Exhibit 99.1
Navigators Reports Third Quarter Results
NEW YORK--(BUSINESS WIRE)--Nov. 3, 2004--The Navigators Group,
Inc. (NASDAQ:NAVG) reported net income of $6,280,000 or $0.50 per
share for the 2004 third quarter compared to $6,308,000 or $0.73 per
share for the 2003 third quarter. Net income for the 2004 and 2003
third quarters includes net realized capital gains of $0.01 per share
and $0.03 per share, respectively. Diluted average shares outstanding
for the 2004 and 2003 third quarter were 12,679,000 and 8,691,000,
respectively.
Net income for the 2004 third quarter was reduced by $3.3 million
or $0.26 per share for the after-tax loss related to Hurricane Ivan.
Gross written premium for the 2004 third quarter was $151,178,000,
an increase of 8% from the comparable 2003 period. Net written premium
for the 2004 third quarter was $65,992,000, a decrease of 7% from the
2003 comparable period. The 2003 third quarter includes net written
premium and net earned premium of $11,776,000 and $8,597,000,
respectively, recorded by the Company as a result of a commutation
agreement with a former member of the marine pool whereby the Company
retroactively increased its participation in the marine pool from 70%
to 80% for the 2003 underwriting year. The 2004 net written premium
increased 12% and net earned premium increased 14% compared to the
2003 third quarter exclusive of such commutation.
Net income for the nine month period ended September 30, 2004 was
$24,230,000 or $1.91 per share, compared to $17,175,000 or $1.99 per
share for the nine month period ended September 30, 2003. Included in
these results were net realized capital gains of $0.03 per share and
$0.12 per share for the nine months ended September 30, 2004 and 2003,
respectively.
Gross written premium and net written premium for the nine month
period ended September 30, 2004 were $508,756,000 and $235,616,000
respectively, increases of 12% and 6% from the comparable 2003
periods.
The combined loss and expense ratios for the 2004 third quarter
and nine month period were 93.4% and 90.4%, respectively, compared to
92.9% and 95.0% for the comparable 2003 periods. The combined loss and
expense ratios for the 2004 third quarter and nine month period were
increased by an aggregate 6.5 and 2.2 loss and expense ratio points,
respectively, for the net loss from Hurricane Ivan which is inclusive
of expected reinsurance recoveries and related cost for reinsurance
reinstatement premiums. Offsetting such increases were redundancies of
prior year loss reserves recorded by our Lloyd's operations which
reduced the 2004 third quarter and nine month combined loss and
expense ratios by 1.6 and 2.3 loss ratio points, respectively.
Stan Galanski, Navigators' Chief Executive Officer, commented,
"Our business continues to perform well, with favorable incurred loss
activity aside from Hurricane Ivan. While certain product lines have
experienced some price softening, market conditions remain generally
favorable. Both our insurance companies and Lloyd's operation produced
profitable underwriting results, and cash flow continues to grow."
Consolidated cash flow from operations for the 2004 third quarter
and nine month period ended September 30, 2004 was $48,588,000 and
$141,748,000 respectively, compared to $45,383,000 and $110,933,000
for the comparable 2003 periods.
Net investment income for the 2004 third quarter and nine month
period was $6,881,000 and $19,408,000 respectively, increases of 48%
and 40% from the 2003 comparable periods. The pre-tax investment
yields for both the 2004 third quarter and nine month periods were
3.5% compared to 3.6% and 3.9% for the comparable 2003 periods.
The Company adopted the fair value method of accounting for
stock-based employee compensation in the 2003 fourth quarter
retroactive to January 1, 2003. As a result of the 2003 accounting
change, net income for the 2004 third quarter and nine month period
reflect after-tax charges of $179,000 or $0.01 per share and $490,000
or $0.04 per share, respectively, compared to $124,000 or $0.01 per
share and $385,000 or $0.04 per share for the comparable 2003 periods.
