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                                                       EXHIBIT  10-7

                                                       July 30, 1996

Mr. Michael J. Abdallah
48 Ince Road
Burwood Park
Walton on Thames
Surrey KT 125BJ
England

Dear Mike:

This letter confirms our agreement to the terms and conditions applying to your
employment as President of the Somerset Companies.

I.   RESPONSIBILITY

  You will have the responsibility for the Group's worldwide Marine, Aviation,
  Offshore and Onshore Energy and related activities, which currently account
  for approximately eighty percent of our existing insurance and reinsurance
  business.  You will be expected to report directly to me.  You will also be
  responsible for our London and International operations, as well as having
  joint responsibility (as part of the Senior Management Team) for managing
  outwards reinsurance for the Group.

II.  COMPENSATION AND BENEFITS

  A. Your base salary will be $250,000 per annum.

  B.   As a member of the executive committee, you will participate in our
       executive incentive bonus program, based upon an earnings formula, where
       you can earn up to a further one hundred percent of your base salary.

       Insofar as we are halfway through the year, we have agreed we will pay
       you a flat $125,000 bonus for 1996 and then for future years you will be
       on the same formula basis as the rest of the staff.  These bonuses are
       generally paid in March, once the results are finalized.

  C.   To compensate you for the loss of bonus from CIGNA, which you have
       told me was $55,000 after tax last year, we will pay you a one time sum
       of $80,000.

  D.   You will receive twenty working days vacation each year.

III. MONEY PURCHASE PLAN

  You will participate in the Company's Money Purchase Plan which is invested
  on a tax deferred basis for you.  Please refer to the Employee Manual for
  more details on how the plan works and for the many other benefits provided
  by the Company.

  In addition, in the event of your termination prior to your being fully
  vested, we will pay you a bonus equivalent to the difference between the
  amount vested and the fully vested amount at that point in time.

IV.  STOCK OPTIONS

  The company has an stock option program and as an incentive to you, you will
  be granted 50,000 options, or warrants, on Navigators' stock.  Depending on
  your performance, and the company's results, you can expect to receive
  further options as circumstances permit.

  As a general rule, these "options" have been granted at a price approximately
  10% below the market price at the time of the grant.



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V.   MOVING EXPENSES

  A.   The Company will provide you and your family with business class
       airfare and reimburse your travel expenses for your relocation to the
       United States.  It is understood that, insofar as for the first few
       months you wish to rent a house before deciding to purchase one, we will
       likely be picking up moving costs twice.  For a period of up to two
       months, while you search for your rental accommodation, we will
       reimburse you for reasonable temporary hotel accommodation.

       When you decide to purchase your first house, we will reimburse you for
       the reasonable closing costs and lawyers fees.

  B.   The Company will pay for packing and shipping your household and
       personal effects, furniture and furnishings to the United States.

  C.   To help you and your family assimilate into a new community and
       culture, until the end of 1998, the Company will assist you with the
       expenses of domestic help.

VI.  EMERGENCY HOME LEAVE

   In the event of a death or serious illness of a member of your or your
   spouse's immediate family, or other personal emergency requiring your and
   your spouse's presence in Sydney, Australia, emergency leave and
   transportation expenses will be provided.

VII. TAX RETURN PREPARATION

  The Company's accounting firm will assist you in the preparation and filing
  of your United States, U.K., and Australian income tax returns.  The fees for
  this service will be paid by the Company.

VIII. TERMINATION

  Your employment will be continuous subject to six months prior written notice
  by either party of termination, except for reasons of sexual harassment or
  suspected dishonesty. We further both agree, except for the aforementioned
  reasons, that no notice will be given prior to January 1, 1999, unless, you
  decide to leave the company, against our wishes but for your own family
  reasons.  If this occurs before January 1, 1999, we will pay you three months
  salary to help you get relocated back to Sydney, Australia.

IX.  RELOCATION COSTS

  In the event of termination of your employment, either at your own, or the
  Company's initiative, the Company will pay for moving you, your family, and
  your household goods back to Sydney, Australia subject to a maximum of
  $50,000.  These expenses will be paid providing that you return to your home
  Country within 30 days of termination and do not accept other employment in
  the insurance business within a six month period.


If you find these terms satisfactory, would you please sign and return a Copy
of this letter to me, retaining the Original for your own records.


Sincerely,


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President, Somerset Marine, Inc.                        Date



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Michael J. Abdallah                                     Date