the navigators group, inc. “insuring a world in motion”
DESCRIPTION
The Navigators Group, Inc. “Insuring a World in Motion”. Friedman Billings Ramsey 11 th Annual Investor Conference November 30, 2004 New York City. Stanley A. Galanski, President & Chief Executive Officer Paul J. Malvasio, Executive Vice President & Chief Financial Officer. - PowerPoint PPT PresentationTRANSCRIPT
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The Navigators Group, Inc.Insuring a World in Motion
Friedman Billings Ramsey11th Annual Investor ConferenceNovember 30, 2004New York CityStanley A. Galanski, President & Chief Executive OfficerPaul J. Malvasio, Executive Vice President & Chief Financial Officer
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This presentation 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. We cannot assure that results which we anticipate will be achieved, since results may differ materially because of known and unknown risks and uncertainties which we face. Please refer to Navigators most recent 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 which may affect that business. Navigators undertakes no obligation to publicly update or revise any forward- looking statement.2
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Navigators Investment HighlightsA global leader in marine insuranceBusiness founded through Navigators Agencies in 1974Lloyds presence through Syndicate 1221 acquired in 1998Complements US operations and provides global market accessCommitment to underwriting profitWorld-class specialty underwriting teamsEmphasis on bottom-line results, not market shareDiversifying opportunistically into attractive new business linesSpecialty Property & Casualty and Professional LiabilityExcellent market opportunities and producer supportPortfolio diversification for stronger earnings stream across market cyclesOperating from a strong and leveragable platformRated A by A.M. Best and Standard and PoorsLloyds licenses provide access to major world marketsNo debt3
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Deep, Experienced Underwriting TeamSenior Underwriting management team has an average of approximately 30 years in the industry and 14 years at Navigators.4
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Navigators Core ValuesUnderwriting Profit is the Primary ObjectiveSpecialization in High Margin BusinessesIntellectual Capital Hire and Build Top Notch ExpertsUnderwrite Severity but Utilize Reinsurance to Protect our Balance SheetDiscipline Dont be Afraid to Shrink or Exit a NicheTeamworkIntegrity, Professionalism and Pride5
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Growth and Portfolio DiversificationGross Premium Written by Segment($s in millions)9%
22%
37%
32%5%
26%
29%
40%$607$448$50910%
22%
37%
31%8%
21%
38%
33%$4566Nine MonthsYear
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Lloyds Marine & Energy
Navigators Marine & EnergyLargest and longest standing area of specialization for over 30 yearsNavigators has an 80% participation in marine insurance pool operated by Navigators Agencies in 2004 and 2003Renewal rate increases averaged 4% in the nine months of 2004, 13% in 2003, and 21% in 2002Every regional office produced an underwriting profit in 2003 (excluding asbestos reserve strengthening) 2004 nine month combined ratio of 90.9% (85.9% excluding Hurricane Ivan)30% of 2003 Year NWP 26% of Nine Months 2004 NWP7
Display
Chart
115.2857142857
126
23
120
&R&8&F - &D - &T
&L&7Credit Suisse First Boston
Marine & Energy (Lloyd's)
Navigators Pro
Navigators Specialty
Graph Data
Marine & Energy (NAVG Agencies)115.2857142857Lloyd's Marine126
Marine & Energy (Lloyd's)126
Navigators Pro23
Navigators Specialty120
384.2857142857
Examples
Bar ChartIndustryVolume
Insurance$1,312.0
Entertainment$1,035.0
Health Care$953.0
Energy$653.0
Retail$576.0
Technology$432.0
Chemicals$325.0
Bar-Floating ChartCategoryMinimumMaximum
Category 128
Category 2410
Category 3612
Category 4814
Category 51016
Column ChartRatingA RatedBBB RatedBB RatedB Rated
Net Sales2,435.01,735.01,345.0807.0
Book Equity1,247.0645.0201.0301.0
Total Assets1,756.01,645.01,345.0724.0
Column Line Combination ChartDateRevenueEBIT Margin
1992$15.517.0%
1993$16.819.0%
1994$23.523.0%
1995$27.821.0%
1996$35.819.0%
1997$43.723.0%
1998$55.827.0%
1999$60.828.0%
Column Stacked ChartIndustryIPOSECCVT
Communications$1,315.0$1,195.0$555.0
Technology$1,135.0$1,100.0$815.0
REITs$798.0$744.0$585.0
Health Care$775.0$715.0$575.0
International$715.0$615.0$555.0
Energy$645.0$541.0$200.0
Insurance$425.0$321.0$45.0
