Exhibit 99.1
Navigators Reports Record Fourth Quarter Earnings
NEW YORK--(BUSINESS WIRE)--Feb. 14, 2007--The Navigators Group,
Inc. (NASDAQ:NAVG) reported net income of $20,607,000 or $1.22 per
share for the 2006 fourth quarter compared to net income of
$15,310,000 or $0.96 per share for the 2005 fourth quarter. The 2006
fourth quarter results include a net realized capital loss of $0.01
per share and the 2005 fourth quarter results include a net realized
capital gain of $0.01 per share.
Net income for the year ended December 31, 2006 was $72,563,000 or
$4.30 per share, compared to $23,564,000 or $1.73 per share for the
year ended December 31, 2005. The 2006 year results include a net
realized capital loss of $0.04 per share and the 2005 year results
include a net realized capital gain of $0.06 per share.
Gross written premium for the 2006 fourth quarter and year was
$232,974,000 and $970,790,000, respectively, increases of 26% and 25%
from the comparable 2005 year periods.
Net written premium for the 2006 fourth quarter and year was
$129,096,000 and $520,807,000, respectively, an increase of 37% from
both the 2005 fourth quarter and full year period.
The combined loss and expense ratios for the 2006 fourth quarter
and year were 87.7% and 87.8%, respectively, compared to 88.6% and
101.3% for the comparable 2005 year periods. Net paid loss ratios for
the 2006 fourth quarter and year were 28.0% and 32.7%, respectively,
compared to 26.8% and 35.6% for the comparable 2005 year periods. The
combined loss and expense ratios for the 2006 fourth quarter and year
were reduced by 3.4 loss ratio points and 3.7 loss ratio points,
respectively, resulting from the release of net loss reserve
redundancies relating to prior years.
Net investment income for the 2006 fourth quarter and year was
$15,651,000 and $56,895,000, respectively, increases of 39% and 53%
from the comparable 2005 year periods. The pre-tax investment yields
for the 2006 fourth quarter and year were both 4.4%, compared to 4.2%
and 3.8%, respectively, for the comparable 2005 year periods.
Navigators' Chief Executive Officer Stan Galanski commented, "We
are pleased with the excellent results produced for both the fourth
quarter and the full year, including a record level of net income and
the lowest combined ratio in our history. Our Marine underwriting
teams in the Insurance Companies and Lloyd's Operations continued to
demonstrate market leadership and strong performance. Our Navigators
Specialty and Navigators Pro divisions both earned solid underwriting
profits while growing their businesses both geographically and through
expanded product offerings. While clearly the peak of the hard market
has passed, we believe that market conditions remain favorable for
those underwriters who value profit over premium volume."
Consolidated cash flow from operations for the 2006 fourth quarter
and year ended December 31, 2006 was $57,932,000 and $146,030,000,
respectively, compared to $73,914,000 and $247,762,000 for the
comparable 2005 periods. Effective in the 2006 fourth quarter and for
all prior periods, the Company has identified the impact of foreign
exchange rate changes in its consolidated statements of cash flows.
Stockholders' equity increased 17% to $551,343,000 or $32.94 per
share at December 31, 2006 compared to $470,238,000 or $28.30 per
share at December 31, 2005. Statutory surplus of Navigators Insurance
Company was $524,188,000 at December 31, 2006.
The Company will hold a conference call on Thursday, February 15,
2007 starting at 8:30 a.m. EST to discuss the fourth quarter's
results. To access the call, please dial 1-866-271-6130, using
confirmation code 72327556. Internationally, the call may be accessed
by dialing 617-213-8894 using the same confirmation code. To listen
via live audio webcast, please visit the Company's website
(www.navg.com) at least ten minutes prior to the start of the call and
click on the February 15th Live Audio Webcast link. The webcast will
also be available as a replay at the same location starting one hour
after the call is finished.
