STAMFORD, Conn., Nov. 02, 2017 (GLOBE NEWSWIRE) -- The Navigators Group, Inc. (NASDAQ:NAVG) reported a Net Loss of $(28.0) million, or $(0.95) per diluted share, for the three months ended September 30, 2017 compared to Net Income of $22.0 million, or $0.73 per diluted share, for the same period in 2016. Net Operating Earnings (Loss)¹ were $(29.6) million, or $(1.00) per diluted share, for the three months ended September 30, 2017 compared to $21.1 million, or $0.70 per diluted share, for the same period in 2016.

Gross Written Premiums and Net Written Premiums for the three months ended September 30, 2017 were $402.0 million and $296.0 million, respectively, increasing 7.2% and 6.9%, respectively, from the comparable period in 2016. Our Combined Ratio for the three months ended September 30, 2017 was 121.9%, compared to 95.6% for the same period in 2016.

The current quarter includes Net Losses and Loss Adjustment Expenses and related net reinsurance reinstatement premiums of $75.1 million from Hurricanes Maria, Irma and Harvey and the Puebla, Mexico Earthquake, as well as prior accident year reserve strengthening of $29.5 million primarily within our U.S. and International Insurance reporting segments.

Net Investment Income for the three months ended September 30, 2017 was $22.6 million, an increase of 13.7% as compared to the same period in 2016. Our annualized pre-tax investment yield, excluding Net Realized Gains and Losses and Other-Than-Temporary Impairment Losses Recognized in Earnings, was 2.7% for the three months ended September 30, 2017, compared to 2.5% for the same period in 2016.

Other Income (Loss) for the three months ended September 30, 2017 was $(1.7) million, compared to $(0.2) million for the same period in 2016, and primarily consists of realized and unrealized foreign exchange gains and losses.

For the nine months ended September 30, 2017, our Company reported Net Income of $13.6 million, or $0.45 per diluted share, compared to $61.1 million, or $2.04 per diluted share, for the same period in 2016. Net Operating Earnings were $10.5 million, or $0.35 per diluted share, for the nine months ended September 30, 2017 compared to $53.5 million, or $1.79 per diluted share, for the same period in 2016.

Gross Written Premiums and Net Written Premiums for the nine months ended September 30, 2017 were $1.3 billion and $1.0 billion, respectively, increasing 8.6% and 7.0%, respectively, from the comparable period in 2016. Our Combined Ratio for the nine months ended September 30, 2017 was 105.5%, compared to 96.7% for the same period in 2016, mostly due to the net loss activity noted above.

Net Investment Income for the nine months ended September 30, 2017 was $66.3 million, an increase of 11.7% as compared to the same period in 2016. Our annualized pre-tax investment yield, excluding Net Realized Gains and Losses and Other-Than-Temporary Impairment Losses Recognized in Earnings, was 2.7% for the nine months ended September 30, 2017, compared to 2.6% for the same period in 2016.

Other Income (Loss) for the nine months ended September 30, 2017 was $(1.0) million, compared to $6.8 million for the same period in 2016.

Stan Galanski, President and Chief Executive Officer, commented, “Navigators’ financial impact from our exposure to multiple natural catastrophe events in the third quarter was well within our tolerance and expectations, reflected in the modest decline in Book Value per Share of 1.7% for the quarter and increase of 2.6% for the nine month period. Our underwriting teams are well positioned to respond to anticipated improvement in regional property markets. Premium volume was up across all three segments, led by strong growth in GlobalRe, our global reinsurance segment. Our investment portfolio continued to perform well, with Net Investment Income up 13.7% for the quarter. During the quarter, we made a modest strengthening of prior year loss reserves across a number of lines of business, reflecting our commitment to maintaining prudent levels of loss reserving and a solid balance sheet.”

Our Company’s investment portfolio mainly consists of fixed income securities with an average quality rating of “AA-/Aa3” as defined by S&P and Moody’s, respectively, with an average effective duration of 3.6 years as of September 30, 2017. As of September 30, 2017, Net Unrealized Gains within our investment portfolio were $87.2 million, an increase of $12.9 million compared to June 30, 2017 and an increase of $58.2 million compared to December 31, 2016. We recognized $4.2 million of Net Realized Gains (inclusive of Net Other-Than-Temporary Impairment Losses Recognized in Earnings) for the three months ended September 30, 2017, compared to $1.6 million of Net Realized Gains for the same period in 2016. For the nine months ended September 30, 2017 we recognized $5.9 million of Net Realized Gains (inclusive of Net Other-Than-Temporary Impairment Losses Recognized in Earnings), compared to $5.0 million of Net Realized Gains (inclusive of Net Other-Than-Temporary Impairment Losses Recognized in Earnings) for the same period in 2016.

Stockholders’ Equity was $1.2 billion, or $41.49 per share, as of September 30, 2017 compared to $42.21 per share, as of June 30, 2017 and $40.45 per share, as of December 31, 2016.

