Crawford & Company · NYSE:CRD.A
Crawford & — Keefe, Bruyette & Woods Insurance Conference 2009
34 slides from Crawford &'s conference presentation, Sep 9, 2009
Slide 1: Keefe, Bruyette & Woods Insurance Conference
Exhibit 99.1 Keefe, Bruyette & Woods Insurance Conference September 9, 2009 WORKINGTOGETHER: theCrawfordDifference
Slide 2: Forward-looking Statements, Segment Operating Earnings and Non-GAAP Financial Information
Forward-looking Statements, Segment Operating Earnings and Non-GAAP Financial Information Forward Looking Statements: This presentation contains forward-looking statements, including statements about the future financial condition, results of operations and earnings outlook of Crawford & Company. St
Slide 3: Our Market Leading Global Businesses
Our Market Leading Global Businesses • World’s largest fully-integrated independent provider of global claims management solutions. • Four operating segments: – International Operations • Serves the global insurance industry and multi-national corporations – U.S. Property & Casualty • Serves the U.S
Slide 4: Positioned for a Global Economy
Positioned for a Global Economy More than 700 locations in 63 countries 4 WORKING TOGETHER: theCrawfordDifference
Slide 5: Diversified Business and Clients
Diversified Business and Clients Fiscal 2008 Revenues of $1.05 Billion • No single client over 6% of total revenue • Top 20 Clients represent 35% of total revenue • Top 50 Clients represent 49% of total revenue Broadspire • Workers’ Compensation and International Liability Claims Administration Oper
Slide 6: Goals: 2009 - 2011
Goals: 2009 - 2011 •Leverage and grow Crawford & Company’s position as the world’s largest independent provider of claims solutions. –Expand Key Account Management to improve sales and marketing initiatives to win more business. •Further improve working capital management. – Accounts receivable, DSO
Slide 7: The Crawford System of Claims Solutions
SM The Crawford System of Claims Solutions The Crawford System is the most comprehensive global, integrated solution for all corporate, insurer, and re-insurer claims administration. 7 WORKING TOGETHER: theCrawfordDifference
Slide 8: Financial Review
Financial Review WORKINGTOGETHER: theCrawfordDifference
Slide 9: Crawford Financial Performance
Crawford Financial Performance • Solid performance in a difficult operating $1,200 $ in millions environment $1,100 Revenue CAGR of 5.9% from 2005 to 2009(E) Net income CAGR of 16.0% from 2005 to 2009(E) $1,000 1,049 International growth (before currency effects) of 8.7% $900 975 970 from 2005 to 20
Slide 10: Second Quarter 2009 Financials
Second Quarter 2009 Financials CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Thousands, Except Earnings Per Share Amounts and Percentages) Three Months Ended June 30 2009 2008 % Change Revenues: Revenues Before Reimbursements $249,664 $263,265 -5% Reimbursements 21
Slide 11: Revenue and Earnings Per Share Bridge 2nd Quarter 2008 to 09
Revenue and Earnings Per Share Bridge 2nd Quarter 2008 to 2009 Net Income (Loss) Attributable Revenues Before to Crawford In millions, except per share amounts Reimbursements & Company EPS 2nd quarter 2008 results $263.3 $7.9 $0.16 (Less)/Add: Foreign currency impact in 2009 (24.3) (1.5) (0.03) Incr
Slide 12: Second Quarter 2009 Financials: Balance Sheet Highlights
Second Quarter 2009 Financials Crawford & Company Balance Sheet Highlights As of June 30, 2009 and December 31, 2008 (in thousands) June 30 December 31, 2009 2008 Change Cash and cash equivalents $58,100 $73,124 ($15,024) Accounts receivable, net 149,099 157,430 (8,331) Work in process 101,393 99,11
Slide 13: Second Quarter 2009 Financials: Free Cash Flow (Non-GAAP)
Second Quarter 2009 Financials Crawford & Company Free Cash Flow (Non-GAAP) For the year-to-date periods ended June 30, 2009 and 2008 (In Thousands) June 30, June 30, 2009 2008 Net Income Attributable to Crawford & Company ($85,042) $17,000 Plus: Non-Cash Preliminary Goodwill Impairment Charge 94,00
Slide 14: Operating Segments
Operating Segments WORKINGTOGETHER: theCrawfordDifference
Slide 15: Summary Results, International Operations
Second Quarter 2009 Financials Summary Results, International Operations $ in millions For the quarters ended June 30, 2009 and 2008 120 in thousands except percentages 110 Unaudited 100 2009 2008 % Change $113.4 90 $96.1 80 Revenues $ 96,127 $ 113,433 -15.3% 70 Total Operating Expenses 87,907 102,9
Slide 16: International (excluding U.S.) Property & Casualty Insurance Market
International (excluding U.S.) Property & Casualty Insurance Market • Only 4.4% of dollars spent by rest of world (ROW) carriers on claims are outsourced to third party independent adjusters. • Very few global claims providers – Crawford is the largest • As ROW insurance carriers look to consolidate
Slide 17: Summary Results, U.S. Property & Casualty
Second Quarter 2009 Financials $ in millions Summary Results, U.S. Property & Casualty 60 For the quarters ended June 30, 2009 and 2008 50 in thousands except percentages 40 $54.5 Unaudited $51.2 2009 2008 % Change 30 20 Revenues $ 54,547 $ 51,198 6.5% 10 0 Total Operating Expenses 48,329 46,106 4.8
Slide 18: U.S. Insurance Market
