May 7, 2018 at 5:00 PM EDT

Navigators Reports First Quarter 2018 Earnings

Net Income up 46.3% and Record Quarterly Operating Earnings

STAMFORD, Conn., May 07, 2018 (GLOBE NEWSWIRE) -- The Navigators Group, Inc.(NASDAQ:NAVG) reported Net Income of $30.9 million, or $1.02 per diluted share, for the three months ended March 31, 2018 compared to $21.1 million, or $0.70 per diluted share, for the same period in 2017. Net Operating Earnings1 were $32.9 million, or $1.09 per diluted share, for the three months ended March 31, 2018 compared to $20.4 million, or $0.68 per diluted share, for the same period in 2017.

Gross Written Premiums and Net Written Premiums for the three months ended March 31, 2018 were $495.2 million and $393.3 million, respectively, increasing 10.0% and 16.6%, respectively, from the comparable period in 2017. The Combined Ratio for the three months ended March 31, 2018 was 94.0%, compared to 96.4% for the same period in 2017.

Net Investment Income for the three months ended March 31, 2018 was $23.7 million, an increase of 10.5% as compared to the same period in 2017. The annualized pre-tax investment yield, excluding Total Net Realized and Unrealized Gains and Losses recognized in the Results of Operations, was 2.7% for the three months ended March 31, 2018 and 2017.

Other Income (Loss) for the three months ended March 31, 2018 was $(0.1) million, compared to $1.1 million for the same period in 2017. Other Income (Loss) for the three months ended March 31, 2018 included revenue from the sale of renewal rights for the Company’s fixed-premium protection and indemnity (“P&I”) business, offset by net realized and unrealized foreign exchange losses. Other Income (Loss) for the same period in 2017 primarily consisted of net realized and unrealized foreign exchange gains.

Stan Galanski, President and Chief Executive Officer, commented, “We are very  pleased with our financial performance for the first quarter, reporting strong net income, a record level of operating earnings, double digit premium growth and underwriting profit in all three of our reporting segments. GlobalRe was a stand-out, achieving significant premium growth, driven by our Accident & Health and Latin American business, and a combined ratio of 86.6%. Importantly, our International Insurance reporting segment returned to profitability, reflecting the concerted effort to re-position our portfolio by exiting non-performing product lines and reducing our cost structure. Our U.S. Insurance reporting segment produced profitable results, consistent with our expectations, while achieving growth in our Marine and Professional Liability operating segments during the quarter.”

As disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, accounting guidance for financial instruments changed under the Financial Accounting Standards Board’s Accounting Standard Update 2016-01 (“ASU 2016-01"), which upon adoption as of January 1, 2018, required Equity Securities to be measured at Fair Value through Net Income. Prior to adoption, these securities were classified as Available-For-Sale with unrealized gains and losses excluded from Net Income and reported in Accumulated Other Comprehensive Income. The adoption of this guidance required a cumulative-effect adjustment as of the adoption date that moved the unrealized gains and losses, net of tax, from Accumulated Other Comprehensive Income to Retained Earnings. As a result of this guidance, for 2018 and forward, the Results of Operations will be impacted by the volatility in the performance of these Equity Securities. The unrealized gains and losses on Equity Securities will be excluded from Net Operating Earnings.

The 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 effective duration of 3.5 years as of March 31, 2018. As of March 31, 2018, Net Unrealized Losses within the Available-For-Sale investment portfolio recognized in Accumulated Other Comprehensive Income were $(16.6) million, a decrease of $(58.0) million compared to December 31, 2017. Included in this decrease was the reclassification of $11.8 million of net unrealized gains, before tax, from Accumulated Other Comprehensive Income to Retained Earnings as a result of adopting ASU 2016-01.

The Company recognized $(2.0) million of Total Net Realized and Unrealized Losses within the Results of Operations for the three months ended March 31, 2018, compared to $(44) thousand of Total Net Realized and Unrealized Losses for the same period in 2017. The Net Realized and Unrealized Losses within the Results of Operations for the three months ended March 31, 2018 included $(3.2) million of net unrealized losses on Equity Securities.

The effective tax rate was 16.8% for the first quarter of 2018, which compares to 26.6% for the same period in 2017, primarily as a result of changes related to 2017 tax reform.