The Company's effective tax rate for foreign operations was 35%
for the 2004 third quarter. Included in the 2003 third quarter and
nine month period were tax benefits of $572,000 or $0.07 per share and
$2,056,000 or $0.24 per share, respectively, resulting from the
reduction of a tax valuation allowance related to the Company's
foreign operations. The balance of the tax valuation allowance was
eliminated in the 2003 fourth quarter.
Stockholders' equity was $316,598,000 or $25.08 per share at
September 30, 2004 compared to $290,028,000 or $23.14 per share at
December 31, 2003. Statutory surplus of Navigators Insurance Company
was $231,206,000 at September 30, 2004.
The Company will hold a conference call on Thursday, November 4,
2004 starting at 8:30 a.m. EST to discuss the third quarter's results.
To access the call, please dial 1-800-229-7928, using confirmation
code 60750399. Internationally, the call may be accessed by dialing
617-614-3926 using the same confirmation code. To listen via live
audio webcast, please visit the Company's website (www.navg.com) at
least ten minutes prior to the start of the call and click on the
November 4th Live Audio Webcast link. The webcast will also be
available as a replay at the same location starting one hour after the
call is finished.
The Navigators Group, Inc. is an international insurance holding
company with insurance company operations, underwriting management
companies, and operations at Lloyd's of London. Headquartered in New
York City, Navigators has offices in major insurance centers in the
United States and the United Kingdom.
This press release may contain "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995.
Whenever used in this release, the words "estimate", "expect",
"believe" or similar expressions are intended to identify such
forward-looking statements. We cannot assure that results which we
anticipate will be achieved, since results may differ materially
because of known and unknown risks and uncertainties which we face.
Please refer to Navigators' most recent Forms 10-K and 10-Q and its
other filings with the Securities and Exchange Commission for a
description of Navigators' business and the important factors which
may affect that business. Navigators undertakes no obligation to
publicly update or revise any forward- looking statement.
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Financial Highlights
($'s in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
Financial Highlights 2004 2003 Change 2004 2003 Change
- -------------------- -------- -------- ----- -------- -------- ------
Gross written premium $151,178 $139,632 8% $508,756 $455,526 12%
Net written premium 65,992 70,631 -7% 235,616 223,295 6%
Revenues:
Net earned premium 75,137 74,537 1% 224,627 206,115 9%
Commission income 1,121 23 NM 3,608 2,748 31%
Investment Income 6,881 4,634 48% 19,408 13,847 40%
Net realized capital
gains 271 349 -23% 588 1,235 -52%
Other income (127) 139 NM 267 728 -63%
------------------ ------------------
Total revenues 83,283 79,682 5% 248,498 224,673 11%
------------------ ------------------
Operating expenses:
Net losses and loss
adjustment
expenses incurred 49,247 48,526 1% 138,391 135,857 2%
Commission expense 8,773 9,194 -5% 29,840 28,698 4%
Other operating
expenses 16,014 13,539 18% 44,066 37,734 17%
Interest expense - 68 -100% - 251 -100%
------------------ ------------------
Total operating
expenses 74,034 71,327 4% 212,297 202,540 5%
------------------ ------------------
Income before income
taxes 9,249 8,355 11% 36,201 22,133 64%
------------------ ------------------
Income tax expense:
Current 4,225 4,195 1% 14,184 8,765 62%
Deferred (1,256) (2,148) -42% (2,213) (3,807) -42%
------------------ ------------------
Income tax expense 2,969 2,047 45% 11,971 4,958 141%
------------------ ------------------
Net income $6,280 $6,308 0% $24,230 $17,175 41%
================== ==================
Per Share Data
- --------------
Net income per common
share:
Basic $0.50 $0.74 -33% $1.93 $2.02 -5%
Diluted $0.50 $0.73 -32% $1.91 $1.99 -4%
Average shares
outstanding:
Basic 12,612 8,535 12,584 8,515
Diluted 12,679 8,691 12,688 8,640
Underwriting Ratios
- -------------------
Loss Ratio 65.5% 65.1% 61.6% 65.9%
Expense Ratio 27.9% 27.8% 28.8% 29.1%
------------------ ------------------
Combined Ratio 93.4% 92.9% 90.4% 95.0%
Balance Sheet Data
- ------------------ Sept. 30, Dec. 31,
2004 2003
------------------
Stockholders' equity $316,598 $290,028 9%
Book value per share $25.08 $23.14 8%
Certain amounts for the prior period have been reclassified to conform
to the presentation in the current period.
