Navigators Second Quarter Operating Earnings up 31%

STAMFORD, Conn., Aug. 06, 2015 (GLOBE NEWSWIRE) -- The Navigators Group, Inc. (NASDAQ:NAVG) reported net income of $19.2 million, or $1.30 per diluted share, for the three months ended June 30, 2015 compared to $16.9 million, or $1.17 per diluted share, for the comparable period in 2014. Operating earnings were $19.7 million, or $1.34 per diluted share, for the three months ended June 30, 2015 compared to $15.0 million, or $1.04 per diluted share, for the comparable period in 2014.

For the six months ended June 30, 2015, the Company reported net income of $45.1 million, or $3.06 per diluted share compared to $44.8 million, or $3.11 per diluted share, for the comparable period in 2014. 2014 results included 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 Syndicate, which was equally offset by a reversal within the Accumulated Other Comprehensive Income component of stockholders’ equity. Excluding this gain, the six months ended June 30, 2014 net income per diluted share would have been $2.66. Operating earnings were $40.6 million, or $2.76 per diluted share, for the six months ended June 30, 2015 compared to $35.9 million, or $2.49 per diluted share, for the comparable period in 2014. The one-time foreign exchange gain discussed above had no impact on operating earnings.

Gross written premiums and net written premiums for the three months ended June 30, 2015 were $379.5 million and $258.2 million, respectively, an increase of 8.8% and 11.4% from the comparable period in 2014.

Gross written premiums and net written premiums for the six months ended June 30, 2015 were $775.9 million and $547.2 million, respectively, each an increase of 0.6% from the comparable period in 2014.

The combined ratio for the three and six months ended June 30, 2015 was 93.4% and 92.8%, respectively, compared to 95.3% and 93.8% for the comparable periods in 2014.

Stan Galanski, President and Chief Executive Officer commented, “We are pleased to report another quarter of solid performance. We generated profitable underwriting results in each of our three underwriting segments, specifically with strong profit contribution from our US and International Marine units and overall Global Re. Despite challenging competitive conditions in a number of specialty niches, most notably the first-party energy product lines, we achieved double digit net premium growth, led by strong growth in our U.S. Primary and Excess Casualty units.”

Stockholders’ equity was $1,053.6 million, or $73.18 per share, as of June 30, 2015 compared to $1,027.2 million, or $71.93 per share, as of December 31, 2014.

Net investment income for the three and six months ended June 30, 2015 was $16.6 million and $32.8 million, respectively, an increase of 6.1% and 1.8% from the comparable periods in 2014. The annualized pre-tax investment yield, excluding net realized gains and losses and other-than-temporary impairment losses recognized in earnings, was 2.4% for the three and six months ended June 30, 2015, compared to 2.5% and 2.6%, respectively for the comparable periods in 2014.

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, 2015. As of June 30, 2015, net unrealized gains within our investment portfolio were $38.0 million, a decrease of $33.4 million compared to December 31, 2014.

There were $3.9 million of net realized gains recognized in earnings for the three months ended June 30, 2015, compared to $4.5 million for the same period in 2014. For the six months ended June 30, there were $9.5 million of net realized gains, compared to $5.3 million for the same period in 2014.

Other income (loss) for the three months ended June 30, 2015 was ($4.4 million), compared to ($1.7 million) for the same period in 2014, each primarily consisting of a net foreign exchange loss. For the six months ended June 30, 2015 other income (loss) was ($2.1 million), primarily consisting of net foreign exchange, compared to $8.7 million in the same period in 2014; largely impacted by a one-time foreign exchange gain in the first quarter of 2014.

The Company will hold a conference call on Friday, August 7, 2015 starting at 8:30 a.m. ET to discuss the 2015 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 (888-240-9373) and the international dial-in is (913) 312-0956. Participants may connect to the webcast at:

http://edge.media-server.com/m/p/3h9rmgcb

Net operating earnings, or net income excluding after-tax net realized gains (losses), after-tax 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.

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.

