Q1 2022 Crawford & Co Earnings Call
It's been fun Crawford <unk> company's general counsel for E Mail some of the matters to be discussed in this conference call and the supplementary financial presentation may include forward looking statements that involve risks and uncertainties. These statements may relate to among other things the impact of COVID-19 are expected future operating results and financial.
Condition, our ability to grow our revenues and reduce our operating expenses expenses expectations regarding our anticipated contributions to our underfunded defined benefit pension plan.
<unk> ability of our billed and Unbilled accounts receivable financial result, compliance with the financial and other covenants contained in our financing agreements our long term capital resources.
What are your requirements and our ability to pay dividends in the future.
The company is actually could differ materially from the results that maybe implied by such forward looking statements.
The company undertakes no obligation to publicly release revisions to any forward looking statements made in this conference call to reflect events or circumstances occurring after the date of the call or to reflect the occurrence of unanticipated. Jim you are reminded that the operating risk.
Results for any historical period are not necessarily.
And for any future period.
For a complete discussion regarding factors, which could affect the companys financial performance.
Please refer to the Companys Form 10-Q for the quarter ended March 31, 2020 to file with the Securities and exchange.
Thanks Commission, particularly the information under the headings risk factors and management's discussion and analysis of financial condition and results of operations as well as subsequent cost measures as defined under SEC rules as required a reconciliation is provided for those measures to the most directly comparable.
GAAP measures.
I'd like to now introduce Mr.
Crawford <unk> company you may begin the conference.
Thank you Debbie good morning, and welcome to Encore.
First quarter 2022 earnings call. Joining me today is Bruce <unk>, Chief Financial Officer, Joseph Blanco, our breath.
Thanks Steven.
As a result, I would like to extend my boss.
Our colleagues clients and partners, who have family and friends.
Well for the safety of the <unk>.
Brendan depot, especially all those.
Hi, good morning.
Peaceful revolution to the conflict.
Duration to understand how this morning.
Thanks to our colleagues in your brain.
Crawford delivered strong top line.
My name is increasing over 10% to $279 million.
Despite a benign weather environment.
This marks our fourth consecutive quarter of double digit revenue growth and we are extremely proud of this continued momentum these.
These strong results underscore the hard work of our colleagues as well as the progress we're making on our long term growth strategy.
In the future.
<unk>.
We're gaining market share across all segments of our business.
Within North America loss, adjusting we're seeing strong contributions from major and complex question as loss Adjusters platform solutions also remains a growth driver for us.
<unk> growth year over year. This was aided by increased traction with large U S carriers as well as our better than expected performance of the <unk> acquisition.
Looking globally, we're making progress in our international operations. Despite continued margin pressure due to the same factors. We reviewed with you on our last few earnings calls.
Mainly benign weather activity any weakness in certain pockets of our international business, while economic activity in our international market is gradually coming back it is not rebounding as quickly as anticipated. Nevertheless, we remain confident in our ability to alleviate these martin challenges and are keenly focused on exploring ways to improve the profit.
Contribution from the underperforming segments and more holistically, realizing the gains from our growth.
We continue to execute on our M&A strategy during the first quarter further building our existing extensive presence in the Dutch market comp.
Complementing our recent acquisition of <unk>, we acquired the assets of <unk>, a personal injury loss adjusting company based in the Netherlands. The acquisition expands Crawford bodily injury service by adding a highly qualified team of specialists adjustors.
These experts our skill and managing complex mass events, resulting in engineered debt as well as handling medical liability claims.
In addition, it will provide the opportunity to cross that expertise improve workload allocation and gain operational synergies.
And it reinforces our strategy of increasing scale and driving margin improvement within Europe , while transforming crawford into a leading bodily injury Blair in the Netherlands.
Building on our momentum, we're making strong progress on our long term growth strategy, which is built around our three pillars of differentiation.
Quality that the industry benchmark.
Expertise that is deep and evidence.
Digital capabilities that simplify our processes.
Organic growth remains the foundation of the strategy and amplified by our selective M&A.
Moreover, our updated geographic reporting structure reflects the evolution of our business by better reviewing opportunities for future growth and providing additional transparency.
For our stakeholders.
Not only will this create synergies, but also believe the cultural changes, which foster a growth mindset and empowerment.
