Navigators (NAVG) 8-K Results of Operations and Financial Condition

Exhibit 99.1

	The Navigators Group, Inc.
	CORPORATE NEWS
	Navigators Reports Second Quarter Earnings, Net Income up 21%

Stamford, CT – August 7, 2014 — The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $16.9 million, or $1.17 per diluted share, for the three months ended June 30, 2014 compared to $13.9 million, or $0.97 per diluted share, for the comparable period in 2013. Operating earnings were $15.0 million, or $1.04 per diluted share, for the second quarter of 2014 compared to $11.8 million, or $0.82 per diluted share, for the comparable period in 2013.

For the six months ended June 30, 2014, the Company reported net income of $44.8 million, or $3.11 per diluted share compared to $27.8 million, or $1.93 per diluted share, for the comparable period in 2013. Operating earnings were $35.9 million, or $2.49 per diluted share, for the six months ended June 30, 2014 compared to $22.6 million, or $1.56 per diluted share, for the comparable period in 2013.

Gross written premiums and net written premiums for the three months ended June 30, 2014 were $348.8 million and $231.9 million, respectively, an increase of 5.0% and 16.8% from the comparable period in 2013.

Gross written premiums and net written premiums for the six months ended June 30, 2014 were $771.6 million and $543.7 million, respectively, an increase of 6.4% and 16.2% from the comparable period in 2013.

The combined loss and expense ratio for the three and six months ended June 30, 2014 was 95.3% and 93.8%, respectively, compared to 97.7% and 97.8% for the comparable periods in 2013.

“We are pleased with our financial performance for the first six months of 2014, with net income up 61% and book value per share growth of 7.3%” stated Stan Galanski, President and Chief Executive Officer. “Despite large loss activity in our marine liability business at Lloyd’s, we reported solid underwriting profit, with a combined ratio of 95.3% for the quarter, a more than two point improvement from second quarter 2013. Our U.S. marine business and global management and professional liability units made meaningful earnings contributions to the quarter. We achieved double-digit growth in net written premium, resulting both from ongoing new business success, most notably in our U.S. casualty units and international D&O, and from the restructuring of several ceded reinsurance treaties earlier in the year. We continue to focus on identifying good opportunities for profitable growth.”

Stockholders’ equity was $972.1 million, or $68.16 per share, as of June 30, 2014 compared to $902.2 million, or $63.54 per share, as of December 31, 2013.

400 Atlantic Street	Stamford, CT 06901
TEL (203) 905-6090	FAX (203) 658-1821

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Net investment income for the three and six months ended June 30, 2014 was $15.6 million and $32.3 million, respectively, an increase of 9.8% and 15.6% from the comparable periods in 2013. The annualized pre-tax investment yield, excluding net realized gains and losses and other-than-temporary impairment losses recognized in earnings, was 2.5% and 2.6% for the three and six months ended June 30, 2014, compared to 2.4% for each of the comparable periods in 2013. The effective tax rate on net investment income was 27.0% and 27.5% for the three and six months ended June 30, 2014, respectively, compared to 27.6% and 28.0% for the comparable periods in 2013.

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 3.8 years as of June 30, 2014. As of June 30, 2014, net unrealized gains within our investment portfolio were $75.8 million, an increase of $39.8 million compared to December 31, 2013.

There were $4.5 million of net realized gains recognized in earnings for the three months ended June 30, 2014, compared to $3.3 million for the same period in 2013. For the six months ended June 30, 2014, there were $5.3 million of net realized gains, compared to $8.1 million for the same period in 2013.

Other income for the six months ended June 30, 2014 includes a one-time foreign exchange gain of $10.0 million ($6.6 million after-tax) due to a change in the functional currency of our Lloyd’s Operations, which is equally offset by a reversal within the Accumulated Other Comprehensive Income component of stockholders’ equity.

Consolidated net cash flow from operations for the three and six months ended June 30, 2014 was $69.3 million and $78.1 million, respectively, compared to $44.2 million and $48.5 million for the comparable periods in 2013.

