FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                   Quarterly Report Under Section 13 or 15 (d)

                     of the Securities Exchange Act of 1934

For the Quarterly Period Ended      March 31, 2000
                               -------------------

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                      (IRS Employer
   incorporation or organization)                        Identification No.)


      123 William Street,  New York,  New York                     10038
------------------------------------------------------------------------
        (Address of principal executive offices)                 (Zip Code)

                                 (212) 349-1600

              (Registrant's telephone number, including area code)


              (Former name, former address and former fiscal year,
                         if changed since last report.)

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          X                No
       -------------

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of the latest practicable date.

On May 8, 2000 there were  8,414,356  shares of common  stock,  $0.10 par value,
issued and outstanding.



                                       1
<PAGE>







                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

                                      INDEX

                                                                        Page No.

Part I.  FINANCIAL INFORMATION:

      Consolidated Balance Sheets

              March 31, 2000 and December 31, 1999 .....................    3

      Consolidated Statements of Income

              Three Months Ended March 31, 2000 and 1999 ...............    4

      Consolidated Statements of Cash Flows

              Three Months Ended March 31, 2000 and 1999 ...............    5

      Notes to Interim Consolidated Financial Statements................    6

      Management's Discussion and Analysis of Financial

              Condition and Results of Operations ......................   10

Part II.  OTHER INFORMATION ............................................   15


                                       2
<PAGE>





                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                        (In thousands, except share data)

<TABLE>
                                                                                             March 31,      December 31,
                                                                                               2000             1999
                                                                                               ----             ----
                                                                                            (Unaudited)

                                     ASSETS
<S>                                                                                           <C>               <C>
Investments and cash:
  Fixed maturities, available-for-sale, at fair value
    (amortized cost: 2000, $226,593; 1999, $227,875)....................................       $221,872          $222,555
  Equity securities, available-for-sale, at fair value (cost: 2000, $11,012;
    1999, $11,105)......................................................................         11,557            11,840
  Short-term investments, at cost which approximates fair value.........................          4,174             6,747
  Cash..................................................................................          7,224             5,546
                                                                                                -------           -------
       Total investments and cash.......................................................        244,827           246,688
                                                                                                -------           -------

Premiums in course of collection........................................................         98,861            90,857
Accrued investment income...............................................................          3,249             3,250
Prepaid reinsurance premiums............................................................         32,003            24,765
Reinsurance receivable on paid and unpaid losses and loss adjustment expenses...........        221,705           229,111
Federal income tax recoverable..........................................................          1,596             2,016
Net deferred Federal and foreign income tax benefit.....................................         13,148            13,227
Deferred policy acquisition costs.......................................................          9,276             5,878
Goodwill ...............................................................................          5,683             5,805
Other assets............................................................................          7,349             9,727
                                                                                                -------           -------

         Total assets...................................................................       $637,697          $631,324
                                                                                                =======           =======

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Reserves for losses and loss adjustment expenses......................................       $379,276          $391,094
  Unearned premium......................................................................         67,846            55,003
  Reinsurance balances payable..........................................................         26,024            24,799
  Notes payable to banks................................................................         24,000            24,000
  Deferred state and local income tax...................................................            269               374
  Accounts payable and other liabilities................................................          8,153             5,689
                                                                                                -------           -------
         Total liabilities..............................................................        505,568           500,959
                                                                                                -------           -------

Stockholders' equity:
  Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued.............           --               --
  Common stock, $.10 par value, authorized 10,000,000 shares, issued
    and outstanding : 8,414,356 in 2000 and 8,406,970 in 1999...........................            846               846
  Additional paid-in capital............................................................         39,413            39,447
  Treasury stock, held at cost (shares: 41,314 in 2000 and 48,700 in 1999)..............           (594)             (700)
  Accumulated other comprehensive (loss)................................................         (2,570)           (2,918)
  Retained earnings.....................................................................         95,034            93,690
                                                                                                -------           -------
         Total stockholders' equity.....................................................        132,129           130,365
                                                                                                -------           -------

         Total liabilities and stockholders' equity.....................................       $637,697          $631,324
                                                                                                =======           =======

                                 See accompanying notes to interim consolidated financial statements.
</TABLE>




                                       3
<PAGE>





                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                   (In thousands, except net income per share)

<TABLE>
                                                                                        Three Months Ended

                                                                                           March 31,

                                                                                    2000                1999
                                                                                    ----                ----
                                                                                           (Unaudited)
        <S>                                                                        <C>                  <C>
         Revenues:
           Net earned premium..........................................            $19,572              $16,934
           Commission income............................................               516                  163
           Net investment income........................................             4,350                4,269
           Net realized capital gains (losses)..........................               (94)                 287
           Other income................................................                 51                   67
                                                                                    ------               ------
         Total revenues.................................................            24,395               21,720
                                                                                    ------               ------