Retail$321.0$222.0$35.0
Line ChartIndustryGross MarginEBIT Margin
Insurance52%22.0%
Entertainment55%24.0%
Health Care56%25.0%
Energy55%24.0%
Market Share ChartIndustryVolumeIndustryVolumeMarket Share
Insurance$1,312.0Insurance$1,312.012%
Entertainment$1,035.0Entertainment$1,035.015%
Health Care$953.0Health Care$953.011%
Energy$653.0Energy$653.08%
Retail$576.0Retail$576.08%
Technology$432.0Technology$432.08%
Chemicals$325.0Chemicals$325.09%
Pie ChartDivisionAmount
Broadcasting$6.5
Cable$5.5
Consumer$7.8
Film$1.7
Publishing$3.3
Theme Parks$5.5
Video / Music$3.8
Ranking ChartInvestment BankVolumeInvestment BankVolumeMarket Share
CSFB$10,768.0CSFB$10,768.017%
Merrill Lynch$6,732.0Merrill Lynch$6,732.011%
Goldman, Sachs$6,381.0Goldman, Sachs$6,381.010%
Bear, Stearns$5,075.0Bear, Stearns$5,075.08%
Morgan Stanley$4,676.0Morgan Stanley$4,676.08%
Valuation ChartValuation MethodologyLowHigh
PublicComparableCompanies$9.5$11.5
ComparablePremiums$10.5$11.8
M&AComparableTransactions$9.8$13.5
DCFBaseCase$10.8$14.5
DCFUpsideCase$12.0$16.0
XY Scatter Line ChartDateGross MarginEBIT Margin
3/31/9452%22.0%
6/30/9455%24.0%
9/30/9456%25.0%
12/31/9455%24.0%
3/31/9551%20.0%
6/30/9552%22.0%
9/30/9556%25.0%
12/31/9553%21.0%
3/31/9649%17.0%
6/30/9647%18.0%
9/30/9648%17.0%
12/31/9644%15.0%
3/31/9746%17.0%
6/30/9748%19.0%
XY Scatter Plot ChartCompanyP/E MultipleEPS Growth
Microtest46.0x55%
Webdata40.0x41%
Utilifix36.0x39%
Kingsoft31.0x37%
Cobra24.0x28%
Samachi18.0x20%
Cascom16.0x15%
Scratch
Display
Chart
95.0054127199
126
23
120
&R&8&F - &D - &T
&L&7Credit Suisse First Boston
Marine & Energy (Lloyd's)
Navigators Pro
Navigators Specialty
Graph Data
Marine & Energy (NAVG Agencies)95.0054127199Lloyd's Marine126
Marine & Energy (Lloyd's)126
Navigators Pro23
Navigators Specialty120
364.0054127199
Examples
Bar ChartIndustryVolume
Insurance$1,312.0
Entertainment$1,035.0
Health Care$953.0
Energy$653.0
Retail$576.0
Technology$432.0
Chemicals$325.0
Bar-Floating ChartCategoryMinimumMaximum
Category 128
Category 2410
Category 3612
Category 4814
Category 51016
Column ChartRatingA RatedBBB RatedBB RatedB Rated
Net Sales2,435.01,735.01,345.0807.0
Book Equity1,247.0645.0201.0301.0
Total Assets1,756.01,645.01,345.0724.0
Column Line Combination ChartDateRevenueEBIT Margin
1992$15.517.0%
1993$16.819.0%
1994$23.523.0%
1995$27.821.0%
1996$35.819.0%
1997$43.723.0%
1998$55.827.0%
1999$60.828.0%
Column Stacked ChartIndustryIPOSECCVT
Communications$1,315.0$1,195.0$555.0
Technology$1,135.0$1,100.0$815.0
REITs$798.0$744.0$585.0
Health Care$775.0$715.0$575.0
International$715.0$615.0$555.0
Energy$645.0$541.0$200.0
Insurance$425.0$321.0$45.0
Retail$321.0$222.0$35.0
Line ChartIndustryGross MarginEBIT Margin
Insurance52%22.0%
Entertainment55%24.0%
Health Care56%25.0%
Energy55%24.0%
Market Share ChartIndustryVolumeIndustryVolumeMarket Share
Insurance$1,312.0Insurance$1,312.012%
Entertainment$1,035.0Entertainment$1,035.015%
Health Care$953.0Health Care$953.011%
Energy$653.0Energy$653.08%
Retail$576.0Retail$576.08%
Technology$432.0Technology$432.08%
Chemicals$325.0Chemicals$325.09%
Pie ChartDivisionAmount
Broadcasting$6.5
Cable$5.5
Consumer$7.8
Film$1.7
Publishing$3.3
Theme Parks$5.5
Video / Music$3.8
Ranking ChartInvestment BankVolumeInvestment BankVolumeMarket Share
CSFB$10,768.0CSFB$10,768.017%
Merrill Lynch$6,732.0Merrill Lynch$6,732.011%
Goldman, Sachs$6,381.0Goldman, Sachs$6,381.010%
Bear, Stearns$5,075.0Bear, Stearns$5,075.08%
Morgan Stanley$4,676.0Morgan Stanley$4,676.08%
Valuation ChartValuation MethodologyLowHigh
PublicComparableCompanies$9.5$11.5
ComparablePremiums$10.5$11.8
M&AComparableTransactions$9.8$13.5
DCFBaseCase$10.8$14.5
DCFUpsideCase$12.0$16.0
XY Scatter Line ChartDateGross MarginEBIT Margin
3/31/9452%22.0%
6/30/9455%24.0%
9/30/9456%25.0%
12/31/9455%24.0%
3/31/9551%20.0%
6/30/9552%22.0%
9/30/9556%25.0%
12/31/9553%21.0%
3/31/9649%17.0%
6/30/9647%18.0%
9/30/9648%17.0%
12/31/9644%15.0%
3/31/9746%17.0%
6/30/9748%19.0%
XY Scatter Plot ChartCompanyP/E MultipleEPS Growth
Microtest46.0x55%
Webdata40.0x41%
Utilifix36.0x39%
Kingsoft31.0x37%
Cobra24.0x28%
Samachi18.0x20%
Cascom16.0x15%
Scratch
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Marine & Energy Mix of Business 200434%15%8% 10%18%3% 6% 86% Nine Months Ended September 30, 2004
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Marine & Energy Rate Increases9
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2003 U.S. Market Share($ in thousands)Note: As reported by the AIMU.10
U.S. Companies
Navigators
Market Share
Cargo
$613,864
$39,826
6.5%
Bluewater Hull
107,000 Est.