During the three months ended September 30, 2017, our Company declared and paid a quarterly cash dividend of $0.06 per share of Common Stock.

On November 2, 2017 our Board of Directors declared a cash dividend on our Company’s Common Stock of $0.06 per share, payable on December 15, 2017 to stockholders of record on November 24, 2017.

Our Company will hold a conference call on Friday, November 3, 2017 starting at 8:30 a.m. (ET) to discuss the 2017 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 800-850-2903 and the international dial-in is 224-357-2399. Participants may also connect to the webcast at: https://edge.media-server.com/m6/p/on47jdtw.

On December 6, 2016, our Board of Directors declared a two-for-one stock split of The Navigators Group, Inc. Common Stock, to be effected in the form of a stock dividend. Stockholders of record at the close of business on December 30, 2016 received one additional share of Common Stock for every share of Common Stock held. All disclosures of shares and per share data in this earnings release have been retroactively adjusted to reflect the stock split for all periods presented. The additional shares of Common Stock were issued on January 20, 2017. 

The Navigators Group, Inc. is an international specialty insurance holding company with operations in the United States, the United Kingdom, Continental Europe and Asia.

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.

^{______________________________
1} Net Operating Earnings (Loss) is a “non-GAAP financial measure” as defined in Regulation G. A reconciliation of Net Income (Loss) (the nearest GAAP financial measure) to Net Operating Earnings (Loss) is provided on page 4 of this release, as is a discussion of the rationale for the presentation of this item.

Contact:
Ciro M. DeFalco
Executive Vice President and Chief Financial Officer
(203) 905-6343
cdefalco@navg.com
www.navg.com 

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
		Three Months Ended												Nine Months Ended
amounts in thousands, except per share amounts		September 30,												September 30,
Results of Operations		2017				2016				Change				2017				2016				Change
Gross Written Premiums		$	402,038			$	374,930				7.2	%		$	1,304,522			$	1,201,372				8.6	%
Net Written Premiums			296,016				277,001				6.9	%			966,461				903,356				7.0	%
Revenues:
Net Earned Premiums		$	301,355			$	284,010				6.1	%		$	881,321			$	816,360				8.0	%
Net Investment Income			22,598				19,875				13.7	%			66,311				59,344				11.7	%
Net Realized Gains (Losses):
Total Other-Than-Temporary Impairment Losses			(957	)			23			NM					(2,005	)			(248	)		NM
Portion of Loss Recognized in Other Comprehensive Income (Before Tax)			(15	)			(23	)			(34.8	%)			(60	)			98			NM
Net Other-Than-Temporary Impairment Losses Recognized In Earnings			(972	)			—			NM					(2,065	)			(150	)		NM
Other Realized Gains			5,190				1,586			NM					7,933				5,143				54.2	%
Net Realized Gains			4,218				1,586			NM					5,868				4,993				17.5	%
Other Income (Loss)			(1,699	)			(183	)		NM					(1,042	)			6,796			NM
Total Revenues		$	326,472			$	305,288				6.9	%		$	952,458			$	887,493				7.3	%
Expenses:
Net Losses and Loss Adjustment Expenses		$	276,171			$	172,793				59.8	%		$	622,881			$	492,955				26.4	%
Commission Expenses			45,509				42,611				6.8	%			141,526				120,891				17.1	%
Other Operating Expenses			45,773				56,137				(18.5	%)			165,077				176,020				(6.2	%)
Interest Expense			3,862				3,859				0.1	%			11,584				11,575				0.1	%
Total Expenses		$	371,315			$	275,400				34.8	%		$	941,068			$	801,441				17.4	%
Income (Loss) Before Income Taxes		$	(44,843	)		$	29,888			NM				$	11,390			$	86,052				(86.8	%)
Income Tax Expense (Benefit)			(16,864	)			7,875			NM					(2,243	)			24,917			NM
Net Income (Loss)		$	(27,979	)		$	22,013			NM				$	13,633			$	61,135				(77.7	%)
Per Share Data (1)
Net Income (Loss)  Per Common Share:
Basic		$	(0.95	)		$	0.76			NM				$	0.46			$	2.10				(78.0	%)
Diluted		$	(0.95	)		$	0.73			NM				$	0.45			$	2.04				(77.7	%)
Average Common Shares Outstanding:
Basic			29,500				29,115								29,419				29,058
Diluted			29,500				30,141								30,006				29,997
Underwriting Ratios
Loss Ratio			91.6	%			60.8	%							70.7	%			60.4	%
Expense Ratio			30.3	%			34.8	%							34.8	%			36.3	%
Combined Ratio			121.9	%			95.6	%							105.5	%			96.7	%
Balance Sheet Data		September 30,				June 30,								September 30,				December 31,
		2017				2017								2017				2016
Stockholders' Equity		$	1,224,191			$	1,244,168				(1.6	%)		$	1,224,191			$	1,178,188				3.9	%
Book Value per Share (1)		$	41.49			$	42.21				(1.7	%)		$	41.49			$	40.45				2.6	%

(1) - We completed a two-for-one stock split on January 20, 2017. All share and per share data prior to January 20, 2017 has been retroactively restated on a post-split basis.
NM - Percentage change not meaningful.