Stockholders’ Equity was $1.2 billion, or $40.96 per share, as of March 31, 2018 compared to $41.55 per share, as of December 31, 2017.

During the three months ended March 31, 2018, the Company declared and paid a quarterly cash dividend of $0.07 per share of Common Stock.

The Company will hold a conference call on Tuesday, May 8, 2018 starting at 8:30 a.m. (ET) to discuss the 2018 first 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/di3vjch8.

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. These forward-looking statements include statements on the financial impact of tax reform. We continue to assess the tax accounting effects of tax reform. 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 is a “non-GAAP financial measure” as defined in Regulation G. A reconciliation of Net Income (the nearest GAAP financial measure) to Net Operating Earnings 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        
amounts in thousands, except per share amounts   March 31,        
Results of Operations   2018     2017     Change  
                       
Gross Written Premiums   $ 495,224     $ 450,305     10.0 %
Net Written Premiums     393,262       337,163     16.6 %
                       
Revenues:                      
Net Earned Premiums   $ 322,627     $ 286,131     12.8 %
Net Investment Income     23,702       21,448     10.5 %
Net Realized and Unrealized Gains (Losses):                      
Total Other-Than-Temporary Impairment
  Losses
    (37 )     (1,077 )   (96.5 %)
Portion of Loss Recognized in Other
  Comprehensive Income (Before Tax)
    37       (16 )   NM  
Net Other-Than-Temporary Impairment Losses
  Recognized In Earnings
          (1,093 )   NM  
Net Realized Gains on Investments Sold     1,169       1,049     11.4 %
Net Unrealized Losses on Equity Securities at Fair  Value     (3,181 )         NM  
Total Net Realized and Unrealized Losses     (2,012 )     (44 )   NM  
Other Income (Loss)     (117 )     1,068     NM  
Total Revenues   $ 344,200     $ 308,603     11.5 %
                       
Expenses:                      
Net Losses and Loss Adjustment Expenses   $ 186,145     $ 169,600     9.8 %
Commission Expenses     54,152       47,844     13.2 %
Other Operating Expenses     62,926       58,538     7.5 %
Interest Expense     3,864       3,861     0.1 %
Total Expenses   $ 307,087     $ 279,843     9.7 %
                       
Income Before Income Taxes   $ 37,113     $ 28,760     29.0 %
                       
Income Tax Expense     6,235       7,650     (18.5 %)
                       
Net Income   $ 30,878     $ 21,110     46.3 %
                       
                       
Per Share Data                      
                       
Net Income Per Common Share:                      
Basic   $ 1.04     $ 0.72     44.7 %
Diluted   $ 1.02     $ 0.70     45.6 %
                       
Average Common Shares Outstanding:                      
Basic     29,595       29,283        
Diluted     30,137       30,000        
                       
Underwriting Ratios                      
Loss Ratio     57.7 %     59.3 %      
Expense Ratio     36.3 %     37.1 %      
Combined Ratio     94.0 %     96.4 %      
                       
Balance Sheet Data   March 31,     December 31,        
    2018     2017        
Stockholders' Equity   $ 1,216,952     $ 1,225,965     (0.7 %)
Book Value per Share   $ 40.96     $ 41.55     (1.4 %)

NM - Percentage change not meaningful.

 

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

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

Net Operating Earnings is comprised of Net Income excluding After-Tax Total Net Realized and Unrealized Gains (Losses), After-Tax Foreign Exchange Gains (Losses), and the Net Gain on Disposition of Product Line recognized in the Results of Operations.

We believe this presentation enhances the understanding of the results of operations by highlighting the underlying profitability of the business and enables investors and other users of the 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 (the nearest GAAP financial measure) to Net Operating Earnings:

 
    Three Months Ended March 31, 2018     Three Months Ended March 31, 2017     % Change  
amounts in thousands, except per share amounts   Pre-Tax     Tax (1)     After-Tax     Pre-Tax     Tax (1)     After-Tax     QTD  
Net Income   $ 37,113     $ (6,235 )   $ 30,878     $ 28,760     $ (7,650 )   $ 21,110       46.3 %
Adjustments to Net Income:                                                        
Total Net Realized and Unrealized Losses     2,012       (422 )     1,590       44       (15 )     29     NM  
FX Losses (Gains)     1,522       (320 )     1,202       (1,123 )     393       (730 )   NM  
Net Gain on Disposition of Product Line     (948 )     199       (749 )                     NM  
Net Operating Earnings   $ 39,699     $ (6,778 )   $ 32,921     $ 27,681     $ (7,272 )   $ 20,409       61.3 %
                                                         