The Company will hold a conference call on Friday, August 8, 2014 starting at 8:30 a.m. ET to discuss the 2014 second 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 (888)-364-3109 and the international dial-in is (719) 325-2491. Participants may connect to the webcast at:

http://www.media-server.com/m/p/trvmhk48

Operating earnings, or net income excluding after-tax net realized gains (losses), net other-than-temporary impairment losses recognized in earnings, and after-tax foreign exchange gains and losses resulting from foreign currency transactions (transactions denominated in a currency other than the entity’s functional currency) and translation adjustments (translation of foreign currency denominated assets and liabilities into the entity’s functional currency), 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. Navigators has offices in the United States, the United Kingdom and Continental Europe, as well as representative offices in China and Brazil.

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

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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
	(203) 905-6343
	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									Six Months Ended
	June 30,									June 30,
Results of Operations	2014			2013			Change			2014			2013			Change
Gross written premiums	$	348,795		$	332,128			5.0	%	$	771,585		$	725,350			6.4	%
Net written premiums		231,864			198,469			16.8	%		543,714			467,921			16.2	%
Revenues:
Net earned premiums		231,084			205,814			12.3	%		456,356			408,142			11.8	%
Net investment income		15,648			14,246			9.8	%		32,258			27,903			15.6	%
Total other-than-temporary impairment losses		—			—			NM			—			(42	)		NM
Portion of loss recognized in other comprehensive income (before tax)		—			—			NM			—			—			NM
Net other-than-temporary impairment losses recognized in earnings		—			—			NM			—			(42	)		NM
Net realized gains (losses)		4,473			3,345			33.7	%		5,306			8,159			–35.0	%
Other income		(1,665	)		(915	)		82.0	%		8,734			(297	)		NM
Total revenues		249,540			222,490			12.2	%		502,654			443,865			13.2	%
Expenses:
Net losses and loss adjustment expenses		140,220			131,148			6.9	%		275,287			262,490			4.9	%
Commission expenses		32,150			28,391			13.2	%		57,877			54,946			5.3	%
Other operating expenses		47,992			40,678			18.0	%		95,138			81,552			16.7	%
Interest expense		4,319			2,052			110.5	%		8,171			4,103			99.1	%
Total expenses		224,681			202,269			11.1	%		436,473			403,091			8.3	%
Income before income taxes		24,859			20,221			22.9	%		66,181			40,774			62.3	%
Income tax expense (benefit)		7,998			6,284			27.3	%		21,352			12,927			65.2	%
Net income (loss)	$	16,861		$	13,937			21.0	%	$	44,829		$	27,847			61.0	%
Per Share Data
Net income per common share:
Basic	$	1.18		$	0.99			19.9	%	$	3.15		$	1.97			59.4	%
Diluted	$	1.17		$	0.97			21.4	%	$	3.11		$	1.93			61.3	%
Average common shares outstanding:
Basic		14,259,753			14,131,422						14,246,701			14,108,747
Diluted		14,377,476			14,428,117						14,401,740			14,434,232
Underwriting Ratios
Loss Ratio		60.7	%		63.7	%					60.3	%		64.3	%
Expense Ratio		34.6	%		34.0	%					33.5	%		33.5	%
Combined Ratio		95.3	%		97.7	%					93.8	%		97.8	%
Balance Sheet Data	June 30,			March 31,						June 30,			Dec. 31,
	2014			2014						2014			2013
Stockholders’ equity	$	972,080		$	936,834			3.8	%	$	972,080		$	902,212			7.7	%
Book value per share	$	68.16		$	65.72			3.7	%	$	68.16		$	63.54			7.3	%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands, except share data)

	June 30,			December 31,
	2014			2013
	(unaudited)
ASSETS
Investments and cash:
Fixed maturities, available-for-sale, at fair value (amortized cost: 2014, $2,177,094; 2013, $2,036,999)	$	2,220,855		$	2,047,873
Equity securities, available-for-sale, at fair value (cost: 2014, $148,412; 2013, $118,804)		180,486			143,954
Short-term investments, at cost which approximates fair value		226,237			296,250
Cash		72,604			86,509
Total investments and cash		2,700,182			2,574,586
Premiums receivable		417,122			325,025
Prepaid reinsurance premiums		246,699			247,822
Reinsurance recoverable on paid losses		42,074			38,384
Reinsurance recoverable on unpaid losses and loss adjustment expenses		841,981			822,438
Deferred policy acquisition costs		76,975			67,007
Accrued investment income		14,579			13,866
Goodwill and other intangible assets		7,218			7,177
Current income tax receivable, net		7,149			9,918
Deferred income tax, net		17,307			28,187
Other assets		44,445			35,042
Total assets	$	4,415,731		$	4,169,452
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserves for losses and loss adjustment expenses	$	2,137,802		$	2,045,071
Unearned premiums		801,302			714,606
Reinsurance balances payable		159,261			167,252
Senior notes		263,373			263,308
Payable for investments purchased		18,615			7,624
Accounts payable and other liabilities		63,298			69,379
Total liabilities		3,443,651			3,267,240
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 17,772,359 shares for 2014 and 17,709,876 shares for 2013		1,776			1,770
Additional paid-in capital		339,523			335,546
Treasury stock, at cost (3,511,380 shares for 2014 and 2013)		(155,801	)		(155,801	)
Retained earnings		737,166			692,337
Accumulated other comprehensive income		49,416			28,360
Total stockholders’ equity		972,080			902,212
Total liabilities and stockholders’ equity	$	4,415,731		$	4,169,452