The Navigators Group, Inc. is an international insurance holding
company with insurance company operations, underwriting management
companies, and operations at Lloyd's of London. Headquartered in New
York City, Navigators has offices in major insurance centers in the
United States, the United Kingdom and Belgium.
This press release may contain "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995.
Whenever used in this release, the words "estimate", "expect",
"believe" or similar expressions are intended to identify such
forward-looking statements. We cannot assure that results which we
anticipate will be achieved, since results may differ materially
because of known and unknown risks and uncertainties which we face.
Please refer to Navigators' most recent Forms 10-K and 10-Q and its
other filings with the Securities and Exchange Commission for a
description of Navigators' business and the important factors which
may affect that business. Navigators undertakes no obligation to
publicly update or revise any forward-looking statement.
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Financial Highlights
($'s in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
Financial
Highlights 2006 2005 Change 2006 2005 Change
- ---------------- --------- --------- ------ --------- --------- ------
Gross written
premium $232,974 $184,336 26% $970,790 $779,579 25%
Net written
premium 129,096 94,263 37% 520,807 380,659 37%
Revenues:
Net earned
premium 134,364 100,447 34% 468,323 338,551 38%
Commission
income 610 1,877 -67% 3,075 5,686 -46%
Investment
Income 15,651 11,290 39% 56,895 37,069 53%
Net realized
capital gains
(losses) (259) 311 NM (1,026) 1,238 NM
Other income
(expense) (19) 849 NM (673) 2,675 NM
--------- --------- --------- ---------
Total revenues 150,347 114,774 31% 526,594 385,219 37%
--------- --------- --------- ---------
Operating
expenses:
Net losses and
loss
adjustment
expenses
incurred 76,987 58,987 31% 270,187 235,655 15%
Commission
expense 16,689 12,168 37% 57,787 42,671 35%
Other operating
expenses 24,737 20,586 20% 85,755 73,139 17%
Interest
expense 2,214 - NM 6,248 - NM
--------- --------- --------- ---------
Total operating
expenses 120,627 91,741 31% 419,977 351,465 19%
--------- --------- --------- ---------
Income before
income taxes 29,720 23,033 29% 106,617 33,754 216%
--------- --------- --------- ---------
Income tax
expense
(benefit):
Current 11,152 8,190 36% 38,644 15,826 144%
Deferred (2,039) (467) NM (4,590) (5,636) NM
--------- --------- --------- ---------
Income tax
expense
(benefit) 9,113 7,723 18% 34,054 10,190 234%
--------- --------- --------- ---------
Net income $20,607 $15,310 35% $72,563 $23,564 208%
========= ========= ========= =========
Per Share Data
- ----------------
Net income per
common share:
Basic $1.23 $0.97 28% $4.34 $1.74 149%
Diluted $1.22 $0.96 28% $4.30 $1.73 149%
Average shares
outstanding:
Basic 16,712 15,856 16,722 13,528
Diluted 16,877 16,012 16,856 13,657
Underwriting
Ratios
- ----------------
Loss Ratio 57.3% 58.7% 57.7% 69.6%
Expense Ratio 30.4% 29.9% 30.1% 31.7%
--------- --------- --------- ---------
Combined Ratio 87.7% 88.6% 87.8% 101.3%
Balance Sheet
Data
- ---------------- Dec. 31, Dec. 31,
2006 2005
--------- ---------
Stockholders'
equity $551,343 $470,238 17%
Book value per
share $32.94 $28.30 16%
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($'s in thousands)
December 31, December 31,
2006 2005
------------ ------------
ASSETS
Investments and cash:
Fixed maturities, available-for-sale, at
fair value (amortized cost: 2006,
$1,263,283; 2005, $986,726) $ 1,258,717 $ 984,113
Equity securities, available-for-sale, at
fair value (cost: 2006, $31,878; 2005,
$19,667) 37,828 20,911
Short-term investments, at cost which
approximates fair value 176,961 164,047
Cash 2,404 13,165
------------ ------------
Total investments and cash 1,475,910 1,182,236
------------ ------------
Premiums in course of collection 163,309 155,977