Average Common Shares Outstanding:                                                        
Basic                     29,595                       29,283          
Diluted                     30,137                       30,000          
                                                         
Net Operating Earnings  per Common Share:                                                        
Basic                   $ 1.11                     $ 0.70          
Diluted                   $ 1.09                     $ 0.68          

(1) - Tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of any other relevant factors.
NM - Percentage change not meaningful.

 

 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                 
    March 31,     December 31,  
    2018     2017  
amounts in thousands, except per share amounts   (Unaudited)          
ASSETS                
Investments:                
Fixed Maturities, available-for-sale, at fair value (amortized cost: 2018:  $2,987,492; 2017: $3,027,408)   $ 2,970,934     $ 3,057,054  
Equity Securities, at fair value  (cost: 2018: $245,754; 2017: $224,159)     254,394       235,981  
Other Invested Assets     35,276       30,488  
Short-Term Investments, available-for-sale, at fair value (amortized cost: 2018: $6,707; 2017: $6,477)     6,704       6,480  
Total Investments   $ 3,267,308     $ 3,330,003  
Cash and Cash Equivalents     165,177       102,735  
Restricted Cash and Cash Equivalents     58,956       56,229  
Premiums Receivable     413,253       351,393  
Prepaid Reinsurance Premiums     228,902       228,569  
Reinsurance Recoverable on Paid Losses     82,506       72,494  
Reinsurance Recoverable on Unpaid Losses and Loss Adjustment Expenses     790,388       809,765  
Deferred Policy Acquisition Costs     151,661       135,249  
Accrued Investment Income     20,738       19,480  
Goodwill and Other Intangible Assets     6,668       6,596  
Current Income Tax Receivable, Net     10,497       16,667  
Deferred Income Tax, Net     31,026       22,271  
Other Assets     81,686       73,171  
Total Assets   $ 5,308,766     $ 5,224,622  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Liabilities:                
Reserves for Losses and Loss Adjustment Expenses   $ 2,521,827     $ 2,515,145  
Unearned Premiums     1,059,085       987,681  
Reinsurance Balances Payable     128,919       136,192  
Senior Notes     263,926       263,885  
Payable for Investments Purchased     23,776        
Accounts Payable and Other Liabilities     94,281       95,754  
Total Liabilities   $ 4,091,814     $ 3,998,657  
                 
Stockholders' Equity:                
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 36,733 shares for 2018 and 36,530 shares for 2017)     3,670       3,650  
Additional Paid-In Capital     372,866       376,868  
Treasury Stock, at cost (7,023 shares for 2018 and 2017)     (155,801 )     (155,801 )
Retained Earnings     1,015,109       981,380  
Accumulated Other Comprehensive Income     (18,892 )     19,868  
Total Stockholders' Equity   $ 1,216,952     $ 1,225,965  
Total Liabilities and Stockholders' Equity   $ 5,308,766     $ 5,224,622  
                 

 

 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Segment Information
(Unaudited)
 
    Three Months Ended March 31, 2018  
    U.S.     Int'l                          
amounts in thousands   Insurance     Insurance     GlobalRe     Corporate (1)     Total  
Gross Written Premiums   $ 239,928     $ 127,872     $ 127,424     $     $ 495,224  
Ceded Written Premiums     (66,581 )     (28,888 )     (6,493 )           (101,962 )
Net Written Premiums     173,347       98,984       120,931             393,262  
                                         
Net Earned Premiums   $ 172,913     $ 93,210     $ 56,504     $     $ 322,627  
Net Losses and LAE     (110,422 )     (45,843 )     (29,880 )           (186,145 )
Commission Expenses     (20,861 )     (19,756 )     (13,768 )     233       (54,152 )
Other Operating Expenses     (36,991 )     (20,530 )     (5,405 )           (62,926 )
Other Underwriting Income (Expense)     98             138       (233 )     3  
                                         