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			2015			2014		Change				2015			2014		Change

Gross written premiums		$	379,471		$	348,795			8.8	%	$	775,931		$	771,585			0.6	%
Net written premiums			258,244			231,864			11.4	%		547,202			543,714			0.6	%

Revenues:
	Net earned premiums		242,328			231,084			4.9	%		478,460			456,356			4.8	%
	Net investment income		16,595			15,648			6.1	%		32,848			32,258			1.8	%
	Net realized gains (losses):
	Total other-than-temporary impairment losses		(423	)		-		NM				(423	)		-		NM
	Portion of loss recognized in other comprehensive
	income (before tax)		-			-		NM				-			-		NM
	Net other-than-temporary impairment losses
	recognized in earnings		(423	)		-		NM				(423	)		-		NM
	Other realized gains (losses)		4,339			4,473			-3.0	%		9,935			5,306			87.2	%
	Net realized gains (losses)		3,916			4,473			-12.5	%		9,512			5,306			79.3	%
	Other income (loss)		(4,362	)		(1,665	)	NM				(2,120	)		8,734			-124.3	%
	Total revenues		258,477			249,540			3.6	%		518,700			502,654			3.2	%

Expenses:
	Net losses and loss adjustment expenses		141,973			140,220			1.3	%		272,171			275,287			-1.1	%
	Commission expenses		31,480			32,150			-2.1	%		64,385			57,877			11.2	%
	Other operating expenses		52,789			47,992			10.0	%		107,698			95,138			13.2	%
	Interest expense		3,856			4,319			-10.7	%		7,711			8,171			-5.6	%
	Total expenses		230,098			224,681			2.4	%		451,965			436,473			3.5	%

Income before income taxes			28,379			24,859			14.2	%		66,735			66,181			0.8	%

Income tax expense (benefit)			9,195			7,998			15.0	%		21,622			21,352			1.3	%

Net income (loss)		$	19,184		$	16,861			13.8	%	$	45,113		$	44,829			0.6	%


Per Share Data

Net income per common share:
	Basic	$	1.33		$	1.18			12.7	%	$	3.14		$	3.15			-0.3	%
	Diluted	$	1.30		$	1.17			11.1	%	$	3.06		$	3.11			-1.6	%

Average common shares outstanding:
	Basic		14,396,048			14,259,753						14,370,123			14,246,701
	Diluted		14,763,002			14,377,476						14,726,282			14,401,740

Underwriting Ratios
Loss Ratio			58.6	%		60.7	%					56.9	%		60.3	%
Expense Ratio			34.8	%		34.6	%					35.9	%		33.5	%
Combined Ratio			93.4	%		95.3	%					92.8	%		93.8	%


Balance Sheet Data		Jun. 30,			Mar. 31,						Jun. 30,			Dec. 31,
			2015			2015						2015			2014
Stockholders' equity		$	1,053,629		$	1,053,603			0.0	%	$	1,053,629		$	1,027,224			2.6	%
Book value per share		$	73.18		$	73.21			0.0	%	$	73.18		$	71.93			1.7	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
($ in thousands, except share data)

			June 30,			December 31,
				2015			2014
ASSETS
Investments and cash:
	Fixed maturities, available-for-sale, at fair value
	(amortized cost: 2015, $2,291,137; 2014, $2,323,959)		$	2,313,937		$	2,365,934
	Equity securities, available-for-sale, at fair value (cost: 2015, $179,917; 2014, $154,843)			195,078			184,295
	Short-term investments, at fair value (amortized cost: 2015: $201,688; 2014: $179,527)			201,748			179,506
	Cash			89,250			90,751
		Total investments and cash		2,800,013			2,820,486