24,966
23.3%
Craft/Fishing
205,963
11,695
5.7%
Liability
268,036
69,290
25.9%
Offshore Energy
242,018
37,354
15.4%
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Lloyds Marine & Energy
Lloyds Marine & EnergyNavigators Underwriting Agency, Ltd. manages Syndicate 1221Navigators provides 97.4% of Syndicate 1221s gross capacity / $255mm for 2004 underwriting year compared to $200mm for 2003 A Lloyds market leader in cargo and specie insuranceMillennium Consortium at Lloyds for construction/engineering risksExpansion of Pennine operations positioned in three regional U.K. officesRenewal rate decreases averaged 1.1% in nine months of 2004, compared to increases of 15% in year 2003 and 26% in year 20022004 nine month combined ratio of 93.8% (91.0% excluding Hurricane Ivan)37% of 2003 Year NWP 40% of Nine Months 2004 NWP11
Display
Chart
142.9448698315
169.3813560149
23
120
&R&8&F - &D - &T
&L&7Credit Suisse First Boston
Marine & Energy (Lloyd's)
Navigators Pro
Navigators Specialty
Graph Data
Marine & Energy (NAVG Agencies)142.9448698315Lloyd's Marine126
Marine & Energy (Lloyd's)169.3813560149
Navigators Pro23
Navigators Specialty120
455.3262258464
Examples
Bar ChartIndustryVolume
Insurance$1,312.0
Entertainment$1,035.0
Health Care$953.0
Energy$653.0
Retail$576.0
Technology$432.0
Chemicals$325.0
Bar-Floating ChartCategoryMinimumMaximum
Category 128
Category 2410
Category 3612
Category 4814
Category 51016
Column ChartRatingA RatedBBB RatedBB RatedB Rated
Net Sales2,435.01,735.01,345.0807.0
Book Equity1,247.0645.0201.0301.0
Total Assets1,756.01,645.01,345.0724.0
Column Line Combination ChartDateRevenueEBIT Margin
1992$15.517.0%
1993$16.819.0%
1994$23.523.0%
1995$27.821.0%
1996$35.819.0%
1997$43.723.0%
1998$55.827.0%
1999$60.828.0%
Column Stacked ChartIndustryIPOSECCVT
Communications$1,315.0$1,195.0$555.0
Technology$1,135.0$1,100.0$815.0
REITs$798.0$744.0$585.0
Health Care$775.0$715.0$575.0
International$715.0$615.0$555.0
Energy$645.0$541.0$200.0
Insurance$425.0$321.0$45.0
Retail$321.0$222.0$35.0
Line ChartIndustryGross MarginEBIT Margin
Insurance52%22.0%
Entertainment55%24.0%
Health Care56%25.0%
Energy55%24.0%
Market Share ChartIndustryVolumeIndustryVolumeMarket Share
Insurance$1,312.0Insurance$1,312.012%
Entertainment$1,035.0Entertainment$1,035.015%
Health Care$953.0Health Care$953.011%
Energy$653.0Energy$653.08%
Retail$576.0Retail$576.08%
Technology$432.0Technology$432.08%
Chemicals$325.0Chemicals$325.09%
Pie ChartDivisionAmount
Broadcasting$6.5
Cable$5.5
Consumer$7.8
Film$1.7
Publishing$3.3
Theme Parks$5.5
Video / Music$3.8
Ranking ChartInvestment BankVolumeInvestment BankVolumeMarket Share
CSFB$10,768.0CSFB$10,768.017%
Merrill Lynch$6,732.0Merrill Lynch$6,732.011%
Goldman, Sachs$6,381.0Goldman, Sachs$6,381.010%
Bear, Stearns$5,075.0Bear, Stearns$5,075.08%
Morgan Stanley$4,676.0Morgan Stanley$4,676.08%
Valuation ChartValuation MethodologyLowHigh
PublicComparableCompanies$9.5$11.5
ComparablePremiums$10.5$11.8
M&AComparableTransactions$9.8$13.5
DCFBaseCase$10.8$14.5
DCFUpsideCase$12.0$16.0
XY Scatter Line ChartDateGross MarginEBIT Margin
3/31/9452%22.0%
6/30/9455%24.0%
9/30/9456%25.0%
12/31/9455%24.0%
3/31/9551%20.0%
6/30/9552%22.0%
9/30/9556%25.0%
12/31/9553%21.0%
3/31/9649%17.0%
6/30/9647%18.0%
9/30/9648%17.0%
12/31/9644%15.0%
3/31/9746%17.0%
6/30/9748%19.0%
XY Scatter Plot ChartCompanyP/E MultipleEPS Growth
Microtest46.0x55%
Webdata40.0x41%
Utilifix36.0x39%
