**EXHIBIT11-1**

 

THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES

 

COMPUTATION OF PER SHARE EARNINGS

 

Earnings Per Share of Common Stock and CommonStock Equivalents

*($ and shares in thousands, except per sharedata)*

* *
| ** **                                                          | ** ** | **Three Months Ended** | ** ** | **Nine Months Ended** | ** ** |
|---------------------------------------------------------------------|------------|----------------------------------|------------|---------------------------------|------------|
| ** **                                                          | ** ** | **September 30,**           | ** ** | **September 30,**          | ** ** |
| ** **                                                          | ** ** | **2006**                         | ** ** | **2005**                        | ** ** | **2006** | ** ** | **2005** | ** ** |
| ** **                                                          | ** ** | ** **                       | ** ** | ** **                      | ** ** | ** ** | ** ** | ** ** | ** ** |
| Net income (loss) applicable to common  stock                       |       | $                                | 18,333     |                            | $          | (12,725 | ) | $ | 51,956 |   | $ | 8,254 |   |
|                                                                |       |                             |       |                            |       |   |   |   |   |
| Average number of common shares outstanding                         |       | 16,685                           |       | 12,791                          |       | 16,664 |   | 12,744 |   |
|                                                                |       |                             |       |                            |       |   |   |   |   |
| Net income (loss) per share - Basic                                 |       | $                                | 1.10       |                            | $          | (0.99 | ) | $ | 3.12 |   | $ | 0.65 |   |
|                                                                |       |                             |       |                            |       |   |   |   |   |
| Average number of common shares outstanding                         |       | 16,685                           |       | 12,791                          |       | 16,664 |   | 12,744 |   |
| Add: Assumed exercise of stock options and  vesting of stock grants |       | 142                              |       | —                          |       | 148 |   | 105 |   |
|                                                                |       |                             |       |                            |       |   |   |   |   |
| Common and common equivalent shares  outstanding                    |       | 16,827                           |       | 12,791                          |       | 16,812 |   | 12,849 |   |
|                                                                |       |                             |       |                            |       |   |   |   |   |
| Net income (loss) per share - Diluted                               |       | $                                | 1.09       |                            | $          | (0.99 | ) | $ | 3.09 |   | $ | 0.64 |   |

 

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