Crawford & Company · NYSE:CRD.A
Crawford & — Investor Presentation (August 2021)
46 slides from Crawford &'s investor presentation, Aug 25, 2021
Slide 1: Investor Presentation August 2021
CRD - A & CRD - B (NYSE) Investor Presentation August 2021
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: Crawford & Company at a glance
3 $ 18 BILLION + Claims managed annually 1.6 MILLION Claims handled 3 The world’s largest publicly listed independent provider of global claims management and outsourcing solutions. BY GLOBAL SERVICE LINES BY GEOGRAPHY 44% ⎹ Loss Adjusting 38% ⎹ TPA: Broadspire 18% ⎹ Platform Solutions 58% ⎹ US 9% ⎹
Slide 4: Financial Snapshot
4 (1) As of 7/30/2021 ( 2 ) See appendix for non - GAAP explanation and reconciliation of non - GAAP measures OVERVIEW Q2 2021 GAAP Q2 2021 NON - GAAP 2 ~$ 500 MILLION Market capitalization¹ Financial Snapshot $ 80 MILLION Net debt $ 20 MILLION Operating earnings $ 268 MILLION Revenues before reimbu
Slide 5: Market Leading Solutions
5 5 BY GLOBAL SERVICE LINES 44% ⎹ Loss Adjusting 38% ⎹ TPA: Broadspire 18% ⎹ Platform Solutions The Crawford brands offer high - quality and technologically advanced solutions to clients : Market Leading Solutions LOSS ADJUSTING TPA: BROADSPIRE PLATFORM SOLUTIONS • Loss Adjusting (Property / Auto /
Slide 6: Strategic Pillars
6 Strategic Pillars Our Purpose Restoring and enhancing lives, businesses and communities. Our Values Our purpose is embedded in our values – to RESTORE is part of everything we do. espect mpowerment ustainability raining ne Crawford ecognition ntrepreneurial Spirit
Slide 7: Evolving Crawford's Strategy for Long-Term Growth
7 Evolving Crawford’s Strategy for Long - Term Growth • Become the benchmark in quality and expertise • Digitally enabled for efficiency • Broadest global reach • Major and complex: Grow by investing in expertise • Volume claims: Improve margin through efficiency • Most comprehensive alternatives in
Slide 8: Why Invest in Crawford?
8 8 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? Crawford’
Slide 9: Strategically Positioned in a Rapidly Changing Industry
9 9 Industry is looking to leverage technology and seek new cost - efficient solutions to improve profitability Increasing claims severity and complexity Carriers move to improve margins by cutting fixed costs and outsourcing the claims process Consolidation of TPA and independent claims management
Slide 10: Solutions Addressing Customer and Industry Challenges
10 10 Solutions Addressing Customer and Industry Challenges Focus on Speed & Simplicity Strengthen Knowledge Disruptive Technology Innovative Solutions Continuous Quality Claims processing is evolving with customer expectations for on - demand, simplified products and services Data analytics are cha
Slide 11: More Frequent and Destructive CAT Events
11 11 More Frequent and Destructive CAT Events Leading to Heightened Insured Losses (1) SwissRe 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 soluti
Slide 12: Targeting National and Regional Players
12 12 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 unsust
Slide 13: Inclusion and Diversity; ESG initiatives
13 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 14: Reimagining the Claims Process: Crawford Platform Solutions
14 14 14 Reimagining the Claims Process Crawford Platform Solutions
Slide 15: Reimagined Claims Process
15 15 Digital Claim Intake and Smart Triage process serve as enablers to fast track claim assignment. Virtual Adjuster leverages Digital Desk to segment and channel to best qualified, cost - efficient network resource to provide inspection. Technology enabled network resources include self service,
Slide 16: Reimagining the Claims Process
16 16 Reimagining the Claims Process 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 Trad
Slide 17: Crawford Platform Solutions
17 Crawford Platform Solutions For clients looking for speed, cost savings, customer satisfaction and quality through end - to - end digitized solutions, Crawford Platform Solutions is reimagining claims management by uniquely architecting networks, technology and Insurtech innovations. *First Notic
Slide 18: Digital claim platforms from FNOL to repair
18 From FNOL to finished repair, our commitment is to provide digitized claim platforms that reimagine and simplify the claims process resulting in elevated customer experience outcomes * In development including white label capabilities Digital X iOT RPA Escape of Water Alexa Asservio Renovo Job Tr
Slide 19: Driving Loss Ratio Improvement
19 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 20: Managed Repair Summary
20 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 21: Crawford Catastrophe Services
21 Crawford Catastrophe Services 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 r
Slide 22: Partnering with Leading Insurtechs
22 Crawford is Partnering with Leading Insurtechs Smart Water Meters Property Measurement and 3 - D Modeling Digital Desk for Interior Property Claims Automate and Expedite Claim Handling via Mobile* Enables Digitalization of Estimate Review Process* Immersive 3D Technology One - stop Information Po
Slide 23: On-Demand Services
23 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 24: Asservio
24 • 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 25: Our Capital Allocation Strategy
25 Strong financial position and liquidity Continuing share repurchase program as a component of our capital allocation strategy Our Capital Allocation Strategy We’re committed to employing a consistent strategy and are staying disciplined on our valuation approach Regular quarterly dividend For CRD
Slide 26: 2021 Priorities