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($'s in thousands)
Sept. 30, Dec. 31,
2004 2003
----------- -----------
ASSETS
Investments and cash:
Fixed maturities, available-for-sale, at fair
value (amortized cost: 2004, $688,993: 2003,
$577,904) $699,828 $588,545
Equity securities, available-for-sale, at
fair value (cost: 2004, $17,708: 2003,
$11,977) 19,198 13,446
Short-term investments, at cost which
approximates fair value 104,794 83,202
Cash 16,029 8,399
----------- -----------
Total investments and cash 839,849 693,592
----------- -----------
Premiums in course of collection 155,209 128,676
Commissions receivable 2,829 3,970
Prepaid reinsurance premiums 138,957 102,141
Reinsurance receivable on paid losses 17,787 26,270
Reinsurance receivable on unpaid losses and
loss adjustment expense 469,428 350,441
Federal income tax recoverable - 8,747
Net deferred income tax benefit 17,292 15,195
Deferred policy acquisition costs 28,540 24,720
Accrued investment income 6,906 5,546
Goodwill 5,128 5,093
Other assets 10,578 15,067
----------- -----------
Total assets $1,692,503 $1,379,458
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Reserves for losses and loss adjustment
expenses $909,507 $724,612
Unearned premium 287,450 238,803
Reinsurance balances payable 139,518 97,583
Federal income tax payable 1,821 -
Payable for securities purchased 12,737 12,857
Accounts payable and other liabilities 24,872 15,575
----------- -----------
Total liabilities 1,375,905 1,089,430
----------- -----------
Stockholders' equity:
Preferred stock, $.10 par value, authorized
1,000,000 shares, none issued - -
Common stock, $.10 par value, 20,000,000
shares authorized for 2004 and 2003; issued
and outstanding: 12,625,706 for 2004 and
12,535,360 for 2003 1,263 1,254
Additional paid-in capital 153,881 151,765
Accumulated other comprehensive income 8,752 8,537
Retained earnings 152,702 128,472
----------- -----------
Total stockholders' equity 316,598 290,028
----------- -----------
Total liabilities and stockholders'
equity $1,692,503 $1,379,458
=========== ===========
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Comparative Premium Data
($'s in thousands)
Gross Written
Premium: Third Quarter Nine Months
------------------ ------------------
Insurance Companies: 2004 2003 Change 2004 2003 Change
--------- ------- ------ -------- -------- ------
Marine $48,413 $45,716 6% $159,412 $149,080 7%
Specialty 39,025 33,861 15% 110,739 97,475 14%
Professional
Liability 18,723 12,428 51% 51,982 37,987 37%
Assumed from Lloyd's 1,056 7,746 -86% 4,398 26,164 -83%
Other (includes run-
off) 101 346 NM 224 618 NM
------------------ ------------------
107,318 100,097 7% 326,755 311,324 5%
Lloyd's Operations:
Marine 39,807 39,243 1% 168,564 145,708 16%
Other 5,197 7,762 -33% 17,907 23,772 -25%
------------------ ------------------
45,004 47,005 -4% 186,471 169,480 10%
Intercompany
elimination (1,144) (7,470) NM (4,470) (25,278) NM
------------------ ------------------
Total $151,178 $139,632 8% $508,756 $455,526 12%
================== ==================
Net Written Premium: Third Quarter Nine Months
------------------ ------------------
Insurance Companies: 2004 2003 Change 2004 2003 Change
