38,350		1,223		(187	)		37,314
Asset-backed securities		47,092		1,110		(29	)		46,011
Commercial mortgage-backed securities		180,939		13,170		(29	)		167,798
Subtotal		613,210		27,345		(885	)		586,750
Corporate bonds		483,943		25,970		(124	)		458,097
Total fixed maturities		2,078,003		78,922		(2,784	)		2,001,865
Equity securities—common stocks		116,482		24,712		(247	)		92,017
Short-term investments		129,475		—		—			129,475
Cash		58,576		—		—			58,576
Total	$	2,382,536	$	103,634	$	(3,031	)	$	2,281,933

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

March 31, 2013

($ 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, 2013:

			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
Agency mortgage-backed securities:	Value		Gains		(Losses)			Cost
GNMA	$	126,391	$	4,074	$	(556	)	$	122,873
FNMA		169,045		6,294		(62	)		162,813
FHLMC		51,393		1,474		(22	)		49,941
Total	$	346,829	$	11,842	$	(640	)	$	335,627
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
Residential mortgage obligations:	Value		Gains		(Losses)			Cost
Prime	$	12,507	$	417	$	(141	)	$	12,231
Alt-A		2,139		81		(46	)		2,104
Subprime		668		28		—			640
Non-US RMBS		23,036		697		—			22,339
Total	$	38,350	$	1,223	$	(187	)	$	37,314