A.M. Best Upgrades Issuer Credit and Debt Ratings for the Members of The Navigators Group, Inc

Business Wire, Jan 2, 2007

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and upgraded the issuer credit ratings (ICR) to "a " from "a" for Navigators Insurance Group (Navigators), which is comprised of Navigators Insurance Company and its wholly-owned subsidiary, NIC Insurance Company. A.M. Best has also upgraded the ICR to "bbb " from "bbb" for The Navigators Group, Inc. (Navigators) [NASDAQ: NAVG]. Concurrently, A.M. Best has upgraded the debt ratings to "bbb " from "bbb" on Navigators' $125 million of 7% senior unsecured notes, due 2016; to "bbb-" from "bb " on preferred securities; to "bbb" from "bbb-" on subordinated notes; and to "bbb " from "bbb" on senior unsecured notes under the shelf registration. All companies are domiciled in New York, NY. The outlook for all ratings is stable.

The ratings recognize Navigators' leading position as a global provider of insurance to the marine energy sector, its solid level of capitalization, management's conservative approach to underwriting and claims management and its improving level of profitability.

These positive rating factors are somewhat offset by the group's rapid growth in relatively new lines of business in recent years and its somewhat elevated dependence on reinsurance. Nevertheless, the financial flexibility and explicit support of the holding company is sufficient to offset these concerns. The financial leverage of the parent organization is a conservative 19% of debt-to-total tangible capital, with coverage ratios far exceeding A.M. Best's requirements for the current rating levels. The rating outlook anticipates continued strong earnings performance and strong capitalization.

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.