-------- -------- ------ -------- -------- ------
Marine $15,576 $28,691 -46% $61,219 $73,227 -16%
Specialty 20,677 14,933 38% 60,229 51,558 17%
Professional
Liability 6,703 3,182 111% 19,080 9,454 102%
Assumed from Lloyd's 1,056 7,733 -86% 4,191 26,151 -84%
Other (includes run-
off) 892 292 NM 895 (101) NM
------------------ ------------------
44,904 54,831 -18% 145,614 160,289 -9%
Lloyd's Operations:
Marine 18,941 12,945 46% 81,979 54,260 51%
Other 2,147 2,855 -25% 8,023 8,746 -8%
------------------ ------------------
21,088 15,800 33% 90,002 63,006 43%
------------------ ------------------
Total $65,992 $70,631 -7% $235,616 $223,295 6%
================== ==================
Net Earned Premium: Third Quarter Nine Months
------------------ ------------------
Insurance Companies: 2004 2003 Change 2004 2003 Change
-------- -------- ------ -------- -------- ------
Marine $17,862 $27,322 -35% $59,124 $70,572 -16%
Specialty 22,824 19,900 15% 65,728 62,311 5%
Professional
Liability 5,692 2,680 112% 14,199 6,186 130%
Assumed from Lloyd's
Operations 4,271 7,320 -42% 16,554 15,500 7%
Other (includes run-
off) 892 307 NM 901 (32) NM
------------------ ------------------
51,541 57,529 -10% 156,506 154,537 1%
Lloyd's Operations:
Marine 22,075 14,806 49% 64,918 47,912 35%
Other 1,521 2,202 -31% 3,203 3,666 -13%
------------------ ------------------
23,596 17,008 39% 68,121 51,578 32%
------------------ ------------------
Total $75,137 $74,537 1% $224,627 $206,115 9%
================== ==================
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Quarter Ended
September 30, 2004
($'s in thousands)
Insurance Lloyd's Navigators Parent &
Companies Operations Agencies Other(1) Total
--------------------------------------------------
Gross premium
written $107,318 $45,004 $(1,144) $151,178
Net premium written 44,904 21,088 65,992
Revenues:
Net earned premium 51,541 23,596 75,137
Commission income - 300 $ 7,797 (6,976) 1,121
Investment Income 6,225 649 2 5 6,881
Net realized
capital
gains / (losses) 326 (55) - - 271
Other income
(expense) (7) (378) 258 - (127)
--------------------------------------------------
Total revenues 58,085 24,112 8,057 (6,971) 83,283
--------------------------------------------------
Operating expenses:
Net losses and loss
adjustment
expenses 35,401 13,846 - - 49,247
Commission expense 11,682 4,067 - (6,976) 8,773
Other operating
expenses 1,780 3,425 9,616 1,193 16,014
Interest expense
--------------------------------------------------
Total operating
expenses 48,863 21,338 9,616 (5,783) 74,034
--------------------------------------------------
Income (loss)
before
income tax expense
(benefit) 9,222 2,774 (1,559) (1,188) 9,249
Income tax expense
(benefit) 2,871 971 (460) (413) 2,969
--------------------------------------------------
Net Income (loss) $ 6,351 $ 1,803 $(1,099) $ (775) $ 6,280
==================================================
Loss and loss
expenses
ratio 68.7% 58.7% 65.5%
Commission expense
ratio 22.7% 17.2% 21.0%
Other operating
expense
ratio 3.4% 14.5% 6.9%
------------------- --------
Combined ratio 94.8% 90.4% 93.4%
=================== ========
Notes:
(1) Includes inter-segment eliminations.
