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

Exhibit 99.1

	The Navigators Group, Inc.
	CORPORATE NEWS
	Navigators Reports Record Third Quarter Earnings

Stamford, CT– November 6, 2014 —The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $31.2 million, or $2.14 per diluted share, for the three months ended September 30, 2014 compared to $21.3 million, or $1.48 per diluted share, for the comparable period in 2013. Operating earnings were $26.1 million, or $1.79 per diluted share, for the third quarter of 2014 compared to $23.1 million, or $1.60 per diluted share, for the comparable period in 2013.

For the nine months ended September 30, 2014, the Company reported net income of $76.1 million, or $5.22 per diluted share compared to $49.1 million, or $3.42 per diluted share, for the comparable period in 2013. Operating earnings were $62.0 million, or $4.25 per diluted share, for the nine months ended September 30, 2014 compared to $45.7 million, or $3.18 per diluted share, for the comparable period in 2013.

Gross written premiums and net written premiums for the three months ended September 30, 2014 were $327.5 million and $228.4 million, respectively, an increase of 4.9% and 16.2% from the comparable period in 2013.

Gross written premiums and net written premiums for the nine months ended September 30, 2014 were $1,099.1 million and $772.1 million, respectively, an increase of 5.9% and 16.2% from the comparable period in 2013.

The combined loss and expense ratio for the three and nine months ended September 30, 2014 was 89.5% and 92.3%, respectively, compared to 89.8% and 95.1% for the comparable periods in 2013.

“We are pleased to report excellent underwriting results, continued premium growth, increased book value per share and strong cash flow for the quarter and first nine months of 2014. Despite increasingly challenging competitive conditions, our underwriters continue to focus on risk selection and achieving appropriate rates for exposures” stated Stan Galanski, President and Chief Executive Officer.

Stockholders’ equity was $996.6 million, or $69.85 per share, as of September 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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November 6, 2014

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Net investment income for the three and nine months ended September 30, 2014 was $15.8 million and $48.1 million, respectively, an increase of 12.4% and 14.5% 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 2.2% and 2.4% for the three and nine months ended September 30, 2014, compared to 2.4% for each of the comparable periods in 2013. The effective tax rate on net investment income was 27.5% for both the three and nine months ended September 30, 2014, compared to 27.5% and 27.9% 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 3.7 years as of September 30, 2014. As of September 30, 2014, net unrealized gains within our investment portfolio were $59.5 million, an increase of $23.5 million compared to December 31, 2013.

There were $6.7 million of net realized gains recognized in earnings for the three months ended September 30, 2014, compared to $2.8 million of net realized losses for the same period in 2013. For the nine months ended September 30, there were $12.0 million of net realized gains, compared to $5.3 million of net realized gains for the same period in 2013.

Other income for the nine months ended September 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 nine months ended September 30, 2014 was $103.2 million and $181.4 million, respectively, compared to $81.5 million and $130.0 million for the comparable periods in 2013.