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION OF NET INCOME (LOSS) TO NET OPERATING EARNINGS (LOSS)
(Unaudited)

In this release, we present Net Operating Earnings (Loss), which is a “non-GAAP financial measure” as defined in Regulation G.

Net Operating Earnings (Loss) is comprised of Net Income (Loss) 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 recognized in our Consolidated Statements of Income (Loss).

We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our business and enables investors and other users of our financial information to analyze underlying business performance in a manner similar to management. We also believe this measure follows industry practice and, therefore facilitates comparison of our performance with our peer group.

The following tables provide a reconciliation of Net Income (Loss) (the nearest GAAP financial measure) to Net Operating Earnings (Loss):

		Three Months Ended September 30, 2017												Three Months Ended September 30, 2016												% Change
amounts in thousands, except per share amounts		Pre-Tax				Tax (1)				After-Tax				Pre-Tax				Tax (1)				After-Tax				QTD
Net Income (Loss)		$	(44,843	)		$	16,864			$	(27,979	)		$	29,888			$	(7,875	)		$	22,013			NM
Adjustments to Net Income (Loss):
Realized Losses (Gains)			(4,218	)			1,477				(2,741	)			(1,586	)			555				(1,031	)		NM
FX Losses (Gains)			1,675				(586	)			1,089				227				(80	)			147			NM
Net Operating Earnings (Loss)		$	(47,386	)		$	17,755			$	(29,631	)		$	28,529			$	(7,400	)		$	21,129			NM
Average Common Shares Outstanding: (2)
Basic											29,500												29,115
Diluted											29,500												30,141
Net Operating Earnings (Loss) per Common Share: (2)
Basic										$	(1.00	)										$	0.73
Diluted										$	(1.00	)										$	0.70

		Nine Months Ended September 30, 2017												Nine Months Ended September 30, 2016												% Change
amounts in thousands, except per share amounts		Pre-Tax				Tax (1)				After-Tax				Pre-Tax				Tax (1)				After-Tax				YTD
Net Income		$	11,390			$	2,243			$	13,633			$	86,052			$	(24,917	)		$	61,135				(77.7	%)
Adjustments to Net Income:
Realized Losses (Gains)			(5,868	)			2,055				(3,813	)			(4,993	)			1,747				(3,246	)			17.5	%
FX Losses (Gains)			1,015				(355	)			660				(6,679	)			2,337				(4,342	)		NM
Net Operating Earnings		$	6,537			$	3,943			$	10,480			$	74,380			$	(20,833	)		$	53,547				(80.4	%)
Average Common Shares Outstanding: (2)
Basic											29,419												29,058
Diluted											30,006												29,997
Net Operating Earnings per Common Share: (2)
Basic										$	0.36											$	1.84
Diluted										$	0.35											$	1.79

(1) - Tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of any other relevant factors.
(2) - We completed a two-for-one stock split on January 20, 2017. All share and per share data prior to January 20, 2017 has been retroactively restated on a post-split basis.
NM - Percentage change not meaningful.

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
		September 30,				December 31,
		2017				2016
amounts in thousands, except per share amounts		(Unaudited)
ASSETS
Investments:
Fixed Maturities, available-for-sale, at fair value (amortized cost: 2017:  $2,752,102; 2016: $2,628,225)		$	2,798,185			$	2,635,882
Equity Securities, available-for-sale, at fair value (cost: 2017: $334,739; 2016: $327,911)			375,876				349,142
Other Invested Assets			1,751				1,960
Short-Term Investments, at fair value (amortized cost: 2017: $247,602; 2016: $143,451)			247,607				143,539
Total Investments		$	3,423,419			$	3,130,523
Cash			56,471				64,643
Premiums Receivable			361,272				306,686
Prepaid Reinsurance Premiums			231,174				213,377
Reinsurance Recoverable on Paid Losses			61,054				82,582
Reinsurance Recoverable on Unpaid Losses and Loss Adjustment Expenses			847,505				779,276
Deferred Policy Acquisition Costs			134,625				119,660
Accrued Investment Income			20,420				17,315
Goodwill and Other Intangible Assets			6,591				6,451
Current Income Tax Receivable, Net			48,186				20,556
Deferred Income Tax, Net			13,080				20,938
Other Assets			71,751				52,030
Total Assets		$	5,275,548			$	4,814,037
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Reserves for Losses and Loss Adjustment Expenses		$	2,558,134			$	2,289,727
Unearned Premiums			990,518				887,344
Reinsurance Balances Payable			129,306				108,980
Senior Notes			263,845				263,728
Payable for Investments Purchased			21,862				—
Accounts Payable and Other Liabilities			87,692				86,070
Total Liabilities		$	4,051,357			$	3,635,849
Stockholders' Equity: (1)
Preferred Stock ($.10 par value per share, authorized 1,000 shares, none issued)		$	—			$	—
Common Stock ($.10 par value per share, authorized 50,000 shares, issued 36,526 shares for 2017 and 36,147 shares for 2016)			3,650				3,612
Additional Paid-In Capital			371,512				373,983
Treasury Stock, at cost (7,023 shares for 2017 and 2016)			(155,801	)			(155,801	)
Retained Earnings			956,290				947,519
Accumulated Other Comprehensive Income			48,540				8,875
Total Stockholders' Equity		$	1,224,191			$	1,178,188
Total Liabilities and Stockholders' Equity		$	5,275,548			$	4,814,037