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Comparative Premium Data

($ in thousands)

	Three Months							Six Months
	2014		2013		Change			2014		2013		Change
Gross Written Premiums:
Insurance Companies:
Marine	$	48,119	$	43,077		11.7	%	$	100,352	$	93,924		6.8	%
Property Casualty		168,597		152,095		10.8	%		397,953		371,059		7.2	%
Professional Liability		27,013		33,393		–19.1	%		57,222		65,210		–12.2	%
		243,729		228,565		6.6	%		555,527		530,193		4.8	%
Lloyd’s Operations:
Marine		46,005		45,893		0.2	%		108,962		99,537		9.5	%
Property Casualty		37,162		41,217		–9.8	%		70,241		66,275		6.0	%
Professional Liability		21,899		16,453		33.1	%		36,855		29,345		25.6	%
		105,066		103,563		1.5	%		216,058		195,157		10.7	%
Total	$	348,795	$	332,128		5.0	%	$	771,585	$	725,350		6.4	%
	Three Months							Six Months
	2014		2013		Change			2014		2013		Change
Net Written Premiums:
Insurance Companies:
Marine	$	35,357	$	27,366		29.2	%	$	76,481	$	68,507		11.6	%
Property Casualty		119,633		90,711		31.9	%		291,994		240,662		21.3	%
Professional Liability		19,051		25,303		–24.7	%		39,517		50,530		–21.8	%
		174,041		143,380		21.4	%		407,992		359,699		13.4	%
Lloyd’s Operations:
Marine		29,562		34,060		–13.2	%		81,693		73,618		11.0	%
Property Casualty		14,392		12,181		18.2	%		30,926		19,493		58.7	%
Professional Liability		13,869		8,848		56.7	%		23,103		15,111		52.9	%
		57,823		55,089		5.0	%		135,722		108,222		25.4	%
Total	$	231,864	$	198,469		16.8	%	$	543,714	$	467,921		16.2	%
	Three Months							Six Months
	2014		2013		Change			2014		2013		Change
Net Earned Premiums:
Insurance Companies:
Marine	$	31,752	$	31,798		–0.1	%	$	64,512	$	68,523		–5.9	%
Property Casualty		124,695		99,477		25.4	%		235,521		192,195		22.5	%
Professional Liability		21,965		25,272		–13.1	%		44,263		50,160		–11.8	%
		178,412		156,547		14.0	%		344,296		310,878		10.7	%
Lloyd’s Operations:
Marine		32,213		34,623		–7.0	%		71,100		68,668		3.5	%
Property Casualty		11,463		8,562		33.9	%		24,421		16,441		48.5	%
Professional Liability		8,996		6,082		47.9	%		16,539		12,155		36.1	%
		52,672		49,267		6.9	%		112,060		97,264		15.2	%
Total	$	231,084	$	205,814		12.3	%	$	456,356	$	408,142		11.8	%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

June 30, 2014

($ in thousands)