         Operating expenses:
           Net losses and loss adjustment expenses incurred.............            12,100                9,999
           Commission expense...........................................             3,833                3,288
           Other operating expenses.....................................             6,217                5,163
           Interest expense.............................................               429                  344
                                                                                   -------               ------
         Total operating expenses.......................................            22,579               18,794
                                                                                    ------               ------

         Income before income tax expense...............................             1,816                2,926
                                                                                   -------               ------

         Income tax expense (benefit):
             Current....................................................               660                  996
             Deferred...................................................              (188)                (177)
                                                                                   -------               -------
         Total income tax expense.......................................               472                  819
                                                                                   -------               ------

         Net income.....................................................           $ 1,344              $ 2,107
                                                                                    ======               ======


         Net income per common share:

           Basic........................................................             $0.16                $0.25
           Diluted......................................................             $0.16                $0.25

         Average common shares outstanding:

           Basic........................................................             8,412                8,450
           Diluted......................................................             8,412                8,450


                                      See accompanying notes to interim consolidated financial statements.
</TABLE>



                                       4
<PAGE>





                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (In thousands)

<TABLE>
                                                                                              Three Months Ended

                                                                                                   March  31,

                                                                                            2000                 1999
                                                                                            ----                 ----
                                                                                                   (Unaudited)
<S>                                                                                     <C>                 <C>
Operating activities:
      Net income.................................................................       $   1,344           $   2,107
      Adjustments to reconcile net income to net
       cash provided by (used in) operating activities:
      Depreciation & amortization................................................             324                 237
      Reinsurance receivable on paid and unpaid
       losses and loss adjustment expenses.......................................           7,406              (8,136)
      Reserve for losses and loss adjustment expenses...........................          (11,818)              8,024
      Prepaid reinsurance premiums...............................................          (7,238)             (2,905)
      Unearned premium...........................................................          12,843               5,038
      Premiums in course of collection...........................................          (8,004)             (6,237)
      Commissions receivable.....................................................           3,218               2,942
      Deferred policy acquisition costs..........................................          (3,398)               (106)
      Accrued investment income..................................................               1                 107
      Reinsurance balances payable...............................................           1,225                (401)
      Federal and foreign income tax.............................................             420               1,060
      Net deferred Federal and foreign income tax................................             (81)                  1
      Net realized capital (gains) losses........................................              94                (287)
      Other......................................................................           2,652                 342
                                                                                           ------             -------
        Net cash provided by (used in) operating activities......................          (1,012)              1,786
                                                                                           ------              ------
 Investing activities:
    Fixed maturities, available-for-sale
      Redemptions and maturities.................................................           4,501               8,595
      Sales......................................................................          10,603              11,038
      Purchases..................................................................         (13,860)            (12,360)
    Equity securities, available-for-sale
      Sales......................................................................           1,178                 495
      Purchases..................................................................          (1,194)               (491)
    Payable for securities purchased.............................................             -                (2,158)
    Net sales (purchases) of short-term investments..............................           2,573              (2,978)
    Purchase of property and equipment...........................................          (1,111)               (217)
                                                                                           ------            --------
      Net cash provided by investing activities..................................           2,690               1,924
                                                                                          -------            --------
Financing activities:
    Stock repurchase program......................................................             -                 (382)
    Proceeds from exercise of stock options......................................             -                    44
                                                                                          -------            --------
      Net cash (used in) financing activities....................................             -                  (338)
                                                                                          -------            --------

Increase in cash.................................................................           1,678               3,372
Cash at beginning of year........................................................           5,546               2,807
                                                                                            -----             -------
Cash at end of period...........................................................        $   7,224            $  6,179
                                                                                         ========             =======

Supplemental disclosures of cash flow information:

    Issuance of Stock to Directors...............................................       $      72            $     72
    Federal income tax paid......................................................              23                  -
    Interest paid................................................................              30                  -

                                 See accompanying notes to interim  consolidated financial statements.
</TABLE>

                                       5
<PAGE>







                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

               Notes to Interim Consolidated Financial Statements

                                   (Unaudited)

(1)   Accounting Policies

     The interim consolidated financial statements are unaudited but reflect all
     adjustments which, in the opinion of management, are necessary to provide a
     fair  statement  of the  results  of The  Navigators  Group,  Inc.  and its
     subsidiaries  (the "Company") for the interim periods  presented.  All such
     adjustments are of a normal recurring nature. The results of operations for
     any interim period are not  necessarily  indicative of results for the full
     year.  These financial  statements  should be read in conjunction  with the
     financial  statements  and notes hereto  contained in the Company's  Annual
     Report on Form 10-K for the year ended December 31, 1999.  Certain  amounts
     for prior years have been  reclassified  to conform to the  current  year's
     presentation.

