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     June 30, 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.)


    One Penn Plaza, New York, New York                           10119
--------------------------------------------------------------------------------
  (Address of principal executive offices)                      (Zip Code)

                                 (212) 244-2333

              (Registrant's telephone number, including area code)

     123 William Street, New York, New York                      10038
--------------------------------------------------------------------------------
              (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 August 4, 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

              June 30, 2000 and December 31, 1999........................   3

      Consolidated Statements of Income

              Three Months Ended June 30, 2000 and 1999 .................   4
              Six Months Ended June 30, 2000 and 1999   .................   5

      Consolidated Statements of Cash Flows

              Six Months Ended June 30, 2000 and 1999   .................   6

      Notes to Interim Consolidated Financial Statements.................   7

      Management's Discussion and Analysis of Financial

              Condition and Results of Operations.......................   11

Part II.  OTHER INFORMATION ............................................   17






                                       2
<PAGE>





                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                        (In thousands, except share data)
<TABLE>

                                                                                                       June 30,        December 31,
                                                                                                        2000             1999
                                                                                                        ----             ----
                                                                                                            (Unaudited)

                                     ASSETS
<S>                                                                                                   <C>               <C>
Investments and cash:
  Fixed maturities, available-for-sale, at fair value
    (amortized cost: 2000, $228,676; 1999, $227,875)........................................       $   225,230          $222,555
  Equity securities, available-for-sale, at fair value (cost: 2000, $6,058;
    1999, $11,105)..........................................................................             6,344            11,840
  Short-term investments, at cost which approximates fair value............................             10,346             6,747
  Cash......................................................................................             3,646             5,546
                                                                                                     ---------         ---------
         Total investments and cash.........................................................           245,566           246,688
                                                                                                     ---------         ---------

Premiums in course of collection............................................................           106,361            90,857
Accrued investment income...................................................................             3,223             3,250
Prepaid reinsurance premiums................................................................            33,546            24,765
Reinsurance receivable on paid and unpaid losses and loss adjustment expenses...............           213,481           229,111
Federal income tax recoverable..............................................................               632             2,016
Net deferred Federal and foreign income tax benefit.........................................            12,551            13,227
Deferred policy acquisition costs...........................................................            11,063             5,878
Goodwill ..............................................................................                  5,473             5,805
Other assets................................................................................             6,755             9,727
                                                                                                      --------         ---------

         Total assets.......................................................................       $   638,651          $631,324
                                                                                                       =======           =======

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Reserves for losses and loss adjustment expenses..........................................       $   370,157          $391,094
  Unearned premium..........................................................................            79,065            55,003
  Reinsurance balances payable..............................................................            25,032            24,799
  Notes payable to banks....................................................................            22,000            24,000
  Net deferred state and local income tax...................................................               383               374
  Accounts payable and other liabilities....................................................             7,728             5,689
                                                                                                     ---------         ---------
         Total liabilities..................................................................           504,365           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)....................................................            (2,159)           (2,918)
  Retained earnings.........................................................................            96,780            93,690
                                                                                                     ---------         ---------
         Total stockholders' equity.........................................................           134,286           130,365
                                                                                                     ---------         ---------

         Total liabilities and stockholders' equity.........................................        $  638,651          $631,324
                                                                                                     =========           =======
</TABLE>

      See accompanying notes to interim consolidated financial statements.


                                       3
<PAGE>



                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                   (In thousands, except net income per share)
<TABLE>

                                                                                     Three Months Ended


                                                                                           June 30,

                                                                                      2000             1999
                                                                                      ----             ----
                                                                                           (Unaudited)
<S>                                                                                <C>                <C>
Revenues:
  Net earned premium....................................................           $22,235            $19,830
  Commission income.....................................................               777                524
  Net investment income.................................................             4,489              3,637
  Net realized capital gains............................................               166                504
  Other income..........................................................               148                165
                                                                                    ------           --------
         Total revenues.................................................            27,815             24,660
                                                                                    ------           --------

Operating expenses:
  Net losses and loss adjustment expenses incurred......................            13,817             10,978
  Commission expense....................................................             4,737              4,476
  Other operating expenses..............................................             5,745              6,553
  Interest expense......................................................               407                389
                                                                                   -------           --------
         Total operating expenses.......................................            24,706             22,396
                                                                                   -------           --------

