NAVG Q3 2018 10-Q

Navigators Group Inc (NAVG) SEC Annual Report (10-K) for 2018

NAVG Q3 2018 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _____.

Commission File number 0-15886

The Navigators Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware

13-3138397

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

400 Atlantic Street, Stamford, Connecticut

06901

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code:  (203) 905-6090

Securities registered pursuant to section 12(b) of the Act:

Title of each class:

Name of each exchange on which registered:

Common Stock, $.10 Par Value

The NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ☒     No   ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes   ☐     No   ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ☒     No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   ☒     No   ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definition of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act

Large accelerated filer

Non-accelerated filer

Accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐     No   ☒

The aggregate market value of voting stock held by non-affiliates as of June 30, 2018 was $1,320,453,310 (Last business day of The Company's most recently completed second fiscal quarter).

The number of common shares outstanding as of February 21, 2019 was 29,818,468 (Last practical business day for the count of shares outstanding).

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company's definitive Proxy Statement in connection with its 2019 Annual Meeting of Stockholders, to be filed within 120 days of the end of the fiscal year ended December 31, 2018 with the Securities and Exchange Commission, are incorporated by reference in Part III hereof.

TABLE OF CONTENTS

Description  

Page

Number

Note on Forward-Looking Statements

3

PART I

3

Item 1.

Business

3

Overview

3

Segment Information

3

Products and Distribution

4

Competitive Environment

7

Employees

7

Loss Reserves

7

Investments

10

Regulation

10

Available Information

12

Item 1A.

Risk Factors

12

Item 1B.

Unresolved Staff Comments

23

Item 2.

Properties

23

Item 3.

Legal Proceedings

24

Item 4.

Mine Safety Disclosures

25

PART II

25

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

25

Item 6.

Selected Financial Data

27

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

28

U.S. GAAP and Non GAAP Financial Performance Metrics

28

Overview

29

Results of Operations

31

Segment Results

36

U.S. Insurance

38

Int'l Insurance

44

GlobalRe

51

Capital Resources and Liquidity

55

Investments

58

Reserves for Losses and LAE for Loss Events

62

Reinsurance Recoverables

65

Critical Accounting Estimates

66

Recent Accounting Pronouncements

70

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

70

Item 8.

Financial Statements and Supplementary Data

72

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

72

Item 9A.

Controls and Procedures

72

Item 9B.

Other Information

75

PART III

75

Item 10.

Directors, Executive Officers and Corporate Governance

75

Item 11.

Executive Compensation

75

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

75

Item 13.

Certain Relationships and Related Transactions, and Director Independence

75

Item 14.

Principal Accountant Fees and Services

75

PART IV

76

Item 15.

Exhibits and Financial Statement Schedules

76

Item 16.

Form 10-K Summary

77

Signatures

78

Index to Consolidated Financial Statements and Schedules

F-1

2