	Insurance Companies			Lloyd’s Operations			Corporate (1)			Total
Gross written premiums	$	243,729		$	105,066		$	—		$	348,795
Net written premiums		174,041		$	57,823			—			231,864
Net earned premiums		178,412		$	52,672			—			231,084
Net losses and loss adjustment expenses		(108,502	)		(31,718	)		—			(140,220	)
Commission expenses		(23,021	)		(9,675	)		546			(32,150	)
Other operating expenses		(34,415	)		(13,577	)		—			(47,992	)
Other underwriting income (expense)		768			13			(546	)		235
Underwriting profit (loss)		13,242			(2,285	)		—			10,957
Net investment income		13,805			1,824			19			15,648
Net realized gains (losses)		4,458			15			—			4,473
Interest expense		—			—			(4,319	)		(4,319	)
Other income (expense)		(68	)		(1,832	)		—			(1,900	)
Income (loss) before income taxes		31,437			(2,278	)		(4,300	)		24,859
Income tax expense (benefit)		10,049			(672	)		(1,379	)		7,998
Net income (loss)	$	21,388		$	(1,606	)	$	(2,921	)	$	16,861
Losses and loss adjustment expenses ratio		60.8	%		60.2	%					60.7	%
Commission expense ratio		12.9	%		18.4	%					13.9	%
Other operating expense ratio(2)		18.9	%		25.7	%					20.7	%
Combined ratio		92.6	%		104.3	%					95.3	%

(1) The Corporate segment includes intercompany eliminations.

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

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

June 30, 2013

($ in thousands)

	Insurance Companies			Lloyd’s Operations			Corporate (1)			Total
Gross written premiums	$	228,565		$	103,563		$	—		$	332,128
Net written premiums		143,380			55,089			—			198,469
Net earned premiums		156,547			49,267			—			205,814
Net losses and loss adjustment expenses		(106,668	)		(24,480	)		—			(131,148	)
Commission expenses		(20,573	)		(8,335	)		517			(28,391	)
Other operating expenses		(29,829	)		(10,849	)		—			(40,678	)
Other income (expense)		689			(1,087	)		(517	)		(915	)
Underwriting profit (loss)		166			4,516			—			4,682
Net investment income		12,515			1,728			3			14,246
Net realized gains (losses)		3,099			242			4			3,345
Interest expense		—			—			(2,052	)		(2,052	)
Income (loss) before income taxes		15,780			6,486			(2,045	)		20,221
Income tax expense (benefit)		4,785			2,206			(707	)		6,284
Net income (loss)	$	10,995		$	4,280		$	(1,338	)	$	13,937
Losses and loss adjustment expenses ratio		68.1	%		49.7	%					63.7	%
Commission expense ratio		13.1	%		16.9	%					13.8	%
Other operating expense ratio(2)		18.7	%		24.2	%					20.2	%
Combined ratio		99.9	%		90.8	%					97.7	%

(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

Six Months Ended

June 30, 2014

($ in thousands)

	Insurance Companies			Lloyd’s Operations			Corporate (1)			Total
Gross written premiums	$	555,527		$	216,058		$	—		$	771,585
Net written premiums		407,992		$	135,722			—			543,714
Net earned premiums		344,296		$	112,060			—			456,356
Net losses and loss adjustment expenses		(214,929	)		(60,358	)		—			(275,287	)
Commission expenses		(39,731	)		(19,201	)		1,055			(57,877	)
Other operating expenses		(67,802	)		(27,336	)		—			(95,138	)
Other underwriting income (expense)		1,426			19			(1,055	)		390
Underwriting profit (loss)		23,260			5,184			—			28,444
Net investment income		28,582			3,639			37			32,258
Net realized gains (losses)		5,695			(389	)		—			5,306
Interest expense		—			—			(8,171	)		(8,171	)
Other income (expense)		(19	)		8,363			—			8,344
Income (loss) before income taxes		57,518			16,797			(8,134	)		66,181
Income tax expense (benefit)		18,161			5,966			(2,775	)		21,352
Net income (loss)	$	39,357		$	10,831		$	(5,359	)	$	44,829
Losses and loss adjustment expenses ratio		62.4	%		53.9	%					60.3	%
Commission expense ratio		11.5	%		17.1	%					12.7	%
Other operating expense ratio(2)		19.3	%		24.4	%					20.8	%
Combined ratio		93.2	%		95.4	%					93.8	%

(1) The Corporate segment includes intercompany eliminations.