	Premiums receivable			407,122			342,479
	Prepaid reinsurance premiums			260,010			237,851
	Reinsurance recoverable on paid losses			124,439			51,347
	Reinsurance recoverable on unpaid losses and loss adjustment expenses			780,297			851,498
	Deferred policy acquisition costs			84,905			79,452
	Accrued investment income			14,573			14,791
	Goodwill and other intangible assets			6,947			7,013
	Current income tax receivable, net			16,109			14,549
	Deferred income tax, net			7,658			-
	Other assets			39,159			44,710
		Total assets	$	4,541,232		$	4,464,176


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
	Reserves for losses and loss adjustment expenses		$	2,131,157		$	2,159,634
	Unearned premiums			857,068			766,167
	Reinsurance balances payable			155,423			152,774
	Senior notes			263,509			263,440
	Deferred income tax, net			-			1,467
	Accounts payable and other liabilities			80,446			93,470
		Total liabilities		3,487,603			3,436,952

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 17,908,734 shares
	for 2015 and 17,792,846 shares for 2014			1,791			1,778
	Additional paid-in capital			350,151			347,022
	Treasury stock, at cost (3,511,380 shares for 2015 and 2014)			(155,801	)		(155,801	)
	Retained earnings			832,779			787,666
	Accumulated other comprehensive income			24,709			46,559
		Total stockholders' equity		1,053,629			1,027,224

		Total liabilities and stockholders' equity	$	4,541,232		$	4,464,176

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
($ in thousands)

	Three Months Ended June 30, 2015
	U.S.			International			Global
	Insurance			Insurance			Reinsurance			Corporate ⁽¹⁾			Total
Gross written premiums	$	239,987		$	108,790		$	30,694		$	-		$	379,471
Ceded written premiums		(78,882	)		(41,621	)		(724	)		-			(121,227	)
Net written premiums		161,105			67,169			29,970			-			258,244

Net earned premiums		137,304			63,186			41,838			-			242,328
Net losses and loss adjustment expenses		(84,155	)		(32,363	)		(25,455	)		-			(141,973	)
Commission expenses		(12,275	)		(11,298	)		(8,039	)		132			(31,480	)
Other operating expenses		(31,374	)		(17,366	)		(4,049	)		-			(52,789	)
Other underwriting income (expenses)		121			-			36			(132	)		25

Underwriting profit (loss)	$	9,621		$	2,159		$	4,331		$	-		$	16,111

Net investment income											16,595			16,595
Net realized gains (losses)											3,916			3,916
Interest expense											(3,856	)		(3,856	)
Other income (expense)											(4,387	)		(4,387	)

Income before income taxes	$	9,621		$	2,159		$	4,331		$	12,268		$	28,379

Income tax (expense) benefit											(9,195	)		(9,195	)
Net income (loss)													$	19,184

Losses and loss adjustment expenses ratio		61.3	%		51.2	%		60.8	%					58.6	%
Commission expense ratio		8.9	%		17.9	%		19.2	%					13.0	%
Other operating expense ratio ⁽²⁾		22.8	%		27.5	%		9.6	%					21.8	%
Combined ratio		93.0	%		96.6	%		89.6	%					93.4	%

(1) The Corporate segment includes intercompany eliminations.
(2) The Other operating expense ratio includes Other underwriting income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
($ in thousands)

	Three Months Ended June 30, 2014
	U.S.			International			Global
	Insurance			Insurance			Reinsurance			Corporate ⁽¹⁾			Total
Gross written premiums	$	206,703		$	120,732		$	21,360		$	-		$	348,795
Ceded written premiums		(60,004	)		(56,345	)		(582	)		-			(116,931	)
Net written premiums		146,699			64,387			20,778			-			231,864

Net earned premiums		125,254			59,661			46,169			-			231,084
Net losses and loss adjustment expenses		(73,131	)		(35,293	)		(31,796	)		-			(140,220	)
Commission expenses		(13,219	)		(11,009	)		(8,468	)		546			(32,150	)
Other operating expenses		(28,840	)		(15,436	)		(3,716	)		-			(47,992	)
Other underwriting income (expenses)		736			11			34			(546	)		235