(1) - We completed a two-for-one stock split on January 20, 2017. All share data prior to January 20, 2017 has been retroactively restated on a post-split basis.

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
(Unaudited)
		Three Months Ended September 30, 2017
		U.S.				Int'l
amounts in thousands		Insurance				Insurance				GlobalRe				Corporate (1)				Total
Gross Written Premiums		$	235,052			$	113,601			$	53,385			$	—			$	402,038
Ceded Written Premiums			(64,328	)			(38,966	)			(2,728	)			—				(106,022	)
Net Written Premiums			170,724				74,635				50,657				—				296,016
Net Earned Premiums		$	169,150			$	84,407			$	47,798			$	—			$	301,355
Net Losses and LAE			(135,340	)			(81,713	)			(59,118	)			—				(276,171	)
Commission Expenses			(18,286	)			(16,201	)			(11,233	)			211				(45,509	)
Other Operating Expenses			(25,375	)			(16,388	)			(4,010	)			—				(45,773	)
Other Underwriting Income (Expense)			125				—				94				(211	)			8
Underwriting Loss		$	(9,726	)		$	(29,895	)		$	(26,469	)		$	—			$	(66,090	)
Net Investment Income															22,598				22,598
Net Realized Gains															4,218				4,218
Interest Expense															(3,862	)			(3,862	)
Other Loss															(1,707	)			(1,707	)
Loss Before Income Taxes		$	(9,726	)		$	(29,895	)		$	(26,469	)		$	21,247			$	(44,843	)
Income Tax Benefit															16,864				16,864
Net Loss																		$	(27,979	)
Losses and LAE Ratio			80.0	%			96.8	%			123.7	%							91.6	%
Commission Expense Ratio			10.8	%			19.2	%			23.5	%							15.1	%
Other Operating Expense Ratio (2)			14.9	%			19.4	%			8.2	%							15.2	%
Combined Ratio			105.7	%			135.4	%			155.4	%							121.9	%

(1) - Includes Corporate segment intercompany eliminations.
(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
(Unaudited)
		Three Months Ended September 30, 2016
		U.S.				Int'l
amounts in thousands		Insurance				Insurance				GlobalRe				Corporate (1)				Total
Gross Written Premiums		$	234,647			$	104,484			$	35,799			$	—			$	374,930
Ceded Written Premiums			(61,359	)			(35,194	)			(1,376	)			—				(97,929	)
Net Written Premiums			173,288				69,290				34,423				—				277,001
Net Earned Premiums		$	161,722			$	79,761			$	42,527			$	—			$	284,010
Net Losses and LAE			(106,320	)			(45,043	)			(21,430	)			—				(172,793	)
Commission Expenses			(18,630	)			(15,348	)			(8,951	)			318				(42,611	)
Other Operating Expenses			(31,517	)			(20,183	)			(4,437	)			—				(56,137	)
Other Underwriting Income (Expense)			240				—				122				(318	)			44
Underwriting Profit (Loss)		$	5,495			$	(813	)		$	7,831			$	—			$	12,513
Net Investment Income															19,875				19,875
Net Realized Gains															1,586				1,586
Interest Expense															(3,859	)			(3,859	)
Other Loss															(227	)			(227	)
Income (Loss) Before Income Taxes		$	5,495			$	(813	)		$	7,831			$	17,375			$	29,888
Income Tax Expense															(7,875	)			(7,875	)
Net Income																		$	22,013
Losses and LAE Ratio			65.7	%			56.5	%			50.4	%							60.8	%
Commission Expense Ratio			11.5	%			19.2	%			21.0	%							15.0	%
Other Operating Expense Ratio (2)			19.4	%			25.3	%			10.2	%							19.8	%
Combined Ratio			96.6	%			101.0	%			81.6	%							95.6	%

