Q2 2023 Crawford & Company Earnings Call

Speaker 1: Good morning. My name is Enes and I'll be your conference facilitator today. At this time, I'd like to welcome everyone to the Crawford & Company second quarter 2023 earnings release conference call. In conjunction with this call, a supplementary financial presentation is available on our website at www.crawco.com. Under the investor relations section, we have a link to the conference call.

Good morning, My name is Dennis and I'll be your conference facilitator today at this.

I would like to welcome everyone to the Crawford <unk> Company second quarter 2023 earnings release conference call in conjunction with this call a supplementary financial presentation is available on our website at www dot crowd code that call.

The Investor Relations section.

Speaker 1: All lines of employees send mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. Instructions will follow that time. Should anyone need assistance at any time during this conference, please press star then zero and an operator will...

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period and instructions will follow at that time should anyone need assistance that in January . This conference. Please press Star then zero and an operator will assist you.

Speaker 1: As a reminder, ladies and gentlemen, this conference is being recorded today, Friday, August 4, 2023.

As a reminder, ladies and gentlemen, this conference is being recorded today Friday August 4th 2023.

Speaker 1: Some of the matters to be discussed in this conference call and in this supplementary financial presentation may include forward-looking statements and develop risks and insert

The matters to be discussed in this conference call and in the supplementary financial presentation May include forward looking statements and risks and uncertainties. These statements may relate to among other things our expected future operating results and financial condition.

Speaker 1: These statements may relate to, among other things, our expected future operating results and financial condition, our ability to grow revenues and reduce our operating expenses, expectations regarding anticipated contributions to our independent defined benefit pension plans, collectability for build and unbuild accounts, receivable financial results from our recently completed acquisitions, our continued compliance with financial and other covenants containing our financial agreement.

Our ability to grow our revenues and reduce our operating expenses expectations regarding anticipated contributions are independent defined benefit pension plans collectability of our billed and Unbilled accounts receivable financial results from our recently completed acquisitions, our continued compliance with financial and other covenants contained in our financing agreements.

Speaker 1: I will launch in Kappa resource and liquidity requirements and our ability to pay dividends in the future. The company's actual results achieved in future quarters with a fair majority from results that may be applied by such robust state-runs.

Long term capital resource and liquidity requirements, and our ability to pay dividends in the future.

The company's actual results achieved in future quarters may differ materially from results that maybe implied by such forward looking statements.

Speaker 1: The company undertakes no obligation to publicly release revisions to any forelooking statements. Mainly in this conference call to reflect events or circumstances occurring after the date of the call or to reflect the occurrence of an anticipated event.

Company undertakes no obligation to publicly release revisions to any forward looking statements.

This conference call to reflect events or circumstances occurring after the date of the call ultra reflect the occurrence of an anticipated.

Anticipated events.

Speaker 1: In addition, you are reminded that operating results for any historical period are not necessarily indicative of results to be expected for any future period.

In addition, you are reminded that operating results for any historical period are not necessarily indicators of results should be expected for any future period for a complete discussion regarding factors, which could affect the company's financial performance. Please refer to the company's Form 10-Q for the quarter ended June 32023.

Speaker 1: For a complete discussion regarding factors which could affect the company's financial performance, please refer to the company's Fund 10Q for the quarter ended June 30, 2023, Follow the Securities and Exchange Commission, particularly the information under the headings, risks, factors, and management discussion, analysis of financial conditions, and results of operations, as well as subsequent campaigns.

File with the Securities and Exchange Commission purchase.

Larry the information under the headings risk factors and management's discussion and analysis of financial conditions and results of operations.

As well as subsequent filings with the SEC. This spring adjacent also includes certain non-GAAP financial measures as defined under SEC rules.

Speaker 1: This presentation also includes certain non-GAAP financial measures as defined under SEC rules. As required, a reconciliation is provided for those measures to the most directly comparable GAAP measures.

It required a reconciliation is provided for those measures to the most directly comparable GAAP measures.

Speaker 1: I would now like to introduce Mr. Jorge Verma, Chief Executive Officer of Crawford & Company. Sir, you may begin your conversation.

I would now like to introduce Mr. Rohit Verma, Chief Executive Officer of Crawford <unk> Company, Sir you May begin your conference.

Speaker 2: Thank you, Anas. Good morning and welcome to our second quarter 2023 earnings call. Joining me today is Bruce Swain, our Chief Financial Officer, and Joseph Blanco, our President. After our prepared remarks, we will open the call for your questions.

Thank you good morning, and welcome to our second quarter 2023 earnings call. Joining me today is Bruce Swain, our Chief Financial Officer, and Joseph Blanco, Our President after our prepared remarks, we will open the call for your questions.

Speaker 2: During Q2, we continue to build upon our strong start to 2023. Our sustained momentum drove improved results across all segments of our business, resulting in revenue growth and margin improvement for the company.

During Q2, we continued to build upon our strong start to 2023, our sustained momentum drove improved results across all segments of our business, resulting in revenue growth and margin improvement for the company.

Speaker 2: Before I jump into specific achievements in the quarter, I think it's important to take a moment, to step back, to highlight our market position, and some of the broader trends we're seeing in the business.

Before I jump into specific achievements in the quarter I think it's important to take a moment to step back to highlight our market position.

And some of the broader trends, we're seeing in the business.

Speaker 2: As many of you know, Crawford continues to strategically scale our business across complementary service offerings within the claims space.

As many of you know Crawford continuous to strategically scale, our business across complementary service offerings within the claims space.

Speaker 2: We operate globally, manage over $18 billion in claims annually, and have approximately 10,000 employees and thousands of field resources.

We operate globally manage over $18 billion in claims annually and have approximately 10000 employees and thousands of your resources are.

Speaker 2: Our customer base is diversified and growing, including a wide spectrum of brand names who are increasingly looking to Crawford as a claims solution provider.

Customer base is diversified and growing including a wide spectrum of brand names, who are increasingly looking to Crawford as it claims solution provider.

Speaker 2: That said, we estimate our market share to be in the low single digits. Clearly, we have a large market opportunity in front of us.

That said, we estimate our market share to be in the low single digits clearly, we have a large market opportunity in front of us.

There are some important growth drivers that support our confidence in the long term opportunity before us.

Speaker 2: There are some important growth drivers that support our confidence in the long-term opportunity before us.

Speaker 2: First, natural catastrophes are becoming more prevalent. And our services are increasingly called for as carriers and other providers need increased resources to help policy holders recover in the aftermath.

First natural catastrophes are becoming more prevalent in our services are increasingly called for as carriers and other providers need increased resources to help policyholders recover in the aftermath.

Speaker 2: Importantly, we do not take underwriting risk, an issue that many carriers wrestle with as loss patterns continue to get more frequent and more severe. Rather, we work with carriers, self-insured corporations, and captives to deliver outsource claim solutions that offer expertise, timeliness, scale, proximity, and most of all, quality of service that is representative of their brand.

Importantly, we do not take underwriting risk and issue that many carriers wrestle with as lost patents continue to get more frequent and more severe.

Rather we work with carriers self insured corporations and captives to deliver outsource claims solutions that offer expertise timeliness scale proximity.

