Crawford & Company · NYSE:CRD.A
Crawford & — CFA New York 25th Annual Insurance Conference 2021
50 slides from Crawford &'s conference presentation, Nov 10, 2021
Slide 1: Investor Presentation
Investor Presentation November 2021 CRD-A & CRD-B (NYSE)
Slide 2: Forward-Looking Statements and Additional Information
Forward-Looking Statements and Additional Information Forward-Looking Statements This presentation contains forward-looking statements, including statements about the expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative a
Slide 3: Table of Contents
Table of Contents 3 4 Company Profile 8 Long-Term Growth Strategy 14 Platform Solutions Deep Dive 24 M&A Strategy 29 Environmental, Social, and Governance 30 Investment Thesis 31 Global Reach 32 Appendix 3
Slide 4: Crawford & Company
Crawford & Company 4 Uniquely positioned Uniquely positioned as as the the largest largest public public company company in in $60 $60 billion billion global claims global claims management global claims management market market. $18 BILLION+ 1.6 MILLION 9,000 Claims managed annually Claims handled
Slide 5: Financial Snapshot
Financial Snapshot OVERVIEW Q3 2021 GAAP $289 MILLION $11 MILLION CRD-A & CRD-B Revenues before reimbursements Net income NYSE ticker Q3 2021 NON-GAAP2 ~$500 MILLION Market capitalization¹ $30 MILLION $21 MILLION Adjusted EBITDA Operating earnings $0.06 Per share quarterly dividends $104 MILLION $0.
Slide 6: Market Leading Solutions
Market Leading 80-Year-Old Brand Trusted by Key Solutions Customers The Crawford brands offer high-quality and Crawford’s customer base includes the largest global technologically advanced solutions to clients: insurance carriers as well as Fortune 1000 companies • Loss Adjusting (Property / Auto /
Slide 7: Strategically Positioned in a Rapidly Changing Industry
Strategically Positioned in a Rapidly Changing Industry Industry is looking to leverage technology and seek new cost-efficient solutions to improve profitability Climate change: Rising frequency and severity of weather claims $219 Billion Estimated Loss Digitization of volume claims: Increasing digi
Slide 8: Evolving Crawford's Strategy for Long-Term Growth
Evolving Crawford’s Strategy for Long-Term Growth Our enhanced operating structure creates a better focus for management to take market share by differentiation Pillars of Differentiation • Become the benchmark in quality and expertise • Digitally enabled for efficiency LOSS • Broadest global reach
Slide 9: Crawford Loss Adjusting
Crawford Loss Adjusting 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. Property Casualty C
Slide 10: Crawford Loss Adjusting
Crawford Loss Adjusting Long-term strategy focused on becoming the industry benchmark in quality and expertise Focused Hiring of Major and Complex 250 Loss Adjusting Experts 200+ Adding experts for major and complex claims 200 Creating digitally enabled solutions 150 Setting benchmark of quality 100
Slide 11: Crawford TPA Solutions: Broadspire
Crawford TPA Solutions: Broadspire 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. Workers Auto/ General Medic
Slide 12: Leveraging Data & Analytics to Drive Growth in TPA
Leveraging Data & Analytics to Drive Growth in TPA Broadspire Streamlined approach to casualty claim solutions Omni-channel Desk Adjuster FNOL*/ Intake WeGoLook Claim Office On-demand Services Claim Team Manager Resolution Medical Management Dedicated or designated team Consultative Analytics 15% re
Slide 13: Crawford Platform Solutions
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. Managed Adjuster Em
Slide 14: Reimagining the Claims Process
14 Reimagining the Claims Process Crawford Platform Solutions 14
Slide 15: The Claims Process Evolution
The Claims Process Evolution Crawford Platform Solutions is using digital tools to improve efficiency, accuracy and quality of claims process Traditional Claims Process Reimagined Claims Process Policyholder reports claim. Carrier uses manual process to segment and channel claim. Automated triage Di
Slide 16: Reimagining the Claims Process