The Company will hold a conference call on Friday, November 7, 2014 starting at 8:30 a.m. ET to discuss the 2014 third 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 (888-438-5535) and the international dial-in is (719) 325-2215. 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									Nine Months Ended
	September 30,									September 30,
Results of Operations	2014			2013			Change			2014			2013			Change
Gross written premiums	$	327,469		$	312,076			4.9	%	$	1,099,054		$	1,037,426			5.9	%
Net written premiums		228,417			196,556			16.2	%		772,131			664,477			16.2	%
Revenues:
Net earned premiums		245,367			213,895			14.7	%		701,723			622,037			12.8	%
Net investment income		15,839			14,094			12.4	%		48,097			41,997			14.5	%
Total other-than-temporary impairment losses		(41	)		(1,821	)	–	97.7	%		158			(1,863	)		NM
Portion of loss recognized in other comprehensive income (before tax)		41			—			NM			(158	)		—			NM
Net other-than-temporary impairment losses recognized in earnings		—			(1,821	)		NM			—			(1,863	)		NM
Net realized gains (losses)		6,718			(988	)		NM			12,024			7,171			67.7	%
Other income		1,336			(210	)		NM			10,070			(507	)		NM
Total revenues		269,260			224,970			19.7	%		771,914			668,835			15.4	%
Expenses:
Net losses and loss adjustment expenses		135,284			125,086			8.2	%		410,571			387,576			5.9	%
Commission expenses		33,943			27,685			22.6	%		91,820			82,631			11.1	%
Other operating expenses		50,388			39,056			29.0	%		145,526			120,608			20.7	%
Interest expense		3,388			2,053			65.0	%		11,559			6,156			87.8	%
Total expenses		223,003			193,880			15.0	%		659,476			596,971			10.5	%
Income before income taxes		46,257			31,090			48.8	%		112,438			71,864			56.5	%
Income tax expense (benefit)		15,032			9,804			53.3	%		36,384			22,731			60.1	%
Net income (loss)	$	31,225		$	21,286			46.7	%	$	76,054		$	49,133			54.8	%
Per Share Data
Net income per common share:
Basic	$	2.19		$	1.50			45.5	%	$	5.34		$	3.48			53.4	%
Diluted	$	2.14		$	1.48			44.6	%	$	5.22		$	3.42			52.7	%
Average common shares outstanding:
Basic		14,265,260			14,144,478						14,252,910			14,120,788
Diluted		14,613,744			14,408,413						14,577,297			14,379,943
Underwriting Ratios
Loss Ratio		55.1	%		58.5	%					58.5	%		62.3	%
Expense Ratio		34.4	%		31.3	%					33.8	%		32.8	%
Combined Ratio		89.5	%		89.8	%					92.3	%		95.1	%
Balance Sheet Data	Sept. 30, 2014			June 30, 2014						Sept. 30, 2014			Dec. 31, 2013
Stockholders’ equity	$	996,593		$	972,080			2.5	%	$	996,593		$	902,212			10.5	%
Book value per share	$	69.85		$	68.16			2.5	%	$	69.85		$	63.54			9.9	%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands, except share data)

	September 30, 2014			December 31, 2013
	(unaudited)
ASSETS
Investments and cash:
Fixed maturities, available-for-sale, at fair value (amortized cost: 2014, $2,277,384; 2013, $2,036,999)	$	2,310,195		$	2,047,873
Equity securities, available-for-sale, at fair value (cost: 2014, $136,762; 2013, $118,804)		163,473			143,954
Short-term investments, at fair value (amortized cost: 2014: $255,434; 2013: $296,250)		255,445			296,250
Cash		74,408			86,509
Total investments and cash		2,803,521			2,574,586
Premiums receivable		363,053			325,025
Prepaid reinsurance premiums		237,094			247,822
Reinsurance recoverable on paid losses		49,327			38,384
Reinsurance recoverable on unpaid losses and loss adjustment expenses		850,582			822,438
Deferred policy acquisition costs		76,268			67,007
Accrued investment income		15,075			13,866
Goodwill and other intangible assets		7,089			7,177
Current income tax receivable, net		2,506			9,918
Deferred income tax, net		14,531			28,187
Other assets		44,267			35,042
Total assets	$	4,463,313		$	4,169,452
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Reserves for losses and loss adjustment expenses	$	2,168,974		$	2,045,071
Unearned premiums		772,755			714,606
Reinsurance balances payable		157,900			167,252
Senior notes		263,406			263,308
Payable for investments purchased		35,757			7,624
Accounts payable and other liabilities		67,928			69,379
Total liabilities		3,466,720			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 17,778,131 shares for 2014 and 17,709,876 shares for 2013		1,777			1,770
Additional paid-in capital		343,407			335,546
Treasury stock, at cost (3,511,380 shares for 2014 and 2013)		(155,801	)		(155,801	)
Retained earnings		768,391			692,337
Accumulated other comprehensive income		38,819			28,360
Total stockholders’ equity		996,593			902,212
Total liabilities and stockholders’ equity	$	4,463,313		$	4,169,452