Most of all quality of service that is representative of their brand.

Second there continues to be a long term tailwind driving the outsourcing of claims processing.

Speaker 2: Second, there continues to be a long-term tailwind driving the outsourcing of claims as process.

PNC margin pressure is leading to more outsourcing of major and complex claims.

Speaker 2: DNC margin pressure is leading to more outsourcing of major and complex claims.

Speaker 2: and there is a greater need for a more nimble and empathetic response to major cat events.

And there is a greater need for a more nimble and empathetic response to major cat events.

Speaker 2: Third, the independent law suggesting market in the US is fragment.

So the independent loss adjusting market in the U S is fragmented.

Speaker 2: And our growing scale is a considerable competitive advantage in our market.

Our growing scale is a considerable competitive advantage in our market.

Where the reliability and resiliency of service providers are becoming more and more critical.

Speaker 2: where the reliability and resiliency of service providers are becoming more and more critical.

Fourth a key strategic focus of mine since I assumed the role of the CEO has been to strengthen our strategic partnerships and relationships with key clients across all our customer segments. Our relationships have unquestionably grown deeper and this has led to increased business with our existing customers as well as uncovering.

Speaker 2: A key strategic focus of mine since I assume the role of the CEO has been to strengthen our strategic partnerships and relationships with key clients across all our customer segments.

Speaker 2: Our relationships have unquestionably grown deeper and this has led to increased business with our existing customers, as well as uncovering new opportunities.

Opportunities.

And finally, we have industry, leading in short tech capabilities that are creating double digit growth across our platform segment. We are investing in innovation, whether its machine learning data visualization or other SaaS based offerings, improving the claims process and experience.

Speaker 2: And finally, we have industry leading in short tech capabilities that are creating double digit growth across our platform segment. We are investing in innovation, whether it's machine learning, data visualization, or other fast-based offerings, improving the claims process and experience.

Speaker 2: We are keenly focused on driving technological evolution in our sector.

We are keenly focused on driving technological evolution in our sector.

Now, let's get into the results for the second quarter, we delivered another quarter of strong results revenue grew by 9% or 12% on a constant currency basis and operating earnings nearly doubled year over year.

Speaker 2: Now let's get into the results for the second quarter. We delivered another quarter of strong results. Revenue grew by 9% or 12% on a constant currency basis and operating earnings nearly doubled year over year. We achieved revenue growth and profit expansion across all segments, highlighting the underlying strength of our business model and solid execution of our stated strategy.

We achieved revenue growth and profit expansion across all segments, highlighting the underlying strength of our business model and solid execution of our stated strategy.

Speaker 2: Our second quarter results mark our 11th consecutive quarter of revenue growth, reflecting the hard work and dedication of our valued teams across the globe.

Our second quarter results, Mark our 11th consecutive quarter of revenue growth, reflecting the hard work and dedication of our valued teams across the globe.

Their unwavering commitment to quality and customer excellence is enabling us to execute our long term strategy and bring our envision future to life.

Speaker 2: Their unwavering commitment to quality and customer excellence is enabling us to execute our long-term strategy and bring our envision future to life.

Speaker 2: We added $26 million in new enhanced business in Q2 2023.

We added $26 million in new enhanced business in Q2 2023.

Speaker 2: This growth included contributions from all of our business segments helping to drive margin expansion and improve profitability.

Growth included contributions from all of our business segments, helping to drive margin expansion and improved profitability.

Speaker 2: In the first quarter of this year, we had a slightly negative operating cash flow as we leverage our liquidity to fund working capital needs related to the storm activities in Australia and the US. As expected, we saw a significant improvement in cash generation in the second quarter, with $27 million in operating cash flow strengthening our position to be able to continue to invest in the business and return capital to shareholder.

In the first quarter of this year, we had a slightly negative operating cash flow as we leverage our liquidity to fund working capital needs related to the storm activities in Australia, and the U S. As expected we saw a significant improvement in cash generation in the second quarter with $27 million in operating cash flow strengthening our position to be able to.

Continue to invest in the business and return capital to shareholders.

Speaker 2: that end we have decided to raise our quarterly dividend to seven cents going forward.

To that end, we have decided to raise our quarterly dividend to <unk> going forward.

Speaker 2: Finally, on the Promoter Score, a metric used to measure customer loyalty, which we tracked closely, was a healthy 46 in the quarter. We are continuously looking for opportunities to improve our score.

Our net promoter score a metric used to measure customer loyalty, which we track closely was a healthy 46 in the quarter and we are continuously looking for opportunities to improve our score.

Speaker 2: Two years ago, we communicated our strategic commitment to grow organically and improve margins across our business.

Two years ago, we communicated our strategic commitment to grow organically and improve margins across our business. Our subsequent financial results have demonstrated progress across our organization.

Speaker 2: Our subsequent financial results have demonstrated progress across our organization, a reflection of the continual execution of our strategy. While we may see quarterly fluctuations due to weather, our overall trajectory is ahead of our planned velocity.

Selection of the continued execution of our strategy, while we may see quarterly fluctuations due to weather. Our overall trajectory is ahead of our plan velocity.

Speaker 2: In our North America Laws Adjusting segment, we've focused on driving low to mid-single digit revenue growth and improved margins through efficiency on the volume side and investments and expertise on the major and complex side.

In our North America loss adjusting segment, we focused on driving low to mid single digit revenue growth and improve margins through efficiency on the volume side and investments and expertise on the major and complex side.

Speaker 2: our ongoing investments in onboarding expert adjusters, increasing coverage density of our adjusters in the US, and delivering industry leading quality have continued to drive growth in the US loss adjusting business.

Our ongoing investments and Onboarding expert adjusters inquiry.

Greece and coverage density offer adjusters in the U S and delivering industry, leading quality have continued to drive growth in the U S loss adjusting business.

Speaker 2: Additionally, during the second quarter, our improved utilization drove meaningful margin expansion. We're seeing some softness in Canada, which we expect to continue for the rest of the year. While we're optimistic moving forward, we may face a tough comparison in the fourth quarter if we have a benign hurricane season. You may recall the fourth quarter of last year included activity from Hurricane Ian and Winterstrom Elliott.

Additionally, during the second quarter or improve utilization drove meaningful margin expansion, we're seeing some softness in Canada, which we expect to continue for the rest of the year. While we are optimistic moving forward, we may face a tough comparison in the fourth quarter, if we havent benign hurricane season.

May recall, the fourth quarter of last year included activity from Hurricane Ian and Winter Storm Elliot.

Speaker 2: We are very pleased with the progress we're making in our international business, although there still work to be done. Our goal has been to get international to a mid-single-digit growth target. In the second quarter, we saw just under 2% or 8.3% growth on a constant dollar basis. And we have a clear strategy to continue to enhance organic growth in the segment. International delivery significantly improved operating earnings of $3.7 million as compared to an operating loss in the second quarter of last year.

We are very pleased with the progress we're making in our international business. Although there is still work to be done.

Our goal has been to get international to a mid single digit growth target in the second quarter, we saw just under 2% or eight 3% growth on a constant dollar basis, and we have a clear strategy to continue to enhance organic growth. In this segment international delivered significantly improved operating earnings of $3 $7 million as can.

