NAVIGATORS GROUP INC - FORM 8-K - EX-99.1

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8-K - 8-K 1Q-2017 - NAVIGATORS GROUP INC	navg-8k_20170505.htm

Exhibit 99.1

The Navigators Group, Inc.

CORPORATE NEWS

Navigators Reports First Quarter 2017 Earnings

Stamford, CT – May 4, 2017 -- 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.

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.

400 Atlantic Street		Stamford, CT 06901
TEL (203) 905-6090		FAX (203) 658-1821

News Release

May 4, 2017

Page 2

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.


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

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May 4, 2017

Page 3

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.

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May 4, 2017

Page 4

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.

News Release

May 4, 2017

Page 5

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.

News Release

May 4, 2017

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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).

News Release

May 4, 2017

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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).

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May 4, 2017

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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.

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May 4, 2017

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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).

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May 4, 2017

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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	%

News Release

May 4, 2017

Page 11

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

News Release

May 4, 2017

Page 12

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

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NAVIGATORS GROUP INC Reports