Let's turn to our capital allocation strategy capital allocation in all of our discipline on our priorities remain to invest in the long term growth and the health of our company, particularly to organic growth and M&A, followed by share buybacks and a consistent dividend.
As you have seen in the recent quarter, we have made several bolt on acquisitions to add to our differentiated capabilities in.
In addition to M&A, we believe share buybacks have also been a prudent use of our capital. The board recently authorized an increase to the share repurchase program of up to an additional 5 million shares.
Given our growth trajectory and our belief that our shares trade well below their intrinsic value. We bought back two 2 million shares in the first quarter and believe this to be an attractive investment opportunity.
Overall, we are in a strong financial position and feel confident in our ability to continue executing on our growth strategy, while navigating an evolving macroeconomic environment.
With that I'd like to hand over the call to Joseph who will discuss our business line results for the first quarter.
Thanks, Rod focusing on North America, la suggesting which services the north American property and casualty market.
Revenues were driven by our large and complex business. We have continued to hire more specialists, including 35 loss adjusters during the first quarter.
Our deep expertise is establishing us as leaders in the marketplace and driving new business wins, especially among large U S clients.
As we anticipated our business in Canada experienced growth of the prior year due to a rebound in activity as a result of the continued COVID-19 recovery.
Additionally, our clients are increasingly turning to Crawford as they grapple with staffing challenges.
This is direct result of our cultivated relationships.
Although we expect the elevated outsourcing opportunities to be short term. We believe there will be a long term benefit of these deepening relationships, which will lead to additional opportunities in the future.
Turning now to our international operations.
We are building solid traction in this segment. Despite continued weakness in certain business lines in the U K, Australia and Asia.
In the U K the weakness is isolated to specific business lines, while Australia exhibited some transitory weakness in the first quarter is expected to see recovery in the second quarter amidst unprecedented flooding in southeast, Queensland, and New South Wales.
In Asia, Despite a muted performance in the first quarter, we have made good progress on our regionalization strategy and remain optimistic in our outlook.
Europe is seeing signs of the COVID-19 recovery and benefiting from talent acquisitions.
We're taking steps to further diversify our business and implement some cost containment measures and geographies experiencing continued weakness although.
Although it will take time for the full effect of those actions to be realized we believe that we will see some of these impacts throughout the remainder of the year.
Looking to our U S based brought by our business. We are continuing to make solid headway as we have seen a benefit from the recovering economic environment. We are seeing an increase in claims volumes and we expect further improvement as medical management claims continued to recover.
We are continuing to invest in talent ahead of an anticipated sustained growth trajectory and we expect to see margin improvement as this unfolds.
Platform solutions continues to experience tremendous growth driven by several factors, including our gains in the large carrier space and robust deployment levels from outsourcing opportunities from our clients.
As a result platform solutions is growing despite less storm activity in the first quarter.
Our platforms businesses are consistently delivering stellar performances Pratt.
Practice, which we acquired in late 2021 was a strong contributor to growth with better than expected results in the first quarter benefiting from an additional capabilities that Crawford has been able to provide this business.
Additionally, the Crawford inspection services business that we launched a little over a year ago and we go look we're also gaining traction in the marketplace and we continue to observe strong results each month.
Overall our.
Our strategy to re imagine the claims process within platforms is bearing fruit and our recent success with this business only underscores the strength of our strategy and solid execution.
We remain confident about the long term health of the business and expect organic growth momentum to continue we went over $43 million of new and enhanced business in the first quarter.
We increased our NPS score of 52 up seven points compared to 2021 and up one point from the fourth quarter of 2021. Additionally.
Additionally, we retained 91% of our U S. <unk> business in the first quarter of 2022, and we continue to increase market share with key carrier clients.
We will continue our commitment to delivering service excellence, if you move through 2022.
At Crawford everything we do ties back to our purpose of restoring lives businesses and communities.
We believe in minimizing our environmental impact.
Anything with honesty, and integrity and driving conscious inclusion and diversity at every level of the organization.
We continue to make progress on ensuring our processes are more efficient and sustainable we incorporated sustainability criteria into our purchasing processes to ensure all goods and services are procured an ethical sustainable and socially responsible ways to reduce the environmental footprint of our operations and supply chain.
These requirements include disclosure of relevant sustainability information from suppliers.
We're also making consistent progress on our <unk> and human capital initiatives, our employee resource groups for Eog's continued to engage employees segments, such as multi racial and ethnic employees women LGBTQ plus employees and disabled employees and.