Reimagining the Claims Process Past (2000) Present (2020) Future (2030) Traditional: 80% Traditional: 70% Traditional: 20% Network/Fast Track Desk: 20% Network/Virtual Desk: 30% Network/Virtual Desk: 80% Contractor Network Contractor 2% Fast Track Traditional Network Desk 20% 20% Contractor 18% Netw
Slide 17: Platforms Driving Loss Ratio Improvement
Platforms Driving Loss Ratio Improvement Reduce Claim Costs thru Reimagination • Virtual Desk claims processing integrated with Network Solutions 7.5% Average Indemnity Driving Loss Ratio Improvement powered by Digital Platforms drives: Savings oFaster service oReduced claim expense oIndemnity manag
Slide 18: Crawford Platform Solutions: Growth Engine of the Future
Crawford Platform Solutions: Growth Engine of the Future Platforms strategy will develop the ‘next generation’ of the company Transformational Driver • Reimagining and simplifying the historically complex claims process through digital solutions • Q3 YTD Revenue: $157.8M • Q3 YTD Operating Margin: 1
Slide 19: Contractor Connection
Contractor Connection Key Stakeholder Value Service Delivery Highlights Value Proposition Contractor Services The largest managed repair network in the U.S., driving increased policy • Emergency Services – Board Up, Tree Removal, Roof Tarping holder satisfaction and indemnity accuracy, while enhanci
Slide 20: Crawford Catastrophe Services
Crawford Catastrophe Services Key Stakeholder Value Service Delivery Highlights Value Proposition Global Presence Enhancing the customer experience through scalable claims • Technology enabled scalable Workforce 6,000+ strong adjudication solutions leveraging the full spectrum of technology • US & C
Slide 21: WeGoLook
WeGoLook Key Stakeholder Value Service Delivery Highlights Value Proposition • Speed–We provide networks and technology to complete inspections Enhancing the policyholder experience and optimizing claim expense quickly. (Average time to complete inspections is 1.6 days). by combining technology with
Slide 22: Crawford is Partnering with Leading Insurtechs
Crawford is Partnering with Leading Insurtechs Digital Desk for Interior Smart Water Meters Property Claims Property Measurement and Cloud Service Platform 3-D Modeling for P&C Insurers Insurance Risk Data Analytics Immersive 3D Technology Mobile Claims Handling 22
Slide 23: Asservio
Asservio Crawford’s proprietary solution for enabling digitalization of estimate review process Providing efficiency • QA Automation & Digitalization providing continuous improvement thru reimagination process • Rules based on Crawford industry expertise and customizable by client Improving • Delive
Slide 24: Our M&A Strategy
Our M&A Strategy Crawford
Slide 25: M&A Strategy
M&A Strategy Our M&A is aligned to the three pillars of our strategy ▪ Bring digital enablement Digital ▪ Short circuit lead times ▪ Differentiated and entrenched ▪ Improves customer experience ▪ Special capability in the ▪ Enhances the quality value Expertise Quality proposition ecosystem ▪ People
Slide 26: edjuster
edjuster Two decades of recognized experience in the industry and a blue-chip carrier client base • In August 2021, Crawford acquired 100% of edjuster, the contents valuation leader in North America • Total purchase price of $33.1 million, structured as an upfront payment of $21.0 million in cash an
Slide 27: Praxis Consulting, Inc.
Praxis Consulting, Inc. Leader in the subrogation claims market with over 20 years of recognized experience and proven results • In October 2021, Crawford acquired the assets of Praxis Consulting, Inc. — the leading provider of outsourced subrogation claims management and recovery services in the Un
Slide 28: BosBoon
BosBoon More than two decades of specialist loss adjusting experience and a blue-chip client base • 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 $4.9 million, structured as an
Slide 29: Environmental, Social and Governance
Environmental, Social and Governance We are continuing to look for opportunities across our enterprise to become more socially responsible and are increasingly integrating ESG best practices into our operations Data Privacy & Human Capital Inclusion and Diversity Security Management & Diversity Esta
Slide 30: Why Invest in Crawford?