(2)   Reinsurance Ceded

      The Company's ceded earned  premiums were  $19,097,000 and $18,700,000 and
      ceded losses were  $17,158,000  and $20,435,000 for the three months ended
      March 31, 2000 and 1999, respectively.

(3)   Segments of an Enterprise

      The  Company's  subsidiaries  are  primarily  engaged in the  writing  and
      management  of property and casualty  insurance.  The  Company's  segments
      include the Insurance  Companies,  the Somerset  Companies and the Lloyd's
      operations,  each of which is managed separately.  The Insurance Companies
      consist of Navigators  Insurance Company and NIC Insurance Company and are
      primarily  engaged in underwriting  marine  insurance and related lines of
      business,  and a  contractors'  general  liability  program.  The Somerset
      Companies are underwriting  management companies which produce, manage and
      underwrite   insurance   and   reinsurance   for   both   affiliated   and
      non-affiliated companies. The Lloyd's operations include a Lloyd's agency
      which  underwrites  marine and  related  lines of  business  at Lloyd's of
      London  for two  wholly  owned  Lloyd's  corporate  members  with  limited
      liability.  All segments are evaluated based on their GAAP underwriting or
      operating results.

      The results of the  Insurance  Companies  and the Lloyd's  operations
      include net premiums earned, incurred losses and loss expenses, commission
      expense and other underwriting  expenses.  The Somerset Companies' results
      include commission income less other operating expenses. Each segment also
      maintains  their own  investments,  on which they earn  income and realize
      capital gains or losses.  Other operations include intersegment income and
      expense  in the form of  affiliated  commissions,  as well as  income  and
      expense from corporate operations.



                                       6
<PAGE>





The  following  tables  present  financial  data  by  segment  for  the  periods
indicated:

<TABLE>

                                                                             Three Months Ended

                                                                                    March 31,

                                                                             2000              1999
                                                                             ----              ----
                                                                                 (In thousands)
<S>                                                                         <C>               <C>
Revenue, excluding net investment income and realized gains on investments:
Insurance Companies....................................................     $11,751           $10,615
Somerset Companies.....................................................       2,436             1,855
Lloyd's operations.....................................................       7,857             6,510
Other operations (includes corporate activity and
   consolidating adjustments)..........................................      (1,905)           (1,816)
                                                                             ------            ------
   Total...............................................................     $20,139           $17,164
                                                                             ======            ======

Income (loss) before income tax expense (benefit):
Insurance Companies....................................................     $ 4,675           $ 4,722
Somerset Companies.....................................................      (1,457)           (1,703)
Lloyd's operations.....................................................        (457)              190
Other operations.......................................................        (945)             (283)
                                                                             ------            ------
   Total...............................................................     $ 1,816           $ 2,926
                                                                             ======            ======

Income tax expense (benefit):
Insurance Companies....................................................     $ 1,281           $ 1,372
Somerset Companies.....................................................        (491)             (570)
Lloyd's operations.....................................................          -                 (3)
Other operations.......................................................        (318)               20
                                                                             ------            ------
   Total...............................................................     $   472           $   819
                                                                             ======            ======

Net income (loss):
Insurance Companies....................................................     $ 3,394           $ 3,350
Somerset Companies.....................................................        (966)           (1,133)
Lloyd's operations.....................................................        (457)              193
Other operations.......................................................        (627)             (303)
                                                                             ------            ------
   Total...............................................................     $ 1,344           $ 2,107
                                                                             ======            ======

</TABLE>

(4)   Comprehensive Income

      Comprehensive  income  encompasses  all  changes in  shareholders'  equity
      (except  those  arising  from  transactions  with owners) and includes net
      income,  net  unrealized  capital  gains or losses on  available  for sale
      securities and foreign currency translation adjustments.