To ensure that our leader leaders model fairness, and inclusivity and their behaviors unconscious bias training was completed by the <unk>.
For all of our 1300 40 managers globally in 2021.
On the Gulf.
Governance front, we were recently recognized as a three plus company with three or more women.
Women on our board of directors by the organization 50, 50 women on boards, a global education advocacy campaign, driving gender balance and diversity on corporate boards.
We are very proud of this recognition and believe the gender and ethnic diversity is vital to the strength of our board of directors and to our organization as a whole.
Overall, we remain steadfast in our commitment to ESG and we are dedicated to cultivating a safe.
We will continue to look for opportunities across our enterprise.
To become more socially responsible and are increasingly integrating ESG best practices into our operations and.
In the coming weeks, we will be publishing our inaugural global citizenship.
Yep report, which highlights our accomplishments thus far it outlines our commitments for the future as we continue on our journey to help make the way, let me turn the call over to Bruce for a deeper look at our financial performance.
Thank you Joseph Companywide revenues before reimbursements in the 2022 first quarter were $279 million up 10% decreased revenues before reimbursements.
That's about $2 $8 million or 1% on a constant dollar basis revenues before reimbursements.
Yeah.
GAAP diluted EPS in the 2022 first quarter was 10 for both CRD.
Okay, and CRD b compared to <unk> 11 for both share classes in the 2021.
Period.
On a non-GAAP basis first quarter 2022 diluted EPS was <unk> 15 for both CRB and CRD b unchanged for both share classes compared to the 2021 period.
The company's non-GAAP operating earnings totaled $13 1 million in the 2022 first quarter or four 7% of revenues, increasing slightly from $13 million or five 1% of revenue.
And it was in the prior year period.
Consolidated adjusted EBITDA was $21 9 million in the 2022 first quarter were seven 8% of revenues compared to $22 2 million or eight 8% of revenues in the 2021 quarter.
I will now review the first quarter 2022 performance of each of our segments.
As a reminder, North America loss, adjusting which services the North American property and casualty market is comprised of the previously reported Crawford loss adjusting segment in the U S and Canada, including global Technical services and HST.
The Canadian operations will include all operations within that country, including those previously reported within the Crawford Tpa solutions and Crawford Crawford platform solutions segments.
North American loss adjusting revenues totaled $64 4 million in the 2022 first quarter, increasing 14, 5%.
$56 3 million reported in last year's quarter, including $3 6 million from the <unk> acquisition.
The segment reported operating earnings of $4 1 million in the 2022 first quarter decreasing from $4 4 million reported in last year's quarter. The operating margin was six 4% in the 2022 quarter compared to seven 7% in the 2021 quarter.
The prior year was aided by $1 million benefit from the Canada emergency wage subsidy our Qs.
Turning to international operations. This segment services, the global property and casualty market outside of North America, and it's comprised of the previously reported Crawford loss adjusting segment outside of North America and includes Crawford legal services, which was previously within the Crawford AG solutions segment.
Similar to Canada, the individual countries in international International operations revenues totaled $89 3 million in the 2022 first quarter, increasing three 2% from $86 5 million reported in last year's quarter, including $1 million from the boss Boone acquisition.
Foreign exchange rate impacts totaled $2 8 million in the 2022 quarter.
The segment reported operating losses of $3 1 million in the 2022 first quarter, increasing from losses of 700000 reported in last year's quarter. The operating margin was negative three 4% in the 2022 quarter compared to negative <unk>, 8% in the 2021 quarter as Joseph discussed earlier.
<unk> operating earnings and margins during the quarter were pressured by higher centralized support cost and weaknesses in certain international business lines in the U K, Australia and Asia.
Our broad spire segment provides third party administration for workers' compensation auto and liability disability absence management medical management and accident and health to corporations brokers and insurers in the U S.
<unk> revenues were $75 million in the 2022 first quarter, increasing two 9% from 70.
One period.
<unk> operating earnings were $6 4 million in the 2022 first quarter decreasing from last year's first quarter operating earnings of $6 7 million. The operating margin in this segment was eight 4% in 2022 quarter.
Nine 1% in the 2021 period with increased compensation and indirect costs weighing on margins.
Lastly, as platform solutions, which consist of contractor connection networks and subrogation service lines in the U S.
Network service line includes catastrophe.