Kingsoft31.0x37%
Cobra24.0x28%
Samachi18.0x20%
Cascom16.0x15%
Scratch
Display
Chart
142.9448698315
247.5343649288
23
120
&R&8&F - &D - &T
&L&7Credit Suisse First Boston
Marine & Energy (Lloyd's)
Navigators Pro
Navigators Specialty
Graph Data
Marine & Energy (NAVG Agencies)142.9448698315Lloyd's Marine126
Marine & Energy (Lloyd's)247.5343649288
Navigators Pro23
Navigators Specialty120
533.4792347603
Examples
Bar ChartIndustryVolume
Insurance$1,312.0
Entertainment$1,035.0
Health Care$953.0
Energy$653.0
Retail$576.0
Technology$432.0
Chemicals$325.0
Bar-Floating ChartCategoryMinimumMaximum
Category 128
Category 2410
Category 3612
Category 4814
Category 51016
Column ChartRatingA RatedBBB RatedBB RatedB Rated
Net Sales2,435.01,735.01,345.0807.0
Book Equity1,247.0645.0201.0301.0
Total Assets1,756.01,645.01,345.0724.0
Column Line Combination ChartDateRevenueEBIT Margin
1992$15.517.0%
1993$16.819.0%
1994$23.523.0%
1995$27.821.0%
1996$35.819.0%
1997$43.723.0%
1998$55.827.0%
1999$60.828.0%
Column Stacked ChartIndustryIPOSECCVT
Communications$1,315.0$1,195.0$555.0
Technology$1,135.0$1,100.0$815.0
REITs$798.0$744.0$585.0
Health Care$775.0$715.0$575.0
International$715.0$615.0$555.0
Energy$645.0$541.0$200.0
Insurance$425.0$321.0$45.0
Retail$321.0$222.0$35.0
Line ChartIndustryGross MarginEBIT Margin
Insurance52%22.0%
Entertainment55%24.0%
Health Care56%25.0%
Energy55%24.0%
Market Share ChartIndustryVolumeIndustryVolumeMarket Share
Insurance$1,312.0Insurance$1,312.012%
Entertainment$1,035.0Entertainment$1,035.015%
Health Care$953.0Health Care$953.011%
Energy$653.0Energy$653.08%
Retail$576.0Retail$576.08%
Technology$432.0Technology$432.08%
Chemicals$325.0Chemicals$325.09%
Pie ChartDivisionAmount
Broadcasting$6.5
Cable$5.5
Consumer$7.8
Film$1.7
Publishing$3.3
Theme Parks$5.5
Video / Music$3.8
Ranking ChartInvestment BankVolumeInvestment BankVolumeMarket Share
CSFB$10,768.0CSFB$10,768.017%
Merrill Lynch$6,732.0Merrill Lynch$6,732.011%
Goldman, Sachs$6,381.0Goldman, Sachs$6,381.010%
Bear, Stearns$5,075.0Bear, Stearns$5,075.08%
Morgan Stanley$4,676.0Morgan Stanley$4,676.08%
Valuation ChartValuation MethodologyLowHigh
PublicComparableCompanies$9.5$11.5
ComparablePremiums$10.5$11.8
M&AComparableTransactions$9.8$13.5
DCFBaseCase$10.8$14.5
DCFUpsideCase$12.0$16.0
XY Scatter Line ChartDateGross MarginEBIT Margin
3/31/9452%22.0%
6/30/9455%24.0%
9/30/9456%25.0%
12/31/9455%24.0%
3/31/9551%20.0%
6/30/9552%22.0%
9/30/9556%25.0%
12/31/9553%21.0%
3/31/9649%17.0%
6/30/9647%18.0%
9/30/9648%17.0%
12/31/9644%15.0%
3/31/9746%17.0%
6/30/9748%19.0%
XY Scatter Plot ChartCompanyP/E MultipleEPS Growth
Microtest46.0x55%
Webdata40.0x41%
Utilifix36.0x39%
Kingsoft31.0x37%
Cobra24.0x28%
Samachi18.0x20%
Cascom16.0x15%
Scratch
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2003 Lloyds Market Share( in thousands)Source: Lloyds Market Association 12
Lloyds Market
Syndicate 1221
Market Share
Cargo
328,000
31,000
9.5%
Bluewater Hull
392,000
7,000
1.8%
Marine Excess of Loss
223,000
12,000
5.4%
Liability
315,000
16,000
5.1%
Offshore energy
500,000
10,000
2.0%
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Lloyds Marine Premium Rates%Base Year = 199213
-