Income before income tax expense........................................             3,109              2,264
                                                                                   -------           --------

Income tax expense (benefit):
    Current.............................................................               899               (304)
    Deferred...........................................................                464                631
                                                                                   -------           --------
         Total income tax expense.......................................             1,363                327
                                                                                   -------           --------

Net income..............................................................          $  1,746          $   1,937
                                                                                   =======           ========


Net income per common share:

   Basic................................................................          $   0.21          $    0.23
   Diluted..............................................................          $   0.21          $    0.23

Average common shares outstanding:

   Basic...............................................................              8,414              8,414
   Diluted.............................................................              8,414              8,414

</TABLE>

      See accompanying notes to interim consolidated financial statements.


                                       4
<PAGE>







                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                   (In thousands, except net income per share)
<TABLE>

                                                                                      Six Months Ended

                                                                                           June 30,

                                                                                      2000              1999
                                                                                      ----              ----
                                                                                         (Unaudited)
<S>                                                                               <C>                  <C>
Revenues:
  Net earned premium ...................................................          $ 41,808             $ 36,764
  Commission income.....................................................             1,293                  687
  Net investment income.................................................             8,840                7,906
  Net realized capital gains............................................                71                  791
  Other income.........................................................                199                  232
                                                                                   -------              -------
         Total revenues.................................................            52,211               46,380
                                                                                   -------              -------

Operating expenses:
  Net losses and loss adjustment expenses incurred......................            25,917               20,977
  Commission expense....................................................             8,570                7,764
  Other operating expenses..............................................            11,962               11,716
  Interest expense......................................................               836                  733
                                                                                   -------              -------

         Total operating expenses.......................................            47,285               41,190
                                                                                   -------              -------

Income before income tax expense........................................             4,926                5,190
                                                                                   -------              -------

Income tax expense:
    Current.............................................................             1,560                  692
    Deferred............................................................               276                  454
                                                                                   -------              -------
         Total income tax expense.......................................             1,836                1,146
                                                                                   -------              -------

Net income..............................................................          $  3,090             $  4,044
                                                                                   =======              =======


Net income per common share:

   Basic................................................................          $   0.37             $   0.48
   Diluted..............................................................          $   0.37             $   0.48

Average common shares outstanding:

   Basic................................................................             8,413                8,432
   Diluted..............................................................             8,413                8,433


</TABLE>

      See accompanying notes to interim consolidated financial statements.