Three operations and we go look.
Revenues for platform solutions were $48 9 million into 2022 first quarter, increasing 35, 2% over the $36 1 million in the prior year quarter, including $6 1 million from the practice acquisition.
Operating earnings in platform solutions totaled $8 million or 16, 5% of revenues in the 2022 first quarter doubling our operating earnings of $4 million or 11, 1% of revenues in the prior year quarter.
Expanding margins in our network service line and the positive contribution from the recent practice acquisition drove the profit improvements.
Unallocated corporate costs were $2 5 million in the 2022 first quarter compared to cost of $1 4 million in the same period of 2021. This.
This increase was primarily due to a 1 million skus benefit in the 2021 quarter, a $1 million increase in unallocated payroll taxes and benefits and a 900000 increase in other and other unallocated costs, partially offset by a $1 8 million gain on the 2022 sale of our Canadian head office building.
In Kitchener, Ontario.
We recognized $2 1 million pre tax adjustment to our contingent earn out and the 2020 to first quarter.
This was the result of favorable changes to projections of certain acquired entities.
This non operating charge, which impacts EPS by three is.
Is added back for the determination of non-GAAP net income and EPS.
During 2022, there were no benefits from Qs compared to a total of $1 9 million in the 2022 2021, rather first quarter.
During the first three months of 2022, the company repurchased one 5 million shares of CRD, a and 720000 shares of CRD B at an average cost per share of $7 23 and.
$7 31, respectively.
The total cost of share purchase share repurchases during 2022 was $16 1 million.
As Robert and Joseph touched upon earlier subsequent to quarter end, we purchased certain assets of RP van Dijk. The total purchase price included the upfront payment of $4 4 million in cash with a maximum payout of $2 2 million structured as a two year earn out.
The company's cash and cash equivalent position as of March 31, 2022 totaled $49 2 million compared to $53 2 million at the 2021 year end.
Our total receivables were up $3 6 million from the 2021 year and largely driven by our international operations and accounts receivable from our recently completed acquisitions.
We've made no discretionary contributions to our U S defined benefit pension plan for the first quarters.
Yes.
'twenty one.
Although the company has made these contributions for the last several years in the U S. Given the significant improvement in funding levels.
Tend to make contributions in 2022.
Company's total debt outstanding as of March 31, 2022 totaled $232 6 million compared with $175 million as of December 31, 2021, reflecting borrowings.
<unk> and share repurchases.
Net debt stood at $183 4 million as of March 31, 2022, while our leverage ratio under our credit agreement closed at 2.06 times EBITDA.
Additionally, our pension liability was down $15 4 million at the end of the first quarter, reflecting the funded ratio of 95, 6%.
Cash used by operations totaled $15 3 million during 2022 compared to $1 6 million provided in 2021 the.
The decrease in cash provided by operating activities was primarily due to increased incentive compensation payments of $6 4 million in 2022 compared to 2021.
Cash benefits.
To queues and other international Covid related programs of $4 9 million that were not present in 2022, and another $5 6 million and timing differences in U S payroll taxes and other prepaid assets.
Free cash flow was negative $22 9 million for the first three months of 2022 compared with negative $3 4 million in the prior year.
I would like to turn the call back to <unk> for concluding remarks.
Thank you Brent is overall, we're tremendously pleased with our results for the first quarter, which highlight the effectiveness of our long term growth strategy.
Years remained shifted in growth mode, which is demonstrated by the fourth consecutive quarter of revenue growth and we are confident in our ability to carry this momentum forward into future quarters.
We believe the strategic evolution of our business, but enable us to confidently execute on our growth plan and envisioned future supported by our best in class group of experts and leaders.
Our financial position is enviable and we look forward to delivering value to our shareholders in 2022, while fulfilling our purpose of restoring lives businesses and communities.
Thank you for your time today now please open the call for questions.
Hey, Dan Lee at this time, if you would like to ask a question. Please press Star then the number one on the telephone keypad to withdraw your question press. The turnkey. If you are using a speakerphone. Please pick up your handset before asking a question, we'll pause for just a moment to compile the Q&A roster.
Our first question comes from the line of.
<unk> of <unk> Securities. Your line is now open you may ask your question.
Thanks. Good morning, guys. This is Michael Ramirez in for Mark. Thanks for taking my question. This morning, Hey, Michael.
Hi, Mike.
