Navigators Q1 Earnings up 22% to $15.5 Million; Conference Call Info

The New York-based Navigators Group, Inc. reported net income of $15,525,000 or $0.93 per share for the 2006 first quarter based on 16,757,000 diluted shares compared to net income of $9,699,000 or $0.76 per share for the 2005 first quarter based on 12,760,000 diluted shares. The 2006 first quarter results include a net realized capital loss of $0.02 per share and the 2005 first quarter results include a net realized capital gain of $0.01 per share.

The report stated: “Gross written premium increased 22 percent over the 2005 first quarter, up 25 percent for the Insurance Companies and 16 percent for the Lloyd’s Operations. Net written premium increased 22 percent compared to the first quarter of 2005. The growth rate would have approximated 30 percent excluding the net impact on the 2005 first quarter of the cancellation of a specialty quota share reinsurance treaty.

“The combined loss and expense ratio for the 2006 first quarter was 89.4 percent compared to 91.7 percent for the comparable 2005 period. These combined ratios reflect the change in accounting for segment reporting adopted in the 2006 first quarter commencing with the elimination of the marine pool. The 2006 first quarter combined ratio was reduced by 3.7 loss ratio points for a net loss reserve redundancy of $3.8 million relating to prior years. The 2006 first quarter net paid loss ratio was 37.5 percent compared to 39.3 percent for the comparable 2005 period.”

CEO Stan Galanski commented: “Our first quarter results were characterized by favorable loss experience and strong premium growth, particularly in Marine & Energy and Specialty. Market conditions continue to support profitable underwriting, with an especially strong pricing environment for offshore energy. We are retaining more of the business that we write, reflecting the increased levels of policyholder surplus resulting from capital raising in 2005 and 2006. We continue to respond to opportunities to expand our intellectual capital base, with targeted hirings domestically and in the United Kingdom to support ongoing geographical and product line expansion.”

The bulletin indicated that last year’s loss events had reduced cash flow from operations “by gross loss payments of approximately $10,200,000 for 2005 hurricane losses and $1,900,000 for a settled asbestos claim of which $4,000,000 and $1,100,000, respectively. However Navigators said it expects to be reimbursed by its reinsurers for these amounts. “The 2005 cash flow from operations included $24,000,000 attributable to the settlement of the 2002 underwriting year reinsurance to close premium recorded by our Lloyd’s Operations in the 2004 fourth quarter,” the bulletin added

Navigators also noted: “Effective in 2006, the Company classifies its business into two underwriting segments, consisting of the Insurance Companies and Lloyd’s Operations, and a Corporate segment. Segment data for each of the two underwriting operations include allocations of revenues and expenses of Navigators Agencies and Parent Company expenses and related income tax amounts previously reported separately. Segment data for 2005 and prior periods reflect this change in segment reporting.”

The Company will hold a conference call today Tuesday, May 2, 2006 starting at 8:30 a.m. ET to discuss the first quarter’s results. To access the call, please dial 1-866-800-8652, using confirmation code 17440771. Internationally, the call may be accessed by dialing 617-614-2705 using the same confirmation code. To listen via live audio webcast, please visit the Company’s website (www.navg.com) at least ten minutes prior to the start of the call and click on the May 2nd Live Audio Webcast link.

The full report and a replay of the webcast will also be available on the Website.

Topics Profit Loss Excess Surplus Training Development