                                       7
<PAGE>

  The following table summarizes comprehensive income:
<TABLE>

                                                                                    Three Months Ended
                                                                                         March 31,

                                                                                     2000            1999
                                                                                     ----            ----
                                                                                        (In thousands)

      <S>                                                                          <C>              <C>
      Net income..............................................................     $1,344           $2,107
                                                                                    -----            -----
      Other comprehensive income, net of tax:
        Net unrealized gains (losses) on securities available for sale:
            Unrealized holding gain (loss) arising during period
              (net of income tax expense (benefit) of $176 for 2000 and
              $(865) for 1999) ...............................................        327           (1,607)
        Reclassification adjustment for gains (losses) included in
              net income (net of tax expense (benefit) of $(33)
              for 2000 and $80 for 1999)......................................        (61)             149
                                                                                    -----          -------
        Net unrealized gain (loss) on securities..............................        266           (1,458)
        Foreign currency translation gain (loss) adjustment, net of tax
              expense (benefit) of $44 for 2000 and $(108) for 1999...........         82             (201)
                                                                                    -----          -------
                    Other comprehensive income (loss).........................        348           (1,659)

                         Comprehensive income.................................     $1,692         $    448
                                                                                    =====          =======
</TABLE>


      The  following  table  summarizes  the  components  of  accumulated  other
comprehensive income (loss):
<TABLE>

                                                                                  March 31,       December 31,
                                                                                    2000               1999
                                                                                  -----------     -----------
                                                                                        (In thousands)

<S>                                                                               <C>                  <C>
      Net unrealized (losses) on securities available-for-sale
         (net of tax (benefit) of $(1,461) in 2000 and
         $(1,605) in 1999)....................................................    $(2,714)             $(2,980)
      Foreign currency translation adjustment (net of tax expense
         (benefit) of $78 in 2000 and $34 in 1999)............................        144                   62
                                                                                   ------               ------

             Accumulated other comprehensive (loss)...........................    $(2,570)             $(2,918)
                                                                                   ======               ======
</TABLE>


(5)   Future Application of Accounting Standards

      The  Financial   Accounting   Standards  Board's  Statement  of  Financial
      Accounting   Standards   ("SFAS")  No.  133,   Accounting  for  Derivative
      Instruments  and  Hedging   Activities,   was  issued  in  June  1998  and
      establishes accounting and reporting standards for derivative instruments,
      including  certain  derivative  instruments  embedded in other  contracts,
      (collectively  referred to as derivatives) and for hedging activities.  It
      requires  that an entity  recognize  all  derivatives  as either assets or
      liabilities  in the  statement  of financial  position  and measure  those
      instruments at fair value. This statement,  as amended by SFAS No. 137, is
      effective for all fiscal quarters of fiscal years beginning after June 15,
      2000.  Earlier  application is encouraged,  but it is permitted only as of
      the  beginning of any fiscal  quarter  that begins after  issuance of this
      statement.  SFAS No. 133 should not be applied  retroactively to financial
      statements  of  prior  periods.  The  adoption  of this  statement  is not
      expected to have a material effect on the Company's  results of operations
      or financial condition.

                                       8
<PAGE>

(6)   Lloyd's Participation

      The  Company  has  direct  and  indirect  control  over  75.6% of  Lloyd's
      Syndicate  1221's  capacity  for the 2000  underwriting  year.  Since  the
      controlled  capacity exceeds 75%, Lloyd's Mandatory Byelaw (No. 5 of 1999)
      requires  the  Company  to  make  a  mandatory   offer  to   noncontrolled
      participants  for  their  capacity.  The  offer  will  take the form of an
      Announced  Auction Offer to be made at the first Lloyd's  capacity auction
      in July 2000.



                                       9
<PAGE>





                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Management's Discussion and Analysis of

Financial Condition and Results of Operations

General

     The  accompanying  consolidated  financial  statements  consisting  of  the
accounts of The Navigators  Group,  Inc., a Delaware  holding  company,  and its
sixteen  wholly  owned  subsidiaries,  are  prepared  on the basis of  generally
accepted accounting principles ("GAAP").  Unless the context otherwise requires,
the term  "Company"  as used herein  means The  Navigators  Group,  Inc. and its
subsidiaries.   All  significant  intercompany  transactions  and  balances  are
eliminated.

     The Company's two insurance  subsidiaries are Navigators  Insurance Company
("Navigators Insurance"),  which includes a United Kingdom Branch ("UK Branch"),
and NIC Insurance Company ("NIC"). Navigators Insurance is the Company's largest
insurance subsidiary and has been active since 1983. It specializes  principally
in  underwriting   marine   insurance  and  related  lines  of  business  and  a
contractors'  general  liability  program.  NIC, a wholly  owned  subsidiary  of
Navigators  Insurance,  began operations in 1990. It underwrites a small book of
surplus  lines  insurance  in certain  states and cedes 100% of its gross direct
writings from this business to Navigators  Insurance.  Navigators  Insurance and
NIC are collectively referred to herein as the "Insurance Companies".