(1) - Includes Corporate segment intercompany eliminations.
(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
(Unaudited)
		Nine Months Ended September 30, 2017
		U.S.				Int'l
amounts in thousands		Insurance				Insurance				GlobalRe				Corporate (1)				Total
Gross Written Premiums		$	729,843			$	386,654			$	188,025			$	—			$	1,304,522
Ceded Written Premiums			(199,672	)			(129,368	)			(9,021	)			—				(338,061	)
Net Written Premiums			530,171				257,286				179,004				—				966,461
Net Earned Premiums		$	500,241			$	250,593			$	130,487			$	—			$	881,321
Net Losses and LAE			(339,436	)			(176,513	)			(106,932	)			—				(622,881	)
Commission Expenses			(59,130	)			(54,435	)			(28,695	)			734				(141,526	)
Other Operating Expenses			(91,987	)			(58,687	)			(14,403	)			—				(165,077	)
Other Underwriting Income (Expense)			335				—				439				(734	)			40
Underwriting Profit (Loss)		$	10,023			$	(39,042	)		$	(19,104	)		$	—			$	(48,123	)
Net Investment Income															66,311				66,311
Net Realized Gains															5,868				5,868
Interest Expense															(11,584	)			(11,584	)
Other Loss															(1,082	)			(1,082	)
Income (Loss) Before Income Taxes		$	10,023			$	(39,042	)		$	(19,104	)		$	59,513			$	11,390
Income Tax Benefit															2,243				2,243
Net Income																		$	13,633
Losses and LAE Ratio			67.9	%			70.4	%			81.9	%							70.7	%
Commission Expense Ratio			11.8	%			21.7	%			22.0	%							16.1	%
Other Operating Expense Ratio (2)			18.3	%			23.5	%			10.7	%							18.7	%
Combined Ratio			98.0	%			115.6	%			114.6	%							105.5	%

(1) - Includes Corporate segment intercompany eliminations.
(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
(Unaudited)
		Nine Months Ended September 30, 2016
		U.S.				Int'l
amounts in thousands		Insurance				Insurance				GlobalRe				Corporate (1)				Total
Gross Written Premiums		$	689,218			$	384,367			$	127,787			$	—			$	1,201,372
Ceded Written Premiums			(178,474	)			(112,075	)			(7,467	)			—				(298,016	)
Net Written Premiums			510,744				272,292				120,320				—				903,356
Net Earned Premiums		$	462,446			$	235,602			$	118,312			$	—			$	816,360
Net Losses and LAE			(291,260	)			(133,519	)			(68,176	)			—				(492,955	)
Commission Expenses			(50,379	)			(47,524	)			(24,188	)			1,200				(120,891	)
Other Operating Expenses			(96,848	)			(64,997	)			(14,175	)			—				(176,020	)
Other Underwriting Income (Expense)			943				—				374				(1,200	)			117
Underwriting Profit (Loss)		$	24,902			$	(10,438	)		$	12,147			$	—			$	26,611
Net Investment Income															59,344				59,344
Net Realized Gains															4,993				4,993
Interest Expense															(11,575	)			(11,575	)
Other Income															6,679				6,679
Income (Loss) Before Income Taxes		$	24,902			$	(10,438	)		$	12,147			$	59,441			$	86,052
Income Tax Expense															(24,917	)			(24,917	)
Net Income																		$	61,135
Losses and LAE Ratio			63.0	%			56.7	%			57.6	%							60.4	%
Commission Expense Ratio			10.9	%			20.2	%			20.4	%							14.8	%
Other Operating Expense Ratio (2)			20.7	%			27.5	%			11.7	%							21.5	%
Combined Ratio			94.6	%			104.4	%			89.7	%							96.7	%

(1) - Includes Corporate segment intercompany eliminations.
(2) - Includes Other Operating Expenses and Other Underwriting Income (Expense).

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Reportable Segment Results
(Unaudited)
		U.S. Insurance
		Three Months Ended September 30, 2017																Three Months Ended September 30, 2016
amounts in thousands		Marine				P&C				Professional Liability				Total				Marine				P&C				Professional Liability				Total				% Change Total
Gross Written Premiums		$	36,403			$	166,097			$	32,552			$	235,052			$	40,271			$	161,600			$	32,776			$	234,647				0.2	%
Ceded Written Premiums			(18,859	)			(39,952	)			(5,517	)			(64,328	)			(17,636	)			(36,011	)			(7,712	)			(61,359	)			4.8	%
Net Written Premiums			17,544				126,145				27,035				170,724				22,635				125,589				25,064				173,288				(1.5	%)
Net Earned Premiums		$	20,129			$	125,931			$	23,090			$	169,150			$	25,465			$	115,971			$	20,286			$	161,722				4.6	%
Net Losses and LAE			(18,325	)			(89,568	)			(27,447	)			(135,340	)			(14,974	)			(74,129	)			(17,217	)			(106,320	)			27.3	%
Commission Expenses			(967	)			(13,515	)			(3,804	)			(18,286	)			(2,117	)			(13,664	)			(2,849	)			(18,630	)			(1.8	%)
Other Operating Expenses			(4,661	)			(16,897	)			(3,817	)			(25,375	)			(6,767	)			(19,997	)			(4,753	)			(31,517	)			(19.5	%)
Other Underwriting Income			105				18				2				125				126				104				10				240				(47.9	%)
Underwriting Profit (Loss)		$	(3,719	)		$	5,969			$	(11,976	)		$	(9,726	)		$	1,733			$	8,285			$	(4,523	)		$	5,495			NM
Losses and LAE Ratio			91.0	%			71.1	%			118.9	%			80.0	%			58.8	%			63.9	%			84.9	%			65.7	%
Commission Expense Ratio			4.8	%			10.7	%			16.5	%			10.8	%			8.3	%			11.8	%			14.0	%			11.5	%
Other Operating Expense Ratio (1)			22.7	%			13.5	%			16.5	%			14.9	%			26.1	%			17.2	%			23.4	%			19.4	%
Combined Ratio			118.5	%			95.3	%			151.9	%			105.7	%			93.2	%			92.9	%			122.3	%			96.6	%