                                       5
<PAGE>




                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (In thousands)
<TABLE>

                                                                                                 Six Months Ended
                                                                                                     June 30,
                                                                                            2000                 1999
                                                                                            ----                 ----
                                                                                                   (Unaudited)
<S>                                                                                      <C>                  <C>
Operating activities:
    Net income...................................................................        $   3,090            $   4,044
    Adjustments to reconcile net income to net
      cash provided by operating activities:
    Depreciation & amortization..................................................              566                  603
    Net deferred income tax .....................................................              276                  505
    Net realized capital (gains).................................................              (71)                (791)
    Changes in assets and liabilities, net of acquisitions.......................
      Reinsurance receivable on paid and unpaid
         losses and loss adjustment expenses.....................................           15,630              (17,188)
      Reserve for losses and loss adjustment expenses............................          (20,937)              14,124
      Prepaid reinsurance premiums...............................................           (8,781)              (4,509)
      Unearned premium...........................................................           24,062                8,810
      Premiums in course of collection...........................................          (15,504)              (8,906)
      Commissions receivable.....................................................            4,071                2,706
      Deferred policy acquisition costs..........................................           (5,185)                (527)
      Accrued investment income..................................................               27                  216
      Reinsurance balances payable...............................................              233                6,757
      Federal and foreign income tax.............................................            1,384                 (184)
      Other......................................................................            2,813               (2,189)
                                                                                          --------             --------
         Net cash provided by operating activities...............................            1,674                3,471
                                                                                          --------             --------
Investing activities:
    Fixed maturities, available-for-sale
      Redemptions and maturities.................................................            6,880                9,174
      Sales......................................................................           18,475               39,959
      Purchases..................................................................          (26,795)             (36,686)
    Equity securities, available-for-sale
      Sales......................................................................            6,532                1,913
      Purchases..................................................................           (1,409)              (1,444)
    Sales of other investments...................................................               -                 1,145
    Payable for securities purchased.............................................               -                (1,076)
    Net (purchases) of short-term investments....................................           (3,599)             (13,740)
    Payment for purchase of Anfield, net of cash acquired of $68.................               -                (2,591)
    Purchase of property and equipment...........................................           (1,658)                (170)
                                                                                           -------             --------
         Net cash (used in) investing activities.................................           (1,574)              (3,516)
                                                                                          ---------            ---------
Financing activities:
    Purchase of treasury stock ..................................................               -                  (700)
    Proceeds from bank loan......................................................               -                 1,500
    Repayment of bank loan.......................................................           (2,000)                  -
    Proceeds from exercise of stock options......................................               -                    44
                                                                                          --------             --------
    Net cash provided by (used in) financing activities..........................          (2,000)                  844
                                                                                          --------             --------
Increase (decrease) in cash .....................................................           (1,900)                 799
Cash at beginning of year........................................................            5,546                2,807
                                                                                          --------             --------
Cash at end of period............................................................         $  3,646            $   3,606
                                                                                           =======             ========
Supplemental disclosures of cash flow information:
    Federal, state and local income tax paid.....................................         $     31            $   1,600
    Interest paid................................................................              870                  706
    Issuance of stock to Directors...............................................               72                   72
    Fair value of assets acquired................................................               -                 3,915
    Liabilities assumed in acquisitions..........................................               -                 1,256

</TABLE>

      See accompanying notes to interim consolidated financial statements.



                                       6
<PAGE>



                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

               Notes to Interim Consolidated Financial Statements

                                   (Unaudited)

(1)   Accounting Policies

      The interim 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  contained in the Company's 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  $18,258,000 and $15,508,000 for
      the  three  months  ended  June  30,  2000  and  1999,  respectively,  and
      $37,355,000  and  $34,208,000  for the six months  ended June 30, 2000 and
      1999,  respectively.  The Company's ceded incurred losses were $13,935,000
      and  $31,901,000  for the  three  months  ended  June 30,  2000 and  1999,
      respectively,  and were  $31,093,000  and  $52,336,000  for the six months
      ended June 30, 2000 and 1999, respectively.

(3)   Acquisition of Anfield Insurance Services, Inc.

      In April 1999, the Company purchased 100% of Anfield  Insurance  Services,
      Inc.   ("Anfield"),   an  insurance   agency  located  in  San  Francisco,
      California.  The purchase  price of  approximately  $2,700,000  was funded
      through  a bank loan and  working  capital.  Goodwill  of  $2,300,000  was
      recorded in connection with the transaction and is being amortized over 20
      years.

(4)   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.  The Somerset Companies
      produce,   manage  and  underwrite  insurance  and  reinsurance  for  both
      affiliated and non-affiliated companies. The Lloyd's operations underwrite
      marine and  related  lines of business at Lloyd's of London as a corporate
      member with limited  liability.  All segments are evaluated based on their
      GAAP underwriting or operating results.

      The Insurance  Companies and the Lloyd's  operations  are measured  taking
      into  account 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,
      income  and  expense  from   corporate   operations,   and   consolidating
      adjustments.



                                       7
<PAGE>



Financial data by segment for the periods indicated were as follows:
<TABLE>

                                                              Three Months Ended                 Six Months Ended
                                                                    June 30,                          June 30,
                                                              -----------------------            ----------------
                                                              2000              1999             2000            1999
                                                              ----              ----             ----            ----
                                                                                      (In thousands)

Revenue, excluding net investment income and net realized capital gains:

   <S>                                                       <C>              <C>               <C>           <C>
    Insurance Companies..............................        $  12,120      $  12,480           $  23,871     $23,094
    Somerset Companies...............................            2,679          2,198               5,115       4,053
    Lloyd's operations..............................            10,210          7,430              18,067      13,940
    Other operations.................................           (1,849)        (1,589)             (3,753)     (3,404)
                                                                ------        -------            --------     -------
      Total..........................................        $  23,160      $  20,519           $  43,300     $37,683
                                                                ======        -======            -======-      ======



