USA. Navigators Group reports record third quarter results Print E-mail
Wednesday, 01 November 2006
Company news:


The Navigators Group, Inc. (NASDAQ:NAVG) reported record net income of $18,333,000 or $1.09 per share for the 2006 third quarter compared to a net loss of $12,725,000 or $0.99 per share for the 2005 third quarter. The 2006 third quarter results include a net realized capital loss of $.01 per share and the 2005 third quarter results include a net realized capital gain of $.02 per share. The 2005 third quarter net loss includes $23,889,000 or $1.87 per share for after-tax net losses from Hurricanes Katrina and Rita.

Gross written premium and net written premium for the 2006 third quarter were $221,667,000 and $119,037,000, respectively, increases of 18% and 57% from the comparable 2005 period. Such 2006 third quarter increases were 21% and 31%, respectively, when the effects of reinsurance reinstatement premiums for hurricane losses are excluded from the 2005 gross and net written premium amounts.

Net income for the nine month period ended September 30, 2006 was $51,956,000 or $3.09 per share compared to $8,254,000 or $0.64 per share for the nine month period ended September 30, 2005. The results for the nine months ended September 30, 2006 included a net realized capital loss of $.03 per share and the results for the nine months ended September 30, 2005 included a net realized capital gain of $.05 per share.

Gross written premium and net written premium for the nine month period ended September 30, 2006 were $737,816,000 and $391,711,000, respectively, increases of 24% and 37% from the comparable 2005 periods.

The combined loss and expense ratios for the 2006 third quarter and nine month period were 87.4% and 87.9%, respectively, compared to 139.8% and 106.7% for the comparable 2005 periods. The combined loss and expense ratios for the 2006 third quarter and nine month period were favorably impacted by 5.1 and 3.8 loss ratio points, respectively, by redundancies of prior year loss reserves. Net paid loss ratios for the 2006 third quarter and nine month period were 35.9% and 34.6%, respectively, compared to 39.1% and 39.3% for the comparable 2005 periods. The combined loss and expense ratios for the 2005 third quarter and nine month period were increased by an aggregate 47.2 and 14.9 loss and expense ratio points, respectively, for the net losses from Hurricanes Katrina and Rita.

Stan Galanski, Navigators’ Chief Executive Officer, commented, “We continue to generate excellent underwriting results, reflecting what we believe to be a well underwritten and properly priced book of business. Loss emergence patterns continue to be favorable, particularly in Specialty and Professional Liability business. Despite some softening in these two areas, we view the underwriting environment as favorable. Our strong growth comes from the continued development of several initiatives launched over the past two years.”

Galanski continued, “Market conditions in the marine business remain favorable. With the lack of hurricane activity during the quarter, we hope that marine and energy underwriters will recall the significant rate deficiencies in pricing catastrophe exposures for energy risks made evident by last year’s storms, and will maintain the discipline required to profitably underwrite this challenging niche.”

Net investment income for the 2006 third quarter and nine month period was $14,691,000 and $41,244,000, respectively, both increases of 60% from the comparable 2005 periods. The pre-tax investment yields for the 2006 third quarter and nine month period were 4.5% and 4.4%, respectively, compared to 3.8% for the comparable 2005 periods.

Consolidated cash flow from operations for the 2006 third quarter and nine month period ended September 30, 2006 was $76,043,000 and $92,715,000, respectively, compared to $52,041,000 and $167,947,000 for the comparable 2005 periods. The 2006 nine month cash flow from operations was reduced by gross loss payments of approximately $114,500,000 for 2005 hurricane losses and $19,900,000 for settled asbestos claims of which $67,200,000 and $10,689,000, respectively, are due to be collected from reinsurers in subsequent accounting periods.

Stockholders’ equity was $527,515,000 or $31.59 per share at September 30, 2006 compared to $470,238,000 or $28.30 per share at December 31, 2005. Statutory surplus of Navigators Insurance Company was $500,760,000 at September 30, 2006.
Last Updated ( Wednesday, 01 November 2006 )
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