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Comparative Premium Data

($ in thousands)

	Three Months							Nine Months
	2014		2013		Change			2014		2013		Change
Gross Written Premiums:
Insurance Companies:
Marine	$	38,726	$	38,912		–0.5	%	$	139,078	$	132,836		4.7	%
Property Casualty		174,868		156,228		11.9	%		572,821		527,287		8.6	%
Professional Liability		28,888		32,469		–11.0	%		86,110		97,679		–11.8	%
		242,482		227,609		6.5	%		798,009		757,802		5.3	%
Lloyd’s Operations:
Marine		38,568		36,009		7.1	%		147,530		135,546		8.8	%
Property Casualty		31,172		35,869		–13.1	%		101,413		102,144		–0.7	%
Professional Liability		15,247		12,589		21.1	%		52,102		41,934		24.2	%
		84,987		84,467		0.6	%		301,045		279,624		7.7	%
Total	$	327,469	$	312,076		4.9	%	$	1,099,054	$	1,037,426		5.9	%
	Three Months							Nine Months
	2014		2013		Change			2014		2013		Change
Net Written Premiums:
Insurance Companies:
Marine	$	24,166	$	26,437		–8.6	%	$	100,647	$	94,944		6.0	%
Property Casualty		126,665		97,553		29.8	%		418,659		338,215		23.8	%
Professional Liability		21,653		25,300		–14.4	%		61,170		75,830		–19.3	%
		172,484		149,290		15.5	%		580,476		508,989		14.0	%
Lloyd’s Operations:
Marine		32,245		26,795		20.3	%		113,938		100,413		13.5	%
Property Casualty		13,758		13,761		0.0	%		44,684		33,254		34.4	%
Professional Liability		9,930		6,710		48.0	%		33,033		21,821		51.4	%
		55,933		47,266		18.3	%		191,655		155,488		23.3	%
Total	$	228,417	$	196,556		16.2	%	$	772,131	$	664,477		16.2	%
	Three Months							Nine Months
	2014		2013		Change			2014		2013		Change
Net Earned Premiums:
Insurance Companies:
Marine	$	31,123	$	31,490		–1.2	%	$	95,635	$	100,013		–4.4	%
Property Casualty		129,547		105,759		22.5	%		365,068		297,954		22.5	%
Professional Liability		21,381		25,713		–16.8	%		65,644		75,873		–13.5	%
		182,051		162,962		11.7	%		526,347		473,840		11.1	%
Lloyd’s Operations:
Marine		39,368		34,264		14.9	%		110,468		102,932		7.3	%
Property Casualty		12,980		10,472		23.9	%		37,401		26,913		39.0	%
Professional Liability		10,968		6,197		77.0	%		27,507		18,352		49.9	%
		63,316		50,933		24.3	%		175,376		148,197		18.3	%
Total	$	245,367	$	213,895		14.7	%	$	701,723	$	622,037		12.8	%

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THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Segment Information

Three Months Ended

September 30, 2014

($ in thousands)

	Insurance Companies			Lloyd’s Operations			Corporate (1)			Total
Gross written premiums	$	242,482		$	84,987		$	—		$	327,469
Net written premiums		172,484			55,933			—			228,417
Net earned premiums		182,051			63,316			—			245,367
Net losses and loss adjustment expenses		(108,425	)		(26,859	)		—			(135,284	)
Commission expenses		(22,705	)		(11,788	)		550			(33,943	)
Other operating expenses		(35,161	)		(15,227	)		—			(50,388	)
Other underwriting income (expense)		656			1			(550	)		107
Underwriting profit (loss)		16,416			9,443			—			25,859
Net investment income		13,971			1,849			19			15,839
Net realized gains (losses)		6,673			45			—			6,718
Interest expense		—			—			(3,388	)		(3,388	)
Other income (expense)		(1,100	)		2,329			—			1,229
Income (loss) before income taxes		35,960			13,666			(3,369	)		46,257
Income tax expense (benefit)		11,489			4,787			(1,244	)		15,032
Net income (loss)	$	24,471		$	8,879		$	(2,125	)	$	31,225
Losses and loss adjustment expenses ratio		59.6	%		42.4	%					55.1	%
Commission expense ratio		12.5	%		18.6	%					13.8	%
Other operating expense ratio(2)		18.9	%		24.1	%					20.6	%
Combined ratio		91.0	%		85.1	%					89.5	%