Underwriting profit (loss)	$	10,800		$	(2,066	)	$	2,223		$	-		$	10,957

Net investment income											15,648			15,648
Net realized gains (losses)											4,473			4,473
Interest expense											(4,319	)		(4,319	)
Other income (expense)											(1,900	)		(1,900	)

Income before income taxes	$	10,800		$	(2,066	)	$	2,223		$	13,902		$	24,859

Income tax (expense) benefit											(7,998	)		(7,998	)
Net income (loss)													$	16,861

Losses and loss adjustment expenses ratio		58.4	%		59.2	%		68.9	%					60.7	%
Commission expense ratio		10.6	%		18.5	%		18.3	%					13.9	%
Other operating expense ratio ⁽²⁾		22.4	%		25.8	%		8.0	%					20.7	%
Combined ratio		91.4	%		103.5	%		95.2	%					95.3	%

(1) The Corporate segment includes intercompany eliminations.
(2) The Other operating expense ratio includes Other underwriting income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
($ in thousands)

	Six Months Ended June 30, 2015
	U.S.			International			Global
	Insurance			Insurance			Reinsurance			Corporate ⁽¹⁾			Total
Gross written premiums	$	439,314		$	231,217		$	105,400		$	-		$	775,931
Ceded written premiums		(147,612	)		(75,877	)		(5,240	)		-			(228,729	)
Net written premiums		291,702			155,340			100,160			-			547,202

Net earned premiums		268,395			128,711			81,354			-			478,460
Net losses and loss adjustment expenses		(161,954	)		(62,054	)		(48,163	)		-			(272,171	)
Commission expenses		(26,620	)		(22,711	)		(15,337	)		283			(64,385	)
Other operating expenses		(65,062	)		(34,375	)		(8,261	)		-			(107,698	)
Other underwriting income (expenses)		317			-			46			(283	)		80

Underwriting profit (loss)	$	15,076		$	9,571		$	9,639		$	-		$	34,286

Net investment income											32,848			32,848
Net realized gains (losses)											9,512			9,512
Interest expense											(7,711	)		(7,711	)
Other income (expense)											(2,200	)		(2,200	)

Income before income taxes	$	15,076		$	9,571		$	9,639		$	32,449		$	66,735

Income tax (expense) benefit											(21,622	)		(21,622	)
Net income (loss)													$	45,113

Losses and loss adjustment expenses ratio		60.3	%		48.2	%		59.2	%					56.9	%
Commission expense ratio		9.9	%		17.6	%		18.9	%					13.5	%
Other operating expense ratio ⁽²⁾		24.2	%		26.8	%		10.1	%					22.4	%
Combined ratio		94.4	%		92.6	%		88.2	%					92.8	%

(1) The Corporate segment includes intercompany eliminations.
(2) The Other operating expense ratio includes Other underwriting income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
($ in thousands)

	Six Months Ended June 30, 2014
	U.S.			International			Global
	Insurance			Insurance			Reinsurance			Corporate ⁽¹⁾			Total
Gross written premiums	$	405,051		$	239,924		$	126,610		$	-		$	771,585
Ceded written premiums		(125,070	)		(98,927	)		(3,874	)		-			(227,871	)
Net written premiums		279,981			140,997			122,736			-			543,714

Net earned premiums		240,444			121,715			94,197			-			456,356
Net losses and loss adjustment expenses		(146,095	)		(66,513	)		(62,679	)		-			(275,287	)
Commission expenses		(22,728	)		(19,864	)		(16,340	)		1,055			(57,877	)
Other operating expenses		(56,833	)		(30,495	)		(7,810	)		-			(95,138	)
Other underwriting income (expenses)		1,249			17			179			(1,055	)		390

Underwriting profit (loss)	$	16,037		$	4,860		$	7,547		$	-		$	28,444

Net investment income											32,258			32,258
Net realized gains (losses)											5,306			5,306
Interest expense											(8,171	)		(8,171	)
Other income (expense)											8,344			8,344

