Mr. Galanski: We've substantially grown our business and profits. Navigators was recently named as one of Fortune's '100 Fastest Growing' companies. In the second quarter, our net income was up 47% over the second quarter of 2003, and we are very proud of the profitable underwriting results we've achieved in each of our businesses. In the insurance business, a combined loss and expense ratio below 100% is the measure of profitability and the measure of success. Our combined ratio for the first six months of 2004 was 88.8%, an improvement from 96.2% in the first six months of 2003. We expect the property-casualty insurance industry will likely be above a 100% ratio for the year.
TWST: What's accounted for that strong showing?
Mr. Galanski: We believe that underwriting profit results from
expertise, disciplined underwriting and specialization. Navigators has
certainly benefited from improved market conditions over the last three
years, during which our stock price increased from $13.12 on January 1,
2001, to about $30 per share. During that time, our gross written
premium increased from $278 million to over $600 million. We are a niche
player and operate in a handful of targeted markets globally. Some of
our niches have enjoyed particularly hard market conditions, fostering
an environment in which our underwriters can establish their terms and
conditions. An example is with one of our larger specialty niches of
providing primary general liability for California contractors. We've
experienced three years in a row of significant rate increases in this
niche as many of the competitors left that market. Our underwriters are
much better positioned to obtain the appropriate rate levels and the
terms and conditions for the risk they are taking.
Tickers included in this excerpt: NAVG
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