Underwriting Profit   $ 4,737     $ 7,081     $ 7,589     $     $ 19,407  
                                         
Net Investment Income                             23,702       23,702  
Total Net Realized and Unrealized Losses                             (2,012 )     (2,012 )
Interest Expense                             (3,864 )     (3,864 )
Other Loss                             (120 )     (120 )
Income Before Income Taxes   $ 4,737     $ 7,081     $ 7,589     $ 17,706     $ 37,113  
Income Tax Expense                             (6,235 )     (6,235 )
Net Income                                   $ 30,878  
                                         
Losses and LAE Ratio     63.9 %     49.2 %     52.9 %             57.7 %
Commission Expense Ratio     12.1 %     21.2 %     24.4 %             16.8 %
Other Operating Expense Ratio (2)     21.3 %     22.0 %     9.3 %             19.5 %
Combined Ratio     97.3 %     92.4 %     86.6 %             94.0 %

(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 March 31, 2017  
    U.S.     Int'l                          
amounts in thousands   Insurance     Insurance     GlobalRe     Corporate (1)     Total  
Gross Written Premiums   $ 237,605     $ 141,860     $ 70,840     $     $ 450,305  
Ceded Written Premiums     (61,487 )     (46,593 )     (5,062 )           (113,142 )
Net Written Premiums     176,118       95,267       65,778             337,163  
                                         
Net Earned Premiums   $ 164,004     $ 84,086     $ 38,041     $     $ 286,131  
Net Losses and LAE     (98,826 )     (50,705 )     (20,069 )           (169,600 )
Commission Expenses     (20,384 )     (19,233 )     (8,492 )     265       (47,844 )
Other Operating Expenses     (33,472 )     (19,793 )     (5,273 )           (58,538 )
Other Underwriting Income (Expense)     110             176       (265 )     21  
                                         
Underwriting Profit (Loss)   $ 11,432     $ (5,645 )   $ 4,383     $     $ 10,170  
                                         
Net Investment Income                             21,448       21,448  
Total Net Realized and Unrealized Losses                             (44 )     (44 )
Interest Expense                             (3,861 )     (3,861 )
Other Income                             1,047       1,047  
Income (Loss) Before Income Taxes   $ 11,432     $ (5,645 )   $ 4,383     $ 18,590     $ 28,760  
Income Tax Expense                             (7,650 )     (7,650 )
Net Income                                   $ 21,110  
                                         
Losses and LAE Ratio     60.3 %     60.3 %     52.8 %             59.3 %
Commission Expense Ratio     12.4 %     22.9 %     22.3 %             16.7 %
Other Operating Expense Ratio (2)     20.3 %     23.5 %     13.4 %             20.4 %
Combined Ratio     93.0 %     106.7 %     88.5 %             96.4 %

(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 March 31, 2018     Three Months Ended March 31, 2017          
amounts in thousands   Marine     P&C     Professional
Liability
    Total     Marine     P&C     Professional
Liability
    Total     %
Change
Total
 
Gross Written Premiums   $ 41,724     $ 168,193     $ 30,011     $ 239,928     $ 40,950     $ 170,634     $ 26,021     $ 237,605       1.0 %
Ceded Written Premiums     (17,480 )     (44,912 )     (4,189 )     (66,581 )     (17,520 )     (38,198 )     (5,769 )     (61,487 )     8.3 %
Net Written Premiums     24,244       123,281       25,822       173,347       23,430       132,436       20,252       176,118       (1.6 %)
                                                                         
Net Earned Premiums   $ 21,092     $ 127,590     $ 24,231     $ 172,913     $ 22,694     $ 119,123     $ 22,187     $ 164,004       5.4 %
Net Losses and LAE     (15,752 )     (80,918 )     (13,752 )     (110,422 )     (13,775 )     (71,749 )     (13,302 )     (98,826 )     11.7 %
Commission Expenses     (1,408 )     (15,167 )     (4,286 )     (20,861 )     (1,472 )     (15,366 )     (3,546 )     (20,384 )     2.3 %
Other Operating Expenses     (6,275 )     (25,624 )     (5,092 )     (36,991 )     (6,821 )     (21,814 )     (4,837 )     (33,472 )     10.5 %
Other Underwriting Income     77       15       6       98       83       18       9       110       (10.9 %)
                                                                         