Income before income taxes	$	16,037		$	4,860		$	7,547		$	37,737		$	66,181

Income tax (expense) benefit											(21,352	)		(21,352	)
Net income (loss)													$	44,829

Losses and loss adjustment expenses ratio		60.8	%		54.6	%		66.5	%					60.3	%
Commission expense ratio		9.5	%		16.3	%		17.3	%					12.7	%
Other operating expense ratio ⁽²⁾		23.0	%		25.1	%		8.2	%					20.8	%
Combined ratio		93.3	%		96.0	%		92.0	%					93.8	%

(1) The Corporate segment includes intercompany eliminations.
(2) The Other operating expense ratio includes Other underwriting income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Reportable Segment Results
($ in thousands)

	U.S. Insurance
	Three months ended June 30, 2015												Three months ended June 30, 2014												% Change
amounts in thousands	Marine			P&C			Professional Liability			Total			Marine			P&C			Professional Liability			Total			Total
Gross written premiums	$	41,803		$	170,216		$	27,968		$	239,987		$	42,548		$	137,137		$	27,018		$	206,703			16.1	%
Ceded written premiums		(15,026	)		(49,305	)		(14,551	)		(78,882	)		(11,587	)		(40,452	)		(7,965	)		(60,004	)		31.5	%
Net written premiums		26,777			120,911			13,417			161,105			30,961			96,685			19,053			146,699			9.8	%

Net earned premiums		25,977			96,440			14,887			137,304			26,727			76,585			21,942			125,254			9.6	%
Net losses and LAE		(11,415	)		(67,809	)		(4,931	)		(84,155	)		(10,609	)		(52,619	)		(9,903	)		(73,131	)		15.1	%
Commission expenses		(2,429	)		(8,751	)		(1,095	)		(12,275	)		(4,101	)		(6,095	)		(3,023	)		(13,219	)		-7.1	%
Other operating expenses		(6,402	)		(19,661	)		(5,311	)		(31,374	)		(5,944	)		(17,675	)		(5,221	)		(28,840	)		8.8	%
Other underwriting income (expenses)		24			97			-			121			320			374			42			736			-83.6	%

Underwriting profit (loss)	$	5,755		$	316		$	3,550		$	9,621		$	6,393		$	570		$	3,837		$	10,800			-10.9	%

Losses and LAE ratio		43.9	%		70.3	%		33.1	%		61.3	%		39.7	%		68.7	%		45.1	%		58.4	%
Commission expense ratio		9.4	%		9.1	%		7.4	%		8.9	%		15.3	%		8.0	%		13.8	%		10.6	%
Other operating expense ratio ⁽¹⁾		24.5	%		20.3	%		35.7	%		22.8	%		21.1	%		22.6	%		23.6	%		22.4	%
Combined ratio		77.8	%		99.7	%		76.2	%		93.0	%		76.1	%		99.3	%		82.5	%		91.4	%


(1) The Other operating expense ratio includes Other income (expense).

	Int'l Insurance
	Three months ended June 30, 2015												Three months ended June 30, 2014												% Change
amounts in thousands	Marine			P&C			Professional Liability			Total			Marine			P&C			Professional Liability			Total			Total
Gross written premiums	$	41,432		$	41,615		$	25,743		$	108,790		$	47,532		$	51,305		$	21,895		$	120,732			-9.9	%
Ceded written premiums		(9,126	)		(24,513	)		(7,982	)		(41,621	)		(17,033	)		(31,284	)		(8,028	)		(56,345	)		-26.1	%
Net written premiums		32,306			17,102			17,761			67,169			30,499			20,021			13,867			64,387			4.3	%

Net earned premiums		40,132			10,199			12,855			63,186			34,177			16,466			9,018			59,661			5.9	%
Net losses and LAE		(21,432	)		(4,084	)		(6,847	)		(32,363	)		(22,963	)		(9,937	)		(2,393	)		(35,293	)		-8.3	%
Commission expenses		(9,495	)		(155	)		(1,648	)		(11,298	)		(10,020	)		(996	)		7			(11,009	)		2.6	%
Other operating expenses		(6,749	)		(6,166	)		(4,451	)		(17,366	)		(6,468	)		(5,570	)		(3,398	)		(15,436	)		12.5	%
Other underwriting income (expenses)		-			-			-			-			3			5			3			11		NM