     Five of the  Company's  subsidiaries  are  marine  underwriting  management
companies:  Somerset Marine,  Inc.,  Somerset Insurance Services of Texas, Inc.,
Somerset Insurance Services of California,  Inc., Somerset Insurance Services of
Washington, Inc. and Somerset Marine (UK) Limited ("Somerset UK") (collectively,
the "Somerset Companies"). The Somerset Companies produce, manage and underwrite
insurance and reinsurance for Navigators  Insurance,  NIC and four  unaffiliated
insurance companies.

     In April 1999,  the  Company  acquired  Anfield  Insurance  Services,  Inc.
("Anfield"),  an insurance  agency located in San Francisco,  California,  which
specializes  in  underwriting  general  liability  insurance  coverage for small
artisan and general contractors on the West Coast for Navigators Insurance.

     The Somerset  Companies  specialize in writing  marine and related lines of
business.  The marine business is written through a pool of insurance companies,
Navigators Insurance having the largest  participation in the pool. The Somerset
Companies  derive  their  revenue  from  commissions,   service  fees  and  cost
reimbursement arrangements from their parent company,  Navigators Insurance, NIC
and the unaffiliated insurers. Commissions are earned both on a fixed percentage
of  premiums  and  on   underwriting   profits  on  business   placed  with  the
participating  insurance  companies  within  the  pool.  Property  and  casualty
insurance premiums  historically have been cyclical in nature and,  accordingly,
during a "hard  market"  demand for  property  and  casualty  insurance  exceeds
supply, or capacity, and as a result,  premiums and commissions may increase. On
the downturn of the property and casualty cycle, supply exceeds demand, and as a
result, premiums and commissions may decrease.

     Navigators  Holdings (UK) Limited is a holding company for the Company's UK
subsidiaries.  Somerset UK  produces  business  for the UK Branch of  Navigators
Insurance  and  four  unaffiliated  insurance  companies.  Navigators  Corporate
Underwriters Limited ("NCUL") is admitted to do business at Lloyd's of London as
a corporate  member with limited  liability.  The Company owns Mander,  Thomas &
Cooper  (Underwriting  Agencies) Limited ("MTC"), a Lloyd's marine  underwriting
managing  agency which manages  Lloyd's  Syndicate  1221, and MTC's wholly owned
subsidiary,  Millennium Underwriting Limited ("Millennium"), a Lloyd's corporate
member with limited liability.  In August 1999, MTC formed Pennine  Underwriting
Limited,  an  underwriting  managing agency located in Northern  England,  which
underwrites cargo and engineering business for Lloyd's Syndicate 1221.

                                       10
<PAGE>

     The Company's revenue is primarily  comprised of premiums,  commissions and
investment income. The Insurance  Companies derive the majority of their premium
from  business  written by the Somerset  Companies  and Anfield.  The  Insurance
Companies are managed by Somerset  Marine,  Inc. The Lloyd's  operations  derive
their premium from business written by MTC.

Results of Operations

     The Company's  2000 and 1999 results of operations  reflect  intense market
competition in the marine business.

     Revenues.  Gross  written  premium  for  the  first  three  months  of 2000
increased by 27% to $51,648,000  from  $40,672,000 for the first three months of
1999.

     The following  table sets forth the Company's gross written premium by line
of business and net written premium in the aggregate for the periods indicated:
<TABLE>


                                                            Three Months Ended March 31,

                                                                 2000                 1999
                                                           -----------------     ---------
                                                                 (Dollars in thousands)

<S>                                                           <C>         <C>      <C>           <C>
Lloyd's Operations:
     Marine..............................................     $20,594     40%      $10,784       27%
     Engineering and Construction........................         176      -           -         -
     Onshore Energy......................................         133      -           -         -
                                                               ------     --        ------       -
         Total Lloyd's Operations........................      20,903     40        10,784       27
                                                               ------     --        ------       --

Insurance Companies:
     Marine..............................................      24,436     48        23,871       59
     Program Insurance...................................       5,228     10         3,922        9
     Other...............................................       1,081      2         2,095        5
                                                               ------     --        ------       --
         Total Insurance Companies.......................      30,745     60        29,888       73
                                                               ------     --        ------       --

         Total Gross Written Premium.....................      51,648    100%       40,672       100%
                                                               ------    ===        ------       ===

         Total Ceded Written Premium.....................     (26,335)             (21,605)
                                                               ------               ------

         Total Net Written Premium.......................     $25,313              $19,067
                                                               ======               ======
</TABLE>

Lloyd's Operations

     The  Lloyd's  premium is  generated  as the  result of NCUL and  Millennium
providing  capacity to Lloyd's  Syndicate  1221  managed by MTC.  The  premiums,
losses and expenses  from the Lloyd's  operations  are included in the Company's
consolidated financials but are not included in the Insurance Companies' results
since NCUL and Millennium are wholly owned by the parent company.