Income (loss) before income taxes:

    Insurance Companies..............................        $   6,207      $   4,612           $  10,882   $   9,334
    Somerset Companies...............................             (906)        (1,804)             (2,363)     (3,507)
    Lloyd's operations...............................           (1,068)          (227)             (1,525)        (37)
    Other operations.................................           (1,124)          (317)             (2,068)       (600)
                                                              --------       --------              ------    --------
      Total..........................................        $   3,109      $   2,264           $   4,926   $   5,190
                                                              ========       ========            ========    ========



Income tax expense (benefit):
    Insurance Companies..............................        $   1,775      $   1,083           $   3,056   $   2,455
    Somerset Companies...............................             (149)          (545)               (640)     (1,115)
    Lloyd's operations...............................               -              -                    -          -
    Other operations.................................             (263)          (211)               (580)       (194)
                                                              --------       --------            --------    --------
         Total.......................................        $   1,363      $     327           $   1,836   $   1,146
                                                              ========       ========            ========    ========



Net income (loss):
    Insurance Companies..............................        $   4,432      $   3,529           $   7,826   $   6,879
    Somerset Companies...............................             (757)        (1,259)             (1,723)     (2,392)
    Lloyd's operations...............................           (1,068)          (230)             (1,525)        (37)
    Other operations.................................             (861)          (103)             (1,488)       (406)
                                                              --------       --------            --------    --------
      Total..........................................        $   1,746      $   1,937           $   3,090   $   4,044
                                                              ========       ========            ========    ========
</TABLE>


(4)   Comprehensive Income

      Comprehensive  income  encompasses  all  changes in  stockholders'  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.

                                       8
<PAGE>




<TABLE>

      The following table summarizes comprehensive income for the three months ended June 30, 2000 and 1999:

                                                                                          June 30,
                                                                                    ------------------
                                                                                    2000            1999
                                                                                    ----            ----
                                                                                        (In thousands)

     <S>                                                                             <C>           <C>
      Net income..............................................................       $  1,746      $  1,937
                                                                                      -------       -------
      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 $264 for 2000
             and ($1,789) for 1999)....................................                   491        (3,322)
          Less:  reclassification adjustment for gains included in
             net income (net of income tax expense of $37 for 2000
             and $176 for 1999) ..............................................            129           328
                                                                                      -------       -------
        Net unrealized gains (losses) on securities...........................            362        (3,650)
        Foreign currency translation gain adjustment, net of tax expense
             of $26 for 2000 and $139 for 1999................................             49           259
                                                                                      -------       -------
                       Other comprehensive income.............................            411        (3,391)
                                                                                      -------       -------

                           Comprehensive income (loss)..........................     $  2,157      $ (1,454)
                                                                                      =======       -======


      The following  table  summarizes  comprehensive  income for the six months
ended June 30, 2000 and 1999:

                                                                                          June 30,
                                                                                    ------------------
                                                                                      2000          1999
                                                                                      ----          ----
                                                                                        (In thousands)

      Net income..............................................................       $  3,090     $  4,044
                                                                                      -------      -------
      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 $374 for 2000 and
              ($2,474) for 1999)..............................................            695       (4,594)
           Less:  reclassification adjustment for gains included in net
              income (net of income tax expense of $4 for 2000 and
              $277 for 1999) .................................................             67           514
                                                                                     --------      --------
        Net unrealized gains (losses) on securities...........................            628       (5,108)
        Foreign currency translation gain adjustment, net of
              tax expense of $70 for 2000 and $31 for 1999....................            131           58
                                                                                      -------      -------
                  Other comprehensive income (loss)...........................            759       (5,050)
                                                                                      -------      -------

                    Comprehensive income (loss)...............................       $  3,849     $ (1,006)
                                                                                      =======      =======

</TABLE>

                                       9
<PAGE>




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

                                                                                     June 30,    December 31,
                                                                                      2000            1999
                                                                                  -----------    ---------
                                                                                        (In thousands)

