Crawford & Company · NYSE:CRD.A
Crawford & — Investor Presentation (April 2022)
44 slides from Crawford &'s investor presentation, Apr 29, 2022
Slide 1: Investor Presentation April 2022
CRD - A & CRD - B (NYSE) Investor Presentation April 2022
Slide 2: Forward-Looking Statements and Additional Information
2 Forward - Looking Statements and Additional Information Forward - Looking Statements This presentation contains forward - looking statements, including statements about the expected future financial condition, resul ts of operations and earnings outlook of Crawford & Company. Statements, both qual
Slide 3: Table of Contents
3 3 4 Company Profile 10 Long - Term Growth Strategy 11 Operational Reorientation 19 M&A Strategy 25 Environmental, Social, and Governance 26 Investment Thesis 27 Global Reach 28 Appendix Table of Contents
Slide 4: Who We Are
4 4 $ 18 BILLION + Claims managed annually 1.7 MILLION Claims handled BY GLOBAL SERVICE LINES BY GEOGRAPHY 22% ⎹ 33% ⎹ 27% ⎹ 18% ⎹ 60% ⎹ US 12% ⎹ UK 8% ⎹ Canada 8% ⎹ Australia 12% ⎹ Rest of the world OUR PURPOSE: To restore lives, businesses and communities OUR VALUES: RESTORE R espect, E mpowerment
Slide 5: Financial Snapshot
5 (1) Combined market capitalization as of March 31, 2022 (2) See appendix for non - GAAP explanation and reconciliation of non - GAAP measures OVERVIEW FY 2021 GAAP FY 2021 NON - GAAP 2 ~$ 400 MILLION Market capitalization¹ The world’s largest publicly listed independent provider of global claims m
Slide 6: Year-Old Brand Trusted by Key Customers
6 6 80 - Year - Old Brand Trusted by Key Customers Crawford’s customer base includes the largest global insurance carriers as well as Fortune 1000 companies
Slide 7: Industry looking to leverage technology and cost-efficient solutions
7 7 Industry is looking to leverage technology and seek new cost - efficient solutions to improve profitability Climate change: Rising frequency and severity of weather claims Digitization of volume claims: Increasing digitization of high - frequency, low complexity claims Scale is critical: Market
Slide 8: More Frequent and Destructive CAT Events Leading to Heightened Insured Losses
8 8 Industry seeks cost effective solutions to address volatility and surge events that exceed their capacity with reduced claims staff. Virtual desk integrated with technology enabled networks will be solution. Catastrophe - related Insured Losses (1970 - 2021) 1 More Frequent and Destructive CAT E
Slide 9: Targeting National and Regional Players
9 9 2 % 63 % 6% 22% 92% 15% # of Carriers Total Premium Medium: $1B - $5B Small: Less than $1B Large: Greater than $5B 1. ~98% of carriers are small to medium sized¹ 2. They have limited financial capacity¹ • Insurance carriers currently operate with a large operating expense base, which is unsustai
Slide 10: Evolving Crawford's Strategy for Long-Term Growth
10 Our enhanced operating structure creates a better focus for management to take market share by differentiation Evolving Crawford’s Strategy for Long - Term Growth Corporate Strategy (1) Refer to 8 - K filed on 2/11/22 CRD Share Repurchase Authorization 8 - K Acquire adjacent services to bolster p
Slide 11: Operational Reorientation
11 We have realigned our segments to create better scale and synergies and have moved to a geographic - centered reporting structure ¹ Operational Reorientation North America Loss Adjusting Broadspire (US - only) International Operations Platform Solutions (US - only) Comprised of the following serv
Slide 12: North America Loss Adjusting and International Operations
12 For clients seeking to increase policyholder satisfaction across the full spectrum of loss adjusting needs, Crawford is the one - stop - shop delivering efficiency and savings through unmatched experience, specialized expertise and digitally - enabled solutions. North America Loss Adjusting and I
Slide 13: Adding experts for major and complex claims