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

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Six Months Ended

June 30, 2013

($ in thousands)

	Insurance Companies			Lloyd’s Operations			Corporate (1)			Total
Gross written premiums	$	530,193		$	195,157		$	—		$	725,350
Net written premiums		359,699			108,222			—			467,921
Net earned premiums		310,878			97,264			—			408,142
Net losses and loss adjustment expenses		(213,653	)		(48,837	)		—			(262,490	)
Commission expenses		(39,090	)		(16,956	)		1,100			(54,946	)
Other operating expenses		(59,172	)		(22,380	)		—			(81,552	)
Other income (expense)		1,348			(545	)		(1,100	)		(297	)
Underwriting profit (loss)		311			8,546			—			8,857
Net investment income		24,466			3,430			7			27,903
Net realized gains (losses)		7,891			222			4			8,117
Interest expense		—						(4,103	)		(4,103	)
Income (loss) before income taxes		32,668			12,198			(4,092	)		40,774
Income tax expense (benefit)		10,199			4,242			(1,514	)		12,927
Net income (loss)	$	22,469		$	7,956		$	(2,578	)	$	27,847
Losses and loss adjustment expenses ratio		68.7	%		50.2	%					64.3	%
Commission expense ratio		12.6	%		17.4	%					13.5	%
Other operating expense ratio(2)		18.6	%		23.6	%					20.0	%
Combined ratio		99.9	%		91.2	%					97.8	%

(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 June 30, 2014
	Net Earned Premiums		Losses and LAE Incurred			Underwriting Expenses		Underwriting Profit (Loss)			Loss Ratio			Expense Ratio			Combined Ratio
Insurance Companies:
Marine	$	31,752	$	11,166		$	12,487	$	8,099			35.2	%		39.3	%		74.5	%
Property Casualty		124,695		87,415			35,895		1,385			70.1	%		28.8	%		98.9	%
Professional Liability		21,965		9,921			8,286		3,758			45.2	%		37.7	%		82.9	%
Total Insurance Companies		178,412		108,502			56,668		13,242			60.8	%		31.8	%		92.6	%
Lloyd’s Operations:
Marine		32,213		24,213			14,738		(6,738	)		75.2	%		45.7	%		120.9	%
Property Casualty		11,463		5,129			5,196		1,138			44.7	%		45.4	%		90.1	%
Professional Liability		8,996		2,376			3,305		3,315			26.4	%		36.7	%		63.1	%
Total Lloyd’s		52,672		31,718			23,239		(2,285	)		60.2	%		44.1	%		104.3	%
Total All	$	231,084	$	140,220		$	79,907	$	10,957			60.7	%		34.6	%		95.3	%
	Three Months Ended June 30, 2013
	Net Earned Premiums		Losses and LAE Incurred			Underwriting Expenses		Underwriting Profit (Loss)			Loss Ratio			Expense Ratio			Combined Ratio
Insurance Companies:
Marine	$	31,798	$	17,295		$	13,124	$	1,379			54.4	%		41.3	%		95.7	%
Property Casualty		99,477		70,757			27,999		721			71.1	%		28.2	%		99.3	%
Professional Liability		25,272		18,616			8,590		(1,934	)		73.7	%		34.0	%		107.7	%
Total Insurance Companies		156,547		106,668			49,713		166			68.1	%		31.8	%		99.9	%
Lloyd’s Operations:
Marine		34,623		18,218			14,914		1,491			52.6	%		43.1	%		95.7	%
Property Casualty		8,562		6,795			3,272		(1,505	)		79.4	%		38.2	%		117.6	%
Professional Liability		6,082		(533	)		2,085		4,530			–8.8	%		34.3	%		25.5	%
Total Lloyd’s		49,267		24,480			20,271		4,516			49.7	%		41.1	%		90.8	%
Total All	$	205,814	$	131,148		$	69,984	$	4,682			63.7	%		34.0	%		97.7	%

	Amounts					Loss Ratio
	June 30, 2014		June 30, 2013			June 30, 2014			June 30, 2013
Net Incurred Loss Activity For the Three Months Ended:
Insurance Companies:
Loss and LAE payments	$	77,300	$	100,920			43.3	%		64.4	%
Change in reserves		31,202		5,748			17.5	%		3.7	%
Net incurred loss and LAE		108,502		106,668			60.8	%		68.1	%
Lloyd’s Operations:
Loss and LAE payments		26,322		27,428			50.0	%		55.7	%
Change in reserves		5,396		(2,948	)		10.2	%		–6.0	%
Net incurred loss and LAE		31,718		24,480			60.2	%		49.7	%
Total
Loss and LAE payments		103,622		128,348			44.9	%		62.3	%
Change in reserves		36,598		2,800			15.8	%		1.4	%
Net incurred loss and LAE	$	140,220	$	131,148			60.7	%		63.7	%
	Amounts					Loss Ratio Impact
	June 30, 2014		June 30, 2013			June 30, 2014			June 30, 2013
Impact of Prior Years Reserves Favorable / (Unfavorable) Development For the Three Months Ended:
Insurance Companies	$	13,852	$	(7,747	)		6.0	%		–3.8	%
Lloyd’s Operations		6,663		5,834			2.9	%		2.8	%
Total	$	20,515	$	(1,913	)		8.9	%		–1.0	%