Commissions receivable 3,647 3,467
Prepaid reinsurance premiums 179,493 136,341
Reinsurance receivable on paid losses 108,878 37,055
Reinsurance receivable on unpaid losses and
loss adjustment expenses 911,439 979,015
Net deferred income tax benefit 30,422 28,317
Deferred policy acquisition costs 41,700 29,697
Accrued investment income 13,052 10,297
Goodwill and other intangible assets 8,012 7,341
Other assets 20,824 13,506
------------ ------------
Total assets $ 2,956,686 $ 2,583,249
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Reserves for losses and loss adjustment
expenses $ 1,607,555 $ 1,557,991
Unearned premium 415,096 316,516
Reinsurance balances payable 194,266 180,059
Senior notes 123,560 -
Federal income tax payable 3,934 1,274
Payable for securities purchased 166 823
Accounts payable and other liabilities 60,766 56,348
------------ ------------
Total liabilities 2,405,343 2,113,011
------------ ------------
Stockholders' equity:
Preferred stock, $.10 par value, authorized
1,000,000 shares, none issued - -
Common stock, $.10 par value, 50,000,000
shares authorized for 2006 and 20,000,000
for 2005; issued and outstanding:
16,735,898 for 2006 and 16,616,781 for
2005 1,674 1,662
Additional paid-in capital 286,732 282,463
Retained earnings 259,464 186,901
Accumulated other comprehensive income
(loss) 3,473 (788)
------------ ------------
Total stockholders' equity 551,343 470,238
------------ ------------
Total liabilities and stockholders'
equity $ 2,956,686 $ 2,583,249
============ ============
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Comparative Premium Data
($'s in thousands)
Gross Written
Premium: Fourth Quarter Twelve Months
------------------- -------------------
Insurance
Companies: 2006 2005 Change 2006 2005 Change
-------------------------- --------------------------
Marine $ 56,423 $ 52,188 8% $266,351 $233,688 14%
Specialty 91,533 58,029 58% 311,376 210,483 48%
Professional
Liability 27,596 26,221 5% 92,760 86,929 7%
Other (includes
run-off) 1,078 (443) NM 2,359 (1,419) NM
------------------- -------------------
176,630 135,995 30% 672,846 529,681 27%
Lloyd's
Operations:
Marine 43,060 38,712 11% 245,134 207,170 18%
Professional
Liability 5,655 1,928 193% 21,759 6,646 227%
Other 7,629 7,224 6% 31,051 34,567 -10%
------------------- -------------------
56,344 47,864 18% 297,944 248,383 20%
Intercompany
elimination - 477 NM - 1,515 NM
------------------- -------------------
Total $232,974 $184,336 26% $970,790 $779,579 25%
=================== ===================
Net Written
Premium: Fourth Quarter Twelve Months
------------------- -------------------
Insurance
Companies: 2006 2005 Change 2006 2005 Change
-------------------------- --------------------------
Marine $ 27,029 $ 20,402 32% $128,920 $ 88,591 46%
Specialty 58,858 37,208 58% 195,104 145,199 34%
Professional
Liability 16,298 11,293 44% 51,192 35,626 44%
Other (includes
run-off) 717 (507) NM 963 (1,671) NM
------------------- -------------------
102,902 68,396 50% 376,179 267,745 40%
Lloyd's
Operations:
Marine 20,610 22,405 -8% 127,636 99,797 28%
Professional
Liability 2,690 758 255% 9,016 2,613 245%
Other 2,894 2,704 7% 7,976 10,504 -24%
------------------- -------------------
26,194 25,867 1% 144,628 112,914 28%
------------------- -------------------
Total $129,096 $ 94,263 37% $520,807 $380,659 37%
=================== ===================
Net Earned
Premium: Fourth Quarter Twelve Months
------------------- -------------------
Insurance
Companies: 2006 2005 Change 2006 2005 Change
========================== --------------------------
Marine $ 34,414 $ 25,899 33% $115,093 $ 83,499 38%
Specialty 51,346 35,779 44% 172,479 117,208 47%
Professional
Liability 11,943 8,625 38% 41,437 30,118 38%
Other (includes
run-off) 686 (505) NM 714 (779) NM
------------------- -------------------
98,389 69,798 41% 329,723 230,046 43%
Lloyd's
Operations:
Marine 31,615 27,989 13% 130,644 102,632 27%