Lloyds Marine & EnergyNavigators Specialty28% of 2003 Year NWP 26% of Nine Months 2004 NWPSince 1995 has underwritten general liability insurance for small general and artisan contractors, mostly in California Written on a non-admitted basisInstituted a premium cap of $100 million GWP in 2003Achieved rate increases of 6.9% in the nine months of 2004 on top of 49% in 2003 and 30% in 2002, resulting in substantially reduced exposure and adequate pricingStrategy to diversify by product line and geographically generated approximately 26% of 2004 Specialty GWPMidwest branch operation since 2002 Personal umbrellaSuretyLaunched new product line, Umbrella Excess Liability, in November, 20042004 nine month combined ratio of 97.3%14
Display
Chart
115.2857142857
126
23
120
&R&8&F - &D - &T
&L&7Credit Suisse First Boston
Marine & Energy (Lloyd's)
Navigators Pro
Navigators Specialty
Graph Data
Marine & Energy (NAVG Agencies)115.2857142857Lloyd's Marine126
Marine & Energy (Lloyd's)126
Navigators Pro23
Navigators Specialty120
384.2857142857
Examples
Bar ChartIndustryVolume
Insurance$1,312.0
Entertainment$1,035.0
Health Care$953.0
Energy$653.0
Retail$576.0
Technology$432.0
Chemicals$325.0
Bar-Floating ChartCategoryMinimumMaximum
Category 128
Category 2410
Category 3612
Category 4814
Category 51016
Column ChartRatingA RatedBBB RatedBB RatedB Rated
Net Sales2,435.01,735.01,345.0807.0
Book Equity1,247.0645.0201.0301.0
Total Assets1,756.01,645.01,345.0724.0
Column Line Combination ChartDateRevenueEBIT Margin
1992$15.517.0%
1993$16.819.0%
1994$23.523.0%
1995$27.821.0%
1996$35.819.0%
1997$43.723.0%
1998$55.827.0%
1999$60.828.0%
Column Stacked ChartIndustryIPOSECCVT
Communications$1,315.0$1,195.0$555.0
Technology$1,135.0$1,100.0$815.0
REITs$798.0$744.0$585.0
Health Care$775.0$715.0$575.0
International$715.0$615.0$555.0
Energy$645.0$541.0$200.0
Insurance$425.0$321.0$45.0
Retail$321.0$222.0$35.0
Line ChartIndustryGross MarginEBIT Margin
Insurance52%22.0%
Entertainment55%24.0%
Health Care56%25.0%
Energy55%24.0%
Market Share ChartIndustryVolumeIndustryVolumeMarket Share
Insurance$1,312.0Insurance$1,312.012%
Entertainment$1,035.0Entertainment$1,035.015%
Health Care$953.0Health Care$953.011%
Energy$653.0Energy$653.08%
Retail$576.0Retail$576.08%
Technology$432.0Technology$432.08%
Chemicals$325.0Chemicals$325.09%
Pie ChartDivisionAmount
Broadcasting$6.5
Cable$5.5
Consumer$7.8
Film$1.7
Publishing$3.3
Theme Parks$5.5
Video / Music$3.8
Ranking ChartInvestment BankVolumeInvestment BankVolumeMarket Share
CSFB$10,768.0CSFB$10,768.017%
Merrill Lynch$6,732.0Merrill Lynch$6,732.011%
Goldman, Sachs$6,381.0Goldman, Sachs$6,381.010%
Bear, Stearns$5,075.0Bear, Stearns$5,075.08%
Morgan Stanley$4,676.0Morgan Stanley$4,676.08%
Valuation ChartValuation MethodologyLowHigh
PublicComparableCompanies$9.5$11.5
ComparablePremiums$10.5$11.8
M&AComparableTransactions$9.8$13.5
DCFBaseCase$10.8$14.5
DCFUpsideCase$12.0$16.0
XY Scatter Line ChartDateGross MarginEBIT Margin
3/31/9452%22.0%
6/30/9455%24.0%
9/30/9456%25.0%
12/31/9455%24.0%
3/31/9551%20.0%
6/30/9552%22.0%
9/30/9556%25.0%
12/31/9553%21.0%
3/31/9649%17.0%
6/30/9647%18.0%
9/30/9648%17.0%
12/31/9644%15.0%
3/31/9746%17.0%
6/30/9748%19.0%
XY Scatter Plot ChartCompanyP/E MultipleEPS Growth
Microtest46.0x55%
Webdata40.0x41%
Utilifix36.0x39%
Kingsoft31.0x37%
Cobra24.0x28%
Samachi18.0x20%
Cascom16.0x15%
Scratch
Display
Chart
96.4891304348
126
23
120
&R&8&F - &D - &T
&L&7Credit Suisse First Boston
Marine & Energy (Lloyd's)
Navigators Pro
Navigators Specialty
Graph Data
Marine & Energy (NAVG Agencies)96.4891304348Lloyd's Marine126
Marine & Energy (Lloyd's)126
Navigators Pro23
Navigators Specialty120
365.4891304348
Examples