Hello.
I'm just curious what does the pipeline look like for client growth that the contractor connection and if you could.
Maybe help us understand if there was one of your major levers for incremental topline and Bottomline growth.
So our pipeline.
<unk> strong across across all of our businesses.
As we shared that we won about $43 million of new business just in comparison to what we have shared in the call related in the fourth quarter last year in total for the full year, we had $100 million of business.
For the entire company.
Contractor connection we already do.
A significant portion of the top 20 carriers and we are continuously expanding that the specific growth that we're seeing in platforms right now is coming from.
Our catastrophe network business or we go look network business.
Well, our process, which was our most recent acquisition that reports through our platform segment, So thats whats driving.
The growth in the third quarter.
But overall, we feel that the pipeline for contractor connection is strong.
Okay, great. Thank you for that.
I guess, we saw a little bit of improvement.
In the international segment.
Can you maybe help us understand how long you think it would take you to get back to positive Berman.
Yes overall, we're encouraged by our international segment. If you look at what's driving the difference between last year. This year than it was a difficult comparison with Australia, because they were strong and as you may recall in the November December timeframe last year in Australia, which.
Which weren't there. So there was definitely some weakness in Australia, although we think that weakness is short lived.
Because of the activity that we're seeing as a result of those laws and we expect that.
We should see a lift coming from that in the second quarter and subsequent quarters.
The second area.
A comparison of North Asia, and we have shared as a matter of fact in our third and the fourth quarter last year, but that is that.
As a geography that glass severely impacted by Covid and the geographies that got severely impacted by certain other changes in the business and we have expanded a rebuilding mode and actually we are operating.
Hi, just back from our expectation in Asia is doing better than what we expected so while it's themes.
Our comparison to last year is not favorable but if we look at a comparative to our expectations. It was actually pretty favorable. So we feel good and in UK. We've got a business, which has had a pocket of weakness, which is continued longer than we want it to be but we feel confident that we will resolve it before the end of the year.
And overall, we're very pleased with our UK operations, it's one specific business or one specific issue.
Cause weakness and we are working to alleviate that and feel pretty confident about it before the end of the year.
Okay perfect. Thank you for that.
Maybe just shifting gears a little bit.
Can you give us a sense of.
What do you think the build would be in terms of workers compensation claims and medical case management.
Sorry, what would be I am I apologize I didn't catch the question Mike.
Sure No. We're just wondering do you think theres going to be sort of a slow build in terms of workers' compensation claims billed and medical.
I understand that yes.
Yes.
Already seeing recovery in our workers' compensation claim volume and the claim volume has been sequentially up.
Alan has been medical management has not recovered at the same pace at which we're seeing the workers' compensation claims recover and while we've seen some recovery in on medical management claims is certainly not to the level of the pre pandemic.
But we've been very encouraged with the new business growth that we're seeing.
And in our businesses and broad spot.
Specifically as it relates to workers' comp.
I think as the year goes by and things remain come back to normalcy, we should see that pick up that's what we've been seeing over the last three quarters.
We also saw a little bit of a bump because of Covid claims we expect the Covid claims.
Two to come down and they have been coming down, but we think that the more traditional account business will continue to pick up as workers return to work.
Okay.
Just a quick follow up on that one.
Regarding the health care costs within Workers' comp and are you seeing any signs of emerging inflation.
So it's a good question I don't know as we looked at it from an inflationary perspective, we're certainly seeing inflation impact on our corresponding loss business, where we're seeing timelines for property repairs to be longer.
Highlights of our order numbers can be longer.
I don't know if.
If I have seen a specific piece on inflation as it relates to comp, but let me ask Bruce.
Bruce are Joseph if they want to add something to that.
No I think.
I think you've covered it I'm not I'm not aware of us.
Specific impact that we're seeing.
Okay, great well, thanks for taking our question.
Thank you Mike.
Thank you. The next question comes from the line of Kevin Spanky Barrington Research. Your line is now open you may ask your question.
Hey, good morning, everyone.
Hi, Kevin Hi, Kevin.
Okay.
Hey, I wanted to start off by asking about within platform solutions.
The network business.
40% year over year.
Growth there in the quarter.
And you mentioned the benign weather environment. So.
I guess should we just think about that is being driven by.
The increased penetration of the large carriers that you referenced.
Overall market share gains.