     <S>                                                                            <C>             <C>
      Net unrealized gains on securities available-for-sale (net of tax
         (benefit) of ($1,266) in 2000 and ($1,605) in 1999)..................     $  (2,352)      $  (2,980)
      Foreign currency translation adjustment (net of tax expense of
      $104 in 2000 and $34 in 1999)...........................................           193              62
                                                                                    --------        --------
                Accumulated other comprehensive (loss)........................     $  (2,159)      $  (2,918)
                                                                                    ========        ========
</TABLE>

(5)   Future Application of Accounting Standards

      The Financial Accounting Standards Board's ("FASB") 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.  SFAS No.  133,  as amended by SFAS No.  137,
      Deferral  of the  Effective  Date of SFAS No. 133,  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.  In June 2000,  the FASB  issued  SFAS No.  138,  Accounting  for
      Certain  Derivative   Instruments  and  Certain  Hedging  Activities,   an
      amendment  of SFAS No. 133,  which  amends the  accounting  and  reporting
      standards  of SFAS  No.  133.  The  adoption  of these  statements  is not
      expected to have a material effect on the Company's  results of operations
      or financial condition.

(6)   Lloyd's Participation

      In the aggregate,  the Company  directly and indirectly  controls 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 Lloyd's capacity  auctions this
      year.

      The  minimum  price that the  Company is obliged to offer is 1.8 pence per
      (pound)1 of capacity, 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.

                                       10
<PAGE>





                   THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

Management's Discussion and Analysis of

Financial Condition and Results of Operations

Forward-looking statements

         Some of the statements in this Form 10-Q are not  historical  facts and
are   "forward-looking   statements"  (as  defined  in  the  Private  Securities
Litigation  Act of  1995).  These  statements  use  words  such  as  "believes,"
"expects,"  "intends," "may," "will,"  "should,"  "anticipates" (or the negative
forms of those words) and describe our strategies, goals, expectations of future
results  and  other  forward-looking   information.  We  derive  forward-looking
information  from information  which we currently have and numerous  assumptions
which we make.  We  cannot  assure  that  results  which we  anticipate  will be
achieved,  since results may differ materially because of both known and unknown
risks and uncertainties  which we face. Factors which could cause actual results
to differ materially from our forward looking  statements  include,  but are not
limited to:

     o    the effects of domestic and foreign economic conditions and conditions
          which affect the market for property and casualty  insurance;
     o    laws, rules and regulations which apply to insurance companies;
     o    the effects of  competition  from banks,  other insurers and the trend
          toward self-insurance;
     o    risks which we face in  entering  new  markets  and  diversifying  the
          products and services we offer;
     o    weather-related events and other catastrophes affecting our insureds;
     o    our ability to obtain rate increases and to retain business;
     o    Year 2000; and
     o    other risks which we identify in future  filings  with the  Securities
          and  Exchange  Commission,  although  we  do  not  promise  to  update
          forward-looking  statements  to reflect  actual  results or changes in
          assumptions or other factors that could affect these statements.

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 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  and  four  unaffiliated
insurance companies.

                                       11
<PAGE>

     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 the Insurance Companies.

     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, 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.

     The Company's revenue is primarily  comprised of premiums,  commissions and
investment income. The Insurance  Companies,  managed by Somerset Marine,  Inc.,
derive the  majority of their  premium  from  business  written by the  Somerset
Companies and Anfield. 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 six months of 2000 increased
30% to $103,835,000 from $79,865,000 for the first six months of 1999.