(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

September 30, 2013

($ in thousands)

	Insurance Companies			Lloyd’s Operations			Corporate (1)			Total
Gross written premiums	$	227,609		$	84,467		$	—		$	312,076
Net written premiums		149,290			47,266			—			196,556
Net earned premiums		162,962			50,933			—			213,895
Net losses and loss adjustment expenses		(95,315	)		(29,771	)		—			(125,086	)
Commission expenses		(20,039	)		(8,289	)		643			(27,685	)
Other operating expenses		(28,510	)		(10,546	)		—			(39,056	)
Other underwriting income (expense)		955			(522	)		(643	)		(210	)
Underwriting profit (loss)		20,053			1,805			—			21,858
Net investment income		12,285			1,807			2			14,094
Net realized gains (losses)		(1,890	)		(919	)		—			(2,809	)
Interest expense		—			—			(2,053	)		(2,053	)
Other income (expense)		—			—			—			—
Income (loss) before income taxes		30,448			2,693			(2,051	)		31,090
Income tax expense (benefit)		9,355			878			(429	)		9,804
Net income (loss)	$	21,093		$	1,815		$	(1,622	)	$	21,286
Losses and loss adjustment expenses ratio		58.5	%		58.5	%					58.5	%
Commission expense ratio		12.3	%		16.3	%					12.9	%
Other operating expense ratio(2)		16.9	%		21.7	%					18.4	%
Combined ratio		87.7	%		96.5	%					89.8	%

(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

Segment Information

Nine Months Ended

September 30, 2014

($ in thousands)

	Insurance Companies			Lloyd’s Operations			Corporate (1)			Total
Gross written premiums	$	798,009		$	301,045		$	—		$	1,099,054
Net written premiums		580,476			191,655			—			772,131
Net earned premiums		526,347			175,376			—			701,723
Net losses and loss adjustment expenses		(323,354	)		(87,217	)		—			(410,571	)
Commission expenses		(62,436	)		(30,989	)		1,605			(91,820	)
Other operating expenses		(102,963	)		(42,563	)		—			(145,526	)
Other underwriting income (expense)		2,082			20			(1,605	)		497
Underwriting profit (loss)		39,676			14,627			—			54,303
Net investment income		42,553			5,488			56			48,097
Net realized gains (losses)		12,368			(344	)		—			12,024
Interest expense		—			—			(11,559	)		(11,559	)
Other income (expense)		(1,119	)		10,692			—			9,573
Income (loss) before income taxes		93,478			30,463			(11,503	)		112,438
Income tax expense (benefit)		29,650			10,753			(4,019	)		36,384
Net income (loss)	$	63,828		$	19,710		$	(7,484	)	$	76,054
Losses and loss adjustment expenses ratio		61.4	%		49.7	%					58.5	%
Commission expense ratio		11.9	%		17.7	%					13.1	%
Other operating expense ratio(2)		19.2	%		24.3	%					20.7	%
Combined ratio		92.5	%		91.7	%					92.3	%

(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

Nine Months Ended

September 30, 2013

($ in thousands)