Professional
Liability 2,107 529 298% 4,237 1,240 242%
Other 2,253 2,131 6% 3,719 4,633 -20%
--------- --------- --------- ---------
35,975 30,649 17% 138,600 108,505 28%
--------- --------- --------- ---------
Total $134,364 $100,447 34% $468,323 $338,551 38%
========= ========= ========= =========
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information (1)
Three Months Ended
December 31, 2006
($'s in thousands)
Insurance Lloyd's
Companies Operations Corporate Total
--------- ---------- --------- ---------
Gross premium written $176,630 $ 56,344 $232,974
Net premium written 102,902 26,194 129,096
Net earned premium 98,389 35,975 134,364
Net losses and loss
adjustment expenses (56,184) (20,803) (76,987)
Commission expense (11,487) (5,202) (16,689)
Other operating expenses (18,363) (6,374) (24,737)
Commission and other income /
(expense) 891 (300) 591
--------- ---------- ---------
Underwriting profit 13,246 3,296 16,542
Investment income 12,945 2,246 $ 460 15,651
Net realized capital gains /
(losses) (293) 34 0 (259)
Interest expense 0 0 (2,214) (2,214)
--------- ---------- --------- ---------
Income (loss) before income
tax expense (benefit) 25,898 5,576 (1,754) 29,720
Income tax expense (benefit) 8,401 1,951 (1,239) 9,113
--------- ---------- --------- ---------
Net Income (loss) $ 17,497 $ 3,625 $ (515) $ 20,607
========= ========== ========= =========
Loss and loss expenses ratio 57.1% 57.8% 57.3%
Commission expense ratio 11.7% 14.5% 12.4%
Other operating expense
ratio(2) 17.7% 18.5% 18.0%
--------- ---------- ---------
Combined ratio 86.5% 90.8% 87.7%
========= ========== =========
(1) Effective in 2006, the Company classifies its business into two
underwriting segments, Insurance Companies and Lloyd's Operations,
and a Corporate segment. Segment data for each of the two
underwriting operations include allocations of revenues and expenses
of Navigators Agencies and Holding Company expenses and related
income tax amounts previously reported separately. Segment data for
2005 and prior periods have been restated to reflect this change in
segment reporting.
(2) The other operating expense ratio is adjusted to include
commission and other income/(expense).
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information (1)
Three Months Ended
December 31, 2005
($'s in thousands)
Insurance Lloyd's
Companies Operations Corporate Total (2)
--------- ---------- --------- ---------
Gross premium written $135,995 $ 47,864 $184,336
Net premium written 68,396 25,867 94,263
Net earned premium 69,798 30,649 100,447
Net losses and loss
adjustment expenses (40,437) (18,550) (58,987)
Commission expense (7,387) (4,781) (12,168)
Other operating expenses (14,813) (5,773) (20,586)
Commission and other income /
(expense) 1,113 1,613 2,726
--------- ---------- ---------
Underwriting profit 8,274 3,158 11,432
Investment income 9,727 1,419 $144 11,290
Net realized capital gains /
(losses) 357 (46) - 311
--------- ---------- --------- ---------
Income (loss) before income
tax expense (benefit) 18,358 4,531 144 23,033
Income tax expense (benefit) 6,086 1,586 51 7,723
--------- ---------- --------- ---------
Net Income $ 12,272 $ 2,945 $ 93 $ 15,310
========= ========== ========= =========
Loss and loss expenses ratio 57.9% 60.5% 58.7%
Commission expense ratio 10.6% 15.6% 12.1%
Other operating expense
ratio(3) 19.6% 13.6% 17.8%
--------- ---------- ---------
Combined ratio 88.1% 89.7% 88.6%
========= ========== =========
(1) Effective in 2006, the Company classifies its business into two
underwriting segments, Insurance Companies and Lloyd's Operations,
and a Corporate segment. Segment data for each of the two
underwriting operations include allocations of revenues and expenses
of Navigators Agencies and Holding Company expenses and related
income tax amounts previously reported separately. Segment data for
2005 and prior periods have been restated to reflect this change in
segment reporting.