                                       12
<PAGE>





     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>

                                                                            Six Months Ended June 30,
                                                                            2000                1999

                                                                                Dollars in thousands)
<S>                                                                   <C>           <C>      <C>           <C>
Lloyd's Operations:
   Marine...................................................          $   43,847    42%      $ 21,573      27%
   Engineering and Construction.............................                 578     1            -
   Onshore Energy...........................................                 278     -            -         -
                                                                       ---------   ---       --------     ---
       Total Lloyd's Operations.............................              44,703    43         21,573      27
                                                                       ---------   ---       --------     ---

Insurance Companies:
   Marine..................................................               45,999    44         47,951      60
   Program Insurance.......................................               11,556    11          7,932      10
   Other ...................................................               1,577     2          2,409       3
                                                                       ---------   ---       --------     ---
       Total Insurance Companies............................              59,132    57         58,292      73
                                                                       ---------   ---       --------     ---

       Total Gross Written Premium..........................             103,835   100%        79,865     100%
                                                                         -------   ===       --------     ===

       Total Ceded Written Premium..........................             (46,136)             (38,717)
                                                                       ---------             --------

       Total Net Written Premium............................          $   57,699             $ 41,148
                                                                       =========              =======
</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.

     Lloyd's  Syndicate  1221 has capacity of (pound)66.3  million  (converts to
$104.1  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 premium 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 Lloyd's capacity auctions this year.

     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 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.

                                       13
<PAGE>

     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 when
comparing  the  first  six  months  of 2000 to the  first  six  months  of 1999.
Navigators  Insurance's  participation  in the marine  pools was 75% in 1999 and
2000.

     Program  Insurance  Premium.  The program  insurance,  primarily written by
Anfield, consists primarily of general liability insurance for contractors and a
small amount of commercial  multi-peril  insurance for  restaurants and taverns.
The 46% increase in the premium, when comparing the first six months 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
relationship of ceded to written premium varies based upon the types of business
written and whether the  business is written by the  Insurance  Companies or the
Lloyd's  operations.  The Company wrote a larger  percentage of Lloyd's  premium
which generally carries a higher retention rate.

     Net Written Premium.  Net written premium  increased 40% when comparing the
first six  months of 2000 to the first six months of 1999  primarily  due to the
increase in the marine business written by the Lloyd's operations.

     Net Earned  Premium.  Net earned  premium  increased  14% for the first six
months of 2000 to  $41,808,000  as  compared  to  $36,764,000  for the first six
months of 1999.  Net earned premium for the three months ended June 30, 2000 and
1999 was $22,235,000 and $19,830,000, respectively.

     Commission  Income.  Commission income generated by the Somerset  Companies
increased to  $1,293,000  for the first six months of 2000 from $687,000 for the
first six months of 1999 and also  increased 48% for the three months ended June
30,  2000 from the same  period  in 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.



                                       14
<PAGE>



     Net Investment  Income.  Net investment  income increased 12% to $8,840,000
for the first six months of 2000 from $7,906,000 for the corresponding period in
1999 and increased  23% to  $4,489,000  for the three months ended June 30, 2000
from $3,637,000  during the  corresponding  period in 1999.  These increases are
primarily due to higher  interest rates on the Insurance  Companies  investments
and the Company's  increased  participation in the Lloyd's operations which earn
income on  investments  held by  Lloyd's  Syndicate  1221 in which  the  Company
participates. Such investments represent funds due to the Company from Syndicate
1221.

     Net Realized Capital Gains. Pre-tax net income included $71,000 of realized
capital gains for the first six months of 2000 compared to $791,000 for the same
period last year. On an after tax basis,  the realized  capital gains were $0.01
per diluted  share and $0.06 per diluted  share for the first six months of 2000
and 1999,  respectively.  Pre-tax net income for the three months ended June 30,
2000  and  1999  included  realized  capital  gains of  $166,000  and  $504,000,
respectively.  On an after tax basis,  the realized capital gains were $0.02 per
diluted  share and $0.04 per diluted  share for the three  months ended June 30,
2000 and 1999, respectively.

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

     Net Loss and Loss Adjustment  Expenses Incurred.  The ratio of net loss and
loss adjustment  expenses incurred to net earned premium was 62.0% and 57.1% for
the first six months of 2000 and 1999, respectively. This increase was primarily
due to higher loss ratios in the Lloyd's operations.  The loss ratios were 62.1%
and 55.4% for the three months ended June 30, 2000 and 1999, respectively.

     Commission  Expense.  Commission  expense  as a  percentage  of net  earned
premium  was  20.5%  and  21.1%  for the  first  six  months  of 2000 and  1999,
respectively,  and 21.3% and 22.6% for the three  months ended June 30, 2000 and
1999, respectively.  The decrease in the commission rate was due to the increase
in the Lloyd's premium as the Lloyd's premium  generally has a lower  commission
rate than the business written by the Insurance Companies.

