Market Overview

Navigators Reports First Quarter 2017 Earnings

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STAMFORD, Conn., May 04, 2017 (GLOBE NEWSWIRE) -- The Navigators Group, Inc. (NASDAQ:NAVG) reported Net income of $21.1 million, or $0.70 per diluted share, for the three months ended March 31, 2017 compared to $22.9 million, or $0.77 per diluted share, for the comparable period in 2016. Net operating earnings1 were $20.4 million, or $0.68 per diluted share, for the three months ended March 31, 2017 compared to $20.2 million, or $0.68 per diluted share, for the same period in 2016. 

Gross written premiums and Net written premiums for the three months ended March 31, 2017 were $450.3 million and $337.2 million, respectively, increasing 8.8% and 5.4% from the comparable period in 2016. The combined ratio for the three months ended March 31, 2017 was 96.4%, compared to 95.1% for the same period in 2016.

Net investment income for the three months ended March 31, 2017 was $21.4 million, an increase of 9.5% as compared to the same period in 2016. The 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 March 31, 2017 and 2016.

Stan Galanski, President and Chief Executive Officer, commented, "We are pleased to report profitable underwriting results and reasonable premium growth for the quarter. Our U.S. Insurance and Global Reinsurance segments had excellent quarters, achieving double digit premium growth and increased underwriting profit over first quarter 2016. Cost control continues to be a priority and our other operating expenses were down 3.7% from first quarter 2016, offset by increased commission levels in large part resulting from competitive market conditions. This is evident in the results of our International Insurance segment, which continues to be challenged by soft trading conditions, particularly in the London market. Our investment portfolio continued to perform well. Book value per share increased 1.2% during the quarter."

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 3.8 years as of March 31, 2017.  As of March 31, 2017, Net unrealized gains within our investment portfolio were $52.2 million, an increase of $23.2 million compared to December 31, 2016. We recognized $44 thousand of Net realized losses (inclusive of Net other-than-temporary impairment losses recognized in earnings) for the three months ended March 31, 2017, compared to $1.6 million of Net realized gains for the same period in 2016. 

Other income for the three months ended March 31, 2017 was $1.1 million, compared to $2.5 million for the same period in 2016. Other income primarily consists of realized and unrealized foreign exchange gains and losses.

Stockholders' equity was $1.2 billion, or $40.94 per share, as of March 31, 2017 compared to $40.45 per share, as of December 31, 2016.

During the three months ended March 31, 2017, our Company declared and paid a quarterly cash dividend of $0.045 per share of Common stock.

Our Company will hold a conference call on Friday, May 5, 2017 starting at 8:30 a.m. (EST) to discuss the 2017 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 connect to the webcast at: 

http://edge.media-server.com/m/p/o6dcrex9.

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 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.

   
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES  
FINANCIAL HIGHLIGHTS  
(Unaudited)  
   
     Three Months Ended            
amounts in thousands, except per share amounts.   March 31,            
Results of Operations   2017     2016      Change     
                           
Gross written premiums   $ 450,305     $ 413,877       8.8 %  
Net written premiums     337,163       319,820       5.4 %  
                           
Revenues:                          
Net earned premiums   $ 286,131     $ 264,358       8.2 %  
Net investment income     21,448       19,594       9.5 %  
Net realized gains (losses):                          
  Total other-than-temporary impairment losses     (1,077 )     (109 )   NM    
  Portion of loss recognized in other comprehensive income (before tax)       (16 )     109     NM    
Net other-than-temporary impairment losses recognized in earnings     (1,093 )         NM    
Other realized gains     1,049       1,597       (34.3 %)  
Net realized gains (losses)     (44 )     1,597     NM    
Other income     1,068       2,549       (58.1 %)  
Total revenues   $ 308,603     $ 288,098       7.1 %  
                           
Expenses:                          
Net losses and loss adjustment expenses     169,600       152,956       10.9 %  
Commission expenses     47,844       37,554       27.4 %  
Other operating expenses     58,538       60,809       (3.7 %)  
Interest expense     3,861       3,858       0.1 %  
Total expenses   $ 279,843     $ 255,177       9.7 %  
                           