Bar ChartIndustryVolume
Insurance$1,312.0
Entertainment$1,035.0
Health Care$953.0
Energy$653.0
Retail$576.0
Technology$432.0
Chemicals$325.0
Bar-Floating ChartCategoryMinimumMaximum
Category 128
Category 2410
Category 3612
Category 4814
Category 51016
Column ChartRatingA RatedBBB RatedBB RatedB Rated
Net Sales2,435.01,735.01,345.0807.0
Book Equity1,247.0645.0201.0301.0
Total Assets1,756.01,645.01,345.0724.0
Column Line Combination ChartDateRevenueEBIT Margin
1992$15.517.0%
1993$16.819.0%
1994$23.523.0%
1995$27.821.0%
1996$35.819.0%
1997$43.723.0%
1998$55.827.0%
1999$60.828.0%
Column Stacked ChartIndustryIPOSECCVT
Communications$1,315.0$1,195.0$555.0
Technology$1,135.0$1,100.0$815.0
REITs$798.0$744.0$585.0
Health Care$775.0$715.0$575.0
International$715.0$615.0$555.0
Energy$645.0$541.0$200.0
Insurance$425.0$321.0$45.0
Retail$321.0$222.0$35.0
Line ChartIndustryGross MarginEBIT Margin
Insurance52%22.0%
Entertainment55%24.0%
Health Care56%25.0%
Energy55%24.0%
Market Share ChartIndustryVolumeIndustryVolumeMarket Share
Insurance$1,312.0Insurance$1,312.012%
Entertainment$1,035.0Entertainment$1,035.015%
Health Care$953.0Health Care$953.011%
Energy$653.0Energy$653.08%
Retail$576.0Retail$576.08%
Technology$432.0Technology$432.08%
Chemicals$325.0Chemicals$325.09%
Pie ChartDivisionAmount
Broadcasting$6.5
Cable$5.5
Consumer$7.8
Film$1.7
Publishing$3.3
Theme Parks$5.5
Video / Music$3.8
Ranking ChartInvestment BankVolumeInvestment BankVolumeMarket Share
CSFB$10,768.0CSFB$10,768.017%
Merrill Lynch$6,732.0Merrill Lynch$6,732.011%
Goldman, Sachs$6,381.0Goldman, Sachs$6,381.010%
Bear, Stearns$5,075.0Bear, Stearns$5,075.08%
Morgan Stanley$4,676.0Morgan Stanley$4,676.08%
Valuation ChartValuation MethodologyLowHigh
PublicComparableCompanies$9.5$11.5
ComparablePremiums$10.5$11.8
M&AComparableTransactions$9.8$13.5
DCFBaseCase$10.8$14.5
DCFUpsideCase$12.0$16.0
XY Scatter Line ChartDateGross MarginEBIT Margin
3/31/9452%22.0%
6/30/9455%24.0%
9/30/9456%25.0%
12/31/9455%24.0%
3/31/9551%20.0%
6/30/9552%22.0%
9/30/9556%25.0%
12/31/9553%21.0%
3/31/9649%17.0%
6/30/9647%18.0%
9/30/9648%17.0%
12/31/9644%15.0%
3/31/9746%17.0%
6/30/9748%19.0%
XY Scatter Plot ChartCompanyP/E MultipleEPS Growth
Microtest46.0x55%
Webdata40.0x41%
Utilifix36.0x39%
Kingsoft31.0x37%
Cobra24.0x28%
Samachi18.0x20%
Cascom16.0x15%
Scratch
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Navigators SpecialtyExposure Management Strategy Dramatic Reduction in IFCIn Force Policy Counts15
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Lloyds Marine & EnergyIntroduced D&O liability insurance in late 2001 with team of experienced professionalsIn late 2002, introduced lawyers professional liability and other miscellaneous professional liability coveragesTargeting small cap to mid cap public corporations and private companiesClaims made policies reserves are substantially IBNRAs we have grown comfortable with the quality of underwriting, we have increased our net retention through a variable quota shareEstablished a London Branch presence in 2004; will expand to utilize Lloyds licenses in 20052004 nine month combined ratio of 79.1%5% of 2003 Year NWP 8% of Nine Months 2004 NWPNavigators Pro16
Display
Chart
178
126
120
28.9914529915
&R&8&F - &D - &T
&L&7Credit Suisse First Boston
Graph Data
Marine & Energy (NAVG Agencies)178Lloyd's Marine126
Marine & Energy (Lloyd's)126
Navigators Specialty120Navigators Specialty120
Navigators Pro28.9914529915