Peer to an operating loss in the second quarter of last year.

Speaker 2: We're still seeing slowness in Asia, but the UK and Latin America have bounced back well. This turnaround is largely the result of the specific actions we have taken to address pricing and productivity, and to better align our cost structure with current market conditions.

We're still seeing slowness in Asia, but the U K and Latin America have bounce back well.

This turnaround is largely the result of the specific actions, we have taken to address pricing and productivity and to better align our cost structure with current market conditions.

Speaker 2: For a broad spot, our focus has been to capture share in alternative markets and leverage data to offer cutting edge analytic services to clients.

For <unk>, our focus has been to capture share in alternative markets and leverage data to offer cutting edge analytics services to clients.

Speaker 2: Similar to Q1, overall sales momentum in Q2 was driven by new client wins and accelerated improvement in medical management revenue.

Similar to Q1 overall sales momentum in Q2 was driven by new client wins and accelerated improvement in medical management revenue.

We expect continued recovery in medical management as claim frequency improved through new and existing client wins.

Speaker 2: We expect continued recovery in medical management as claim frequency improves through new and existing client wins.

Speaker 2: We're also increasing unbounded law forings for medical management and data analytics.

We're also increasing unbundled offerings for medical management and data analytics. We are on course for what may very well be one of our best sales year in broad spire.

Speaker 2: We are on course for what may very well be one of our best sales year in Broadspire.

Speaker 2: Platform solutions is performing extraordinarily well. And we continue to scale this business to deliver double digit revenue growth and a strong flow through to the bottom line.

Platform solutions is performing extraordinarily well and we continue to scale this business to deliver double digit revenue growth and a strong flow through to the bottom line.

Speaker 2: Platforms is our highest margin operating segment and continues to serve as a key growth engine for our business.

Platforms is our highest margin operating segment and continues to serve as a key growth engine for our business.

Speaker 2: We delivered double digit revenue growth in the quarter driven by improved utilization and contract a connection along with increasing our market share with our top five carrier partners in our cat business and growth in our subrogation business.

We delivered double digit revenue growth in the quarter driven by improved utilization in contractor connection along with increasing our market share with our top five carrier partners and our cat business and growth in our subrogation business.

We expect continued strength moving forward supported by healthy underlying margins and solid execution.

Speaker 2: We expect continued strance moving forward, supported by healthy underlying margins, and solid execution.

Turning now to capital allocation.

Speaker 2: We continue to maintain a disciplined and prudent capital allocation strategy. As expected, we saw significant improvement in our cash generation this quarter over the previous quarters. Our stated goal was to have our leverage ratio below two times the EBITDAF by the end of 2023.

We continue to maintain a disciplined and prudent capital allocation strategy as expected we saw a significant improvement in our cash generation this quarter over the previous quarters.

Stated goal was to have our leverage ratio below two times EBITDA by the end of 2023, and we achieved that ahead of plan coming in at one eight times at the end of Q2.

Speaker 2: And we achieved that a head of plan coming in at 1.8 times at the end of Q2.

Speaker 2: our positive earnings results and conservatively managed balance sheet gives us tremendous flexibility to make strategic investments for the benefit of the company.

Our positive earnings results and conservatively managed balance sheet gives us tremendous flexibility to make strategic investments for the benefit of the company.

Speaker 2: as we already shared last week we raised our dividend to $0.7 from $0.6 per share for both CRDA and CRDB.

As we already shared last week, we raised our dividend to seven cents from <unk> <unk> per share for both CRD, a and CRD b.

Speaker 2: We have also reinstated our share buy back program for the highlighting our commitment to deliver shareholder value.

We have also reinstated our share buyback program further highlighting our commitment to deliver shareholder value.

Speaker 2: As a point of reference, we have returned more than $120 million of capital to shareholders through share buybacks and dividends since 2019.

As a point of reference we have returned more than $120 million of capital to shareholders through share buybacks and dividends since 2019.

Speaker 2: With that, I'd like to hand the call over to Joseph who will discuss our business line results for the second quarter. Thanks, Roy. As most of you know, we report our business in four operating seconds.

With that I'd like to hand, the call over to Joseph who will discuss our business line results for the second quarter.

Thanks, Rod as most of you know we report our business in four operating segments.

Speaker 2: North America law suggesting a compasses primarily our law suggesting business and the US and Canada.

North America loss adjusting our compass is primarily our loss adjusting business in the U S and Canada.

Speaker 2: Our international operations is comprised of all reported service lines outside of North America.

Our international operations is comprised of all reported service lines outside of North America.

Speaker 2: Broadspires are TPN, the U.S. and platform solutions includes contractor connection, our networks business including catastrophe and legal look, as well as our subrogation.

Broad spire is our tpa in the U S and platform solutions includes contractor connection our networks business, including catastrophe and we go look as well as our subrogation business.

Speaker 2: As you can see, revenue contribution is fairly evenly spread across the reportable segments.

As you can see revenue contribution is fairly evenly spread across the reportable segments.

Beginning with North America loss, adjusting we achieved revenues of $75 8 million, representing 15% year over year revenue growth.

Speaker 2: Beginning with North America law suggesting we achieve revenues of 75.8 million representing 15% year over year revenues.

Speaker 2: Operating earnings were 3.9 million and we expanded our margin by 112 base

Operating earnings were $3 9 million and we expanded our margin by 112 basis points.

Speaker 2: Strength in the quarter was driven by specialist adjuster additions as Crawford continues to seek and secure the highest quality industry talent.

Strength in the quarter was driven by specialists adjuster editions as Crawford continues to seek and secure the highest quality industry talent.

Speaker 2: Additionally, Q2 revenue increases are attributed to new account nominations and overall increased utilization of the gestures in the U.S. due to severe convective storm action.

Additionally, Q2 revenue increases are attributed to new account nominations and overall increased utilization of adjusters in the U S. Due to severe convective storm activity.

We continue to see progress in our international segment, where second quarter revenue was $95 3 million and operating earnings were $3 7 million.

Speaker 2: We continue to see progress in an international segment. We're second quarter revenue with 95.3 million and operating earnings were 3.7 million.

Speaker 2: Notably, as Roed Highlighter the moment ago, operating earnings grew by more than 4 million year over year, and margins expanded by 463 basis.

Notably as Robert highlighted a moment ago operating earnings grew by more than $4 million year over year and margins expanded by 463 basis points.

Our ability to significantly improve operating metrics as a direct result of our actions to improve pricing and productivity as well as simplifying our cost structure.

Speaker 2: Our ability to snepically improve operating metrics is a direct result of our actions to improve pricing and productivity as well as simplifying our cost structure.

Speaker 2: We saw growth in our UK TPA business and large loss performance in Latin America with continued volume improvement in Brazil and Peru.

We saw growth in our UK Tpa business and large loss performance in Latin America with continued volume improvement in Brazil and Peru.

Speaker 2: Our Australian business continues to see benefits from the tale of 2022 Caddick.

Our Australian business continues to see benefits from the tail of 2022 cat activity.