     Other  Operating  Expenses.   Other  operating  expenses  increased  2%  to
$11,962,000  during  the first six  months of 2000 from  $11,716,000  during the
corresponding  period of 1999  primarily  due to the  acquisition  of Anfield on
April 2, 1999.  Other  operating  expenses  decreased 12.3% for the three months
ended June 30, 2000  compared to the same period in 1999  primarily due to lower
costs in the Company's foreign operations.

     Interest Expense. Interest expense was $836,000 during the first six months
of 2000  compared  to $733,000  during the  corresponding  period of 1999.  This
increase was due to higher interest rates, partially offset by a decrease in the
loan balance.

     Income Taxes. The effective tax rate was 37.3% and 22.1% for the six months
ended June 30,  2000 and 1999,  respectively.  The  increase in the tax rate was
primarily  due to the  Company's  inability  to utilize  losses from its foreign
operations.

     Net  Income.  The Company  had net income of  $3,090,000  for the first six
months of 2000  compared  to  $4,044,000  for the same  period  last year.  On a
diluted per share basis, this represents net income per share of $0.37 and $0.48
for the first six months of 2000 and 1999,  respectively.  The  Company  had net
income of  $1,746,000 or $0.21 per diluted share for the three months ended June
30, 2000 compared to net income of $1,937,000 or $0.23 per diluted share for the
same period in 1999.

Liquidity and Capital Resources

     Cash flow from  operations  was $1,674,000 and $3,471,000 for the first six
months  of 2000 and  1999,  respectively.  Invested  assets  and cash  decreased
slightly to  $245,566,000  at June 30, 2000 from  $246,688,000  at December  31,
1999.


                                       15
<PAGE>




     The Company's  bank credit  facility  provided for a $23,000,000  revolving
line of credit facility at June 30, 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
June 30, 2000, $22,000,000 in loans were outstanding under the revolving line of
credit  facility at an interest rate of 7.8%.  The letter of credit  facility is
utilized  primarily by NCUL and Millennium to  participate in Lloyd's  syndicate
1221 managed by MTC. At June 30, 2000,  letters of credit with an aggregate face
amount of $47,276,000 were issued under the letter of credit facility.

     As of June 30, 2000, the Company's  consolidated  stockholders'  equity was
$134,286,000  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
efforts were rewarded as no computer related Y2K problems have been 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. The Company has not incurred
any losses as the result of Y2K Issues.

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 June 30, 2000 and 1999,  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.




                                       16
<PAGE>


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:
         ------------------------------------------------------

          On June 1, 2000,  the Company's  stockholders  voted for the following
          matters at the annual stockholders' meeting:

         (a)  The election of seven (7) directors to serve until the 2001 Annual
              Meeting of Stockholders or until their respective  successors have
              been duly elected and qualified. The results of the voting were as
              follows:

                   Name                           For              Withheld

              Terence N. Deeks                6,428,448               38,281
              Robert M. DeMichele             6,422,148               44,581
              Leandro S. Galban, Jr.          6,415,548               51,181
              Marc M. Tract                   6,415,548               51,181
              William D. Warren               6,388,993               77,736
              Robert F. Wright                6,422,148               44,581
              Howard M. Zelikow               6,393,798               72,931

         (b)  The  ratification  of the appointment of KPMG LLP as the Company's
              independent  auditors.  The stockholders cast 6,465,729 votes for,
              900 votes against and 100 votes abstaining ratification.

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

         None.


                                       17
<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 six months  ended
June 30, 2000.


                                       18
<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:   August 11, 2000               /s / Bradley D. Wiley
         ---------------               -----------------------------------------
                                       Bradley D. Wiley
                                       Senior Vice President, Chief Financial
                                       Officer and Secretary



                                       19
<PAGE>



                                INDEX OF EXHIBITS

                                                                Sequentially
                                                                Numbered

Exhibit No.       Description of Exhibit                        Page

    27.1          Financial Data Schedule




                                       20
<PAGE>