452.9914529915
Examples
Bar ChartIndustryVolume
Insurance$1,312.0
Entertainment$1,035.0
Health Care$953.0
Energy$653.0
Retail$576.0
Technology$432.0
Chemicals$325.0
Bar-Floating ChartCategoryMinimumMaximum
Category 128
Category 2410
Category 3612
Category 4814
Category 51016
Column ChartRatingA RatedBBB RatedBB RatedB Rated
Net Sales2,435.01,735.01,345.0807.0
Book Equity1,247.0645.0201.0301.0
Total Assets1,756.01,645.01,345.0724.0
Column Line Combination ChartDateRevenueEBIT Margin
1992$15.517.0%
1993$16.819.0%
1994$23.523.0%
1995$27.821.0%
1996$35.819.0%
1997$43.723.0%
1998$55.827.0%
1999$60.828.0%
Column Stacked ChartIndustryIPOSECCVT
Communications$1,315.0$1,195.0$555.0
Technology$1,135.0$1,100.0$815.0
REITs$798.0$744.0$585.0
Health Care$775.0$715.0$575.0
International$715.0$615.0$555.0
Energy$645.0$541.0$200.0
Insurance$425.0$321.0$45.0
Retail$321.0$222.0$35.0
Line ChartIndustryGross MarginEBIT Margin
Insurance52%22.0%
Entertainment55%24.0%
Health Care56%25.0%
Energy55%24.0%
Market Share ChartIndustryVolumeIndustryVolumeMarket Share
Insurance$1,312.0Insurance$1,312.012%
Entertainment$1,035.0Entertainment$1,035.015%
Health Care$953.0Health Care$953.011%
Energy$653.0Energy$653.08%
Retail$576.0Retail$576.08%
Technology$432.0Technology$432.08%
Chemicals$325.0Chemicals$325.09%
Pie ChartDivisionAmount
Broadcasting$6.5
Cable$5.5
Consumer$7.8
Film$1.7
Publishing$3.3
Theme Parks$5.5
Video / Music$3.8
Ranking ChartInvestment BankVolumeInvestment BankVolumeMarket Share
CSFB$10,768.0CSFB$10,768.017%
Merrill Lynch$6,732.0Merrill Lynch$6,732.011%
Goldman, Sachs$6,381.0Goldman, Sachs$6,381.010%
Bear, Stearns$5,075.0Bear, Stearns$5,075.08%
Morgan Stanley$4,676.0Morgan Stanley$4,676.08%
Valuation ChartValuation MethodologyLowHigh
PublicComparableCompanies$9.5$11.5
ComparablePremiums$10.5$11.8
M&AComparableTransactions$9.8$13.5
DCFBaseCase$10.8$14.5
DCFUpsideCase$12.0$16.0
XY Scatter Line ChartDateGross MarginEBIT Margin
3/31/9452%22.0%
6/30/9455%24.0%
9/30/9456%25.0%
12/31/9455%24.0%
3/31/9551%20.0%
6/30/9552%22.0%
9/30/9556%25.0%
12/31/9553%21.0%
3/31/9649%17.0%
6/30/9647%18.0%
9/30/9648%17.0%
12/31/9644%15.0%
3/31/9746%17.0%
6/30/9748%19.0%
XY Scatter Plot ChartCompanyP/E MultipleEPS Growth
Microtest46.0x55%
Webdata40.0x41%
Utilifix36.0x39%
Kingsoft31.0x37%
Cobra24.0x28%
Samachi18.0x20%
Cascom16.0x15%
Scratch
Display
Chart
178
126
120
47.1111111111
&R&8&F - &D - &T
&L&7Credit Suisse First Boston
Graph Data
Marine & Energy (NAVG Agencies)178Lloyd's Marine126
Marine & Energy (Lloyd's)126
Navigators Specialty120Navigators Specialty120
Navigators Pro47.1111111111
471.1111111111
Examples
Bar ChartIndustryVolume
Insurance$1,312.0
Entertainment$1,035.0
Health Care$953.0
Energy$653.0
Retail$576.0
Technology$432.0
Chemicals$325.0
Bar-Floating ChartCategoryMinimumMaximum
Category 128
Category 2410
Category 3612
Category 4814
Category 51016
Column ChartRatingA RatedBBB RatedBB RatedB Rated
Net Sales2,435.01,735.01,345.0807.0
Book Equity1,247.0645.0201.0301.0
Total Assets1,756.01,645.01,345.0724.0
Column Line Combination ChartDateRevenueEBIT Margin
1992$15.517.0%
1993$16.819.0%
1994$23.523.0%
1995$27.821.0%
1996$35.819.0%
1997$43.723.0%
1998$55.827.0%
1999$60.828.0%
Column Stacked ChartIndustryIPOSECCVT
Communications$1,315.0$1,195.0$555.0
Technology$1,135.0$1,100.0$815.0
REITs$798.0$744.0$585.0
Health Care$775.0$715.0$575.0
International$715.0$615.0$555.0
Energy$645.0$541.0$200.0
