Navigators Reports Record Q4, 2004 Earnings

February 25, 2005

The New York-based Navigators Group, Inc. reported net income of $10,635,000 or $0.84 per share for the 2004 fourth quarter compared to a net loss of $9,490,000 or $0.78 per share for the 2003 fourth quarter.

Net income for the year ended December 31, 2004 was $34,865,000 or $2.74 per share, compared to $7,685,000 or $0.80 per share for the year ended December 31, 2003. Included in these results were net realized capital gains of $0.05 per share and $0.13 per share for the year ended December 31, 2004 and 2003, respectively.

The company noted that the fourth quarter of 2003 and the full year results were affected by an after-tax charge of $20.5 million or $1.68 per share and $2.14 per share, respectively, for incurred losses related to asbestos exposures.

The bulletin said: “Gross written premium for the 2004 fourth quarter and year was $187,390,000 and $696,146,000, respectively, representing increases of 24 percent and 15 percent from the comparable 2003 year periods. Included in the 2004 fourth quarter gross written premium is approximately $38,129,000 of ‘reinsurance to close’ (‘RITC’) premium recorded by Lloyd’s Syndicate 1221 representing the transfer of assets and liabilities from the participants of the 2002 underwriting year to the 2003 underwriting year in which Navigators had increased its participation to 97.4 percent from 68.1 percent. The RITC transaction is recorded as additional gross written and earned premium, losses incurred, loss reserves and receivables all in the same amount, net of applicable ceded reinsurance amounts. There are no gains or losses recorded on the RITC transaction. The comparable 2003 fourth quarter RITC transaction amount was $514,000.”

CEO Stan Galanski commented: “Each of our business units generated profitable underwriting results and showed strong operating performance in 2004. Our Marine & Energy business led the way, with solid results both in our insurance companies and at Lloyd’s. Navigators Pro expanded its product portfolio in the United States and United Kingdom, while maintaining underwriting discipline despite an irrational marketplace for public company D&O. Navigators Specialty continued to perform well, particularly in its core construction liability segment. We are pleased to have achieved a satisfactory return for our shareholders in 2004 while maintaining our balance sheet integrity of prudent loss reserving and conservative investment management in a culture that emphasizes integrity, professionalism and pride. We are optimistic that each of our business units is well positioned to continue to generate profitable underwriting results in the current environment.”

For further financial details go to the company’s Website at: http://www.navg.com/.

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