Stanley A. Galanski, President & Chief Executive Officer

The Navigators Group, Inc.Insuring a World in Motion

Cochran, Coronia & Co. Investor MeetingsJune 22, 2004New York CityStanley A. Galanski, President & Chief Executive OfficerPaul J. Malvasio, Executive Vice President & Chief Financial Officer

This presentation may contain forward looking statements as defined in the Private Securities Litigation Act of 1995. 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 Form 10-Q and Form 10-K 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.

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 debt

Deep, Experienced Underwriting TeamSenior underwriting management team has an average of approximately 29 years in the industry and 13 years at NAVG.

Executive

Position

Years in Industry

Terence N. Deeks

Chairman

46

Stanley A. Galanski

President and CEO

23

David E. Hope

President ( Navigators Marine & Energy

22

Michael L. Civisca

SVP Navigators U.S. Marine & Energy

22

Colin T. Dingley

Active Underwriter, Syndicate 1221

30

Noel Higgitt

President ( Navigators Specialty

47

Christopher C. Duca

President ( Navigators Pro

12

Growth and Portfolio DiversificationGross Premium Written by Segment($s in millions) 6%

21%

47%

26%$1967%

18%

44%

31%$1759%

22%

37%

32%5%

26%

29%

40%$607$448

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 2003 and 2004Renewal rate increases averaged 4% in first quarter 2004, 13% in 2003, and 21% in 2002Every regional office produced an underwriting profit in 2003 (excluding asbestos reserve strengthening) First quarter 2004 combined ratio of 86.4%30% of 2003 Year NWP 26% of First Quarter 2004 NWP

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

Display

Chart

115.2857142857

126

23

120

&R&8&F - &D - &T



Navigators Pro


Graph Data



Navigators Pro23


384.2857142857

Examples


Insurance$1,312.0


Health Care$953.0

Energy$653.0

Retail$576.0

Technology$432.0

Chemicals$325.0


Category 128

Category 2410

Category 3612

Category 4814

Category 51016


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


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%


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


Energy$645.0$541.0$200.0

Insurance$425.0$321.0$45.0

Retail$321.0$222.0$35.0


Insurance52%22.0%


Health Care56%25.0%

Energy55%24.0%










Broadcasting$6.5

Cable$5.5

Consumer$7.8

Film$1.7

Publishing$3.3

Theme Parks$5.5

Video / Music$3.8


CSFB$10,768.0CSFB$10,768.017%












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%


Microtest46.0x55%

Webdata40.0x41%

Utilifix36.0x39%

Kingsoft31.0x37%

Cobra24.0x28%

Samachi18.0x20%

Cascom16.0x15%

Scratch

Marine & Energy - Mix of Business 200338%12%9% 10%20%4% 7%

Marine & Energy Rate Increases

2003 U.S. Market Share($ in thousands)Note: As reported by the AIMU.

U.S. Companies

Navigators

Market Share

Cargo

$613,864

$39,826

6.5%

Bluewater

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%

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 increases averaged 4% in first quarter 2004, 15% in year 2003 and 26% in year 2002First quarter 2004 combined ratio of 84.9%

37% of 2003 Year NPW47% of First Quarter 2004 NPW

Display

Chart

142.9448698315

169.3813560149

23

120

&R&8&F - &D - &T



Navigators Pro


Graph Data


Marine & Energy (Lloyd's)169.3813560149

Navigators Pro23


455.3262258464

Examples


Insurance$1,312.0


Health Care$953.0

Energy$653.0

Retail$576.0

Technology$432.0

Chemicals$325.0


Category 128

Category 2410

Category 3612

Category 4814

Category 51016


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


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%


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


Energy$645.0$541.0$200.0

Insurance$425.0$321.0$45.0

Retail$321.0$222.0$35.0


Insurance52%22.0%


Health Care56%25.0%

Energy55%24.0%










Broadcasting$6.5

Cable$5.5

Consumer$7.8

Film$1.7

Publishing$3.3

Theme Parks$5.5

Video / Music$3.8


CSFB$10,768.0CSFB$10,768.017%












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%


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



Navigators Pro


Graph Data



Navigators Pro23


533.4792347603

Examples


Insurance$1,312.0


Health Care$953.0

Energy$653.0

Retail$576.0

Technology$432.0

Chemicals$325.0


Category 128

Category 2410

Category 3612

Category 4814

Category 51016


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


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%


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


Energy$645.0$541.0$200.0

Insurance$425.0$321.0$45.0

Retail$321.0$222.0$35.0


Insurance52%22.0%


Health Care56%25.0%

Energy55%24.0%










Broadcasting$6.5

Cable$5.5

Consumer$7.8

Film$1.7

Publishing$3.3

Theme Parks$5.5

Video / Music$3.8


CSFB$10,768.0CSFB$10,768.017%












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%


Microtest46.0x55%

Webdata40.0x41%

Utilifix36.0x39%

Kingsoft31.0x37%

Cobra24.0x28%

Samachi18.0x20%

Cascom16.0x15%

Scratch

2003 Lloyds Market Share( in thousands)Source: Lloyds Market Association

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%

Lloyds Marine Premium Rates%Base Year = 1992

Navigators SpecialtySince 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 28% in the first quarter 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 20% of 2003 Specialty GWPMidwest branch operation since 2002 Personal umbrellaSuretyFirst quarter 2004 combined ratio of 98.8%28% of 2003 Year NWP21% of First Quarter 2004 NWP