(1) - Includes Other Operating Expenses and Other Underwriting Income.
NM – Percentage change not meaningful

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Reportable Segment Results
(Unaudited)
		Int'l Insurance
		Three Months Ended September 30, 2017																Three Months Ended September 30, 2016
amounts in thousands		Marine				P&C				Professional Liability				Total				Marine				P&C				Professional Liability				Total				% Change Total
Gross Written Premiums		$	41,689			$	37,415			$	34,497			$	113,601			$	38,453			$	38,077			$	27,954			$	104,484				8.7	%
Ceded Written Premiums			(9,948	)			(19,772	)			(9,246	)			(38,966	)			(12,631	)			(15,331	)			(7,232	)			(35,194	)			10.7	%
Net Written Premiums			31,741				17,643				25,251				74,635				25,822				22,746				20,722				69,290				7.7	%
Net Earned Premiums		$	39,038			$	21,775			$	23,594			$	84,407			$	34,794			$	25,584			$	19,383			$	79,761				5.8	%
Net Losses and LAE			(39,457	)			(29,918	)			(12,338	)			(81,713	)			(17,289	)			(16,080	)			(11,674	)			(45,043	)			81.4	%
Commission Expenses			(8,532	)			(2,666	)			(5,003	)			(16,201	)			(8,358	)			(3,502	)			(3,488	)			(15,348	)			5.6	%
Other Operating Expenses			(6,788	)			(5,614	)			(3,986	)			(16,388	)			(7,654	)			(7,913	)			(4,616	)			(20,183	)			(18.8	%)
Underwriting Profit (Loss)		$	(15,739	)		$	(16,423	)		$	2,267			$	(29,895	)		$	1,493			$	(1,911	)		$	(395	)		$	(813	)		NM
Losses and LAE Ratio			101.1	%			137.4	%			52.3	%			96.8	%			49.7	%			62.8	%			60.2	%			56.5	%
Commission Expense Ratio			21.9	%			12.2	%			21.2	%			19.2	%			24.0	%			13.7	%			18.0	%			19.2	%
Other Operating Expense Ratio			17.3	%			25.8	%			16.9	%			19.4	%			22.0	%			31.0	%			23.8	%			25.3	%
Combined Ratio			140.3	%			175.4	%			90.4	%			135.4	%			95.7	%			107.5	%			102.0	%			101.0	%

NM- Percentage change not meaningful

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Reportable Segment Results
(Unaudited)
		U.S. Insurance
		Nine Months Ended September 30, 2017																Nine Months Ended September 30, 2016
amounts in thousands		Marine				P&C				Professional Liability				Total				Marine				P&C				Professional Liability				Total				% Change Total
Gross Written Premiums		$	119,040			$	524,223			$	86,580			$	729,843			$	129,621			$	471,532			$	88,065			$	689,218				5.9	%
Ceded Written Premiums			(55,830	)			(129,297	)			(14,545	)			(199,672	)			(53,823	)			(103,286	)			(21,365	)			(178,474	)			11.9	%
Net Written Premiums			63,210				394,926				72,035				530,171				75,798				368,246				66,700				510,744				3.8	%
Net Earned Premiums		$	64,635			$	366,280			$	69,326			$	500,241			$	73,636			$	335,342			$	53,468			$	462,446				8.2	%
Net Losses and LAE			(44,867	)			(239,175	)			(55,394	)			(339,436	)			(35,448	)			(217,898	)			(37,914	)			(291,260	)			16.5	%
Commission Expenses			(4,014	)			(44,113	)			(11,003	)			(59,130	)			(5,775	)			(38,337	)			(6,267	)			(50,379	)			17.4	%
Other Operating Expenses			(18,280	)			(60,356	)			(13,351	)			(91,987	)			(20,956	)			(61,568	)			(14,324	)			(96,848	)			(5.0	%)
Other Underwriting Income			270				45				20				335				357				550				36				943				(64.5	%)
Underwriting Profit (Loss)		$	(2,256	)		$	22,681			$	(10,402	)		$	10,023			$	11,814			$	18,089			$	(5,001	)		$	24,902				(59.8	%)
Losses and LAE Ratio			69.4	%			65.3	%			79.9	%			67.9	%			48.1	%			65.0	%			70.9	%			63.0	%
Commission Expense Ratio			6.2	%			12.0	%			15.9	%			11.8	%			7.8	%			11.4	%			11.7	%			10.9	%
Other Operating Expense Ratio (1)			27.9	%			16.5	%			19.2	%			18.3	%			28.1	%			18.2	%			26.8	%			20.7	%
Combined Ratio			103.5	%			93.8	%			115.0	%			98.0	%			84.0	%			94.6	%			109.4	%			94.6	%

(1) - Includes Other Operating Expenses and Other Underwriting Income (Expense). 