Insurance$425.0$321.0$45.0
Retail$321.0$222.0$35.0
Line ChartIndustryGross MarginEBIT Margin
Insurance52%22.0%
Entertainment55%24.0%
Health Care56%25.0%
Energy55%24.0%
Market Share ChartIndustryVolumeIndustryVolumeMarket Share
Insurance$1,312.0Insurance$1,312.012%
Entertainment$1,035.0Entertainment$1,035.015%
Health Care$953.0Health Care$953.011%
Energy$653.0Energy$653.08%
Retail$576.0Retail$576.08%
Technology$432.0Technology$432.08%
Chemicals$325.0Chemicals$325.09%
Pie ChartDivisionAmount
Broadcasting$6.5
Cable$5.5
Consumer$7.8
Film$1.7
Publishing$3.3
Theme Parks$5.5
Video / Music$3.8
Ranking ChartInvestment BankVolumeInvestment BankVolumeMarket Share
CSFB$10,768.0CSFB$10,768.017%
Merrill Lynch$6,732.0Merrill Lynch$6,732.011%
Goldman, Sachs$6,381.0Goldman, Sachs$6,381.010%
Bear, Stearns$5,075.0Bear, Stearns$5,075.08%
Morgan Stanley$4,676.0Morgan Stanley$4,676.08%
Valuation ChartValuation MethodologyLowHigh
PublicComparableCompanies$9.5$11.5
ComparablePremiums$10.5$11.8
M&AComparableTransactions$9.8$13.5
DCFBaseCase$10.8$14.5
DCFUpsideCase$12.0$16.0
XY Scatter Line ChartDateGross MarginEBIT Margin
3/31/9452%22.0%
6/30/9455%24.0%
9/30/9456%25.0%
12/31/9455%24.0%
3/31/9551%20.0%
6/30/9552%22.0%
9/30/9556%25.0%
12/31/9553%21.0%
3/31/9649%17.0%
6/30/9647%18.0%
9/30/9648%17.0%
12/31/9644%15.0%
3/31/9746%17.0%
6/30/9748%19.0%
XY Scatter Plot ChartCompanyP/E MultipleEPS Growth
Microtest46.0x55%
Webdata40.0x41%
Utilifix36.0x39%
Kingsoft31.0x37%
Cobra24.0x28%
Samachi18.0x20%
Cascom16.0x15%
Scratch
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Navigators Pro - Premium Distribution$30.8$14.3$5.1$1.82004 GWP $52 Million 17
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Lloyds Marine & EnergyNavigators Insurance Company High Quality Investment PortfolioInvested Assets: $840 millionFixed Maturities and Cash:97.7% of portfolioAverage AA ratingDuration of approximately 3.7 yearsAverage yield of 3.5% for 3rd Quarter 2004Equity Securities: 2.3% of portfolioAt September 30, 20041814.6%2.3%31.4%14.9%19.7%17.3%
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Key Summary Financial DataConsolidated Group Data($s in millions)19
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Key Summary Financial DataConsolidated Group Data($s in thousands)20*At December 31, 2003
Sheet1
20042003
9 Months9 MonthsChange
Net income24,23017,17541%
Per share data:
Net income$1.91$1.99(4%)
Realized gains.03.12
$1.88$1.871%
Hurricane Ivan.26
Tax valuation benefit(.24)--
Adjusted net income$2.14$1.8731%
Book value$25.08$ 23.14*8%
Sheet2
Sheet3
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Key Strategies: 2005 - 2007Maintain our Leadership Position in MarineMaintain a Profitable Construction SegmentComplete the Build Out of Specialty Admitted Unit in ChicagoExpand Product Lines of Navigators ProDevelop a Commercial Umbrella Book of BusinessExpansion of European Branch Operations Deploy Technologies to Reduce Costs and Enhance ResultsHire and Retain the Best and the Brightest21
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Why Navigators Now?Global leader in marine insuranceDiversification strategy is on targetExperienced management teamIntellectual capital / specialty expertiseCommitment to underwriting profitProven track recordOperating from a strong and leveragable platform22
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NavigatorsInsuring a World in Motion