Income before income taxes     28,760       32,921       (12.6 %)  
                           
Income tax expense     7,650       9,989       (23.4 %)  
                           
Net income   $ 21,110     $ 22,932       (7.9 %)  
                           
Per Share Data (1)                          
                           
Net income per common share:                          
Basic   $ 0.72     $ 0.79       (8.9 %)  
Diluted   $ 0.70     $ 0.77       (9.1 %)  
                           
Average common shares outstanding:                          
Basic     29,283       28,984            
Diluted     30,000       29,783            
                           
Underwriting Ratios                          
Loss Ratio     59.3 %     57.9 %          
Expense Ratio     37.1 %     37.2 %          
Combined Ratio     96.4 %     95.1 %          
                           
Balance Sheet Data   March 31,     December 31,            
    2017     2016            
Stockholders' equity   $    1,206,136     $ 1,178,188       2.4 %  
Book value per share   $ 40.94     $ 40.45       1.2 %  

(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 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 net realized gains (losses), After-tax net other-than-temporary impairment losses recognized in earnings, and After-tax foreign exchange gains and losses resulting from foreign currency transactions (transactions denominated in a currency other than the entity's functional currency) and translation adjustments (translation of foreign currency denominated assets and liabilities into the entity's functional currency). We believe that showing Net income exclusive of Realized gains and losses, Net other-than-temporary impairment losses recognized in earnings, and Foreign exchange gains and losses reflects the underlying fundamentals of our business.

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 table provides a reconciliation of Net income (the nearest GAAP financial measure) to Net operating earnings:

 
    Three Months Ended March 31, 2017     Three Months Ended March 31, 2016     % Change  
amounts in thousands, except per share amounts.     Pre-Tax     Tax (1)     After-Tax     Pre-Tax     Tax (1)     After-Tax     QTD  
Net income   $ 28,760     $ (7,650 )   $ 21,110     $ 32,921     $ (9,989 )   $ 22,932       (7.9 %)
Adjustments to Net income:                                                        
Realized losses (gains)     44       (15 )     29       (1,597 )     559       (1,038 )   NM  
FX losses (gains)     (1,123 )     393       (730 )     (2,540 )     888       (1,652 )     (55.8 %)
Net operating earnings   $ 27,681     $ (7,272 )   $ 20,409     $ 28,784     $ (8,542 )   $ 20,242       0.8 %
                                                         
Average common shares outstanding: (2)                                                        
Basic                     29,283                       28,984          
Diluted                     30,000                       29,783          
                                                         
Net operating earnings per common share: (2)                                                        
Basic                   $ 0.70                     $ 0.70          
Diluted                   $ 0.68                     $ 0.68          

(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
                 
    March 31,     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:  $2,678,475; 2016: $2,628,225)     $   2,695,277     $ 2,635,882  
Equity securities, available-for-sale, at fair value (cost: 2017: $326,910; 2016: $327,911)     362,214       349,142  
Other invested assets     1,776       1,960  
Short-term investments, at fair value (amortized cost: 2017: $123,796; 2016: $143,451)     123,846       143,539  
Total investments   $ 3,183,113     $ 3,130,523  
Cash     63,462       64,643  
Premiums receivable     379,787       306,686  
Prepaid reinsurance premiums     224,562       213,377  
Reinsurance recoverable on paid losses     76,876       82,582  
Reinsurance recoverable on unpaid losses and loss adjustment expenses     794,576       779,276  
Deferred policy acquisition costs     126,199       119,660  
Accrued investment income     18,107       17,315  
Goodwill and other intangible assets     6,442       6,451  
Current income tax receivable, net     4,280       20,556  
Deferred income tax, net     21,574       20,938  
Other assets     58,365       52,030  
Total assets   $ 4,957,343     $ 4,814,037  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Liabilities:                
Reserves for losses and loss adjustment expenses   $ 2,331,392     $ 2,289,727  
Unearned premiums     949,483       887,344  
Reinsurance balances payable     118,167       108,980  
Senior notes     263,767       263,728  
Payable for investments purchased     6,715        
Accounts payable and other liabilities     81,683       86,070  
Total liabilities   $ 3,751,207     $ 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 36,484 shares for 2017 and 36,147 shares for 2016)      3,645       3,612  
Additional paid-in capital     367,311       373,983  
Treasury stock, at cost (7,023 shares for 2017 and 2016)     (155,801 )     (155,801 )
Retained earnings     967,305       947,519  
Accumulated other comprehensive income     23,676       8,875  
Total stockholders' equity   $ 1,206,136     $ 1,178,188  
Total liabilities and stockholders' equity   $ 4,957,343     $ 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 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  
Net realized losses                             (44 )     (44 )
Interest expense                             (3,861 )     (3,861 )
Other income                             1,047       1,047  
Income 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
Segment Information
(Unaudited)
 