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Reportable Segment Results
(Unaudited)
		Int'l Insurance
		Nine Months Ended September 30, 2017																Nine Months Ended September 30, 2016
amounts in thousands		Marine				P&C				Professional Liability				Total				Marine				P&C				Professional Liability				Total				% Change Total
Gross Written Premiums		$	160,119			$	124,446			$	102,089			$	386,654			$	151,548			$	145,125			$	87,694			$	384,367				0.6	%
Ceded Written Premiums			(33,410	)			(69,780	)			(26,178	)			(129,368	)			(33,274	)			(57,025	)			(21,776	)			(112,075	)			15.4	%
Net Written Premiums			126,709				54,666				75,911				257,286				118,274				88,100				65,918				272,292				(5.5	%)
Net Earned Premiums		$	116,058			$	67,292			$	67,243			$	250,593			$	109,746			$	70,608			$	55,248			$	235,602				6.4	%
Net Losses and LAE			(83,906	)			(54,654	)			(37,953	)			(176,513	)			(54,398	)			(49,174	)			(29,947	)			(133,519	)			32.2	%
Commission Expenses			(27,590	)			(10,985	)			(15,860	)			(54,435	)			(26,124	)			(11,427	)			(9,973	)			(47,524	)			14.5	%
Other Operating Expenses			(24,454	)			(19,983	)			(14,250	)			(58,687	)			(24,794	)			(25,686	)			(14,517	)			(64,997	)			(9.7	%)
Underwriting Profit (Loss)		$	(19,892	)		$	(18,330	)		$	(820	)		$	(39,042	)		$	4,430			$	(15,679	)		$	811			$	(10,438	)		NM
Losses and LAE Ratio			72.3	%			81.2	%			56.4	%			70.4	%			49.6	%			69.6	%			54.2	%			56.7	%
Commission Expense Ratio			23.8	%			16.3	%			23.6	%			21.7	%			23.8	%			16.2	%			18.1	%			20.2	%
Other Operating Expense Ratio			21.0	%			29.7	%			21.2	%			23.5	%			22.6	%			36.4	%			26.2	%			27.5	%
Combined Ratio			117.1	%			127.2	%			101.2	%			115.6	%			96.0	%			122.2	%			98.5	%			104.4	%

NM- Percentage change not meaningful

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Incurred Loss Activity
(Unaudited)
		For the Three Months Ended September 30,
amounts in thousands		Amounts								Loss Ratio
Net Incurred Loss Activity		2017				2016				2017				2016
U.S. Insurance:
Loss and LAE Payments		$	68,454			$	81,461				40.5	%			50.4	%
Change in Reserves			66,886				24,859				39.5	%			15.3	%
Net Incurred Loss and LAE		$	135,340			$	106,320				80.0	%			65.7	%
Int'l Insurance:
Loss and LAE Payments		$	55,148			$	43,848				65.3	%			55.0	%
Change in Reserves			26,565				1,195				31.5	%			1.5	%
Net Incurred Loss and LAE		$	81,713			$	45,043				96.8	%			56.5	%
GlobalRe:
Loss and LAE Payments		$	13,659			$	20,770				28.6	%			48.8	%
Change in Reserves			45,459				660				95.1	%			1.6	%
Net Incurred Loss and LAE		$	59,118			$	21,430				123.7	%			50.4	%
Total
Loss and LAE Payments		$	137,261			$	146,079				45.5	%			51.4	%
Change in Reserves			138,910				26,714				46.1	%			9.4	%
Net Incurred Loss and LAE		$	276,171			$	172,793				91.6	%			60.8	%
		For the Three Months Ended September 30,
Impact of Prior Years Reserves		Amounts								Loss Ratio Impact
Favorable / (Unfavorable) Development		2017				2016				2017				2016
U.S. Insurance		$	(18,383	)		$	(4,903	)			(6.0	%)			(1.7	%)
Int'l Insurance			(10,714	)			2,860				(3.6	%)			1.0	%
GlobalRe			(397	)			3,074				(0.1	%)			1.1	%
Total		$	(29,494	)		$	1,031				(9.7	%)			0.4	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Incurred Loss Activity
(Unaudited)
		For the Nine Months Ended September 30,
amounts in thousands		Amounts								Loss Ratio
Net Incurred Loss Activity		2017				2016				2017				2016
U.S. Insurance:
Loss and LAE Payments		$	225,017			$	226,742				45.0	%			49.0	%
Change in Reserves			114,419				64,518				22.9	%			14.0	%
Net Incurred Loss and LAE		$	339,436			$	291,260				67.9	%			63.0	%
Int'l Insurance:
Loss and LAE Payments		$	146,106			$	106,087				58.3	%			45.0	%
Change in Reserves			30,407				27,432				12.1	%			11.7	%
Net Incurred Loss and LAE		$	176,513			$	133,519				70.4	%			56.7	%
GlobalRe:
Loss and LAE Payments		$	63,268			$	63,829				48.5	%			53.9	%
Change in Reserves			43,664				4,347				33.4	%			3.7	%
Net Incurred Loss and LAE		$	106,932			$	68,176				81.9	%			57.6	%
Total
Loss and LAE Payments		$	434,391			$	396,658				49.3	%			48.6	%
Change in Reserves			188,490				96,297				21.4	%			11.8	%
Net Incurred Loss and LAE		$	622,881			$	492,955				70.7	%			60.4	%
		For the Nine Months Ended September 30,
Impact of Prior Years Reserves		Amounts								Loss Ratio Impact
Favorable / (Unfavorable) Development		2017				2016				2017				2016
U.S. Insurance		$	(18,206	)		$	1,768				(2.1	%)			0.2	%
Int'l Insurance			(22,073	)			5,359				(2.5	%)			0.7	%
GlobalRe			(4,330	)			4,517				(0.5	%)			0.6	%
Total		$	(44,609	)		$	11,644				(5.1	%)			1.5	%