Speaker 2: For Europe , revenue growth is primarily attributed to growth in high margin areas, including Holland and the Middle East.

For Europe revenue growth is primarily attributed to growth in high margin areas, including Holland in the Middle East.

Furthermore.

Speaker 2: Furthermore, efficiency improvement measures in Europe helped drive increased smartness.

Efficiency improvement measures in Europe helped drive increased margins.

Speaker 2: As Roy had mentioned, we remain focused on enhancing organic growth in this segment.

As Rohit mentioned, we remain focused on enhancing organic growth in this segment.

Looking at our broad spire business Q2 revenue grew 5% medical management services continued to perform well with revenues growing 7% as we saw sales momentum and alternative markets and data and analytical services.

Speaker 2: Looking at our broad-spired business, Q2 revenue grew 5%. Medical management services continued to perform well with revenues growing 7%. As we saw sales momentum and alternative markets and data and analytical service.

Our innovative technology, including advanced analytics, and predictive modeling is driving market share and we retained 97% of our business year to date.

Speaker 2: Our innovative technology, including advanced data analytics and predictive modeling, is driving market share. And we retain 97% of our business year.

Platform solutions also delivered strong results with double digit revenue growth of 22% over the prior year. This was led by networks, which grew 18% as we continued to deepen our relationships with two of the top five carriers in our property and flood businesses.

Speaker 2: Platform solutions also delivered strong results, with double digit revenue growth of 22% over the prior year. This was led by networks, which grew 18% as we continue to deepen our relationships with two of the top five carriers in our property and flood.

Speaker 2: We are expanding relations now with the third carrier in this space and are excited about the process.

We are expanding relations now with a third carrier in this space and are excited about the prospects.

Speaker 2: We saw increased contribution from contractor connection benefiting from pricing actions and improved utilization along with continued market share gains. And our subregation business.

We saw increased contribution from contractor connection benefiting from pricing actions and improved utilization along with continued market share gains and our subrogation business had a stellar quarter.

With that 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 2023 second quarter were $327 million up 9% from $293 3 million in the prior year second quarter.

Speaker 2: With that, let me turn the call over to Bruce for deeper look at our financial.

Speaker 3: Thank you, Joseph. Company-wide revenues before reimbursements in the 2022 second quarter were 320.7 million, up 9% from 293.3 million in the prior year's second.

Speaker 3: For an exchange rate, decreased revenues before reimbursements by $7.5 million or 3%. On a constant dollar basis, revenues before reimbursements totaled $328.1 million, increasing 12% compared to the 2022 second.

Foreign exchange rates decreased revenues before reimbursements by $7 5 million or 3% on a constant dollar basis revenues before reimbursements totaled $328 1 million, increasing 12% compared to the 2022 second quarter.

Speaker 3: Gap net income attributable to shareholders totaled 8.4 million, increasing 45% from 5.8 million in the same period of 2020.

GAAP net income attributable to shareholders totaled $8 4 million, increasing 45% from $5 8 million in the same period of 2022.

Speaker 3: Gap diluted EPS in the 2023 second quarter with 17 cents for both CRDA and CRDB. Compared to 12 cents for both share classes in the 2022.

GAAP diluted EPS in the 2023 second quarter was <unk> 17 for both CRD, a and CRD b compared to <unk> 12 for both share classes in the 2022 period.

On a non-GAAP basis second quarter 2023 diluted EPS was <unk> 24 cents for both CRD, a and CRD b compared to <unk> 15 for both share classes in the prior year period.

Speaker 3: On a non-gap basis, second quarter, 2023 diluted EPS was 24 cents for both CRDA and CRDB, compared to 15 cents for both share classes in the prior year period.

The company's non-GAAP operating earnings totaled $22 8 million in the 2023 second quarter were seven 1% of revenues up 85% from $12 3 million or four 2% of revenues in the prior year period.

Speaker 3: The company's non-GAAP operating earnings totaled $22.8 million in the 2023 second quarter, or 7.1% of revenues, up 85% from $12.3 million, or 4.2% of revenues in the prior year period.

Consolidated adjusted EBITDA was 31 5 million in the 2023 second quarter or nine 8% of revenues compared to $21 2 million or seven 2% of revenues in the 2022 quarter.

Speaker 3: and solidated adjusted EBITDA was 31.5 million in the 2022 second quarter, or 9.8% of revenue.

Speaker 3: I will now review the

I will now review the second quarter performance for each of our segments.

North America loss adjusting revenues totaled $75 8 million in the 2023 second quarter, increasing 15, 3% from $65 8 million reported in last year's quarter. Due to the continued addition of expert adjusters in this segment and the impact of severe weather in the quarter.

Speaker 3: North America law suggesting revenues totaled $75.8 million in the 2023 second quarter, increasing 15.3% from $65.8 million reported in the last year's quarter, due to the continued addition of expert adjusters in the segment and the impact of severe weather.

Speaker 3: The segment reported operating earnings of 3.9 million in the 2023 second quarter, increasing from 2.6 million reported in the last year.

The segment reported operating earnings of $3 9 million in the 2023 second quarter, increasing from $2 6 million reported in last year's quarter. The operating margin was five 1% in the 2023 quarter compared to 4% in the 2022 quarter.

Speaker 3: The operating margin was 5.1% in the 2023 quarter compared to 4% in the 2022.

International operations revenues totaled $95 3 million in the 2023 second quarter up one 7% from $93 7 million reported in last year's quarter, including 600000 from the Van Dyke acquisition on a constant dollar basis international revenues totaled $101 $5 million gross.

Speaker 3: International Operations Revenues totaled 95.3 million in the 2022 second quarter of 1.7 percent from 93.7 million reported in last year's quarter, including 600,000 from the VAND ICHEC.

Speaker 3: a constant dollar basis. International Revenue is totaled 101.5 million, growing 8.3% over last year.

Eight 3% over last year's quarter.

The segment reported operating earnings of $3 7 million in the 2023 second quarter improving significantly from losses of 700000 reported in last year's quarter. The operating margin was three 9% in the 2023 quarter compared to negative <unk>, 7% in the 2022 quarter.

Speaker 3: The segment reported operating earnings of 3.7 million in the 2022 second quarter, improving significantly from losses of 700,000 reported in last years.

Speaker 3: The operating margin was 3.9% in the 2023 quarter compared to negative 0.7% in the 2022

<unk> revenues were $83 9 million into 2023 second quarter, increasing four 7% from $80 1 million in the 2022 period, driven primarily by improving medical management revenues.

Speaker 3: Fraud Spyro revenues were 83.9 million in the 2023 second quarter, increasing 4.7% from 80.1 million in the 2022 period. Driven primarily by improving.

Speaker 3: broads by our operating earnings were 8.1 million in the 2023 second quarter up from last year's second quarter operating earnings of 7.7

It's by our operating earnings were $8 1 million into 2023 second quarter up from last year's second quarter operating earnings of $7 7 million.

Speaker 3: The operating margin in this segment was 9.7% in the 2023 quarter, improving from 9.6% in the 2022.

The operating margin in this segment was nine 7% in the 2023 quarter improving from nine 6% in the 2022 period.

