Amid storm losses, Nav­i­ga­tors posts profit

Stamford Advocate - - Business - By Paul Schott

Stam­ford-based in­surer The Nav­i­ga­tors Group, which agreed ear­lier this year to an ac­qui­si­tion by in­sur­ance gi­ant Hart­ford Fi­nan­cial Ser­vices, posted a quar­terly profit de­spite storm losses, the com­pany re­ported this week.

The $4.6 mil­lion bot­tom line for the third quar­ter fac­tored in net losses and loss-re­lated ex­penses of $11.8 mil­lion from Hur­ri­cane Florence and Typhoon Jebi, which struck Ja­pan in Septem­ber. It also took into ac­count a re­serve “strength­en­ing” of $16.5 mil­lion, mainly within the pri­mary ca­su­alty divi­sion of the U.S. in­sur­ance busi­ness.

In com­par­i­son, the com­pany in­curred in the same pe­riod last year losses and loss-re­lated ex­penses of about $75 mil­lion from Hur­ri­canes Har­vey, Irma and Maria and the Puebla, Mex­ico, earth­quake.

“In a quar­ter in which the in­sur­ance in­dus­try ex­pe­ri­enced sig­nif­i­cant nat­u­ral catas­tro­phe ac­tiv­ity, our nat­u­ral catas­tro­phe loss es­ti­mates were well within our ex­pec­ta­tions,” Nav­i­ga­tors CEO and Pres­i­dent Stan­ley Galan­ski said in a state­ment.

Nav­i­ga­tors recorded a

“com­bined ra­tio” of 99 per­cent for the first nine months of the year, com­pared with about 106 per­cent a year ago. The ra­tio mea­sures the per­cent­age of pre­mi­ums used to cover losses and un­der­writ­ing ex­penses. Any ra­tio less than 100 re­flects an un­der­writ­ing profit.

Third-quar­ter rev­enues reached ap­prox­i­mately $377 mil­lion, up about 15 per­cent from a year ago.

“We ben­e­fited from mod­est rate in­creases across the ma­jor­ity of our spe­cialty prod­uct lines,” Galan­ski said. “The on­go­ing strength of the U.S. econ­omy, and par­tic­u­larly the con­struc­tion seg­ment, also ben­e­fited us, pro­vid­ing a strong growth of new busi­ness.”

In Au­gust, Nav­i­ga­tors an­nounced that it would be ac­quired by The Hart­ford for $2.1 bil­lion.

A 30-day “go-shop” pe­riod fol­lowed, dur­ing which Nav­i­ga­tors so­licited 44 po­ten­tial ac­quir­ers. The com­pany did not re­ceive any al­ter­na­tive of­fers in that win­dow.

The ac­qui­si­tion is set to close in the first half of 2019.

In its largest deal closed this year, Nav­i­ga­tors an­nounced in early June it had ac­quired for about $41 mil­lion the An­twerp, Bel­gium-based spe­cialty un­der­writer Bracht, Deck­ers & Mack­el­bert NV and its af­fil­i­ated in­sur­ance com­pany, ASCO.

Nav­i­ga­tors’ An­twerp of­fice is now its largest in Eu­rope, with other cen­ters in Madrid, Mi­lan, Paris and Rot­ter­dam.

Getty Im­ages

Ve­hi­cles piled in a heap due to strong winds in Kobe, Ja­pan, on Sept. 5 af­ter Typhoon Jebi hit the west coast of Ja­pan. Stam­ford-based in­surer Nav­i­ga­tors in­curred third-quar­ter net losses and loss-re­lated ex­penses of $11.8 mil­lion from Hur­ri­cane Florence and Typhoon Jebi, but still re­ported a profit for the quar­ter.

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