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Quarter Ended
September 30, 2003
($'s in thousands)
Insurance Lloyd's Navigators Parent &
Companies Operations Agencies Other (1) Total
--------------------------------------------------
Gross premium
written $100,097 $47,005 $(7,470) $139,632
Net premium written 54,831 15,800 70,631
Revenues:
Net earned premium 57,529 17,008 74,537
Commission income - 136 $7,990 (8,103) 23
Investment Income 4,207 422 (2) 7 4,634
Net realized
capital gains 217 132 - - 349
Other income
(expense) (82) (98) 443 (124) 139
--------------------------------------------------
Total revenues 61,871 17,600 8,431 (8,220) 79,682
--------------------------------------------------
Operating expenses:
Net losses and loss
adjustment
expenses 37,732 10,794 - - 48,526
Commission expense 14,189 3,108 - (8,103) 9,194
Other operating
expenses 1,461 2,049 8,610 1,419 13,539
Interest expense - - - 68 68
--------------------------------------------------
Total operating
expenses 53,382 15,951 8,610 (6,616) 71,327
--------------------------------------------------
Income (loss)
before
income tax expense
(benefit) 8,489 1,649 (179) (1,604) 8,355
Income tax expense
(benefit) 2,726 - (146) (533) 2,047
--------------------------------------------------
Net Income (loss) $ 5,763 $ 1,649 $ (33) $(1,071) $ 6,308
==================================================
Loss and loss
expenses ratio 65.6% 63.5% 65.1%
Commission expense
ratio 24.7% 18.3% 23.2%
Other operating
expense ratio 2.5% 12.0% 4.6%
------------------- --------
Combined ratio 92.8% 93.8% 92.9%
=================== ========
Notes:
(1) Includes inter- segment eliminations.
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Nine Months Ended
September 30, 2004
($'s in thousands)
Insurance Lloyd's Navigators Parent &
Companies Operations Agencies Other(1) Total
---------------------------------------------------
Gross premium
written $326,755 $186,471 $ (4,470) $508,756
Net premium
written 145,614 90,002 235,616
Revenues:
Net earned
premium 156,506 68,121 224,627
Commission income - 863 $23,884 (21,139) 3,608
Investment Income 17,538 1,844 6 20 19,408
Net realized
capital gains /
(losses) 707 (119) - - 588
Other income
(expense) 6 (368) 629 - 267
---------------------------------------------------
Total revenues 174,757 70,341 24,519 (21,119) 248,498
---------------------------------------------------
Operating
expenses:
Net losses and
loss
adjustment
expenses 100,669 37,722 - - 138,391
Commission
expense 39,069 11,910 - (21,139) 29,840
Other operating
expenses 3,967 9,654 27,314 3,131 44,066
Interest expense
---------------------------------------------------
Total operating
expenses 143,705 59,286 27,314 (18,008) 212,297
---------------------------------------------------
Income (loss)
before income tax 31,052 11,055 (2,795) (3,111) 36,201
expense (benefit)
Income tax expense
(benefit) 9,892 3,869 (852) (938) 11,971
---------------------------------------------------
Net Income (loss) $ 21,160 $ 7,186 $(1,943) $ (2,173) $ 24,230
===================================================
Loss and loss
expenses ratio 64.3% 55.4% 61.6%
Commission expense
ratio 25.0% 17.5% 22.7%
Other operating
expense ratio 2.5% 14.2% 6.1%
------------------- --------
Combined ratio 91.8% 87.1% 90.4%
=================== ========
Notes:
(1) Includes inter- segment eliminations.