    Three Months Ended March 31, 2016  
    U.S.     Int'l                          
amounts in thousands   Insurance     Insurance     GlobalRe      Corporate (1)      Total  
Gross written premiums   $     210,647     $     144,143     $  59,087     $     $ 413,877  
Ceded written premiums     (54,497 )     (34,971 )     (4,589 )           (94,057 )
Net written premiums     156,150       109,172       54,498             319,820  
                                         
Net earned premiums   $ 148,340     $ 78,008     $ 38,010     $     $ 264,358  
Net losses and LAE     (91,512 )     (40,410 )        (21,034 )            (152,956 )
Commission expenses     (14,855 )     (15,355 )     (7,745 )     401       (37,554 )
Other operating expenses     (33,761 )     (21,771 )     (5,277 )           (60,809 )
Other underwriting income (expense)      361             49       (401 )     9  
                                         
Underwriting profit   $ 8,573     $ 472     $ 4,003     $     $ 13,048  
                                         
Net investment income                             19,594       19,594  
Net realized gains                             1,597       1,597  
Interest expense                             (3,858 )     (3,858 )
Other income                             2,540       2,540  
Income before income taxes   $ 8,573     $ 472     $ 4,003     $ 19,873     $ 32,921  
Income tax expense                             (9,989 )     (9,989 )
Net income                                   $ 22,932  
                                         
Losses and LAE ratio     61.7 %     51.8 %     55.3 %             57.9 %
Commission expense ratio     10.0 %     19.7 %     20.4 %             14.2 %
Other operating expense ratio (2)     22.5 %     27.9 %     13.8 %             23.0 %
Combined ratio     94.2 %     99.4 %     89.5 %             95.1 %

(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, 2017     Three Months Ended March 31, 2016          
amounts in thousands   Marine     P&C      Professional
Liability
    Total     Marine     P&C      Professional
Liability
    Total     %
 Change 
Total
 
Gross written premiums   $ 40,950     $  170,634     $ 26,021     $  237,605     $ 43,163     $  141,278     $ 26,206     $  210,647       12.8 %
Ceded written premiums      (17,520 )     (38,198 )     (5,769 )     (61,487 )      (17,647 )     (30,507 )     (6,343 )     (54,497 )     12.8 %
Net written  premiums     23,430       132,436       20,252       176,118       25,516       110,771       19,863       156,150       12.8 %
                                                                         
Net earned premiums   $ 22,694     $ 119,123     $ 22,187     $ 164,004     $ 23,250     $ 109,159     $ 15,931     $ 148,340       10.6 %
Net losses and LAE     (13,775 )     (71,749 )     (13,302 )     (98,826 )     (9,775 )     (71,597 )     (10,140 )     (91,512 )     8.0 %
Commission expenses     (1,472 )     (15,366 )     (3,546 )     (20,384 )     (1,482 )     (11,852 )     (1,521 )     (14,855 )     37.2 %
Other operating expenses     (6,821 )     (21,814 )     (4,837 )     (33,472 )     (7,372 )     (21,522 )     (4,867 )     (33,761 )     (0.9 %)
Other underwriting income     83       18       9       110       79       268       14       361       (69.4 %)
                                                                         
