Crawford reports Q3 2024 results

Crawford & Company held its earnings call on Nov 5, 2024. Key highlights:

• Crawford, the largest publicly traded claims management provider, handles over $20 billion in claims annually across 70 countries. In Q3 2024, Broadspire and US GTS achieved new quarterly revenue records, with International Operations showing strong revenue growth and margin expansion in key markets.
• Third-quarter earnings declined, impacted by reduced weather-related revenue in North America Loss Adjusting and Platform Solutions. North America Loss Adjusting reported $79.3 million in revenue, consistent with the previous year, though operating earnings fell by 48% due to tough year-over-year comparisons and higher expenses in US GTS.
• Broadspire revenue reached $99 million, up 7% from Q3 2023, reinforcing its role as a core non-weather-dependent business. Platform Solutions revenue declined by 24% to $45.3 million, while subrogation revenues grew 12%.
• Lower storm activity, including a 50% drop in storm frequency from 2023, led to a 39% decline in weather-related revenue, reducing demand for catastrophe services. “While Hurricanes Helene and Milton were headline economic loss events, the overall storm frequency in the third quarter of 2024 decreased by almost 50% compared to 2023.” – CEO Rohit Verma.
• Higher incentive compensation for 2023 earnings and increased unbilled revenues pressured 2024 cash flow, but this is expected to reverse by year-end, though overall cash flow will remain lower than the strong 2023 levels. “I mean last year, ’23 was a tremendous operating cash flow year. So we’ll be down compared to that, largely because our earnings are down, and we had higher cash outflows related to incentive compensation earned in ’23.” – CFO Bruce Swain.