Revenues for platform solutions were $65 6 million in the 2023 second quarter, increasing 22, 1% over the $53 7 million in the prior year quarter due to growth in networks subrogation in contractor connection.

Speaker 3: Revenues for platform solutions were 65.6 million in the 2023 second quarter, increasing 22.1 percent over the 53.7 million in the prior year quarter due to growth in networks, subrogation, and contractor connection.

Speaker 3: Operating earnings in platform solutions total 8.1 million or 12.3% of revenues in the 2023 second quarter, compared to operating earnings of 4.6 million or 8.6% of revenues in the prior year course.

Operating earnings in platform solutions totaled $8 1 million or 12, 3% of revenues into 2023 second quarter compared to operating earnings of $4 6 million or eight 6% of revenues in the prior year quarter.

Unallocated corporate costs were $1 1 million in the 2023 second quarter compared to a cost of $1 9 million in the same period of 2020 to the.

Speaker 3: unallocated corporate costs were 1.1 million in the 2023 second quarter compared to cost of 1.9 million in the same period of 2000.

Speaker 3: decrease was primarily due to an offset to certain internal allocations and other cost reduction.

The decrease was primarily due to an offset to certain internal allocations and other cost reductions.

Speaker 3: During the 2022 second quarter, non-service pension costs were 2.1 million, compared to a $600,000 credit in the 2022.

During the 2023 second quarter non service pension costs were $2 1 million compared to a $600000 credit in the 2022 period.

Speaker 3: These costing credits are not a component of operating earnings and are added back for non-gap earnings and APS.

These cost of credits are not a component of operating earnings and are added back for non-GAAP earnings and EPS.

We recognized a pre tax contingent earn out expense of 700000 in the 2023 period compared to 300000 in the 2022 quarter.

Speaker 3: We recognized a pre-tax contingent earn-out expense of $700,000 in the 2023 period compared to $300,000 in the 2022 quarter.

This was related to the fair value adjustment of certain earn out liabilities arising from recent acquisitions.

Speaker 3: This was related to the fair value adjustment of certain earn out of liabilities arising from recent acquisition.

During the first six months of 2023, the company did not repurchase any shares of CRD, a or CRD b. As a reminder, approximately one 8 million shares are eligible to be repurchased under our 2021 share repurchase authorization.

Speaker 3: During the first six months of 2023, the company did not repurchase any shares of CRDA or CRDB. As a reminder, approximately 1.8 million shares are eligible to be repurchased under our 2021 share repurchase authorizations.

Speaker 3: The company's cash and cash equivalent position has of June 30, 2023 totaled 47.5 million compared to 46 million at the 2022 year-end.

The company's cash and cash equivalent position as of June 32023 totaled $47 5 million compared to $46 million at the 2022 year end or.

Speaker 3: Our total receivables were up 22.1 million from the 2022 year end, primarily due to increased U.S. revenue.

Our total receivables were up $22 1 million from the 2022 year end, primarily due to increased U S revenues.

The company's total debt outstanding as of June 32023 totaled $242 8 million compared with $238 9 million as of December 31, 2022.

Speaker 3: The company's total debt outstanding as of June 30, 2023 totaled $242.8 million, compared with $238.9 million as of December 31, 2020.

Net debt stood at $195 3 million as of June 32023, while our leverage ratio under our credit agreement closed at one eight times EBITDA.

Speaker 3: Net debt stood at $195.3 million as of June 30, 2023, while our leverage ratio under our credit agreement closed at 1.8 times EBITDA.

Speaker 3: Additionally, our pension liability was $25.3 million at the end of the second quarter, reflecting a funded ratio of 93.4.

Additionally, our pension liability was $25 3 million at the end of the second quarter, reflecting our funded ratio of 93, 4%.

We made no discretionary contributions to our U S defined benefit pension plan for the second quarter of 2023, and we do not intend to make contributions during the remainder of the year.

Speaker 3: We made no discretionary contributions to our U.S. defined benefit pension plan for the second quarter of 2023, and we do not intend to make contributions during the remainder of

Cash flow from operations for the first six months of 2023 totaled $27 $2 million with free cash flow of $9 2 million. This compares to cash used in operating activities last year of $12 8 million and negative free cash flow of $28 4 million. This significant improvement in cash flow was driven.

Speaker 3: Cashflow from operations for the first six months of 2023 totaled 27.2 million with free cashflow of 9.2 million.

Speaker 3: This compares to cash used in operating activities last year of $12.8 million and negative free cash flow of $28.4 million. This significant improvement in cash flow was driven by the increase in that income and improvement in working capital.

The increase in net income and an improvement in working capital with that I'll turn the call back to <unk> for concluding remarks. Thank you Bruce this quarter reinforces our confidence in the long term strategy, we're implementing at Crawford the company's financial strength and liquidity provides us with the flexibility to grow our market share.

Speaker 3: that I'll turn the call back to Rohit for concluding remarks. Thank you, Bruce. This quarter reinforces our confidence in the long-term strategy we're implementing at Crawford. The company's financial strength and liquidity provides us with the flexibility to grow our market share as we continue to invest in our industry leading capability.

As we continue to invest in our industry leading capabilities.

These top quality services differentiate us as a reliable and trusted partner, which is of critical importance in a landscape where customers are increasingly outsourcing service elements and responding to higher volume of cat events.

Speaker 2: These top quality services differentiate us as a reliable and trusted partner, which is of critical importance in a landscape where customers are increasingly outsourcing service elements and responding to higher volume of cat events.

Crawford as an industry leader in the next generation in short tech capabilities, a very exciting opportunity for us reflected in the strong growth we're seeing in our platforms revenue and we will continue to leverage new and existing customer relationships in order to create deeper and more durable partnerships. This is an exciting time to be part of <unk>.

Speaker 2: Crawford is an industry leader in the next generation in short tech capabilities. A very exciting opportunity for us reflected in the strong growth we're seeing in our platform's revenue. And we will continue to leverage new and existing customer relationships in order to create deeper and more durable partnerships.

Speaker 2: This is an exciting time to be part of Crawford. And as we advance through 2023, we'll continue to work towards driving shareholder value while delivering top quality services promptly for our customers.

And as we advance through 2023, we will continue to work towards driving shareholder value, while delivering top quality services properly for our customers. Thank you for your time today on <unk>. Please open the call for questions.

Speaker 2: Thank you for your time today. Honest, please open the call for questions.

Speaker 1: Thank you Mr. Verma. This time if you would like to ask a question, please press star at the number one on your telephone keypad. To withdraw your questions, please press star two. If you're using a speaker phone, please pick up your handset before pressing any keys. We'll pause for just a moment to compile the Q&A roster.

Thank you Mr. Vermont savvy who'd like to ask a question. Please press Star then the number one on your telephone keypad.

So we withdraw your question please press star two.

Using a speakerphone please pick up your handset before pressing any keys.

Pause for just a moment to compile the Q&A roster.

Your first question comes from Mike Hughes with <unk>. Please go ahead.

Yes. Thank you good morning.

Speaker 4: Rowan, how much of the momentum in your business you think is being spurred by just the harder personal lines market, a lot of inflation out there, a lot of pressure on carriers. How much is that contributing to the good momentum you're seeing?