Underwriting profit (loss)   $ 709     $ 10,212     $ 511     $ 11,432     $ 4,700     $ 4,456     $ (583 )   $ 8,573       33.3 %
                                                                         
Losses and LAE ratio     60.7 %     60.2 %     60.0 %     60.3 %     42.0 %     65.6 %     63.7 %     61.7 %        
Commission expense ratio     6.5 %     12.9 %     16.0 %     12.4 %     6.4 %     10.9 %     9.5 %     10.0 %        
Other operating expense ratio (1)       29.7 %     18.3 %     21.7 %     20.3 %     31.4 %     19.4 %     30.5 %     22.5 %        
Combined ratio     96.9 %     91.4 %     97.7 %     93.0 %     79.8 %     95.9 %     103.7 %     94.2 %        

(1) - Includes Other operating expenses and Other underwriting income.

 
 
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Reportable Segment Results
(Unaudited)
 
    Int'l Insurance  
    Three Months Ended March 31, 2017     Three Months Ended March 31, 2016          
amounts in thousands   Marine     P&C      Professional
Liability
    Total     Marine     P&C      Professional
Liability
    Total     %
 Change 
Total
 
Gross written premiums   $ 68,833     $ 40,368     $ 32,659     $  141,860     $ 71,948     $ 44,046     $ 28,149     $  144,143       (1.6 %)
Ceded written premiums      (10,926 )      (29,646 )     (6,021 )     (46,593 )      (11,089 )      (17,229 )     (6,653 )     (34,971 )     33.2 %
Net written  premiums     57,907       10,722       26,638       95,267       60,859       26,817       21,496       109,172       (12.7 %)
                                                                         
Net earned premiums   $ 37,495     $ 22,180     $ 24,411     $ 84,086     $ 38,856     $ 21,209     $ 17,943     $ 78,008       7.8 %
Net losses and LAE     (20,601 )     (15,869 )     (14,235 )     (50,705 )     (20,088 )     (11,216 )     (9,106 )     (40,410 )     25.5 %
Commission expenses     (9,541 )     (3,742 )     (5,950 )     (19,233 )     (9,405 )     (2,775 )     (3,175 )     (15,355 )     25.3 %
Other operating expenses     (8,440 )     (6,423 )     (4,930 )     (19,793 )     (8,442 )     (8,708 )     (4,621 )     (21,771 )     (9.1 %)
Other underwriting income (expense)                                                    NM  
                                                                         
Underwriting profit (loss)   $ (1,087 )   $ (3,854 )   $ (704 )   $ (5,645 )   $ 921     $ (1,490 )   $ 1,041     $ 472     NM  
                                                                         
Losses and LAE ratio     54.9 %     71.5 %     58.3 %     60.3 %     51.7 %     52.9 %     50.7 %     51.8 %        
Commission expense ratio     25.4 %     16.9 %     24.4 %     22.9 %     24.2 %     13.1 %     17.7 %     19.7 %        
Other operating expense ratio (1)     22.6 %     29.0 %     20.2 %     23.5 %     21.7 %     41.0 %     25.8 %     27.9 %        
Combined ratio     102.9 %     117.4 %     102.9 %     106.7 %     97.6 %     107.0 %     94.2 %     99.4 %        

NM - Percentage change not meaningful
(1) - Includes Other operating expenses and Other underwriting income (expense).