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
Nine Months Ended
September 30, 2003
($'s in thousands)
Insurance Lloyd's Navigators Parent &
Companies Operations Agencies Other (1) Total
---------------------------------------------------
Gross premium
written $311,324 $169,480 $(25,278) $455,526
Net premium
written 160,289 63,006 223,295
Revenues:
Net earned premium 154,537 51,578 206,115
Commission income - 480 $23,713 (21,445) 2,748
Investment Income 12,406 1,413 20 8 13,847
Net realized
capital gains 642 593 - - 1,235
Other income
(expense) 6 116 980 (374) 728
---------------------------------------------------
Total revenues 167,591 54,180 24,713 (21,811) 224,673
---------------------------------------------------
Operating
expenses:
Net losses and
loss
adjustment
expenses 102,602 33,255 - - 135,857
Commission expense 40,931 9,212 - (21,445) 28,698
Other operating
expenses 3,964 5,895 23,813 4,062 37,734
Interest expense - - - 251 251
---------------------------------------------------
Total operating
expenses 147,497 48,362 23,813 (17,132) 202,540
---------------------------------------------------
Income (loss)
before
income tax
expense
(benefit) 20,094 5,818 900 (4,679) 22,133
Income tax expense
(benefit) 6,361 - 207 (1,610) 4,958
---------------------------------------------------
Net Income (loss) $ 13,733 $ 5,818 $ 693 $ (3,069) $ 17,175
===================================================
Loss and loss
expenses ratio 66.4% 64.5% 65.9%
Commission expense
ratio 26.5% 17.9% 24.3%
Other operating
expense ratio 2.5% 11.4% 4.8%
------------------- --------
Combined ratio 95.4% 93.8% 95.0%
=================== ========
Notes:
(1) Includes inter-segment eliminations.
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Underwriting Results
($'s in thousands)
Three Months Ended September 30, 2004
----------------------------------------------------
Net Losses Combined Ratio
Insurance Earned and LAE Underwriting ---------------------
Companies: Premium Incurred Expenses Loss Expense Total
----------------------------------------------------
Marine $17,862 $13,222 $4,785 74.0% 26.8% 100.8%
Specialty 22,824 15,749 6,516 69.0% 28.5% 97.5%
Professional
Liability 5,692 3,450 915 60.6% 16.1% 76.7%
Assumed from
Lloyd's 4,271 1,997 1,241 46.7% 29.1% 75.8%
Other (includes
run-off) 892 983 5 110.2% 0.6% 110.8%
----------------------------------------------------
51,541 35,401 13,462 68.7% 26.1% 94.8%
Lloyd's Operations 23,596 13,846 7,492 58.7% 31.7% 90.4%
----------------------------------------------------
Total $75,137 $49,247 $20,954 65.5% 27.9% 93.4%
====================================================
Effect of Hurricane Ivan on Three Months Ended
September 30, 2004
----------------------------------------------------
Net Losses Combined Ratio
Earned and LAE Underwriting ---------------------
Premium Incurred Expenses Loss Expense Total
----------------------------------------------------
Marine $(1,522) $1,598 $- 14.1% 2.1% 16.2%
Lloyd's Operations (751) 1,276 - 7.1% 0.9% 8.0%
----------------------------------------------------
Consolidated $(2,273) $2,874 $- 5.6% 0.9% 6.5%
====================================================
Three Months Ended September 30, 2003
----------------------------------------------------
Net Losses Combined Ratio
Insurance Earned and LAE Underwriting ---------------------
Companies: Premium Incurred Expenses Loss Expense Total
----------------------------------------------------
Marine $27,322 $17,251 $8,230 63.1% 30.1% 93.2%
Specialty 19,900 14,486 5,053 72.8% 25.4% 98.2%
Professional
Liability 2,680 1,608 330 60.0% 12.3% 72.3%
Assumed from
Lloyd's 7,320 4,773 2,026 65.2% 27.7% 92.9%
Other (includes
run-off) 307 (386) 11 NM NM NM
----------------------------------------------------
57,529 37,732 15,650 65.6% 27.2% 92.8%
Lloyd's Operations 17,008 10,794 5,157 63.5% 30.3% 93.8%
----------------------------------------------------
Total $74,537 $48,526 $20,807 65.1% 27.8% 92.9%
====================================================