Why Invest in Crawford? Crawford’s leading market position in an evolving landscape provides a compelling investment narrative Attractive investment profile Strategically positioned in a rapidly changing industry Investing to drive innovation and accelerate growth Committed to environmental, social
Slide 31: Crawford & Company
31 Crawford & Company Global coverage that goes beyond borders 9K 50K 70 6K Employees Worldwide Field Resources Countries Network Contractors 31
Slide 32: Appendix A: Changing Industry Environment & Growing Market Opportunity
32 Appendix A: Changing Industry Environment & Growing Market Opportunity 32
Slide 33: More Frequent and Destructive CAT Events Leading to Heightened Insured Losses
More Frequent and Destructive CAT Events Leading to Heightened Insured Losses 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-re
Slide 34: Targeting National and Regional Players
Targeting National and Regional Players 1. ~98% of carriers are small to medium sized¹ 2. They have limited financial capacity¹ Carriers with less than $1B have limited capacity and scale to 15% invest in innovation 22% Commission 15% 92% Losses1 65% 3% Premium Taxes 17% 63% Other Expenses 6% 2% Inv
Slide 35: Appendix B: Global Service Lines & Q3 2021 Segment Results
35 Appendix B: Global Service Lines & Q3 2021 Segment Results 35
Slide 36: Third Quarter 2021 Financial Summary
36 Third Quarter 2021 Financial Summary Quarter Ended September 30, September 30, ($ in millions, except per share amounts) 2021 2020 % Change Revenues $288.5 $253.1 14% Non-GAAP Revenues excluding foreign exchange fluctuations(1) $279.1 $253.1 10% Net Income Attributable to Shareholders of Crawford
Slide 37: Crawford Loss Adjusting
37 Crawford Loss Adjusting Three months ended (in thousands, except percentages) September 30, 2021 September 30, 2020 Variance Highlights Revenues $123,965 $110,929 11.8% • Revenue growth of 12% over the prior year period • Recovering economic activity in US and impact from Direct expenses 95,782 7
Slide 38: Crawford Platform Solutions
38 Crawford Platform Solutions Three months ended (in thousands, except percentages) September 30, 2021 September 30, 2020 Variance Highlights • Revenue growth of 21% over the prior year period Revenues $64,314 $53,287 20.7% • Continued investment in quality assurance and business development resour
Slide 39: Crawford TPA Solutions: Broadspire
39 Crawford TPA Solutions: Broadspire Three months ended (in thousands, except percentages) September 30, 2021 September 30, 2020 Variance Highlights • Revenue growth of 13% over prior year period Revenues $100,221 $88,908 12.7% • Impact of COVID still being felt in Canada and EU • Medical managemen
Slide 40: Net Debt and Pension Liability
Net Debt and Pension Liability Significant reductions over the past 5+ years Net Debt Pension Liability 200,000 140,000 $171.2 million 180,000 120,000 160,000 $121.7 million 140,000 100,000 $103.7 million 120,000 80,000 100,000 60,000 80,000 60,000 40,000 40,000 20,000 $36.9 million 20,000 0 - 2015
Slide 41: Led By Experienced Leadership Team
Led By Experienced Leadership Team With an average of 30+ years of experience, Crawford’s strong and seasoned leadership team leverages its extensive knowledge and industry experience to drive our business Rohit Verma Joseph Blanco Andrew Bart Benedict Burke Mike Hoberman Mike Jones Chief Executive
Slide 42: Appendix C: Non-GAAP Financial Information
42 Appendix C: Non-GAAP Financial Information 42
Slide 43: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily compara
Slide 44: Appendix: Non-GAAP Financial Information (cont.)
Appendix: Non-GAAP Financial Information (cont.) Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and loca
Slide 45: Total Revenues Before Reimbursements by Major Currency
Total Revenues Before Reimbursements by Major Currency The following table illustrates revenue as a percentage of total revenue in the major currencies of the geographic areas in which Crawford does business: Three Months Ended September 30, September 30, (in thousands) 2021 2020 Geographic Area Cur
Slide 46: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Revenues, Costs of Services Provided, and Operating Earnings Quarter Ended Quarter Ended September 30, September 30, Unaudited ($ in thousands) 2021 2020 Revenues Before Reimbursements Total Revenues $ 297,562 $ 261,669 Reimbursements (9,062) (8,545) Revenues Before
Slide 47: Reconciliation of Non-GAAP Items (cont.)
Reconciliation of Non-GAAP Items (cont.) Adjusted EBITDA ) Quarter Ended September 30, September 30, Unaudited ($ in thousands) 2021 2020 Net income attributable to shareholders of Crawford & Company $ 11,195 $ 24,397 Add: Depreciation and amortization 9,826 10,700 Stock-based compensation 2,001 734
Slide 48: Reconciliation of Non-GAAP Items (cont.)
Reconciliation of Non-GAAP Items (cont.) Net Debt September 30, December 31, Unaudited ($ in thousands) 2021 2020 Net Debt Short-term borrowings $ 1,500 $ 1,570 Current installments of finance leases and other obligations 82 267 Long-term debt and finance leases, less current installments 139,028 11
Slide 49: Reconciliation of Non-GAAP Items (cont.)
Reconciliation of Non-GAAP Items (cont.) Segment Gross Profit Three months ended ($ in thousands) September 30, 2021 September 30, 2020 Segment gross profit: $ Crawford Loss Adjusting 28,183 $ 33,171 Crawford Platform Solutions 16,435 14,401 Crawford TPA Solutions 19,782 17,860 Segment gross profit
Slide 50: Reconciliation of Third Quarter Non-GAAP Results
Reconciliation of Third Quarter Non-GAAP Results Three Months Ended September 30, 2021 Net Income Attributable to Non-GAAP Crawford & Diluted Earnings Diluted Earnings Unaudited ($ in thousands) Revenues Operating Earnings Pretax Earnings Company per CRD-A Share per CRD-B Share GAAP $ 288,500 $ 20,7
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