 
 
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   2017     2016     2017     2016  
U.S. Insurance:                                
Loss and LAE payments   $ 69,771     $ 73,035       42.5 %     49.2 %
Change in reserves     29,055       18,477       17.8 %     12.5 %
Net incurred loss and LAE   $  98,826     $ 91,512       60.3 %     61.7 %
                                 
Int'l Insurance:                                
Loss and LAE payments   $ 44,908     $ 29,243       53.4 %     37.5 %
Change in reserves     5,797       11,167       6.9 %     14.3 %
Net incurred loss and LAE   $ 50,705     $ 40,410       60.3 %     51.8 %
                                 
GlobalRe:                                
Loss and LAE payments   $ 28,330     $ 25,131       74.5 %     66.1 %
Change in reserves     (8,261 )     (4,097 )       (21.7 %)      (10.8 %)
Net incurred loss and LAE   $ 20,069     $ 21,034       52.8 %     55.3 %
                                 
Total                                
Loss and LAE payments   $ 143,009     $ 127,409       50.0 %     48.2 %
Change in reserves     26,591       25,547       9.3 %     9.7 %
Net incurred loss and LAE   $  169,600     $  152,956       59.3 %     57.9 %
                                 
                                 
    For the Three Months Ended March 31,  
Impact of Prior Years Reserves   Amounts      Loss Ratio Impact   
Favorable / (Unfavorable) Development     2017     2016     2017     2016  
U.S. Insurance   $ 472     $ 2,669       0.2 %     1.0 %
Int'l Insurance     (6,616 )     (855 )     (2.3 %)     (0.3 %)
GlobalRe     (941 )     20       (0.3 %)     0.0 %
Total   $ (7,085 )   $ 1,834       (2.4 %)     0.7 %
                                 


   
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES  
Net Loss Data  
(Unaudited)  
   
     As of March 31, 2017  
amounts in thousands   Case     IBNR          
Net Loss Reserves:   Reserves     Reserves     Total  
U.S. Insurance:                        
Marine   $ 53,547     $ 51,935     $ 105,482  
P&C     192,160       623,071       815,231  
Professional Liability     26,183       72,578       98,761  
Total U.S. Insurance   $   271,890     $   747,584     $  1,019,474  
Int'l Insurance:                        
Marine   $ 170,805     $ 31,968     $ 202,773  
P&C     74,807       23,125       97,932  
Professional Liability     38,984       70,526       109,510  
Total Int'l Insurance   $ 284,596     $ 125,619     $ 410,215  
                         
GlobalRe   $ 43,093     $ 64,034     $ 107,127  
                         
Total Net Loss Reserves     $ 599,579     $ 937,237     $ 1,536,816  
                         
                         
    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 March 31, 2017, the average quality of the investment portfolio as rated by S&P and Moody's was AA-/Aa3 with an average duration of 3.8 years. Our Company does not own any collateralized debt obligations or asset backed commercial paper.

The following table sets forth our investments as of March 31, 2017:

     As of March 31, 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
  $ 270,009     $ 2,110     $ (3,671 )   $ 271,570  
States, municipalities and political subdivisions     604,912       13,772       (3,353 )     594,493  
Mortgage-backed and asset-backed securities:                                
Agency mortgage-backed securities     468,255       3,858       (7,051 )     471,448  
Residential mortgage obligations     16,970       439       (37 )     16,568  
Asset-backed securities     331,567       1,470       (769 )     330,866  
Commercial mortgage-backed securities     147,353       2,670       (1,843 )     146,526  
  Subtotal   $ 964,145     $ 8,437     $ (9,700 )   $ 965,408  
Corporate exposures     856,211       12,948       (3,741 )     847,004  
Total fixed maturities   $ 2,695,277     $ 37,267     $ (20,465 )   $ 2,678,475  
Equity securities:                                
Common stocks   $ 169,905     $ 29,474     $ (652 )   $ 141,083  
Preferred stocks     192,309       7,702       (1,220 )     185,827  
Total Equity securities   $ 362,214     $ 37,176     $ (1,872 )   $ 326,910  
Short-term investments     123,846       50             123,796  
Total investments   $  3,181,337     $ 74,493     $ (22,337 )   $  3,129,181  

 

Contact:
Ciro M. DeFalco
Executive Vice President and Chief Financial Officer
(203) 905-6343
cdefalco@navg.com
www.navg.com

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