Underwriting profit (loss)	$	2,456		$	(206	)	$	(91	)	$	2,159		$	(5,271	)	$	(32	)	$	3,237		$	(2,066	)	NM

Losses and LAE ratio		53.4	%		40.0	%		53.3	%		51.2	%		67.2	%		60.4	%		26.5	%		59.2	%
Commission expense ratio		23.7	%		1.5	%		12.8	%		17.9	%		29.4	%		6.0	%		-0.1	%		18.5	%
Other operating expense ratio ⁽¹⁾		16.8	%		60.5	%		34.6	%		27.5	%		18.9	%		33.8	%		37.8	%		25.8	%
Combined ratio		93.9	%		102.0	%		100.7	%		96.6	%		115.5	%		100.2	%		64.2	%		103.5	%

NM - Percentage change not meaningful
(1) The Other operating expense ratio includes Other income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Reportable Segment Results
($ in thousands)

	U.S. Insurance
	Six months ended June 30, 2015												Six months ended June 30, 2014												% Change
amounts in thousands	Marine			P&C			Professional Liability			Total			Marine			P&C			Professional Liability			Total			Total
Gross written premiums	$	82,638		$	304,362		$	52,314		$	439,314		$	85,573		$	262,256		$	57,222		$	405,051			8.5	%
Ceded written premiums		(31,312	)		(88,863	)		(27,437	)		(147,612	)		(20,757	)		(86,608	)		(17,705	)		(125,070	)		18.0	%
Net written premiums		51,326			215,499			24,877			291,702			64,816			175,648			39,517			279,981			4.2	%

Net earned premiums		49,901			187,175			31,319			268,395			54,713			141,516			44,215			240,444			11.6	%
Net losses and LAE		(21,603	)		(125,856	)		(14,495	)		(161,954	)		(25,292	)		(96,968	)		(23,835	)		(146,095	)		10.9	%
Commission expenses		(6,461	)		(17,307	)		(2,852	)		(26,620	)		(6,648	)		(10,040	)		(6,040	)		(22,728	)		17.1	%
Other operating expenses		(13,375	)		(40,720	)		(10,967	)		(65,062	)		(11,633	)		(34,988	)		(10,212	)		(56,833	)		14.5	%
Other underwriting income (expenses)		175			141			1			317			521			640			88			1,249			-74.6	%

Underwriting profit (loss)	$	8,637		$	3,433		$	3,006		$	15,076		$	11,661		$	160		$	4,216		$	16,037			-6.0	%

Losses and LAE ratio		43.3	%		67.2	%		46.3	%		60.3	%		46.2	%		68.5	%		53.9	%		60.8	%
Commission expense ratio		12.9	%		9.2	%		9.1	%		9.9	%		12.2	%		7.1	%		13.7	%		9.5	%
Other operating expense ratio ⁽¹⁾		26.5	%		21.8	%		35.0	%		24.2	%		20.3	%		24.3	%		22.9	%		23.0	%
Combined ratio		82.7	%		98.2	%		90.4	%		94.4	%		78.7	%		99.9	%		90.5	%		93.3	%


(1) The Other operating expense ratio includes Other income (expense).