Underwriting Profit (Loss)   $ (2,266 )   $ 5,896     $ 1,107     $ 4,737     $ 709     $ 10,212     $ 511     $ 11,432       (58.6 %)
                                                                         
Losses and LAE Ratio     74.7 %     63.4 %     56.8 %     63.9 %     60.7 %     60.2 %     60.0 %     60.3 %        
Commission Expense Ratio     6.7 %     11.9 %     17.7 %     12.1 %     6.5 %     12.9 %     16.0 %     12.4 %        
Other Operating Expense Ratio (1)     29.3 %     20.1 %     20.9 %     21.3 %     29.7 %     18.3 %     21.7 %     20.3 %        
Combined Ratio     110.7 %     95.4 %     95.4 %     97.3 %     96.9 %     91.4 %     97.7 %     93.0 %        

(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 March 31, 2018     Three Months Ended March 31, 2017          
                                                    %  
                Professional                       Professional           Change  
amounts in thousands   Marine     P&C     Liability     Total     Marine     P&C     Liability     Total     Total  
Gross Written Premiums   $ 56,478     $ 33,960     $ 37,434     $ 127,872     $ 68,833     $ 40,368     $ 32,659     $ 141,860       (9.9 %)
Ceded Written Premiums     (8,054 )     (13,667 )     (7,167 )     (28,888 )     (10,926 )     (29,646 )     (6,021 )     (46,593 )     (38.0 %)
Net Written Premiums     48,424       20,293       30,267       98,984       57,907       10,722       26,638       95,267       3.9 %
                                                                         
Net Earned Premiums   $ 39,279     $ 21,769     $ 32,162     $ 93,210     $ 37,495     $ 22,180     $ 24,411     $ 84,086       10.9 %
Net Losses and LAE     (20,446 )     (9,223 )     (16,174 )     (45,843 )     (20,601 )     (15,869 )     (14,235 )     (50,705 )     (9.6 %)
Commission Expenses     (9,730 )     (2,565 )     (7,461 )     (19,756 )     (9,541 )     (3,742 )     (5,950 )     (19,233 )     2.7 %
Other Operating Expenses     (6,810 )     (7,679 )     (6,041 )     (20,530 )     (8,440 )     (6,423 )     (4,930 )     (19,793 )     3.7 %
                                                                         
Underwriting Profit (Loss)   $ 2,293     $ 2,302     $ 2,486     $ 7,081     $ (1,087 )   $ (3,854 )   $ (704 )   $ (5,645 )   NM  
                                                                         
Losses and LAE Ratio     52.1 %     42.4 %     50.3 %     49.2 %     54.9 %     71.5 %     58.3 %     60.3 %        
Commission Expense Ratio     24.8 %     11.8 %     23.2 %     21.2 %     25.4 %     16.9 %     24.4 %     22.9 %        
Other Operating Expense Ratio     17.3 %     35.2 %     18.8 %     22.0 %     22.6 %     29.0 %     20.2 %     23.5 %        
Combined Ratio     94.2 %     89.4 %     92.3 %     92.4 %     102.9 %     117.4 %     102.9 %     106.7 %        

NM – Percentage change not meaningful

 

 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Incurred Loss Activity
(Unaudited)
 
    For the Three Months Ended March 31,  
amounts in thousands   Amounts     Loss Ratio  
Net Incurred Loss Activity   2018     2017     2018     2017  
U.S. Insurance:                                
Loss and LAE Payments   $ 87,551     $ 69,771       50.7 %     42.5 %
Change in Reserves     22,871       29,055       13.2 %     17.8 %
Net Incurred Loss and LAE   $ 110,422     $ 98,826       63.9 %     60.3 %
                                 
Int'l Insurance:                                
Loss and LAE Payments   $ 48,243     $ 44,908       51.8 %     53.4 %
Change in Reserves     (2,400 )     5,797       (2.6 %)     6.9 %
Net Incurred Loss and LAE   $ 45,843     $ 50,705       49.2 %     60.3 %
                                 
GlobalRe:                                
Loss and LAE Payments   $ 29,273     $ 28,330       51.8 %     74.5 %
Change in Reserves     607       (8,261 )     1.1 %     (21.7 %)
Net Incurred Loss and LAE   $ 29,880     $ 20,069       52.9 %     52.8 %
                                 