Display

Chart

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70.7651156073

106.2114012318

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Graph Data

Marine & Energy (NAVG Agencies)178Lloyd's Marine126


Navigators Specialty106.2114012318Navigators Specialty120

Navigators Pro23

377.9765168391

Examples


Insurance$1,312.0


Health Care$953.0

Energy$653.0

Retail$576.0

Technology$432.0

Chemicals$325.0


Category 128

Category 2410

Category 3612

Category 4814

Category 51016


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


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%


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


Energy$645.0$541.0$200.0

Insurance$425.0$321.0$45.0

Retail$321.0$222.0$35.0


Insurance52%22.0%


Health Care56%25.0%

Energy55%24.0%










Broadcasting$6.5

Cable$5.5

Consumer$7.8

Film$1.7

Publishing$3.3

Theme Parks$5.5

Video / Music$3.8


CSFB$10,768.0CSFB$10,768.017%












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%


Microtest46.0x55%

Webdata40.0x41%

Utilifix36.0x39%

Kingsoft31.0x37%

Cobra24.0x28%

Samachi18.0x20%

Cascom16.0x15%

Scratch

Display

Chart

178

70.7651156073

72.6773629824

23

&R&8&F - &D - &T


Graph Data



Navigators Specialty72.6773629824Navigators Specialty120

Navigators Pro23

344.4424785898

Examples


Insurance$1,312.0


Health Care$953.0

Energy$653.0

Retail$576.0

Technology$432.0

Chemicals$325.0


Category 128

Category 2410

Category 3612

Category 4814

Category 51016


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


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%


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


Energy$645.0$541.0$200.0

Insurance$425.0$321.0$45.0

Retail$321.0$222.0$35.0


Insurance52%22.0%


Health Care56%25.0%

Energy55%24.0%










Broadcasting$6.5

Cable$5.5

Consumer$7.8

Film$1.7

Publishing$3.3

Theme Parks$5.5

Video / Music$3.8


CSFB$10,768.0CSFB$10,768.017%












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%


Microtest46.0x55%

Webdata40.0x41%

Utilifix36.0x39%

Kingsoft31.0x37%

Cobra24.0x28%

Samachi18.0x20%

Cascom16.0x15%

Scratch

Navigators SpecialtyExposure Management Strategy Dramatic Reduction in IFCIn Force Policy Counts

Navigators ProIntroduced 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 shareFirst quarter 2004 combined ratio of 80.7%

5% of 2003 Year NWP 6% of First Quarter 2004 NWP

Display

Chart

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126

120

28.9914529915

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Graph Data



Navigators Specialty120Navigators Specialty120

Navigators Pro28.9914529915

452.9914529915

Examples


Insurance$1,312.0


Health Care$953.0

Energy$653.0

Retail$576.0

Technology$432.0

Chemicals$325.0


Category 128

Category 2410

Category 3612

Category 4814

Category 51016


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


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%


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


Energy$645.0$541.0$200.0

Insurance$425.0$321.0$45.0

Retail$321.0$222.0$35.0


Insurance52%22.0%


Health Care56%25.0%

Energy55%24.0%










Broadcasting$6.5

Cable$5.5

Consumer$7.8

Film$1.7

Publishing$3.3

Theme Parks$5.5

Video / Music$3.8


CSFB$10,768.0CSFB$10,768.017%












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%


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


Graph Data



Navigators Specialty120Navigators Specialty120

Navigators Pro47.1111111111

471.1111111111

Examples


Insurance$1,312.0


Health Care$953.0

Energy$653.0

Retail$576.0

Technology$432.0

Chemicals$325.0


Category 128

Category 2410

Category 3612

Category 4814

Category 51016


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


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%


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


Energy$645.0$541.0$200.0

Insurance$425.0$321.0$45.0

Retail$321.0$222.0$35.0


Insurance52%22.0%


Health Care56%25.0%

Energy55%24.0%










Broadcasting$6.5

Cable$5.5

Consumer$7.8

Film$1.7

Publishing$3.3

Theme Parks$5.5

Video / Music$3.8


CSFB$10,768.0CSFB$10,768.017%












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%


Microtest46.0x55%

Webdata40.0x41%

Utilifix36.0x39%

Kingsoft31.0x37%

Cobra24.0x28%

Samachi18.0x20%

Cascom16.0x15%

Scratch

Navigators Pro - Premium Distribution32.714.24.7 1.4 $53 Million GWP 2003($ in millions)

Navigators Insurance CompanyHigh Quality Investment PortfolioInvested Assets: $726 millionFixed Maturities and Cash:97% of portfolioAverage AA ratingDuration of approximately 3.8 yearsAverage yield of 3.4% for 1st Quarter 2004Equity Securities: 2.8% of portfolioAt March 31, 200420.1%33.4%20.3%13.2%10.2%2.8%

Net Income and Book Value GrowthConsolidated Group Data($s in millions)*At December 31, 2003

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 platform

NavigatorsInsuring a World in Motion

Navigators Anniversary DatesT. Deeks 4/74S. Galanski 3/01D. Hope 3/02M. Civisca 7/87C. Dingley 10/86N. Higgitt 2/90 or (1998 - acquired Anfield)C. Duca 9/01Navigators Anniversary DatesT. Deeks 4/74S. Galanski 3/01D. Hope 3/02M. Civisca 7/87C. Dingley 10/86N. Higgitt 2/90 or (1998 - acquired Anfield)C. Duca 9/01

Stanley A. Galanski, President & Chief Executive Officer

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Transcript of Stanley A. Galanski, President & Chief Executive Officer