ROE at <unk>.

The momentum in your business you think is the.

Being spurred by just the harder personal lines Mark a lot of inflation out there are a lot of pressure on carriers.

How much is that contributing to the good momentum you're seeing.

Mark I think it's a factor as you know inflation environment per se doesn't change for us.

Speaker 2: I think it's the factor. As you know, inflation environment per se doesn't change for us.

Speaker 2: It just doesn't change the business trajectory for us. So I won't attribute too much to inflation. We do have some parts of our business that are impacted by inflation. But as a macro trend, I don't think that is what's impacting our business. I do think that as the property market is putting pressure on our clients, they're looking for new and improved ways in which they make the claims outcomes better. And I think they're increasingly looking towards us to help them with that. So I do see that as a fact.

It just doesn't change the business trajectory for us So I don't I won't attribute too much inflation, we do have some parts of our business that are impacted by inflation, but as a as a macro trend I don't think that is what's impacting our business I do think that.

As the property market is putting pressure on our clients, they're looking for new and improved ways in which they make the claims outcomes are better and I think they are increasingly looking towards us to help them with that so I do see that as a factor.

You had mentioned more outsourcing of a complex claim.

Speaker 4: You had mentioned more outsourcing of complex claims that that's one of the results of all this pressure. Could you talk a little bit more about that? Is there...

One of the.

Result of all this pressure.

Talk a little bit more about that is there.

Speaker 4: How do you gauge that? I know you're seeing your own flow of business, but that's kind of an intriguing point.

How do you gauge that.

Youre seeing your own flow of business.

Kind of intriguing point.

Speaker 2: Yeah, I think three things. Number one, as severe convective storms have increased in the US, we're seeing more and more attention of the claims and justters inside the organizations focused on those. And that's creating an opportunity for us to get more overflow of claims. And a lot of times those are the large and complex claims because they just have a longer to judge.

Yes, I think I think three things number one.

As a as severe convective storms have increased in the U S. We're seeing more and more attention of the.

The claims adjusters inside the organizations focused on those and thats, creating an opportunity for us to get more overflow of claims.

And a lot of times those are the large and complex claims because they just have a longer trajectory.

Speaker 2: Second factor that I believe is that they're just more large and complex claims, period, right? The number of $1 billion buildings that you had in the world is more today than it was two years ago or

Second factor that I believe is that there are just more large and complex claims period right. The number of $1 billion buildings that you had in the world is.

As more today than it was two years ago or three years ago. So I think that there is just that frequency and then the third thing is that the complexity of claims is not just increasing because of the values, but also because of the structures that are there today there are a lot many.

Speaker 2: So I think that there is just that frequency. And then the third thing is that the complexity of claims is not just increasing because of the values, but also because of the structures that are there. Today there are a lot many policies that are being written with multiple carriers using quota shares or layers, as opposed to before, where the capacity was more easy to come. So I think those are the three biggest factors that are creating more outsourcing of the large and complex claims.

Policies that are being written.

With multiple carriers using quota shares or layers as opposed to before where the capacity was more easy to come. So I think those are the three biggest factors that are creating more outsourcing of the large and complex claims.

So the complexity of the claim to speak.

Speaker 4: So the complexity of the claim just because you've got more participants in the coverage tower leads to

You've got more participants in the coverage tower leads.

Yes, yes anytime.

Speaker 4: Yeah, yeah. Yeah. Anytime you have more than one participant in a coverage tower, the general rule is to bring an independent adjuster in the mix.

Anytime you have more than one participant in our coverage our the general rule is to bring an independent adjuster and the mix.

Yeah Okay.

Okay.

Speaker 4: Fascinating. And then you had mentioned in broad spire part of the pipeline is the alternative market opportunities. Could you expand on that?

And then you had mentioned in broad buyer.

Good.

The alternative market.

Community could you expand on that.

Yeah, I think that is also related to what we're seeing in terms of the market trends, we are seeing more and more business moving to alternative markets and alternative markets. We define as MGH <unk> captives sort of other instruments that are being used by risk bearing entities, both from a distribution perspective, as well as as well as sort of risk transfer.

Speaker 2: Yeah, I think that is also related to what we're seeing in terms of market trends. We're seeing more and more business moving to alternative markets and alternative markets we define as MGA, MGUs, captives, you know, sort of other instruments that are being used by risk-bearing entities, both from a distribution perspective as well as sort of risk transfer.

Speaker 2: And in a lot of cases, those new sort of entrants don't have the claims capabilities and are relying on providers like us to provide those claims capabilities. We think it's an attractive segment. We also think it's a segment which is less price sensitive than say at the corporate segment.

And then a lot of cases, those those new entrants don't have the claims capabilities and are relying on providers like us to provide those claims capabilities. We think it's an attractive segment. We also think its a segment, which is less price sensitive than say at the corporate segment.

Speaker 2: and is looking for more technology and more value. So, you know, and we are well positioned to take charge of that segment. Thank you very much.

And is looking for more technology and more value.

So so and we are well positioned to to take charge of that of that segment.

And then one final one you mentioned.

And networks to top five clients.

Speaker 4: in networks, you two top five clients and adding the third, is the third also in the top five, top 10, and does it the... I would say top 10, I don't have the best list in front of me, so I can't tell you if they're top five or not, but they're definitely top.

Adding the third.

Third also in the top 10.

And does it I would say.

10, I don't have the best list in front of me. So I can tell you that their top five or not but theyre definitely top 10.

Yeah, and do you think those will scale like or that will scale like the other two.

Speaker 4: Yeah, and did you think those will scale like, or that will scale like the other two hands?

Speaker 2: That's our intention to scale it. But as you know, with a lot of these large clients, it takes time to scale as we've shared that with you all before. Yeah, yeah. OK.

And that's our intention to.

To scale it but as you know with a lot of these large clients. It takes time to scale as we've shared that with you all before.

Yeah.

Okay.

Thank you very much.

Mark.

Your next question comes from Kevin Steinke with Barrington Research. Please go ahead.

Speaker 1: Your next cushion comes from Kevin Stein with back in research. Peace go ahead. you

Good morning.

Yes, I can.

Kevin.

Okay.

Speaker 5: I wanted to start off by asking about

I wanted to just start off by asking about.

You talked about continued investments in technology and.

Speaker 5: You talked about continued investments in technology and leading the technology revolution for the industry. Just wondering what you're seeing from the competition. I mean, if you feel like you're continuing to build a competitive differentiation through those investments and...

Leading the technology Revolution.

And for the industry.

Just wondering what youre seeing.

Some of the competition.

You feel.

Feel like Youre continuing to.

The competitive differentiation through those investments.

Speaker 5: When you go out and competing for a new business, how much of a dip for an educator, your technology investments have been.

When you go out.

Competing for new business, how much of a differentiator.

Technology investments have been.

Sure Kevin we are extremely excited about this space, we definitely believe that it is a competitive advantage for us. We don't believe that we're seeing the same thing from our traditional competitors as much as is as we have seen that from more of what I would call in short at competitors.

