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Navigators Group Tops on Q3 Earnings - Analyst Blog

By: Zacks.com
Posted: 11/12/2013 10:40:00 AM
Referenced Stocks: AHL;AWH;NAVG;PTP

Navigators Group Inc. ( NAVG ) reported third-quarter 2013 operating net income of $1.60 per share, substantially outpacing the Zacks Consensus Estimate of 76 cents. The results also surged from the prior-year quarter number of 69 cents per share.

Bottom-line growth reflects improved combined ratio and was fueled by strong underwriting performances in Navigators Group's global energy, global marine and U.S. excess and surplus lines units. Strong premium growth as well as lower expenses during the reported quarter  aided the solid quarterly earnings.

Including $2.8 million of net realized losses, Navigators Group reported net income of $1.48 per share for the third quarter, scaling up 64.4% year over year.

Quarterly Operational Update

Total revenues of Navigators Group increased 2.1% year over year to nearly $225 million in the third quarter of 2013. This was driven by improvement in higher net earned premiums (up 6.3% year over year) as well as net investment income (up 3.7% year over year). Total revenues however, missed the Zacks Consensus Estimate by 5.1%.

Net written premiums of Navigators Group increased 4.5% year over year to $196.5 million.

Navigators Group's continued focus on controlling operating expenses helped it trim total expenses by 4.1% during the third quarter. Total expenses slid to nearly $193.9 million in the quarter.

In the reported quarter, underwriting profit for Navigators Group surged to $21.8 million compared to $1.8 million in the prior-year period. The combined ratio improved 930 basis points (bps) year over year to 89.8%.

Segment Update

The Insurance Companies generated net written premiums of $149.3 million, up 5% year over year.

Underwriting profit came in at nearly $20 million, rebounding from an underwriting loss of $13.2 million in the prior-year period. Combined ratio significantly improved 2120 bps year over year to 87.7%.

The Lloyd's Operations' net written premiums in the segment were $47.3 million, up approximately 3% year over year.

Underwriting profit of $1.8 million plunged 87.9% year over year. The decline primarily came on the back of higher net losses and loss adjustment expenses. Combined ratio deteriorated 2530 bps to 96.5%.

Financial Position

Navigators Group exited the reported quarter with cash and investments of $2.42 billion, almost in line with the 2012-end level.

Net cash flows from operating activities stood at $81.5 million, surging 50.6% from the prior-year quarter results.

As of Sep 30, 2013, total assets of Navigators Group were $4.07 billion, up 1.7% from the end of 2012.

Total stockholders' equity of $899.9 million as of Sep 30, 2013 increased 2.3% from $879.5 million at 2012 end.

Performances of Other Property and Casualty Insurers

Allied World Assurance Company Holdings, AG ( AWH ) reported its third-quarter 2013 operating net income of $2.93 per share, surpassing the Zacks Consensus Estimate by 37.5% and the prior-year figure by 35.6%.

Platinum Underwriters Holdings Ltd. ( PTP ) reported its third-quarter 2013 net earnings of $1.32 per share, which beat the Zacks Consensus Estimate of $1.00. However, the results declined a whopping 48% from the year-ago quarter number.

Aspen Insurance Holdings Ltd. ( AHL ) reported third-quarter 2013 operating net income of $1.05 per share, which substantially surpassed the Zacks Consensus Estimate by 31.2%. However, the results lagged the year-ago quarter number by 21.6%.

Zacks Rank

Navigators Group presently carries a Zacks Rank #1 (Strong Buy).



ASPEN INS HLDGS (AHL): Free Stock Analysis Report

ALLIED WORLD AS (AWH): Free Stock Analysis Report

NAVIGATORS GRP (NAVG): Free Stock Analysis Report

PLATINUM UNDRWT (PTP): Free Stock Analysis Report

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