Total                                
Loss and LAE Payments   $ 165,066     $ 143,009       51.2 %     50.0 %
Change in Reserves     21,078       26,591       6.5 %     9.3 %
Net Incurred Loss and LAE   $ 186,145     $ 169,600       57.7 %     59.3 %
                                 
                                 
    For the Three Months Ended March 31,  
Impact of Prior Years Reserves   Amounts     Loss Ratio Impact  
Favorable / (Unfavorable) Development   2018     2017     2018     2017  
U.S. Insurance   $ (4,813 )   $ 472       (1.5 %)     0.2 %
Int'l Insurance     2,483       (6,616 )     0.8 %     (2.4 %)
GlobalRe     364       (941 )     0.1 %     (0.3 %)
Total   $ (1,966 )   $ (7,085 )     (0.6 %)     (2.5 %)
                                 

 

 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Net Loss Data
(Unaudited)
 
    As of March 31, 2018  
amounts in thousands   Case     IBNR          
Net Loss Reserves:   Reserves     Reserves     Total  
U.S. Insurance:                        
Marine   $ 55,621     $ 51,317     $ 106,938  
P&C     190,414       716,879       907,293  
Professional Liability     30,736       87,492       118,228  
Total U.S. Insurance   $ 276,771     $ 855,688     $ 1,132,459  
Int'l Insurance:                        
Marine   $ 179,931     $ 35,943     $ 215,874  
P&C     61,417       35,678       97,095  
Professional Liability     37,884       94,682       132,566  
Total Int'l Insurance   $ 279,232     $ 166,303     $ 445,535  
                         
GlobalRe   $ 62,695     $ 90,750     $ 153,445  
                         
Total Net Loss Reserves   $ 618,698     $ 1,112,741     $ 1,731,439  
                         
                         
    As of December 31, 2017  
    Case     IBNR          
Net Loss Reserves:   Reserves     Reserves     Total  
U.S. Insurance:                        
Marine   $ 58,301     $ 45,393     $ 103,694  
P&C     192,291       700,264       892,555  
Professional Liability     26,774       86,649       113,423  
Total U.S. Insurance   $ 277,366     $ 832,306     $ 1,109,672  
Int'l Insurance:                        
Marine   $ 181,369     $ 39,949     $ 221,318  
P&C     66,412       37,067       103,479  
Professional Liability     31,463       87,211       118,674  
Total Int'l Insurance   $ 279,244     $ 164,227     $ 443,471  
                         
GlobalRe   $ 58,962     $ 93,275     $ 152,237  
                         
Total Net Loss Reserves   $ 615,572     $ 1,089,808     $ 1,705,380  
                         

 

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

As of March 31, 2018, the average quality of the investment portfolio as rated by S&P and Moody’s was “AA-/Aa3”, respectively, with an effective duration of 3.5 years. The Company does not own any collateralized debt obligations or asset backed commercial paper.

The following table sets forth the Available-For-Sale investments as of March 31, 2018:

       
    As of March 31, 2018  
            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   $ 357,303     $ 1,192     $ (4,082 )   $ 360,193  
States, Municipalities and Political Subdivisions     721,232       11,912       (4,554 )     713,874  
Mortgage-Backed and Asset-Backed Securities:                                
Agency Mortgage-Backed Securities     379,354       1,389       (13,466 )     391,431  
Residential Mortgage Obligations     63,430       499       (266 )     63,197  
Asset-Backed Securities     369,337       1,361       (1,701 )     369,677  
Commercial Mortgage-Backed Securities     161,391       1,088       (2,051 )     162,354  
   Subtotal   $ 973,512     $ 4,337     $ (17,484 )   $ 986,659  
Corporate Exposures (1)     918,887       6,140       (14,019 )     926,766  
Total Fixed Maturities   $ 2,970,934     $ 23,581     $ (40,139 )   $ 2,987,492  
Short-Term Investments     6,704             (3 )     6,707  
Total Available-For-Sale Investments   $ 2,977,638     $ 23,581     $ (40,142 )   $ 2,994,199  

(1) - Corporate Exposures consist of investments in corporate bonds, hybrid bonds and redeemable preferred stocks.

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Source: The Navigators Group, Inc.