(2) Certain amounts included in gross written premium relate to inter-
segment transactions, accordingly the sum for each segment does not
agree to the totals shown in the table above.
(3) The other operating expense ratio is adjusted to include
commission and other income/(expense).
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information (1)
Twelve Months Ended
December 31, 2006
($'s in thousands)
Insurance Lloyd's
Companies Operations Corporate Total
---------- ---------- --------- ----------
Gross premium written $ 672,846 $ 297,944 $ 970,790
Net premium written 376,179 144,628 520,807
Net earned premium 329,723 138,600 468,323
Net losses and loss
adjustment expenses (191,740) (78,447) (270,187)
Commission expense (36,412) (21,375) (57,787)
Other operating expenses (62,459) (23,296) (85,755)
Commission and other income
/ (expense) 3,552 (1,150) 2,402
---------- ---------- ----------
Underwriting profit 42,664 14,332 56,996
Investment income 47,723 7,694 $ 1,478 56,895
Net realized capital gains
/ (losses) (622) (404) 0 (1,026)
Interest expense 0 0 (6,248) (6,248)
---------- ---------- --------- ----------
Income (loss) before income
tax expense (benefit) 89,765 21,622 (4,770) 106,617
Income tax expense
(benefit) 28,843 7,601 (2,390) 34,054
---------- ---------- --------- ----------
Net Income (loss) $ 60,922 $ 14,021 $(2,380) $ 72,563
========== ========== ========= ==========
Loss and loss expenses
ratio 58.2% 56.6% 57.7%
Commission expense ratio 11.0% 15.4% 12.3%
Other operating expense
ratio (2) 17.9% 17.6% 17.8%
---------- ---------- ----------
Combined ratio 87.1% 89.6% 87.8%
========== ========== ==========
(1) Effective in 2006, the Company classifies its business into two
underwriting segments, Insurance Companies and Lloyd's Operations,
and a Corporate segment. Segment data for each of the two
underwriting operations include allocations of revenues and expenses
of Navigators Agencies and Holding Company expenses and related
income tax amounts previously reported separately. Segment data for
2005 and prior periods have been restated to reflect this change in
segment reporting.
(2) The other operating expense ratio is adjusted to include
commission and other income/(expense).
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information (1)
Twelve Months Ended
December 31, 2005
($'s in thousands)
Insurance Lloyd's
Companies Operations Corporate Total (2)
---------- ---------- --------- ----------
Gross premium written $ 529,681 $248,383 $ 779,579
Net premium written 267,745 112,914 380,659
Net earned premium 230,046 108,505 338,551
Net losses and loss
adjustment expenses (155,293) (80,362) (235,655)
Commission expense (22,984) (19,687) (42,671)
Other operating expenses (52,353) (20,786) (73,139)
Commission and other income
/ (expense) 4,712 3,649 8,361
---------- ---------- ----------
Underwriting profit /
(loss) 4,128 (8,681) (4,553)
Investment income 31,764 5,061 $ 244 37,069
Net realized capital gains
/ (losses) 1,705 (467) - 1,238
---------- ---------- --------- ----------
Income (loss) before income
tax expense (benefit) 37,597 (4,087) 244 33,754
Income tax expense
(benefit) 11,535 (1,431) 86 10,190
---------- ---------- --------- ----------
Net Income (loss) $ 26,062 $ (2,656) $ 158 $ 23,564
========== ========== ========= ==========
Loss and loss expenses
ratio 67.5% 74.1% 69.6%
Commission expense ratio 10.0% 18.1% 12.6%
Other operating expense
ratio (3) 20.7% 15.8% 19.1%
---------- ---------- ----------
Combined ratio 98.2% 108.0% 101.3%
========== ========== ==========
(1) Effective in 2006, the Company classifies its business into two
underwriting segments, Insurance Companies and Lloyd's Operations,
and a Corporate segment. Segment data for each of the two
underwriting operations include allocations of revenues and expenses
of Navigators Agencies and Holding Company expenses and related
income tax amounts previously reported separately. Segment data for
2005 and prior periods have been restated to reflect this change in
segment reporting.