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Underwriting Results
($'s in thousands)
Nine Months Ended September 30, 2004
------------------------------------------------------
Net Losses Combined Ratio
Insurance Earned and LAE Underwriting ---------------------
Companies: Premium Incurred Expenses Loss Expense Total
------------------------------------------------------
Marine $59,124 $37,691 $16,044 63.7% 27.2% 90.9%
Specialty 65,728 44,551 19,361 67.8% 29.5% 97.3%
Professional
Liability 14,199 8,581 2,661 60.4% 18.7% 79.1%
Assumed from
Lloyd's 16,554 8,942 4,963 54.0% 30.0% 84.0%
Other (includes
run-off) 901 904 7 100.3% 0.8% 101.1%
------------------------------------------------------
156,506 100,669 43,036 64.3% 27.5% 91.8%
Lloyd's
Operations 68,121 37,722 21,564 55.4% 31.7% 87.1%
------------------------------------------------------
Total $224,627 $138,391 $64,600 61.6% 28.8% 90.4%
======================================================
Effect of Hurricane Ivan on Nine Months Ended
September 30, 2004
------------------------------------------------------
Net Losses Combined Ratio
Earned and LAE Underwriting ---------------------
Premium Incurred Expenses Loss Expense Total
------------------------------------------------------
Marine $(1,522) $1,598 $- 4.2% 0.8% 5.0%
Lloyd's
Operations (751) 1,276 - 2.5% 0.3% 2.8%
------------------------------------------------------
Consolidated $(2,273) $2,874 $- 1.9% 0.3% 2.2%
======================================================
Nine Months Ended September 30, 2003
------------------------------------------------------
Net Losses Combined Ratio
Insurance Earned and LAE Underwriting ---------------------
Companies: Premium Incurred Expenses Loss Expense Total
------------------------------------------------------
Marine $70,572 $42,503 $21,011 60.2% 29.8% 90.0%
Specialty 62,311 43,791 17,980 70.3% 28.9% 99.2%
Professional
Liability 6,186 3,887 1,404 62.8% 22.7% 85.5%
Assumed from
Lloyd's 15,500 9,633 4,474 62.1% 28.9% 91.0%
Other (includes
run-off) (32) 2,788 26 NM NM NM
------------------------------------------------------
154,537 102,602 44,895 66.4% 29.0% 95.4%
Lloyd's
Operations 51,578 33,255 15,107 64.5% 29.3% 93.8%
------------------------------------------------------
Total $206,115 $135,857 $60,002 65.9% 29.1% 95.0%
======================================================
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Loss Reserves
($'s in thousands)
9/30/2004 12/31/2003
---------- -----------
Insurance Companies:
Marine $126,872 $110,698
Specialty 143,762 114,167
Professional Liability 15,369 7,059
Assumed from Lloyd's Operations 17,733 14,323
Other (primarily run-off business) 23,546 24,390
---------- -----------
Total Insurance Companies 327,282 270,637
---------- -----------
Lloyd's Operations:
Marine 107,753 100,936
Other 5,044 2,598
---------- -----------
Total Lloyd's Operations 112,797 103,534
---------- -----------
Total net loss reserves $440,079 $374,171
========== ===========
Total net case loss reserves $177,384 $154,531
Total net IBNR loss reserves 262,695 219,640
---------- -----------
Total net loss reserves $440,079 $374,171
========== ===========
Asbestos & Environmental Claim Data
($'s in thousands)
Nine Months Ended
September 30, 2004
Asbestos Environmental Total
-------- ------------- --------
Gross of Reinsurance
Beginning reserve $78,472 $6,800 $85,272
Incurred loss & LAE (18) 1,192 1,174
Calendar year payments 125 17 142
-------- ------------- --------
Ending reserves $78,329 $7,975 $86,304
======== ============= ========
Net of Reinsurance
Beginning reserve $32,083 $1,153 $33,236
Incurred loss & LAE (10) 734 724
Calendar year payments 81 (10) 71
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Ending reserves $31,992 $1,897 $33,889
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Outstanding Claim Count 121 98 219
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CONTACT: The Navigators Group, Inc.
Paul J. Malvasio, 914-933-6088
Executive Vice President
and Chief Financial Officer
pmalvasio@navg.com
www.navg.com