26 Employee Health & Safety Protect our workforce first and foremost Customer Excellence Provide best - in - class service to our clients regardless of the global environment Brands, Relationships & Differentiation Strengthen industry leadership through our innovations and market leading solutions F
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: Global Service Lines & Q2 2021 Segment Results
28 28 Appendix A: Global Service Lines & Q2 2021 Segment Results 28
Slide 29: Second Quarter 2021 Financial Summary
29 (1) See appendix for non - GAAP explanation and reconciliation of non - GAAP measures. 29 Second Quarter 2021 Financial Summary ($ in millions, except per share amounts) June 30, 2021 June 30, 2020 % Change Revenues $267.5 $234.4 14% Non-GAAP Revenues excluding foreign exchange fluctuatio
Slide 30: Net Debt and Pension Liability
30 Net Debt and Pension Liability (1) As of 6/30/2021 Net debt at $80.3 million Pension liability at $44.2 million 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 Q2 2021 Net Debt ¹ - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 2015
Slide 31: Crawford Loss Adjusting
31 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. Crawford Loss Adjusting *First Not
Slide 32: Crawford Loss Adjusting Results
32 32 Highlights • 15% revenue growth in US • Recovering economic activity in US • Strong demand for major and complex adjustors driving investment in talent • Won ~$10 million of new business in the quarter Operating Results (2Q 2021 v. 2Q 2020) • Revenues of $116.0 million versus $109.1 million •
Slide 33: Crawford Platform Solutions
33 Crawford Platform Solutions For clients looking for speed, cost savings, customer satisfaction and quality through end - to - end digitized solutions, Crawford Platform Solutions is reimagining claims management by uniquely architecting networks, technology and Insurtech innovations. *First Notic
Slide 34: Crawford Platform Solutions Results
34 34 Highlights • Transformational area for Crawford • Volume increasing – Q2 saw the highest number of transactions in past two years • Despite benign weather, saw strong flow through • Won nearly $2 million of new business in the quarter Operating Results (2Q 2021 v. 2Q 2020) • Revenues of $51.1
Slide 35: Crawford TPA Solutions: Broadspire
35 For companies looking to enhance the claims experience and drive quantifiable savings, TPA: Broadspire is the third party administrator that delivers client - centric integrated outsourced solutions powered by innovation and data science. Crawford TPA Solutions: Broadspire Workers Compensation Au
Slide 36: Crawford TPA Solutions: Broadspire Results
36 36 Highlights • Claims volume up ~5% versus prior year • Impact of COVID still being felt in Canada and EU • Medical management is below pre - pandemic levels • Won more than $8 million of new business in the quarter Operating Results (2Q 2021 v. 2Q 2020) • Revenues of $100.4 million versus $88.7
Slide 37: Recent M&A
37 Recent M&A Extending our market position through recent acquisitions and innovative solutions HBA Group • Acquired HBA Group in 2020, a legal services provider which complements the Crawford TPA Solutions segment in Australia and the larger Asia region Asservio • Launched Asservio in 2021, a bold
Slide 38: Appendix B: Non-GAAP Financial Information
38 38 Appendix B: Non - GAAP Financial Information 38
Slide 39: Non-GAAP measures definitions
39 Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessaril y comparable to other similarly - titled measu
Slide 40: Segment and Consolidated Gross Profit; Adjusted EBITDA
40 Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Ind irect expenses consist of centralized administrative support costs, regional and local shared services that are allocated to each
Slide 41: Total Revenues Before Reimbursements by Major Currency
41 41 Total Revenues Before Reimbursements by Major Currency The following table illustrates revenue as a percentage of total revenue in the major currencies of the geographic areas in which Crawford does business: Three Months Ended ( in thousands ) June 30, 2021 June 30, 2020 Geographic Area Curre
Slide 42: Reconciliation of Non-GAAP Items
42 42 Reconciliation of Non - GAAP Items Revenues, Costs of Services Provided, and Operating Earnings Quarter Ended Quarter Ended June 30 , June 30 , Unaudited ($ in thousands) 2021 2020 Revenues Before Reimbursements Total Revenues $ 276,545 $ 242,875 Reimbursements ( 9,088 ) ( 8,459 ) Revenues Bef
Slide 43: Reconciliation of Non-GAAP Items: Adjusted EBITDA
43 43 Reconciliation of Non - GAAP Items (cont.) Adjusted EBITDA ) Quarter Ended June 30 , June 3 0 , Unaudited ($ in thousands) 20 21 20 20 Net income attributable to shareholders of Crawford & Company $ 11,780 $ 5,898 Add: Depreciation and amortization 10,464 9,390 Stock - based compensation 1,954
Slide 44: Reconciliation of Non-GAAP Items: Net Debt
44 44 Reconciliation of Non - GAAP Items (cont.) Net Debt June 30 , December 31, Unaudited ($ in thousands) 20 21 20 20 Net Debt Short - term borrowings $ 7,000 $ 1,570 Current installments of finance leases and other obligations 84 267 Long - term debt and finance leases, less current installments
Slide 45: Reconciliation of Non-GAAP Items: Segment Gross Profit
45 45 Reconciliation of Non - GAAP Items (cont.) Segment Gross Profit Three months ended ( $ in thousands) June 30, 20 21 June 30 , 20 20 Segment gross profit: Crawford Loss Adjusting $ 27 , 244 $ 30,525 Crawford Platform Solutions 15 , 435 10,662 Crawford TPA Solutions 19,064 17,170 Segment gross p
Slide 46: Reconciliation of Second Quarter Non-GAAP Results
46 46 Reconciliation of Second Quarter Non - GAAP Results Three Months Ended June 3 0 , 20 21 Unaudited ($ in thousands) Revenues Non - GAAP Operating Earnings Pretax Earnings Net Income Attributable to Crawford & Company Diluted Earnings per CRD - A Share (1) Diluted Earnings per CRD - B Share GAAP