News Release

Page 12

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($ in thousands)

	Six Months Ended June 30, 2014
	Net Earned Premiums		Losses and LAE Incurred		Underwriting Expenses		Underwriting Profit (Loss)			Loss Ratio			Expense Ratio			Combined Ratio
Insurance Companies:
Marine	$	64,512	$	28,574	$	22,929	$	13,009			44.3	%		35.5	%		79.8	%
Property Casualty		235,521		162,520		66,853		6,148			69.0	%		28.4	%		97.4	%
Professional Liability		44,263		23,835		16,325		4,103			53.8	%		36.9	%		90.7	%
Total Insurance Companies		344,296		214,929		106,107		23,260			62.4	%		30.8	%		93.2	%
Lloyd’s Operations:
Marine		71,100		43,643		29,863		(2,406	)		61.4	%		42.0	%		103.4	%
Property Casualty		24,421		9,755		10,005		4,661			39.9	%		41.0	%		80.9	%
Professional Liability		16,539		6,960		6,650		2,929			42.1	%		40.2	%		82.3	%
Total Lloyd’s		112,060		60,358		46,518		5,184			53.9	%		41.5	%		95.4	%
Total All	$	456,356	$	275,287	$	152,625	$	28,444			60.3	%		33.5	%		93.8	%

	Six Months Ended June 30, 2013
	Net Earned Premiums		Losses and LAE Incurred		Underwriting Expenses		Underwriting Profit (Loss)			Loss Ratio			Expense Ratio			Combined Ratio
Insurance Companies:
Marine	$	68,523	$	40,680	$	25,952	$	1,891			59.4	%		37.8	%		97.2	%
Property Casualty		192,195		131,995		54,641		5,559			68.7	%		28.4	%		97.1	%
Professional Liability		50,160		40,978		16,321		(7,139	)		81.7	%		32.5	%		114.2	%
Total Insurance Companies		310,878		213,653		96,914		311			68.7	%		31.2	%		99.9	%
Lloyd’s Operations:
Marine		68,668		37,055		28,026		3,587			54.0	%		40.8	%		94.8	%
Property Casualty		16,441		7,546		7,681		1,214			45.9	%		46.7	%		92.6	%
Professional Liability		12,155		4,236		4,174		3,745			34.9	%		34.3	%		69.2	%
Total Lloyd’s		97,264		48,837		39,881		8,546			50.2	%		41.0	%		91.2	%
Total All	$	408,142	$	262,490	$	136,795	$	8,857			64.3	%		33.5	%		97.8	%

	Amounts					Loss Ratio
	June 30, 2014		June 30, 2013			June 30, 2014			June 30, 2013
Net Incurred Loss Activity For the Six Months Ended:
Insurance Companies:
Loss and LAE payments	$	152,210	$	180,824			44.2	%		58.1	%
Change in reserves		62,719		32,829			18.2	%		10.6	%
Net incurred loss and LAE		214,929		213,653			62.4	%		68.7	%
Lloyd’s Operations:
Loss and LAE payments		52,075		57,890			46.5	%		59.5	%
Change in reserves		8,283		(9,053	)		7.4	%		–9.3	%
Net incurred loss and LAE		60,358		48,837			53.9	%		50.2	%
Total
Loss and LAE payments		204,285		238,714			44.7	%		58.5	%
Change in reserves		71,002		23,776			15.6	%		5.8	%
Net incurred loss and LAE	$	275,287	$	262,490			60.3	%		64.3	%
	Amounts					Loss Ratio Impact
	June 30, 2014		June 30, 2013			June 30, 2014			June 30, 2013
Impact of Prior Years Reserves Favorable / (Unfavorable) Development For the Six Months Ended:
Insurance Companies	$	13,304	$	(15,477	)		2.9	%		–3.8	%
Lloyd’s Operations		7,249		9,481			1.6	%		2.3	%
Total	$	20,553	$	(5,996	)		4.5	%		–1.5	%