	Insurance Companies			Lloyd’s Operations			Corporate (1)			Total
Gross written premiums	$	757,802		$	279,624		$	—		$	1,037,426
Net written premiums		508,989			155,488			—			664,477
Net earned premiums		473,840			148,197			—			622,037
Net losses and loss adjustment expenses		(308,968	)		(78,608	)		—			(387,576	)
Commission expenses		(59,129	)		(25,245	)		1,743			(82,631	)
Other operating expenses		(87,682	)		(32,926	)		—			(120,608	)
Other underwriting income (expense)		2,303			(1,067	)		(1,743	)		(507	)
Underwriting profit (loss)		20,364			10,351			—			30,715
Net investment income		36,751			5,237			9			41,997
Net realized gains (losses)		6,001			(697	)		4			5,308
Interest expense		—			—			(6,156	)		(6,156	)
Other income (expense)		—			—			—			—
Income (loss) before income taxes		63,116			14,891			(6,143	)		71,864
Income tax expense (benefit)		19,554			5,120			(1,943	)		22,731
Net income (loss)	$	43,562		$	9,771		$	(4,200	)	$	49,133
Losses and loss adjustment expenses ratio		65.2	%		53.0	%					62.3	%
Commission expense ratio		12.5	%		17.0	%					13.3	%
Other operating expense ratio (2)		18.0	%		23.0	%					19.5	%
Combined ratio		95.7	%		93.0	%					95.1	%

(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 September 30, 2014
	Net Earned Premiums		Losses and LAE Incurred		Underwriting Expenses		Underwriting Profit (Loss)			Loss Ratio			Expense Ratio			Combined Ratio
Insurance Companies:
Marine	$	31,123	$	13,080	$	12,014	$	6,029			42.0	%		38.6	%		80.6	%
Property Casualty		129,547		81,682		37,171		10,694			63.1	%		28.6	%		91.7	%
Professional Liability		21,381		13,663		8,025		(307	)		63.9	%		37.5	%		101.4	%
Total Insurance Companies		182,051		108,425		57,210		16,416			59.6	%		31.4	%		91.0	%
Lloyd’s Operations:
Marine		39,368		16,389		15,629		7,350			41.6	%		39.7	%		81.3	%
Property Casualty		12,980		4,260		7,105		1,615			32.8	%		54.8	%		87.6	%
Professional Liability		10,968		6,210		4,280		478			56.6	%		39.0	%		95.6	%
Total Lloyd’s		63,316		26,859		27,014		9,443			42.4	%		42.7	%		85.1	%
Total All	$	245,367	$	135,284	$	84,224	$	25,859			55.1	%		34.4	%		89.5	%
	Three Months Ended September 30, 2013
	Net Earned Premiums		Losses and LAE Incurred		Underwriting Expenses		Underwriting Profit (Loss)			Loss Ratio			Expense Ratio			Combined Ratio
Insurance Companies:
Marine	$	31,490	$	14,745	$	10,997	$	5,748			46.8	%		34.9	%		81.7	%
Property Casualty		105,759		64,156		28,203		13,400			60.7	%		26.6	%		87.3	%
Professional Liability		25,713		16,414		8,394		905			63.8	%		32.7	%		96.5	%
Total Insurance Companies		162,962		95,315		47,594		20,053			58.5	%		29.2	%		87.7	%
Lloyd’s Operations:
Marine		34,264		22,129		13,240		(1,105	)		64.6	%		38.6	%		103.2	%
Property Casualty		10,472		3,661		4,428		2,383			35.0	%		42.2	%		77.2	%
Professional Liability		6,197		3,981		1,689		527			64.3	%		27.2	%		91.5	%
Total Lloyd’s		50,933		29,771		19,357		1,805			58.5	%		38.0	%		96.5	%
Total All	$	213,895	$	125,086	$	66,951	$	21,858			58.5	%		31.3	%		89.8	%