Speaker 2: Kevin, we are extremely excited about this space. We definitely believe that it is a competitive advantage for us.

Speaker 2: We don't believe that we're seeing the same thing from our traditional competitors as much as we have seen that from more of what I would call insure tech competitors. And as you know that the insure tech market has been challenged because of what's happening in the capital markets broad.

And as you know that the insured tech market has been has been challenged because of what's happening in the capital markets broadly and.

Speaker 2: And as a result of that, we believe that our history in this space, our brand name, our expertise in claims space already, is giving us the edge to sort of push forward on these technology solutions.

And as a result of that we believe that our history in this space our brand name our expertise in claims space already is giving us the edge.

Is that a push forward on these technology solutions and because of our history because of our brand because of our expertise we're edging out even the insured tech competitors in this space. So we feel very good about the progress that we're making here and we certainly believe that a lot of the business that we're winning as an example in our <unk> unit can be attributed to our superior technology capable.

Speaker 2: And because of our history, because of our brand, because of our expertise, we're edging out even the insure tech competitors in this space. So we feel very good about the progress that we're making here. And we certainly believe that a lot of the business that we're winning as an example in our broadspire unit can be attributed to our superior technology capabilities in that space.

<unk> in that space.

Okay great.

Speaker 5: Why don't you get this good on an update on your hiring of specialist adjusters?

Wondering if you could just get an update on your hiring specialist adjustors.

I think you talked about last quarter, surpassing that goal of 200 hires.

Speaker 5: I think you talked about last quarter surpassing that goal of 200 hires. And if you're continuing to make progress there and maybe just talk about

If you are continuing to make progress there and.

Maybe just talk about.

Speaker 5: if your platform is really something that's helping to attract those.

If your platform.

<unk> is really something thats, helping to attract those.

Skilled professionals to Crawford in terms of just.

Speaker 5: skilled professionals to Crawford in terms of just your stability and your expertise and client relationships, etc.

Youre stability in your expertise.

Relationships et cetera.

Yeah. When in 2020, we set our strategy and reset our vision of critical element of our vision was to be the place where experts want to be.

Speaker 2: Yeah, when in 2020 we set our strategy and we set our vision, a critical element of our vision was to be the place where experts want to be.

Speaker 2: So we've been investing a lot in our culture and our approach to people.

So we've been investing a lot in our culture in our approach to people to be a place where experts want to be and and yes. We had this target that we surpassed in Q1 that we had targeted to surpassed by Q4 of this year, but we're not slowing down.

Speaker 2: be a place where experts want to be. And yes, we had this target that we surpassed in Q1, that we had targeted to surpassed by Q4 of this year. But we're not slowing down. We are certainly continuing to attract experts and we're continuing to add experts into our business. Even in Q2, we added additional experts. So we don't see that slowing down. Yes, certainly we're getting to a point where, you know, we...

We are certainly continuing to attract experts and we're continuing to add expertise into our into our business. Even in Q2, we added additional expert. So we don't see that slowing down yes, certainly we are getting to a point where we.

We.

Speaker 2: within markets, there are no longer are there that many experts left for us to attract, but we're also starting to build our own quite a bit now. So we're investing quite a bit in internal development of our people.

Within the markets that are not that no longer are there that many experts left for us to attract but we're also starting to build our own quite a bit now so we're investing quite a bit in internal development of our people. So that we not only attract experts from the outside but build and develop experts and then retain them to be part of the Crawford family.

Speaker 2: so that we not only attract experts from the outside, but build and develop experts and then retain them to be part of the Crawford family.

Speaker 5: Okay, that's interesting. The development of experts internally is can that be a little more attractive from a financial standpoint, or the investments in...

Okay that's interesting.

This.

The development of experts internally.

E.

A little more attractive from a financial standpoint or are the investments in.

Speaker 5: growing them similar to maybe trying to track experts from the outside.

Growing similar to maybe try to track.

Experts from the outside.

Speaker 2: When we say growing them from within, it is about giving them the expo or the experiences that they need to become experts. It is about mentoring and coaching them for them to become experts. So there's definitely an element of financial investment that comes with it. But it's also about a mindset and attitude which is focused and geared towards learning, which is something that we have been pushing across the organization.

When we say growing them from within it is it is about giving them the exposure and the experiences that they needed to become experts at is about mentoring and coaching them offer them to become experts. So there's definitely an element of financial investment that comes with it but it's also about our mindset and attitude which is focus.

And geared towards learning, which is something that we have been pushing across the organization.

Speaker 2: At the end of the day, we are an expertise-based organization. People come to us because we have the expertise, so it's important that that's an area that we continue to invest.

At the end of the day, we arent expertise based organization people come to us because we have the expertise. So its important that that's an area that we continue to invest in as.

Speaker 2: As you know, due to the demographics, it's becoming a, age is becoming a big factor in our industry. Many people refer to it as silver tsunami. So we're also focused on that for the long term view of our organization and the industry. We're continuing to bring in new talent into the industry, or I would say talent which has a significant more runway or tenure left so they can have longevity of their career.

Due to the demographics.

It's becoming a.

H is becoming a big factor in our industry. Many people refer to it as a silver tsunami. So we're also focused on that for the long term view of our organization in the industry. We are continuing to bring in new talent into the industry or I would say talent, which has a significant more runway or tenure left so they can have longevity of their career in this space.

Speaker 5: Okay, that's great. Maybe just a few questions on the particular segments. You talked about your growth fast ratio.

Okay, that's great.

Just a few questions on the particular segments.

<unk> talked about your growth aspirations.

Speaker 5: with an international and you saw a sequential improvement in the quarter and your operating earnings both on an absolute dollar basis as well as the operating earnings margin. How much more room do you think there is to run? Do you think on international profitability in terms of the ability to improve margins in that segment?

Within international.

Yes.

Sequential improvement in the quarter in your operating earnings.

Absolute dollar basis as well.

Operating earnings margin, how much more room do you think there is the Ron do you think international profitability.

In terms of the ability to improve margins in that segment.

As I mentioned during my prepared remarks that there is still more work to be done and we're continuing to do the work. We believe that there is absolutely more room in our international segment.

Speaker 2: As I mentioned during my prepared remarks that there is still more work to be done and we're continuing to do the work, we believe that there is absolutely more room in our international segment.

Speaker 2: uh... to get more margin and uh... and i'm proud to say that the entire international team is diligently working on that uh... and and over the coming quarters you should see uh... you know continued improvement as as you see within or the america business where they can be fluctuations on a quarterly basis just based on

To get more margin and and I'm proud to say that the entire international team is diligently working on that and over the coming quarters you should see.

<unk> improvement as as you see with our North America business, where there can be fluctuations on a quarterly basis just based on.

Speaker 2: just based on volumes coming from either a CAD event or one time project events.

Just based on volume is coming from either a cat event or one time project events.

We might see something similar in international but the overall trajectory is towards improved margins both over the short term as well as over the long term.

Speaker 2: We might see something similar in international, but the overall trajectory is towards improved margins, both over their short term as well as over the long.

Okay.

Speaker 5: Okay, and you just kind of touched it on it there, I guess, within North American, North America lost adjusting the operating earnings margin. It was up year of a year, but down sequentially.

