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 | |||||||