13 13 Adding experts for major and complex claims Creating digitally enabled solutions Setting benchmark of quality Major and Complex Claims • Grow organically by creating differentiation to gain market share by expanding expertise and increasing nominations through brokers Volume Claims • Dr ive di
Slide 14: Broadspire
14 For companies looking to enhance the claims experience and drive quantifiable savings, Broadspire is the U.S. third - party administrator that delivers client - centric integrated outsourced solutions powered by innovation and data science. Broadspire Workers Compensation Auto/ Motor Accident & H
Slide 15: Leveraging Data & Analytics to Drive Growth in Broadspire
15 15% reduction in average paid when using full clinical & analytical claim model 98% return - to - work rate with case management program 8.5% savings in average incurred with litigation predictive model Claim Resolution Desk Adjuster Omni - channel FNOL ¹ / Intake Intelligent Triage WeGoLook On -
Slide 16: Platform Solutions
16 Clients Scope & Scale Value Proposition • Carriers • Corporates • Risk Managers and Brokers • 6,000 General/Specialty Contractors • $3B total managed repair project costs • 45,000 on demand resources • 7,000+ licensed and trained catastrophe resources • 175,000+ claim calls handled • Enhancing th
Slide 17: Recent Share Buybacks
17 Cumulative buybacks represent 13.7% of total shares outstanding as of year - end 2018 Recent Share Buybacks 1,736 1,897 3,596 4,316 1,103 1,259 1,789 3,287 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2019 5,385 YTD Q1 2022 2020 2021 2,839 3,156 7,603 Cumulative Average Price Per Share $9.23
Slide 18: Net Debt and Pension Liability
18 Net Debt and Pension Liability Significant reductions over the past 5+ years 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 2015 2016 2017 2018 2019 2020 2021 Net Debt - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 2015 2016 2017 2018 2019 2020 2021 Pension L
Slide 19: Our M&A Strategy
Our M&A Strategy Crawford
Slide 20: M&A Overview
20 20 M&A Overview Our M&A is aligned to the three pillars of our strategy Digital Expertise Quality ▪ Bring digital enablement ▪ Short circuit lead times ▪ Di f ferentiated and entrenched ▪ Improves customer experience ▪ Enhances the quality value proposition ▪ Usually in tandem with Digital or Exp
Slide 21: Acquisition of edjuster
21 In August 2021, Crawford acquired 100% of edjuster , the c ontents valuation leader in North America Total purchase price of $34.6 million, consisting of $20.9 million initial payment, $0.4 million working capital adjustment, and $13.3 million maximum earnout Offers on - site contents inventory s
Slide 22: Acquisition of Praxis Consulting
22 In October 2021, Crawford acquired the assets of Praxis Consulting, Inc. — the leading provider of outsourced subrogation claims management and recovery services in the United States Total purchase price of $52.3 million, consisting of $21.5 million initial payment, $20.7 million deferred payment
Slide 23: Acquisition of BosBoon Expertise Group
23 In October 2021, Crawford acquired 100% of BosBoon Expertise Group B.V., a reputable specialist loss adjusting company based in The Netherlands Total purchase price of $3.9 million, consisting of $2.1 million initial payment and $1.9 million maximum earnout Primarily offers expert loss adjusting
Slide 24: R.P. van Dijk B.V.
24 R.P. van Dijk B.V. Transforms Crawford into a leading BI player in the Netherlands In April 2022, Crawford purchased assets associated with R.P. van Dijk B.V., a bodily injury (“BI”) loss adjusting company ba sed in the Netherlands Total purchase price of $6.6 million, structured as an upfront pa
Slide 25: Environmental, Social, and Governance
25 Inclusion and Diversity Established Employee Resource Groups and an Employee Advisory Council aligned with our purpose to foster a safe and inclusive working environment Human Capital Development Promote an environment where employees are empowered to grow, emboldened to act, and inspired to inno
Slide 26: Why Invest in Crawford?