                                       11
<PAGE>

     Lloyd's  Syndicate  1221 has capacity of (pound)66.3  million  (converts to
$106.5  million) in 2000 and had capacity of  (pound)67.0  million  (converts to
$105.9  million)  in 1999.  The  Lloyd's  marine  business  has been  subject to
continued  pricing  competition  resulting in less premiums per risk relative to
certain prior years. As a result, the Company has been writing less premium than
the capacity available.

     Lloyd's  presents  its results on an  underwriting  year  basis,  generally
closing each  underwriting  year after three years.  The Company makes estimates
for each year and timely accrues the expected results.

     In the aggregate,  the Company  directly and  indirectly  controls 75.6% of
Syndicate 1221's capacity for the 2000  underwriting  year. Since the controlled
capacity  exceeds 75%,  Lloyd's  Mandatory  Byelaw (No. 5 of 1999)  requires the
Company  to make a  mandatory  offer to  noncontrolled  participants  for  their
capacity.  The offer will take the form of an Announced Auction Offer to be made
at the first Lloyd's capacity auction in July 2000.

     The offer may be made at 1.8 pence per  (pound)1 of  capacity  which is the
minimum price that the Company is obliged to offer, being the highest price paid
for  capacity  during the last 12 months.  Whether or not, or to what extent the
offer is accepted  by the  offerees  is to some  extent  dependent  on the price
offered.  As such, it is unlikely that the acceptance will result in a cost that
is material to the Company.  For the purposes of guidance,  each 10% of capacity
accepting  at 1.8 pence per  (pound)1 of  capacity  will result in a cost to the
Company  of  approximately   $200,000.   In  addition,  it  is  anticipated  the
administrative  and  legal  costs of  making  the  offer  will be  approximately
$40,000.  If the Company were to exceed the 90% control threshold as a result of
the offer,  Lloyd's Major Syndicate  Transactions Byelaw (No. 18 of 1997) allows
for a Minority  Buy-out to be  effected.  In such a  transaction  the  remaining
participants  are required to give up their capacity in return for  compensation
which must be at least equal to the offer price preceding the buy-out.

     The Company  provides letters of credit to Lloyd's to support its Syndicate
1221 capacity. If the amount of capacity controlled increases,  the Company will
be  required  to  supply  additional  letters  of  credit  or  other  collateral
acceptable to Lloyd's, or to reduce the capacity of Syndicate 1221.

     Marine Premium.  In 2000, marine premium increased 91% from 1999 due to the
capacity  directly  provided to  Syndicate  1221 by NCUL and  Millennium  in the
aggregate  increasing  from  52.5% in 1999 to 64.5% in 2000 on a larger  premium
base.

     Engineering and Construction Premium. In mid 1999, the Robertson Consortium
managed by MTC began writing engineering and construction business consisting of
coverage for construction  projects including  machinery,  equipment and loss of
use due to delays.  Previously,  the engineering and  construction  business was
written  by  Somerset  Asia  Pacific  Limited  in  Australia  and  Somerset  UK,
wholly-owned   subsidiaries  of  the  Company,  for  Navigators  Insurance.  The
Australia office was closed in 1999.

     Onshore Energy Premium. In mid 1999, the Robertson Consortium began writing
onshore energy business which  principally  focuses on the oil and gas, chemical
and petrochemical,  and power generation industries with coverages primarily for
property damage and machinery breakdown.  The business was previously written by
Navigators Insurance.

Insurance Companies

     Marine  Premium.  Marine gross  written  premium  stayed  relatively  flat,
increasing  2% when  comparing the first quarter of 2000 to the first quarter of
1999.

                                       12
<PAGE>






     Program  Insurance  Premium.  The program  insurance,  primarily written by
Anfield Insurance  Services,  Inc.  ("Anfield"),  consists  primarily of general
liability insurance for contractors and a small amount of commercial multi-peril
insurance for  restaurants  and taverns.  The 33% increase in the premium,  when
comparing the first  quarters of 2000 and 1999,  resulted from  increases in the
business written by Anfield.

     Ceded Premium.  In the ordinary course of business,  the Company  reinsures
certain insurance risks with unaffiliated insurance companies for the purpose of
limiting its maximum loss exposure,  protecting against catastrophic losses, and
maintaining desired ratios of net premiums written to statutory surplus. The 22%
increase in the ceded premium in the first quarter of 2000 compared to the first
quarter of 1999 was primarily due to the increase in gross  premiums  written by
the Lloyd's operations.