Yes, I think that is the primary factor, but I think Kevin the other factor that's playing out right now in the P&C market, specifically, but I am seeing it broadly as well as the availability of staffing.
We have data that we have been very fortunate both in terms of the recruitment and retention.
And what we're seeing is that a lot of our carrier partners.
A lot of the other industry sectors are seeing a pretty significant issues with retention and staffing and as a result of which we have seen more order flow or come to us.
And yes, it's come from mainly the large carriers, but we've seen some significant work coming from from large carriers. While there was no. While there was no real major storm activity and that work has been not just on the property side, but also on the casualty side, where the auto frequency has picked up pretty pretty.
Currently and in auto carriers.
They will have adequate staffing levels, particularly for auto and other casualty lines as well, which are taken a hit during COVID-19 us as you will recall.
So I think we've been we've benefited benefited from that has given us the ability to demonstrate broader capabilities to our to our carrier partners. So it's not just been.
The weather issue or it's been also.
Other elements that have led to increased outsourcing by the by the carriers.
Okay, Yes, that's very interesting.
<unk>.
How do you feel about your ability.
To stay up and retain.
Talent in this environment, obviously, you've mentioned Mckinsey was having some issues.
It's a very tight labor market.
It sounds like you've been able to capitalize on that.
But just wondering about what youre seeing.
In terms of staffing and retention overall.
Yes.
We are obviously not immune from the challenges that are broadly in the industry, but I would like to say that.
We've had a few booster shops that are that have helped with the annuity if I can use that analogy.
Attrition is up but but it's probably up by roughly 100 basis points on the overall in the overall organization.
Which.
The services business from what I've seen is actually pretty pretty good.
We've also been investing pretty significantly in training.
We've trained close to 600 adjusters adjusted in the first quarter.
Which we think creates a healthy pipeline for us to bring in new talent in the industry. We've also partnered at least in the U S as well as in UK with some of the local college system starting to do some a breakfast apprenticeships.
Internships, and we think that that is creating momentum for us to continue to add add people again into the industry and into the organization. So we feel good about the progress that we've been making we're certainly not out of the out of the woods, yet because I think as the year goes by and as people get integrated back into the workforce, we might see some more.
Some more changes happening, but where we are right now we feel pretty good about.
Okay. Good.
Switching to our North American law, suggesting.
It does.
First is housekeeping.
Gesture acquisition when you breakout.
American law, suggesting between U S and Canada are you, including E tester in the.
U S Canada.
Revenue breakout yes.
Yes.
There is actually.
Piece of it that's in the U S on a piece of it.
In Canada most of it is in Canada.
But there is a smaller piece.
Okay.
Okay, Alright, so yes, the retail landscape.
The <unk>.
15% year over year growth.
U S loss, suggesting.
And.
So it sounds like.
Being primarily driven by.
Organic growth you mentioned.
Your success hiring.
Major major clients complex loss adjusters, so maybe just.
Speak to the organic growth and be sure.
Yes.
Adjusting business, there's two components to it.
Okay.
The major and complex.
As well as our volume, which is our which is our field ops on both of those areas have been seeing seeing growth over the last few quarters.
Given by increased client penetration getting more experts onboard as well as starting to geographically expand the footprint that we have within our within our volume business.
We haven't we have new leadership, there I should say relatively new leadership, there, which has brought on some fresh thinking and approach to it.
Made a pretty significant commitment strategically as quality expertise are the two most important pillars for us as it relates to that business and digital as it relates to simplifying the waterfront for adjusters. So we feel very good about the traction that we're creating in the marketplace data. We believe that competitively we are better positioned.
<unk> than anyone in terms of scale in terms of presence in terms of long relationships and knowledge system matter of continuing to execute on that because of the hawk rather than because of the culture that we're building we have been very successful in attracting.
Experts and that continues to happen.
As we have shared with you last year I believe we had hired 60 plus industrial within that high and continued in fact.
We've invested even more this year.
To bring on more experts related to industry segment related to.
Expertise in places like energy and engineering and Marine.
Which is which is making to us just a more valuable player to our to our carrier partners.
Alright, great.
So I can clarify.
You also.
Seeing growth on the volume side of the business and loss Joseph.
Okay, Yes, we are.
Yes, I would say that we're seeing growth there as well, but if you look at that.
The magnitude of the growth has been driven more from the expertise side of the business than on the volume side of the business in the recent quarters.