26 26 Attractive investment profile Strategically positioned in a rapidly changing industry Investing to drive innovation and accelerate growth Committed to environmental, social and governance initiatives Financial strength and flexibility Experienced leadership team Why Invest in Crawford? Crawfor
Slide 27: Global coverage that goes beyond borders
27 9K 50K 70 6K Employees Worldwide Field Resources Countries Network Contractors Crawford & Company Global coverage that goes beyond borders 27
Slide 28: Appendix A: Reimagining the Claims Process: Crawford Platform Solutions
28 28 28 Appendix A: Reimagining the Claims Process: Crawford Platform Solutions
Slide 29: The Claims Process Evolution
29 29 Policyholder reports claim. Carrier uses manual process to segment and channel claim. Field Adjuster assigned and completes on site inspection. Estimate created by adjuster and goes through QA process. Claim payment made based on adjuster estimate. Subject to post loss QA re - inspection leaka
Slide 30: Reimagining the Claims Process
30 30 Contractor Network 2% Fast Track Desk 18% Traditional 80% Network Low Touch Traditional Past (2000) Traditional: 80% Network/Fast Track Desk: 20% • Loss Adjusting • Managed Repair Contractor Network 20% Virtual/On Demand 10% Traditional 70% Network Low Touch Traditional Present (2021) Traditio
Slide 31: Driving Loss Ratio Improvement
31 Driving Loss Ratio Improvement Platforms Driving Loss Ratio Improvement J.D. Power 2020 Certified Customer Service Program recognition is based on successful completion of an evaluation and exceedi ng a customer satisfaction benchmark through a survey of recent servicing interactions. For more in
Slide 32: Crawford Platform Solutions: Growth Engine of the Future
32 32 • Reimagining and simplifying the historically complex claims process through digital solutions • FY 2021 Revenue: $199.3M • FY 2021 Operating Margin: 16.1% • Double - digit growth over the next 3 - 5 years Transformational Driver Crawford Platform Solutions: Growth Engine of the Future Platfo
Slide 33: Managed Repair Summary
33 Summary Speed – Quality – Accuracy – Exceptional Customer Experiences The largest managed repair network in the U.S., driving increased policy holder satisfaction and indemnity accuracy, while enhancing client operational capacity Value Proposition • Digitalization of Processes – Continuous proce
Slide 34: Catastrophe Response Services
34 Enhancing the customer experience through scalable claims adjudication solutions leveraging the full spectrum of technology and the highest trained field personnel in the industry. Value Proposition Value Delivery System • Network of over 6,000 licensed and trained resources throughout the U.S. •
Slide 35: On-Demand Services
35 Enhancing the policyholder experience and optimizing claim expense by combining technology with accessible, on - demand data collection solutions that are fast and reliable. Value Proposition • Vast, diverse and vetted on - demand workforce−45,000 strong • Innovative technologies drive consistent
Slide 36: Crawford is Partnering with Leading Insurtechs
36 Smart Water Meters Property Measurement and 3 - D Modeling Digital Desk for Interior Property Claims Immersive 3D Technology Cloud Service Platform for P&C Insurers Mobile Claims Handling Insurance Risk Data Analytics Crawford is Partnering with Leading Insurtechs
Slide 37: Asservio
37 • QA Automation & Digitalization providing continuous improvement process • Rules based on Crawford industry expertise and customizable by client • Delivers consistent estimate accuracy • Automated processes reduce cycle time • Compliance results communicated in an easily transferrable format • C
Slide 38: Appendix B: Non-GAAP Financial Information
38 38 Appendix B: Non - GAAP Financial Information 38
Slide 39: Non-GAAP Financial Information
39 Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not sub stitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comparable to other similar ly - titled meas
Slide 40: Segment and Consolidated Gross Profit; Adjusted EBITDA
40 Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Ind irect expenses consist of centralized administrative support costs, regional and local shared services that are allocated to each
Slide 41: Total Revenues Before Reimbursements by Major Currency
41 41 Total Revenues Before Reimbursements by Major Currency The following table illustrates revenue as a percentage of total revenue in the major currencies of the geographic areas in which Crawford does business: Year Ended ( in thousands ) December 31, 2021 December 31, 2020 Geographic Area Curre
Slide 42: Reconciliation of Non-GAAP Items: Adjusted EBITDA
42 42 Reconciliation of Non - GAAP Items (cont.) Adjusted EBITDA ) Year Ended December 31 , December 3 1 , Unaudited ($ in thousands) 20 21 20 20 Net income attributable to shareholders of Crawford & Company $ 30,692 $ 28,296 Add: Depreciation and amortization 40,176 40,111 Stock - based compensatio
Slide 43: Reconciliation of Non-GAAP Items: Net Debt
43 43 Reconciliation of Non - GAAP Items (cont.) Net Debt December 31 , December 31, Unaudited ($ in thousands) 20 21 20 20 Net Debt Short - term borrowings $ 10,616 $ 1,570 Current installments of finance leases and other obligations 88 267 Long - term debt and finance leases, less current installm
Slide 44: Reconciliation of Full Year Non-GAAP Results
44 44 Reconciliation of Full Year Non - GAAP Results Year Ended December 3 1 , 20 21 Unaudited ($ in thousands) Revenues Non - GAAP Operating Earnings Pretax Earnings Net Income Attributable to Crawford & Company Diluted Earnings per CRD - A Share Diluted Earnings per CRD - B Share GAAP $ 1,102,032