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Loss Data
(Unaudited)
		As of September 30, 2017
amounts in thousands		Case				IBNR
Net Loss Reserves:		Reserves				Reserves				Total
U.S. Insurance:
Marine		$	62,475			$	47,364			$	109,839
P&C			197,009				680,855				877,864
Professional Liability			32,385				84,753				117,138
Total U.S. Insurance		$	291,869			$	812,972			$	1,104,841
Int'l Insurance:
Marine		$	170,658			$	51,094			$	221,752
P&C			64,255				42,680				106,935
Professional Liability			40,178				76,618				116,796
Total Int'l Insurance		$	275,091			$	170,392			$	445,483
GlobalRe		$	50,351			$	109,954			$	160,305
Total Net Loss Reserves		$	617,311			$	1,093,318			$	1,710,629
		As of December 31, 2016
		Case				IBNR
Net Loss Reserves:		Reserves				Reserves				Total
U.S. Insurance:
Marine		$	56,701			$	54,259			$	110,960
P&C			201,368				603,509				804,877
Professional Liability			24,555				70,559				95,114
Total U.S. Insurance		$	282,624			$	728,327			$	1,010,951
Int'l Insurance:
Marine		$	163,124			$	36,118			$	199,242
P&C			66,496				18,192				84,688
Professional Liability			30,106				70,103				100,209
Total Int'l Insurance		$	259,726			$	124,413			$	384,139
GlobalRe		$	47,505			$	67,856			$	115,361
Total Net Loss Reserves		$	589,855			$	920,596			$	1,510,451

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Investment Data
(Unaudited)

As of September 30, 2017, the average quality of the investment portfolio as rated by S&P and Moody’s was “AA-/Aa3”, respectively, with an average duration of 3.6 years. Our Company does not own any collateralized debt obligations or asset backed commercial paper.

The following table sets forth our investments as of September 30, 2017:

		As of September 30, 2017
						Gross				Gross				Cost or
		Fair				Unrealized				Unrealized				Amortized
amounts in thousands		Value				Gains				(Losses)				Cost
Fixed Maturities:
U.S. Treasury Bonds, Agency Bonds and Foreign Government Bonds		$	269,851			$	8,169			$	(607	)		$	262,289
States, Municipalities and Political Subdivisions			684,792				20,643				(1,481	)			665,630
Mortgage-Backed and Asset-Backed Securities:
Agency Mortgage-Backed Securities			426,441				3,365				(4,298	)			427,374
Residential Mortgage Obligations			34,748				570				(27	)			34,205
Asset-Backed Securities			331,646				2,503				(426	)			329,569
Commercial Mortgage-Backed Securities			140,601				2,742				(1,308	)			139,167
Subtotal		$	933,436			$	9,180			$	(6,059	)		$	930,315
Corporate Exposures			910,106				18,221				(1,983	)			893,868
Total Fixed Maturities		$	2,798,185			$	56,213			$	(10,130	)		$	2,752,102
Equity Securities:
Common Stocks		$	180,771			$	35,179			$	(815	)		$	146,407
Preferred Stocks			195,105				7,418				(645	)			188,332
Total Equity Securities		$	375,876			$	42,597			$	(1,460	)		$	334,739
Short-Term Investments			247,607				5				—				247,602
Total Investments		$	3,421,668			$	98,815			$	(11,590	)		$	3,334,443