	Amounts				Loss Ratio
	Sept. 30, 2014		Sept. 30, 2013		Sept. 30, 2014			Sept. 30, 2013
Net Incurred Loss Activity For the Three Months Ended:
Insurance Companies:
Loss and LAE payments	$	84,899	$	83,008		46.7	%		50.9	%
Change in reserves		23,526		12,307		12.9	%		7.6	%
Net incurred loss and LAE		108,425		95,315		59.6	%		58.5	%
Lloyd’s Operations:
Loss and LAE payments		23,181		27,038		36.6	%		53.1	%
Change in reserves		3,678		2,733		5.8	%		5.4	%
Net incurred loss and LAE		26,859		29,771		42.4	%		58.5	%
Total
Loss and LAE payments		108,080		110,046		44.0	%		51.5	%
Change in reserves		27,204		15,040		11.1	%		7.0	%
Net incurred loss and LAE	$	135,284	$	125,086		55.1	%		58.5	%
	Amounts				Loss Ratio Impact
	Sept. 30, 2014		Sept. 30, 2013		Sept. 30, 2014			Sept. 30, 2013
Impact of Prior Years Reserves Favorable / (Unfavorable) Development For the Three Months Ended:
Insurance Companies	$	9,970	$	3,094		4.1	%		1.4	%
Lloyd’s Operations		5,500		4,591		2.2	%		2.1	%
Total	$	15,470	$	7,685		6.3	%		3.5	%

News Release

Page 12

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Underwriting Results

($ in thousands)

	Nine Months Ended September 30, 2014
	Net Earned Premiums		Losses and LAE Incurred		Underwriting Expenses		Underwriting Profit (Loss)		Loss Ratio			Expense Ratio			Combined Ratio
Insurance Companies:
Marine	$	95,635	$	41,654	$	34,943	$	19,038		43.6	%		36.5	%		80.1	%
Property Casualty		365,068		244,202		104,024		16,842		66.9	%		28.5	%		95.4	%
Professional Liability		65,644		37,498		24,350		3,796		57.1	%		37.1	%		94.2	%
Total Insurance Companies		526,347		323,354		163,317		39,676		61.4	%		31.1	%		92.5	%
Lloyd’s Operations:
Marine		110,468		60,032		45,492		4,944		54.3	%		41.2	%		95.5	%
Property Casualty		37,401		14,015		17,110		6,276		37.5	%		45.7	%		83.2	%
Professional Liability		27,507		13,170		10,930		3,407		47.9	%		39.7	%		87.6	%
Total Lloyd’s		175,376		87,217		73,532		14,627		49.7	%		42.0	%		91.7	%
Total All	$	701,723	$	410,571	$	236,849	$	54,303		58.5	%		33.8	%		92.3	%

	Nine Months Ended September 30, 2014
	Net Earned Premiums		Losses and LAE Incurred		Underwriting Expenses		Underwriting Profit (Loss)			Loss Ratio			Expense Ratio			Combined Ratio
Insurance Companies:
Marine	$	100,013	$	55,425	$	36,949	$	7,639			55.4	%		37.0	%		92.4	%
Property Casualty		297,954		196,151		82,844		18,959			65.8	%		27.8	%		93.6	%
Professional Liability		75,873		57,392		24,715		(6,234	)		75.6	%		32.6	%		108.2	%
Total Insurance Companies		473,840		308,968		144,508		20,364			65.2	%		30.5	%		95.7	%
Lloyd’s Operations:
Marine		102,932		59,184		41,266		2,482			57.5	%		40.1	%		97.6	%
Property Casualty		26,913		11,207		12,109		3,597			41.6	%		45.0	%		86.6	%
Professional Liability		18,352		8,217		5,863		4,272			44.8	%		31.9	%		76.7	%
Total Lloyd’s		148,197		78,608		59,238		10,351			53.0	%		40.0	%		93.0	%
Total All	$	622,037	$	387,576	$	203,746	$	30,715			62.3	%		32.8	%		95.1	%