	Int'l Insurance
	Six months ended June 30, 2015												Six months ended June 30, 2014												% Change
amounts in thousands	Marine			P&C			Professional Liability			Total			Marine			P&C			Professional Liability			Total			Total
Gross written premiums	$	108,842		$	74,565		$	47,810		$	231,217		$	109,514		$	93,555		$	36,855		$	239,924			-3.6	%
Ceded written premiums		(19,948	)		(40,642	)		(15,287	)		(75,877	)		(29,427	)		(55,748	)		(13,752	)		(98,927	)		-23.3	%
Net written premiums		88,894			33,923			32,523			155,340			80,087			37,807			23,103			140,997			10.2	%

Net earned premiums		77,924			26,233			24,554			128,711			72,221			32,907			16,587			121,715			5.7	%
Net losses and LAE		(40,943	)		(8,964	)		(12,147	)		(62,054	)		(42,660	)		(16,894	)		(6,959	)		(66,513	)		-6.7	%
Commission expenses		(18,685	)		(1,182	)		(2,844	)		(22,711	)		(20,007	)		195			(52	)		(19,864	)		14.3	%
Other operating expenses		(13,444	)		(12,150	)		(8,781	)		(34,375	)		(12,883	)		(10,850	)		(6,762	)		(30,495	)		12.7	%
Other underwriting income (expenses)		-			-			-			-			9			5			3			17		NM

Underwriting profit (loss)	$	4,852		$	3,937		$	782		$	9,571		$	(3,320	)	$	5,363		$	2,817		$	4,860			96.9	%

Losses and LAE ratio		52.5	%		34.2	%		49.5	%		48.2	%		59.1	%		51.3	%		42.0	%		54.6	%
Commission expense ratio		24.0	%		4.5	%		11.6	%		17.6	%		27.7	%		-0.6	%		0.3	%		16.3	%
Other operating expense ratio ⁽¹⁾		17.3	%		46.3	%		35.7	%		26.8	%		17.8	%		33.0	%		40.7	%		25.1	%
Combined ratio		93.8	%		85.0	%		96.8	%		92.6	%		104.6	%		83.7	%		83.0	%		96.0	%

NM - Percentage change not meaningful
(1) The Other operating expense ratio includes Other income (expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Incurred Loss Activity
($ in thousands)

	For the Three Months Ended
	Amounts						Loss Ratio
	June 30,			June 30,			June 30,			June 30,
Net Incurred Loss Activity		2015			2014			2015			2014
US Insurance:
Loss and LAE payments	$	56,719		$	49,772			41.3	%		39.8	%
Change in reserves		27,436			23,359			20.0	%		18.6	%
Net incurred loss and LAE		84,155			73,131			61.3	%		58.4	%

International Insurance:
Loss and LAE payments		33,891			31,548			53.6	%		52.9	%
Change in reserves		(1,528	)		3,745			-2.4	%		6.3	%
Net incurred loss and LAE		32,363			35,293			51.2	%		59.2	%

Global Reinsurance:
Loss and LAE payments		20,037			22,302			47.9	%		48.3	%
Change in reserves		5,418			9,494			12.9	%		20.6	%
Net incurred loss and LAE		25,455			31,796			60.8	%		68.9	%

Total
Loss and LAE payments		110,647			103,622			45.7	%		44.9	%
Change in reserves		31,326			36,598			12.9	%		15.8	%
Net incurred loss and LAE	$	141,973		$	140,220			58.6	%		60.7	%

	Amounts						Loss Ratio Impact
Impact of Prior Years Reserves	June 30,			June 30,			June 30,			June 30,
Favorable / (Unfavorable) Development		2015			2014			2015			2014
US Insurance	$	7,829		$	12,582			3.2	%		5.4	%
International Insurance		(581	)		10,373			-0.2	%		4.5	%
Global Reinsurance		7			(2,440	)		0.0	%		-1.0	%
Total	$	7,255		$	20,515			3.0	%		8.9	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Incurred Loss Activity
($ in thousands)

	For the Six Months Ended
	Amounts						Loss Ratio
	June 30,			June 30,			June 30,			June 30,
Net Incurred Loss Activity		2015			2014			2015			2014
US Insurance:
Loss and LAE payments	$	119,453		$	99,427			44.5	%		41.4	%
Change in reserves		42,501			46,668			15.8	%		19.4	%
Net incurred loss and LAE		161,954			146,095			60.3	%		60.8	%