You just touched on it there I guess within North American.

North America loss adjusting.

The.

The operating earnings margin was up year over year, but down.

Sequentially.

Could you just speak to that a little bit more to the sequential trend that you saw there.

Speaker 5: Could you just speak to a little bit more to the sequential trend that you saw there?

Speaker 2: Yeah, so a couple of things that impacted a sequential trend, as you know, we had quite a lot of business that we were carrying into Q1 that was coming from Q4 storm activity. And as you've been working with us, you're aware that typically we have some costs that are up front loaded on a CAD event. So I think what you saw in Q1 was the costs were more probably in Q4 of last year versus.

Yes, so a couple of things that impacted the sequential trend as you know we had quite a lot of business that that we were carrying into Q1 that was coming from Q4 storm activity, So and and as you have been working with US you are aware that typically we have some costs that are upfront loaded on a on a cat event. So I think what you saw.

Saw in Q1 was the costs were more probably in Q4 of last year versus <unk>.

Speaker 2: versus what came into Q1. So you saw that was one effect. Second effect is certainly that we are, as I've mentioned, continuing to invest in adding more people into our business where we see expertise. We continued to do that in Q2, so there was a little bit of

What came into Q1. So you saw that was one effect second effect is certainly that we are as I've mentioned continuing to invest in.

Adding more people into our business, where we see expertise we continue to do that in Q2. So there was a little bit of drag that came from that we also saw some softness in Canada. In Q2, Q2 tends to be a quarter for us where we should have seen some storm activity in Canada, which usually gives us gives us a margin lift we didn't see that if anything we actually.

Speaker 2: drag that came from that. We also saw some softness in Canada in Q2. Q2 tends to be a quarter for us where we should have seen some storm activity in Canada, which usually gives us a margin lift. We didn't see that. If anything, we actually saw a slowdown in Canada. So those were probably the biggest factors. I don't know, Bruce, if you want to add anything to that. No, I think you covered that.

We saw a slowdown in Canada.

So those were probably the biggest factors I don't know Bruce if you want to add anything to that no. I think you covered that I think that's right.

But we're not worried about the margin I mean this was.

Speaker 2: But we're not worried about the margin. I mean, this was, there were some one-time things as well, but that probably created a drag a little bit in Q2.

There were some one time things as well, but that probably created a drag a little bit in Q2.

Okay.

That's helpful.

Speaker 5: Maybe you'll speak to contractor connection. You sound like it hits him up further momentum there. Maybe just how that business is developing. I think you recently added some new client wins. Maybe how that could kind of ramp up for that business going forward.

Maybe speak to contractor connection.

It sounded like you.

Had some.

Further momentum there.

Maybe just how that.

Business is developing I think you've recently added some.

New client wins.

How that could kind of ramp up for that business going forward.

Yes, we continue to feel good about the contractor connection business that as one business as a matter of fact, just referring back to Mark's question before that does have a positive and get some positive impact from inflation.

Speaker 2: Yeah, we continue to feel good about the contractor connection business. That is one business, as a matter of fact, just referring back to Mark's question before, that does have a positive and gets a positive impact from inflation because the size of the project has a direct correlation to our revenue.

Because the size of the size of the project has a direct.

A direct correlation to walk through our revenue there. So we feel that that business is in good shape. You asked me have added a new client or we've added several new clients and we will continue to do that as you know and contractor connection, particularly with our larger clients. The change management on the large client side is it's time consuming so it takes time for us to hit the <unk>.

Speaker 2: So we feel that that business is in good shape. Yes, we've added a new client or we've added several new clients and we'll continue to do that. As you know, in contract a connection, particularly with our larger clients, the change management on the large client side is...

Speaker 2: you know, it's time consuming. So it takes time for us to hit the run rate, but our goal has been to onboard clients and then have a very strong account management structure in place that helps pull through more assignments on for those clients. So again, we feel very good about it and we feel that the trajectory is solid.

Run rate, but our goal has been to onboard clients and then have a very strong account management structure in place that helps pull through or assignments for those clients. So again, we feel we feel very good about it and we feel that the trajectory is solid.

Okay great.

Speaker 5: Okay, great. Just lastly on medical management. You referred some new business there as well as post-pandemic.

Lastly on medical management.

You referenced.

New business, there as well.

Post pandemic stability.

Just.

Speaker 5: just in terms of where you were versus, versus prior and where you are prior to the pandemic, is that just to...

In terms of where you were versus versus prior.

Pandemic is that right.

<unk>.

Just quickly.

Thank you.

Yes, we're getting there we're still below if we look at our two.

Speaker 2: Yeah, we're getting there. We're still below, if we look at our, you know, 2019 Q1 and Q2 as sort of the pre-pandemic, we're probably still, you know, somewhere we've been 3 to 5% below that level from where we were in 2019, but certainly much better from where we were in Q2 of 2020, 2021, 2021, 2022. So we've seen a sequential improvement.

2019, Q1, and Q2 is sort of a pre pandemic, we're probably still somewhere between 3% to 5% below that level from where we were in 2019, but certainly much better from where we were in Q2 of 2000 22021 2022, and so we've seen a sequential improvement in our medical management business, but we're still not at that.

Speaker 2: in our medical management business, but we're still not at that pre-pandemic level. But because of what we've seen in the prior quarters, we feel the trajectory continues to be on the up, and we should pretty soon either get to, you know, or eclipse what was their pre-pandemic.

Pre pandemic level.

But because of what we've seen in prior quarters, we feel the trajectory continues to be on the up and and we shipped pretty soon either get too.

Our eclipse what was their pre pandemic.

Okay, great. Thank you for taking the questions.

Thank you Kevin Thanks, Kevin.

Speaker 1: Thank you, gentlemen. There are no further questions at this time. I will turn the conference back to Mr. Verma.

Thank you gentlemen, there are no further questions at this time I will turn the conference back to Mr. <unk> for closing remarks.

Thank you Anna and thank you to all our employees clients and shareholders for your continued commitment to Crawford <unk> company. We look forward to building on our strong second quarter as we move into the second half of 2023 and as always we wish you well and look forward to.

Speaker 2: Thank you, Ellis, and thank you to all our employees, clients and shareholders for your continued commitment to Crawford & Company. We look forward to building on a strong second quarter as we move into the second half of 2023, and as always, we wish you well and look forward to...

Taking you along on this journey with us Thank you and God bless.

Speaker 2: taking you along on this journey with us. Thank you and God bless.

Thank you participating in today's Crawford <unk> Company Conference call. This call will be available for replay beginning at 11 30 a M.

Speaker 1: Thank you for participating in today's Grafford and Company Conference call. This call will be available for replay beginning at 11.30 a.m. East EST today through 11.59 PM ESC on September 4th, 2023. The conference ID number for the replay is 2, 3, 3, 0, 3, 8, pound. The number to dial for the replay is 877-674-7070 or 416-764-8692. on computing.

Today through 11, 59 PM ESC on September four 2023.

I D number for the replay is 233.

Three a pound the number to dial for the replay is 877 674, <unk> or 416, 70 648 619.

You may now disconnect.

Okay.