U.S. Insurance Market • Approximately 14% of dollars spent by U.S. carriers on claims services are outsourced to third parties – High propensity to outsource non-core lines and/or non-core states • Outsourced claims service provider market is highly fragmented – Crawford is the market leader with ap
Slide 19: U.S. and International Property & Casualty Growth Opportunities
U.S. and International Property & Casualty Growth Opportunities • Strategic Growth – Target large insurers who are consolidating their vendor lists and strive to ensure Crawford is named an approved vendor • Continuous quality improvement • Efforts toward training and product development – Target ma
Slide 20: U.S. Catastrophe (CAT) Activity
U.S. Catastrophe (CAT) Activity Quarter Ended June 30: U.S. Catastrophe Revenues $ in millions 8 Catastrophe revenue up to $7.2 million from $3.5 million 6 $7.2 CAT events totaled 18 in the 2009 4 period compared to 25 in 2008 2009 reflects benefit due to severe 2 $3.5 weather in first and second qu
Slide 21: Summary Results, Broadspire
Second Quarter 2009 Financials $ in millions Summary Results, Broadspire 90 For the quarters ended June 30, 2009 and 2008 80 in thousands except percentages Unaudited 70 $79.1 2009 2008 % Change $73.1 60 50 Revenues $ 73,056 $ 79,065 -7.6% 40 2Q 2009 2Q 2008 Total Operating Expenses 73,662 76,525 -3
Slide 22: U.S. TPA Market Opportunities
U.S. TPA Market Opportunities • Self-insured entities and captives outsource substantially all of their claims services • Outsourced total claims management is fragmented • Local and regional providers unable to leverage technology investment Unallocated Loss Adjusting Expenses Outsourced Loss Adjus
Slide 23: Broadspire Positioning
Broadspire Positioning Third Largest TPA in Workers’ Compensation/Liability Market Products and Services: Workers’ Compensation Claims Services Auto and General Liability Claims Services Medical and Disability Management Services Long-Term Care Services Risk Management Information Systems (Risk Scie
Slide 24: Summary Results, Legal Settlement Administration
Second Quarter 2009 Financials $ in millions Summary Results, Legal Settlement Administration 29.0 For the quarters ended June 30, 2009 and 2008 27.0 in thousands except percentages 25.0 Unaudited 23.0 $25.9 2009 2008 % Change 21.0 19.0 Revenues $ 25,934 $ 19,569 32.5% 17.0 $19.6 15.0 2Q 2009 2Q 200
Slide 25: GCG Products and Services
GCG Products and Services • The Garden City Group, Inc. (GCG) provides these core services: – GCG Class Action Services provides technology-intensive administrative services for plaintiff and defense counsel and corporate defendants to expedite high-volume class action settlements. – GCG Bankruptcy
Slide 26: Securities Class Action Cases
Securities Class Action Cases 35 30 31 25 27 20 15 10 10 5 4 4 4 0 AB Data, Berdon Complete Heffler Gilardi & Garden Ltd. LLP Claims Radetich & Co. LLC City Group Solutions Saitta LLP Source: RiskMetrics Group (SCAS Top 100 since 1995, September 30, 2008) GCG has handled one-third of the largest 100
Slide 27: Summary
Summary WORKING TOGETHER: theCrawfordDifference
Slide 28: Crawford is "Positioned for Growth"
Crawford is “Positioned for Growth” • Access to growing global markets • Increasing market share both domestic and internationally • Crawford expects to benefit from global consolidation of TPA vendors • Diverse customer base • High customer retention rates • Emphasis on quality and value provided s
Slide 29: Execution Strategy
Execution Strategy • Relentless dedication to outstanding execution • Each strategic action and intention translated into monthly, measurable, objectives and outcomes • Systematic tracking of interim milestones better enables leadership control and proactive decision making • Reinforce accountabilit
Slide 30: 2009 Guidance
2009 Guidance • Full Year 2009 Guidance: – Consolidated revenue before reimbursements between $960 million and $980 million – Consolidated operating earnings between $52.5 million and $57.8 million – Consolidated cash provided by operating activities between $35 and $40 million – After reflecting st
Slide 31: WORKING TOGETHER: the Crawford Difference
WORKING TOGETHER: the Crawford Difference “Crawford & Company will be known as a target driven corporation that meets its promises to clients and shareholders.” Jeffrey T. Bowman President and CEO 31 WORKING TOGETHER: theCrawfordDifference
Slide 32: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information Reimbursements for Out-of-Pocket Expenses In the normal course of our business, we sometimes pay for certain out-of-pocket expenses that are reimbursed by our clients. Under GAAP, these out-of- pocket expenses and associated reimbursements are reported as rev
Slide 33: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information CRAWFORD & COMPANY (in $000's) June 30, December 31, 2009 2008 Deferred Revenues, Net Deferred revenues, current $ 58,647 $ 59,679 Deferred revenues, noncurrent 37,405 42,795 Total deferred revenues 96,052 102,474 Less: Receivable held in trust included in ac
Slide 34: Keefe, Bruyette & Woods Insurance Conference
Keefe, Bruyette & Woods Insurance Conference September 9, 2009 WORKINGTOGETHER: theCrawfordDifference
Crawford & — Keefe, Bruyette & Woods Insurance Conference 2009 on 6ix