(2) Certain amounts included in gross written premium relate to inter-
segment transactions, accordingly the sum for each segment does not
agree to the totals shown in the table above.
(3) The other operating expense ratio is adjusted to include
commission and other income/(expense).
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Underwriting Results
($'s in thousands)
Three Months Ended December 31, 2006
---------------------------------------------------
Insurance Net Losses
Companies: Earned and LAE Underwriting Combined Ratio
-------------------
Premium Incurred Expenses Loss Expense Total
---------------------------------------------------
Marine $34,414 $18,247 $9,776 53.0% 28.4% 81.4%
Specialty 51,346 29,935 14,826 58.3% 28.9% 87.2%
Professional
Liability 11,943 8,041 3,572 67.3% 29.9% 97.2%
Other (includes
run-off) 686 (39) 785 NM NM NM
---------------------------------------------------
98,389 56,184 28,959 57.1% 29.4% 86.5%
Lloyd's Operations 35,975 20,803 11,876 57.8% 33.0% 90.8%
---------------------------------------------------
Total $134,364 $76,987 $40,835 57.3% 30.4% 87.7%
===================================================
Three Months Ended December 31, 2005
---------------------------------------------------
Insurance Net Losses
Companies: Earned and LAE Underwriting Combined Ratio
-------------------
Premium Incurred Expenses Loss Expense Total
---------------------------------------------------
Marine $25,899 $15,723 $7,183 60.7% 27.7% 88.4%
Specialty 35,779 21,500 10,806 60.1% 30.2% 90.3%
Professional
Liability 8,625 3,616 2,927 41.9% 33.9% 75.9%
Other (includes
run-off) (505) (402) 171 NM NM NM
---------------------------------------------------
69,798 40,437 21,087 57.9% 30.2% 88.1%
Lloyd's Operations 30,649 18,550 8,941 60.5% 29.2% 89.7%
---------------------------------------------------
Total $100,447 $58,987 $30,028 58.7% 29.9% 88.6%
===================================================
Amounts Loss Ratio
-----------------------------------
Net Incurred Loss Activity Dec. 31, Dec. 31, Dec. 31, Dec. 31,
For the Three Months Ended: 2006 2005 2006 2005
-----------------------------------
Insurance Companies:
Loss and LAE payments $23,856 $43,149 24.2% 61.8%
Change in reserves 32,328 (2,712) 32.9% -3.9%
-----------------------------------
Net incurred loss and LAE 56,184 40,437 57.1% 57.9%
-----------------------------------
Lloyd's Operations:
Loss and LAE payments 13,779 (16,220) 38.3% -52.9%
Change in reserves 7,024 34,770 19.5% 113.4%
-----------------------------------
Net incurred loss and LAE 20,803 18,550 57.8% 60.5%
-----------------------------------
Total
Loss and LAE payments 37,635 26,929 28.0% 26.8%
Change in reserves 39,352 32,058 29.3% 31.9%
-----------------------------------
Net incurred loss and LAE $76,987 $58,987 57.3% 58.7%
===================================
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Underwriting Results
($'s in thousands)
Twelve Months Ended December 31, 2006
-------------------------------------------------------
Insurance Net Losses
Companies: Earned and LAE Underwriting Combined Ratio
--------------------
Premium Incurred Expenses Loss Expense Total
-------------------------------------------------------
Marine $115,093 $ 65,856 $ 31,339 57.2% 27.2% 84.4%
Specialty 172,479 99,112 50,138 57.5% 29.1% 86.6%
Professional
Liability 41,437 26,756 12,648 64.6% 30.5% 95.1%
Other