International Insurance:
Loss and LAE payments		69,428			63,236			53.9	%		52.0	%
Change in reserves		(7,374	)		3,277			-5.7	%		2.6	%
Net incurred loss and LAE		62,054			66,513			48.2	%		54.6	%

Global Reinsurance:
Loss and LAE payments		41,249			41,622			50.7	%		44.2	%
Change in reserves		6,914			21,057			8.5	%		22.3	%
Net incurred loss and LAE		48,163			62,679			59.2	%		66.5	%

Total
Loss and LAE payments		230,130			204,285			48.1	%		44.7	%
Change in reserves		42,041			71,002			8.8	%		15.6	%
Net incurred loss and LAE	$	272,171		$	275,287			56.9	%		60.3	%

	Amounts						Loss Ratio Impact
Impact of Prior Years Reserves	June 30,			June 30,			June 30,			June 30,
Favorable / (Unfavorable) Development		2015			2014			2015			2014
US Insurance	$	14,238		$	12,134			3.0	%		2.7	%
International Insurance		5,610			10,957			1.2	%		2.4	%
Global Reinsurance		6			(2,538	)		0.0	%		-0.6	%
Total	$	19,854		$	20,553			4.2	%		4.5	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Loss Data
($ in thousands)

	As of June 30, 2015
	Case		IBNR
Net Loss Reserves:	Reserves		Reserves		Total
US Insurance:
Marine	$	70,582	$	65,030	$	135,612
Property Casualty		154,775		451,665		606,440
Professional Liability		45,573		71,814		117,387
Total US Insurance		270,930		588,509		859,439
International Insurance:
Marine		176,305		66,970		243,275
Property Casualty		36,429		16,507		52,936
Professional Liability		9,817		56,706		66,523
Total International Insurance		222,551		140,183		362,734

Global Reinsurance		26,964		101,723		128,687

Total Net Loss Reserves	$	520,445	$	830,415	$	1,350,860

	As of December 31, 2014
	Case		IBNR
Net Loss Reserves:	Reserves		Reserves		Total
US Insurance:
Marine	$	74,699	$	64,390	$	139,089
Property Casualty		144,334		391,643		535,977
Professional Liability		56,501		85,369		141,870
Total US Insurance		275,534		541,402		816,936
International Insurance:
Marine		168,575		75,673		244,248
Property Casualty		41,695		21,391		63,086
Professional Liability		12,466		49,712		62,178
Total International Insurance		222,736		146,776		369,512

Global Reinsurance		31,108		90,580		121,688

Total Net Loss Reserves	$	529,378	$	778,758	$	1,308,136

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Investment Data
June 30, 2015

As of June 30, 2015, 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) or asset backed commercial paper.

The following table sets forth our cash and investments as of June 30, 2015:

	As of June 30, 2015
			Gross		Gross			Cost or
	Fair		Unrealized		Unrealized			Amortized
	Value		Gains		(Losses)			Cost
	($ in thousands)
Fixed maturities:
U.S.Treasury bonds, agency bonds
and foreign government bonds	$	295,687	$	3,407	$	(6,173	)	$	298,453
States, municipalities and political
subdivisions		565,188		12,511		(2,531	)		555,208
Mortgage- and asset-backed securities:
Agency mortgage-backed securities		343,916		6,501		(2,100	)		339,515
Residential mortgage obligations		32,396		1,010		(102	)		31,488
Asset-backed securities		195,512		433		(488	)		195,567
Commercial mortgage-backed securities		216,185		4,814		(1,481	)		212,852
Subtotal		788,009		12,758		(4,171	)		779,422

Corporate bonds		665,053		10,210		(3,211	)		658,054

Total fixed maturities		2,313,937		38,886		(16,086	)		2,291,137

Equity securities		195,078		18,733		(3,572	)		179,917

Short-term investments		201,748		60		-			201,688

Total	$	2,710,763	$	57,679	$	(19,658	)	$	2,672,742

Navigators Second Quarter Operating Earnings up 31%

Net Income up 14%

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