	Amounts					Loss Ratio
	Sept. 30, 2014		Sept. 30, 2013			Sept. 30, 2014			Sept. 30, 2013
Net Incurred Loss Activity For the Nine Months Ended:
Insurance Companies:
Loss and LAE payments	$	237,109	$	263,832			45.0	%		55.7	%
Change in reserves		86,245		45,136			16.4	%		9.5	%
Net incurred loss and LAE		323,354		308,968			61.4	%		65.2	%
Lloyd’s Operations:
Loss and LAE payments		75,256		84,928			42.9	%		57.3	%
Change in reserves		11,961		(6,320	)		6.8	%		-4.3	%
Net incurred loss and LAE		87,217		78,608			49.7	%		53.0	%
Total
Loss and LAE payments		312,365		348,760			44.5	%		56.1	%
Change in reserves		98,206		38,816			14.0	%		6.2	%
Net incurred loss and LAE	$	410,571	$	387,576			58.5	%		62.3	%
	Amounts					Loss Ratio Impact
	Sept. 30, 2014		Sept. 30, 2013			Sept. 30, 2014			Sept. 30, 2013
Impact of Prior Years ReservesFavorable / (Unfavorable) DevelopmentFor the Nine Months Ended:
Insurance Companies	$	23,274	$	(12,383	)		3.3	%		–2.0	%
Lloyd’s Operations		12,749		14,072			1.8	%		2.3	%
Total	$	36,023	$	1,689			5.1	%		0.3	%

News Release

Page 13

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Net Loss Data

($ in thousands)

	Case Reserves		IBNR Reserves		Total
Net Loss Reserves, September 30, 2014:
Insurance Companies:
Marine	$	115,304	$	91,775	$	207,079
Property Casualty		167,328		471,193		638,521
Professional Liability		56,937		86,326		143,263
Total Insurance Companies		339,569		649,294		988,863
Lloyd’s Operations:
Marine		138,062		85,430	$	223,492
Property Casualty		26,914		16,679		43,593
Professional Liability		16,246		46,198		62,444
Total Lloyd’s Operations		181,222		148,307		329,529
Total Net Loss Reserves	$	520,791	$	797,601	$	1,318,392

	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

September 30, 2014

As of September 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 3.7 years. The Company does not own any collateralized debt obligations (CDO’s) or asset backed commercial paper.

As of September 30, 2014, the Company owned two collateralized mortgage obligations approximating $0.4 million with subprime mortgage exposures. The securities have an effective maturity of 3.2 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 7.3 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 September 30, 2014:

September 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	$	414,348	$	2,712	$	(6,215	)	$	417,851
States, municipalities and political subdivisions		550,327		16,585		(1,360	)		535,102
Mortgage- and asset-backed securities:
Agency mortgage-backed securities		296,198		7,201		(2,363	)		291,360
Residential mortgage obligations		34,738		1,238		(133	)		33,633
Asset-backed securities		195,180		414		(519	)		195,285
Commercial mortgage-backed securities		210,712		6,244		(588	)		205,056
Subtotal		736,828		15,097		(3,603	)		725,334
Corporate bonds		608,692		11,945		(2,350	)		599,097
Total fixed maturities		2,310,195		46,339		(13,528	)		2,277,384
Equity securities - common stocks		113,250		26,251		(772	)		87,771
Equity securities - preferred stocks		50,223		1,481		(249	)		48,991
Short-term investments		255,445		11		—			255,434
Cash		74,408		—		—			74,408
Total	$	2,803,521	$	74,082	$	(14,549	)	$	2,743,988

News Release

Page 15

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Investment Data

September 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 September 30, 2014:

	Fair Value		Gross Unrealized Gains		Gross Unrealized (Losses)			Cost or Amortized Cost
Agency mortgage-backed securities:
GNMA	$	87,953	$	2,917	$	(1,341	)	$	86,377
FNMA		150,283		3,144		(953	)		148,092
FHLMC		57,962		1,140		(69	)		56,891
Total	$	296,198	$	7,201	$	(2,363	)	$	291,360

	Fair Value		Gross Unrealized Gains		Gross Unrealized (Losses)			Cost or Amortized Cost
Residential mortgage obligations:
Prime	$	13,970	$	574	$	(112	)	$	13,508
Alt-A		1,777		115		(21	)		1,683
Subprime		429		15		—			414
Non-US RMBS		18,562		534		—			18,028
Total	$	34,738	$	1,238	$	(133	)	$	33,633