Search Icon
Crawford & Company (CRD-B): A Diversified Global Claims Management Leader Navigating Challenges with Resilience
Published on September 24, 2024 | Ticker: CRD-B

Crawford & Company (CRD-B), a leading provider of claims management and outsourcing solutions, demonstrated its ability to navigate the evolving insurance landscape with resilience. With a global footprint serving clients in over 70 countries, the company solidified its position as a diversified claims management powerhouse.

Financials

In the fiscal year 2023, Crawford & Company reported annual revenue of $1,316,919,000, a testament to the breadth and depth of its service offerings. The company's net income for the year reached $30,609,000, showcasing its ability to generate consistent profitability. Operating cash flow for the year amounted to $103,790,000, while free cash flow stood at $67,194,000, providing the company with ample liquidity to fund its operations and strategic initiatives.

The first quarter of 2024 saw Crawford & Company's revenues before reimbursements decrease by 4.6% to $301,654,000, compared to $316,334,000 in the same period of 2023. This decline was primarily driven by a reduction in the company's Platform Solutions segment, which experienced a 49.2% decrease in revenues before reimbursements. The North America Loss Adjusting and International Operations segments, however, demonstrated more resilient performance, with revenues before reimbursements decreasing by only 0.3% and increasing by 6.8%, respectively.

The Broadspire segment, which provides third-party administration services, was a standout performer in the first quarter of 2024, reporting a 12.2% increase in revenues before reimbursements to $94,298,000. This growth was driven by new client programs, increased medical management usage, and pricing improvements.

Geographic Revenue Mix

Geographically, Crawford & Company's revenue mix continued to be diverse, with the U.S. accounting for 59.6% of total revenues before reimbursements in the first quarter of 2024, followed by the U.K. at 13.4%, Canada at 7.9%, and Australia at 6.5%. The company's international operations, which include the U.K., Europe, Australia, Asia, and Latin America, contributed 40.4% of total revenues before reimbursements during the quarter.

Segment Performance

The company's operating earnings, which exclude certain corporate-level expenses and credits, provide a more accurate representation of the underlying performance of its business segments. In the first quarter of 2024, the North America Loss Adjusting segment reported operating earnings of $4.5 million, or 5.8% of revenues before reimbursements, compared to $8.1 million, or 10.4%, in the same period of 2023. The decrease was primarily due to a decline in weather-related activity and reduced staff utilization.

The International Operations segment generated operating earnings of $1.7 million, or 1.7% of revenues before reimbursements, in the first quarter of 2024, compared to $3.0 million, or 3.3%, in the prior-year period. The decrease was mainly attributable to reduced productivity in the Legal Services business and the impact of the Australia floods in the prior-year quarter.

The Broadspire segment, on the other hand, reported a strong performance, with operating earnings of $12.8 million, or 13.6% of revenues before reimbursements, in the first quarter of 2024, compared to $7.9 million, or 9.4%, in the same period of 2023. This improvement was driven by increased revenues from new client programs, higher medical management usage, and pricing enhancements.

The Platform Solutions segment, which includes the Contractor Connection, Networks, and Subrogation service lines, experienced a significant decline in operating earnings, from $10.0 million, or 15.9% of revenues before reimbursements, in the first quarter of 2023 to $1.1 million, or 3.5%, in the same period of 2024. This decrease was primarily due to a reduction in revenues in the Networks service line, as the company was completing claims related to Hurricane Ian in the prior-year quarter.

Liquidity

Crawford & Company's liquidity position remained strong, with cash and cash equivalents of $45.2 million as of March 31, 2024. The company also maintained a credit facility with available borrowing capacity of $208.7 million, providing ample financial flexibility to support its operations and strategic initiatives.

The company's defined benefit pension plans, which include a frozen U.S. plan and several U.K. plans, were underfunded by $22.3 million and overfunded by $10.9 million, respectively, as of December 31, 2023. Crawford & Company made no contributions to the U.S. plan and $0.6 million to the U.K. plans during the first quarter of 2024, and does not expect to make any additional discretionary contributions to the U.S. plan for the remainder of the year.

Outlook

Looking ahead, Crawford & Company's management has not provided specific financial guidance for the full year 2024. However, the company's diversified service offerings, global reach, and focus on operational efficiency are expected to continue supporting its long-term growth and profitability.

Risks and Challenges

Risks facing the company include a potential decline in case referrals, changes in global economic conditions, regulatory changes, and the ability to successfully integrate acquired businesses. Additionally, the company's exposure to international operations and defined benefit pension plans may present ongoing challenges.

Conclusion

Overall, Crawford & Company's position as a leading global claims management provider, its resilient performance in the face of market challenges, and its strong liquidity position make it a company worth monitoring for investors seeking exposure to the insurance services industry.

You may be interested in...
Corpay (CPAY): A Global Payments Powerhouse Poised for Continued Growth
Corpay, Inc. (CPAY) is a leading global provider of corporate payment solutions, helping businesses of all sizes control, simplify, and secure their domestic and cross-border payment processes. With a rich history spanning over two decades, Corpay has evolved into a diversified fintech giant, offering a comprehensive suite of innovative payment products and services to customers across a wide array of industries.
Read More
Boston Omaha Corporation (BOC): Navigating the Evolving Outdoor Advertising and Broadband Landscape
Boston Omaha Corporation (BOC) is a diversified holding company that has established a presence in several key industries, including outdoor advertising, surety insurance, broadband services, and asset management. With a focus on strategic acquisitions and organic growth, BOC has transformed itself into a formidable player in the markets it serves.
Read More
Performant Financial Corporation (PFMT): Transforming Payment Integrity and Driving Innovation
Founded in 1976, Performant Financial Corporation (PFMT) has evolved into a leading provider of technology-enabled payment integrity, eligibility, and analytics services for the healthcare industry. The company's mission is to support payers in identifying, preventing, and recovering waste and improper payments by leveraging advanced technology, analytics, and proprietary data assets.
Read More
Crawford & Company B (CRD.B): Building Resilience Amidst Industry Challenges
Crawford & Company B (CRD.B) is a leading global provider of claims management and outsourcing solutions to insurance companies and self-insured entities. The company's roots trace back to 1941 when founder Jim Crawford established the business in Atlanta, Georgia. Over the past eight decades, Crawford & Company has grown into a diversified professional services firm with an expansive global footprint, serving clients in more than 70 countries.
Read More
Crawford & Company (CRD.A): Thriving Through Challenges and Diversifying Its Portfolio
Crawford & Company (CRD.A) is a leading global provider of claims management and outsourcing solutions to insurance companies and self-insured entities. The company has a long and storied history, dating back to its founding in 1941 as a small Atlanta-based firm. Over the decades, Crawford has grown to become a diversified, multinational organization with an expansive network serving clients in more than 70 countries.
Read More