**EXHIBIT 11-1**

 

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  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|---------------------------------------------------------------------|------------|---------------------------------------|------------|-------------------------------------|------------|
| ** **                                                          | ** ** | **2005**                              | ** ** | **2004**                            | ** ** | **2005** | ** ** | **2004** | ** ** |
|                                                                |       |                                  |       |                                |       |   |   |   |   |
| Net income applicable to common stock                               |       | $                                     | 11,280     |                                | $          | 9,037 |   | $ | 20,979 |   | $ | 17,950 |   |
|                                                                |       |                                  |       |                                |       |   |   |   |   |
| Average number of common shares outstanding                         |       | 12,763                                |       | 12,587                              |       | 12,720 |   | 12,570 |   |
|                                                                |       |                                  |       |                                |       |   |   |   |   |
| Net income per share - Basic                                        |       | $                                     | 0.88       |                                | $          | 0.72 |   | $ | 1.65 |   | $ | 1.43 |   |
|                                                                |       |                                  |       |                                |       |   |   |   |   |
| Average number of common shares outstanding                         |       | 12,763                                |       | 12,587                              |       | 12,720 |   | 12,570 |   |
| Add: Assumed exercise of stock options and  vesting of stock grants |       | 90                                    |       | 60                                  |       | 95 |   | 101 |   |
|                                                                |       |                                  |       |                                |       |   |   |   |   |
| Common and common equivalent shares  outstanding                    |       | 12,853                                |       | 12,647                              |       | 12,815 |   | 12,671 |   |
|                                                                |       |                                  |       |                                |       |   |   |   |   |
| Net income per share - Diluted                                      |       | $                                     | 0.88       |                                | $          | 0.71 |   | $ | 1.64 |   | $ | 1.42 |   |

 

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