Sure sure, but anyway, it's encouraging.
Seeing some growth on the volume side Nonetheless.
Okay great.
When we think about.
Yes.
Operating earnings.
For North American loss adjusting.
Just down slightly year over year should we just think about their continued investments.
Do you expect to leverage.
Over the coming quarters.
Yes, I would say two primary factors one is just from last year.
He was impact and languages the Canadian emergency wage subsidy and then the second is on the front end loading up investment to bring on additional resources and expertise onto the under the business. Those are the two primary factors.
Okay.
Understood.
So so.
It's a $43 million of new and enhanced business in the first quarter.
Strong result, there.
Any specific areas.
Areas showing.
Particular strength.
Is it just broad based across the company.
Any more flavor you can provide there.
I would say broadly in North America.
Significant portion of that coming from Ross fire and as you know when we look at when we look at new business growth, it's frankly, much easier for us to quantify it on the <unk> side in some time so that.
That usually is the lion's share of.
The new business growth.
Looked at from a pipeline perspective, so we feel good about it.
In U S and the U S business and they are certainly overly impact.
Number.
Yes.
Whats what do you believe is driving the strength.
New business for broad spire.
I noticed you mentioned youre investing there.
For their approval.
And maybe just comments on that.
With new business there.
Certainly I would put it at three factors one is I think the sales team is doing a great job.
Executing on in the marketplace being a lot more visible making sure that our differentiation has understood our relationships are.
Our developing and our brand.
<unk> promised us recognize battery so I think thats number one number two on the investments that we've made from a technology standpoint continue to differentiate us do our competitors, whether it's in data and analytics, whether that's in machine learning.
Client experience journey on the adjusted experience journey that we're trying to influence.
And then the third thing is I think this focus that we are having on that carrier and MGA market.
<unk> continues to position us well.
And.
In Alaska.
Cause us too.
To take greater share in the marketplace, because when you when and when corporate business is one account at a time when you're weighing carrier business, it's possible accounts at a time.
Okay, Great I also wanted to ask about.
Credit Suisse.
With Asian area, you said this.
<unk> performed better than expected, maybe what's what's driving the traction there and just related to that did that continue.
Alright.
Adjustment in the quarter.
Thats correct. So yes, exactly the same explanation that I gave you on the platform business. We saw an increased level of outsourcing buyback by the carriers.
And we are benefiting.
Great job by the team to execute flawlessly.
Stay on what they got.
And.
In fact of the prolonged better than what we had originally expected and resulted in a higher level for them.
Okay.
Okay.
Yeah.
Perhaps.
Stability.
Okay.
Believe it was mentioned that.
Improvement.
Maybe in the second half of the year. So just.
Are we on course with with.
Okay.
Yeah.
Yes.
Those kind of couple of products.
Okay.
Weakness that you've been calling out here.
Last couple of quarters.
Yes.
Hi.
I'd like to say that we believe that the second quarter shouldnt be as as I was mentioning to Michael earlier that we've had.
We've had an issue in our UK specific pocket of our UK business, we believe that should resolve before the end of the year.
We believe that the Asia business is trending better than what we expected it to.
Terms of in terms of its profitability is still not where we wanted to be but its better than where we expected it to be we believe that the Australia weakness showed.
Really be alleviated by the storm surge that we're seeing right now.
And then.
As it relates to Latin America and.
In Europe , we believe that they should be on a better trajectory as well. So overall, we feel like by the end of the year, we should be in a much better position than where we are right now.
Okay. Thank you for taking all the questions.
Thank you.
Thank you I would like to turn the call back over to Mr. Rohit Verma, Chief Executive Officer of Crawford <unk> company for closing remarks.
Thank you Matt.
And thank you to all of our employees clients and shareholders for your continued commitment to Crawford <unk> company are fantastic start to 2022 provide strong momentum for the rest of the year and beyond as always we wish you well and look forward to seeing you in the next quarter. Thank you and God.
Yes.
Thank you for participating in today's Crawford <unk> Company Conference call. This call will be available for replay beginning at 11 30, a M. Eastern time today through 11 59 P M Eastern time.
Tim Tim plenty.
The conference I'd number for the replay.
598119, the number to dial for the replay is 805 8586.
671416621462. Thank you you may now disconnect.
Okay.
Okay.
Okay.
Okay.
Yes.
Yes.
Okay.