     Net Written Premium.  Net written premium  increased 33% when comparing the
first three  months of 2000 to the first three months of 1999  primarily  due to
the  increase in the marine  business  written by the Lloyd's  operations  which
generally  retains more of the gross written premium than the amount retained by
the Insurance Companies.

     Net Earned  Premium.  Net earned premium  increased 16% for the first three
months of 2000 to  $19,572,000  as compared to  $16,934,000  for the first three
months of 1999.  Net earned  premium  generally  follows  the pattern of written
premium  but at a slower  rate  since  unearned  premium  from the prior year is
partially  earned in the  current  period  along with a portion  of the  premium
written in the current period.

     Commission  Income.  Commission income generated by the Somerset  Companies
increased to $516,000 for the first  quarter of 2000 from $163,000 for the first
quarter of 1999. The increase was primarily due to Navigators Insurance's normal
review of the estimates used to calculate the commission  income  resulting in a
reduction  to those  estimates  in 1999 due to the  extremely  competitive  rate
environment.

     Net Investment  Income.  Net investment  income  increased 2% to $4,350,000
during the first three months of 2000 from $4,269,000  during the  corresponding
period in 1999.  This  increase was  primarily  due to slightly  higher rates in
2000.

     Net Realized Capital Gains. Pre-tax net income included $94,000 of realized
capital  losses for the first  three  months of 2000  compared  to  $287,000  of
realized capital gains for the same period last year. On an after tax basis, the
realized  capital  losses  were  $0.01 per share in 2000  compared  to  realized
capital gains of $0.02 per share in 1999.

Operating Expenses.
------------------

     Net Loss and Loss Adjustment  Expenses Incurred.  The ratio of net loss and
loss  adjustment  expenses  incurred  to net earned  premium was 61.8% and 59.0%
during the first three months of 2000 and 1999, respectively.  This increase was
primarily  due to  increased  premium  from the Lloyd's  operations  which has a
higher loss ratio in the more recent underwriting years.

     Commission  Expense.  Commission  expense  as a  percentage  of net  earned
premium  was 19.6% and 19.4%  during  the first  three  months of 2000 and 1999,
respectively.  The  increase was due to higher  commission  rates in the Lloyd's
operations.

     Other  Operating  Expenses.  Other  operating  expenses  increased 23.4% to
$6,217,000  during the first  three  months of 2000 from  $5,163,000  during the
corresponding period of 1999. This increase was primarily due to the addition of
Anfield,  which was purchased on April 2, 1999,  and  increased  writings in the
companies Lloyd's operations.

                                       13
<PAGE>

     Interest  Expense.  Interest expense increased to $429,000 during the first
three months of 2000 from $344,000 during the corresponding period of 1999. This
increase was primarily due to higher  interest  rates and a higher  average loan
balance during the first quarter of 2000.

Income  Taxes.  The  effective tax rate was 26.0% and 28.0% for the three months
ended March 31, 2000 and 1999, respectively.

Net Income.  The Company had net income of  $1,344,000  for the first quarter of
2000  compared to  $2,107,000  for the same  period last year.  On a diluted per
share  basis,  this  represents  net income per share of $0.16 and $0.25 for the
2000 and 1999 first quarters, respectively.

Liquidity and Capital Resources

     Cash flow from  operations  was  $(1,012,000)  and $1,786,000 for the first
three months of 2000 and 1999, respectively.  Invested assets and cash decreased
to $244,827,000 at March 31, 2000 from $246,688,000 at December 31, 1999.

     The Company's  bank credit  facility  provided for a $24,000,000  revolving
line of credit facility at March 31, 2000, which reduces each quarter by amounts
ranging  between  $1,000,000  to $2,250,000  beginning  January 1, 2000 until it
terminates on November 19, 2003, and a $60,000,000 letter of credit facility. At
March 31, 2000,  $24,000,000 in loans were outstanding  under the revolving line
of credit facility at an interest rate of 7.1%. The letter of credit facility is
utilized  primarily by NCUL and Millennium to  participate in Lloyd's  syndicate
1221 managed by MTC. At March 31, 2000, letters of credit with an aggregate face
amount of $49,559,000 were issued under the letter of credit facility.

     As of March 31, 2000, the Company's  consolidated  stockholders' equity was
$132,129,000  compared to  $130,365,000  at December 31, 1999.  The increase was
primarily  due to net income and, to a lesser  extent,  decreases in  unrealized
losses in the investment portfolio.

