A.M. Best Assigns Rating to The Navigators Group, Inc. Senior Notes.

OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "bbb" to $125 million of 10-year 7.00% senior unsecured notes issued by The Navigators Group, Inc. (Navigators) (NASDAQ: NAVG). The rating outlook is stable.

A.M. Best expects Navigators to utilize the net proceeds from this offering for a $100 million capital contribution to Navigators Insurance Company and to retain the remaining amount at the holding company. Consequently, the group's financial leverage is expected to be approximately 21%. Moreover, Navigators' 2006 interest coverage is projected to be well within A.M. Best's guidelines for the current rating.

The rating recognizes the group's leading position as a global provider of insurance to the marine and energy sector; the anticipated benefits to be derived from the hardening market conditions within the marine and energy field; management's conservative approach to underwriting and claims management; and the group's solid level of capitalization.

These positive factors are somewhat offset by the group's rapid growth in relatively new lines of business in recent years and the tempered concern regarding overall loss reserve adequacy on these new lines. The financial flexibility afforded through the holding company parent is sufficient to offset these concerns. The additional capital to be provided is expected to support the group's planned expansion of existing lines of business during what is anticipated to be further hardening of rates, terms and conditions in their primary markets.

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.