News Release

Page 13

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Net Loss Data

($ in thousands)

	Case Reserves		IBNR Reserves		Total
Net Loss Reserves, June 30, 2014:
Insurance Companies:
Marine	$	124,743	$	92,972	$	217,715
Property Casualty		174,784		427,244		602,028
Professional Liability		57,892		87,702		145,594
Total Insurance Companies		357,419		607,918		965,337
Lloyd’s Operations:
Marine		140,580		85,807	$	226,387
Property Casualty		29,038		15,567		44,605
Professional Liability		13,227		46,265		59,492
Total Lloyd’s Operations		182,845		147,639		330,484
Total Net Loss Reserves	$	540,264	$	755,557	$	1,295,821

	Case Reserves		IBNR Reserves		Total
Net Loss Reserves, December 31, 2013
Insurance Companies:
Marine	$	122,909	$	101,077	$	223,986
Property Casualty		150,477		377,173		527,650
Professional Liability		61,117		89,865		150,982
Total Insurance Companies		334,503		568,115		902,618
Lloyd’s Operations:
Marine		133,060		85,685		218,745
Property Casualty		25,870		18,271		44,141
Professional Liability		14,013		43,116		57,129
Total Lloyd’s Operations		172,943		147,072		320,015
Total Net Loss Reserves	$	507,446	$	715,187	$	1,222,633

News Release

Page 14

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

June 30, 2014

As of June 30, 2014, the average quality of the investment portfolio as rated by S&P and Moody’s was AA/Aa with an average duration of 3.8 years. The Company does not own any collateralized debt obligations (CDO’s), collateralized loan obligations (CLO’s) or asset backed commercial paper.

As of June 30, 2014, the Company owned two asset-backed securities approximating $0.5 million with subprime mortgage exposures. The securities have an effective maturity of 3.4 years. In addition, the Company owned a total of seven collateralized mortgage obligations and asset-backed securities approximating $1.8 million classified as Alt-A which is a credit category between prime and subprime. They have an effective maturity of 7.4 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 June 30, 2014:

June 30, 2014	Fair Value		Gross Unrealized Gains		Gross Unrealized (Losses)			Cost or Amortized Cost
	($ in thousands)
Fixed maturities:
U.S.Treasury bonds, agency bonds and foreign government bonds	$	421,891	$	4,313	$	(4,339	)	$	421,917
States, municipalities and political subdivisions		564,782		15,833		(2,883	)		551,832
Mortgage- and asset-backed securities:
Agency mortgage-backed securities		256,407		8,289		(1,753	)		249,871
Residential mortgage obligations		60,867		1,832		(101	)		59,136
Asset-backed securities		162,529		598		(381	)		162,312
Commercial mortgage-backed securities		184,946		8,071		(131	)		177,006
Subtotal		664,749		18,790		(2,366	)		648,325
Corporate bonds		569,433		15,572		(1,159	)		555,020
Total fixed maturities		2,220,855		54,508		(10,747	)		2,177,094
Equity securities - common stocks		144,977		31,262		(964	)		114,679
Equity securities - preferred stocks		35,509		1,799		(23	)		33,733
Short-term investments		226,237		—		—			226,237
Cash		72,604		—		—			72,604
Total	$	2,700,182	$	87,569	$	(11,734	)	$	2,624,347

News Release

Page 15

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

June 30, 2014

($ 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 June 30, 2013:

	Fair Value		Gross Unrealized Gains		Gross Unrealized (Losses)			Cost or Amortized Cost
Agency mortgage-backed securities:
GNMA	$	93,447	$	3,219	$	(1,233	)	$	91,461
FNMA		118,923		3,731		(486	)		115,678
FHLMC		44,037		1,339		(34	)		42,732
Total	$	256,407	$	8,289	$	(1,753	)	$	249,871

	Fair Value		Gross Unrealized Gains		Gross Unrealized (Losses)			Cost or Amortized Cost
Residential mortgage obligations:
Prime	$	38,041	$	1,106	$	(78	)	$	37,013
Alt-A		1,845		117		(23	)		1,751
Subprime		465		16		—			449
Non-US RMBS		20,516		593		—			19,923
Total	$	60,867	$	1,832	$	(101	)	$	59,136