Year 2000 Compliance

     The "Year  2000  Issue"  or "Y2K  Issue"  is a term  used to  describe  the
predicted  problems  that could have arisen as a result of the inability of some
computer programs and embedded chips to distinguish dates beginning with 19 from
dates  beginning  with 20.  This Y2K Issue  could have  resulted in a variety of
potential  problems for all businesses from  inaccurate  processing of dates and
date-sensitive  calculations  to system  failures and disruptions in operations.
The  Company had  considered  the Y2K Issue a high  priority  since 1996 and had
taken  certain steps to address this  important  aspect of its  operations.  The
Company had formed an Executive  Committee  comprised of senior  management from
all departments to address the issues.  The efforts were rewarded as no computer
related Y2K problems were experienced.  The Company will continue to monitor the
situation  but  remains  confident  that there  will not be any future  computer
related Y2K problems.

     The Company is at risk from  policyholders'  claims for insurance  coverage
due  to  their  Y2K  exposures.  Although  the  Company  has  not  received  any
significant  insurance claims based on losses  resulting from Y2K Issues,  there
can be no assurance that  policyholders  will not suffer losses of this type and
seek  compensation  under the Company's  insurance  policies.  If any claims are
made,  the  Company's  obligations,  if  any,  will  depend  on  the  facts  and
circumstances  of the claim and  provisions  of the  policy.  At this time,  the
Company is unable to determine  whether an adverse impact, if any, in connection
with the foregoing circumstances would be material.



                                       14
<PAGE>




     The aforementioned Year 2000 discussion contains forward-looking statements
about  matters  that are  inherently  difficult  to  predict  the  effect on the
Company.  Such  statements  are made  under the safe  harbor  provisions  of the
Private  Securities  Litigation Reform Act of 1995 and involve a number of risks
and uncertainties that could materially affect future results.

Quantitative and Qualitative Disclosures About Market Risk

     There have been no material  changes in the information  concerning  market
risk as stated in the  Company's  Annual  Report on Form 10-K for the year ended
December 31, 1999.

Stock Repurchase Program

     On January 6, 1999, the Company announced a stock repurchase program for up
to  $3,000,000  of its  common  stock.  At  March  31,  1999,  the  Company  had
repurchased 26,400 shares of stock at a cost of $382,000. At March 31, 2000, the
Company had repurchased 48,700 shares of stock at a cost of $700,000. During the
first quarter of 2000, the Company issued 7,386 of those  repurchased  shares to
the  non-employee  Directors  as  part  of the  Directors'  annual  compensation
amounting in the aggregate to $72,000.

Part II - Other Information

Item 1.       Legal Proceedings:

              The  Company  is not a party  to or the  subject  of any  material
              pending legal  proceedings  which depart from the ordinary routine
              litigation  incident  to the kinds of  business  conducted  by the
              Company,  except for an assessment on Navigators  Insurance by the
              Institute of London  Underwriters  ("ILU").  In late 1998, the ILU
              advised its forty-one  members,  including  Navigators  Insurance,
              that they were each being assessed approximately (pound)900,000 to
              pay for anticipated operating deficits arising from the ILU's long
              term lease of the  building  occupied  by the ILU in London.  This
              matter is currently not in  litigation  and  Navigators  Insurance
              continues   to  oppose   the   assessment   as   inequitable   and
              inappropriate.  Discussions  with  the  ILU  are  ongoing  and the
              Company's ultimate liability,  if any, is not possible to forecast
              at the present time.

Item 2.       Changes in Securities:
              ---------------------

              None.

Item 3.       Defaults Upon Senior Securities:
              -------------------------------

              None.

Item 4.       Submissions of Matters to a Vote of Securities Holders:
              ------------------------------------------------------

              None.

Item 5.       Other Information:
              -----------------

              None.



                                       15
<PAGE>




Item 6.       Exhibits and Reports on Form 8-K:
              --------------------------------

              (a)      Exhibits:


              Exhibit No.        Description of Exhibit

                  27.1           Financial Data Schedule

              (b)   Reports on Form 8-K:

                    There were no reports on Form 8-K filed for the three months
                    ended March 31, 2000.



                                       16
<PAGE>





                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        The Navigators Group, Inc.
                                        --------------------------
                                        (Registrant)


Dated:  May 12, 2000                    /s / Bradley D. Wiley
        ------------                    ------------------------
                                        Bradley D. Wiley
                                        Senior Vice President, Chief Financial
                                        Officer and Secretary




                                       17
<PAGE>



                                INDEX OF EXHIBITS

                                                                Sequentially
                                                                Numbered
Exhibit No.                      Description of Exhibit         Page

    27.1                         Financial Data Schedule



                                       18
<PAGE>