(includes
run-off) 714 16 1,194 NM NM NM
-------------------------------------------------------
329,723 191,740 95,319 58.2% 28.9% 87.1%
Lloyd's
Operations 138,600 78,447 45,821 56.6% 33.0% 89.6%
-------------------------------------------------------
Total $468,323 $270,187 $141,140 57.7% 30.1% 87.8%
=======================================================
Twelve Months Ended December 31, 2005
-------------------------------------------------------
Insurance Net Losses
Companies: Earned and LAE Underwriting Combined Ratio
--------------------
Premium Incurred Expenses Loss Expense Total
-------------------------------------------------------
Marine $ 83,499 $ 68,184 $ 24,620 81.7% 29.5% 111.2%
Specialty 117,208 71,139 36,353 60.7% 31.0% 91.7%
Professional
Liability 30,118 18,292 9,637 60.7% 32.0% 92.7%
Other
(includes
run-off) (779) (2,322) 15 NM NM NM
-------------------------------------------------------
230,046 155,293 70,625 67.5% 30.7% 98.2%
Lloyd's
Operations 108,505 80,362 36,824 74.1% 33.9% 108.0%
-------------------------------------------------------
Total $338,551 $235,655 $107,449 69.6% 31.7% 101.3%
=======================================================
Effect of Hurrs. Katrina and Rita on the Twelve Months
Ended Dec. 31, 2005
-------------------------------------------------------
Marine $ (9,147) $ 7,430 $ - 16.1% 2.9% 19.0%
Lloyd's
Operations (5,318) 14,858 - 16.5% 1.6% 18.1%
-------------------------------------------------------
Total $(14,465) $ 22,288 $ - 9.2% 1.3% 10.5%
=======================================================
Amounts Loss Ratio
------------------- -----------------
Net Incurred Loss Activity Dec. 31, Dec. 31, Dec. 31, Dec. 31,
For the Twelve Months Ended: 2006 2005 2006 2005
--------- --------- -------- --------
Insurance Companies:
Loss and LAE payments $ 90,997 $105,018 27.6% 45.6%
Change in reserves 100,743 50,275 30.6% 21.9%
-------------------------------------
Net incurred loss and LAE 191,740 155,293 58.2% 67.5%
-------------------------------------
Lloyd's Operations:
Loss and LAE payments 62,051 15,448 44.8% 14.3%
Change in reserves 16,396 64,914 11.8% 59.8%
-------------------------------------
Net incurred loss and LAE 78,447 80,362 56.6% 74.1%
-------------------------------------
Total
Loss and LAE payments 153,048 120,466 32.7% 35.6%
Change in reserves 117,139 115,189 25.0% 34.0%
-------------------------------------
Net incurred loss and LAE $270,187 $235,655 57.7% 69.6%
=====================================
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Loss Data
($'s in thousands)
Net Loss Reserves: 12/31/2006 12/31/2005
----------- -----------
Insurance Companies:
Marine $ 179,393 $ 162,644
Specialty 260,844 193,755
Professional Liability 51,571 33,133
Other 19,299 20,831
----------- -----------
Total Insurance Companies 511,107 410,363
----------- -----------
Lloyd's Operations:
Marine 173,497 161,262
Other 11,512 7,351
----------- -----------
Total Lloyd's Operations 185,009 168,613
----------- -----------
Total net loss reserves $ 696,116 $ 578,976
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Total net case loss reserves $ 243,183 $ 228,423
Total net IBNR loss reserves 452,933 350,553
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Total net loss reserves $ 696,116 $ 578,976
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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