Crawford & Co.
Annual Report 2018

Plain-text annual report

Restoring and enhancing lives, businesses and communities. 2018 Annual Report p 20 15p p 8 7p 17p p 19 p 13 We are Crawford® For over 75 years, Crawford has solved the world’s claims handling challenges and helped businesses keep their focus where it belongs – on people. Innovation Integrated Solutions 02 Shareholder Letter 06 Global Expertise 10 Around the World 12 Tailored Industry Verticals 14 16 18 Customization 20 Compassion 22 Experience 24 Our Values & Responsibility 26 Management Team 27 Financial Highlights 28 Financial Statements 34 Board of Directors 02 Crawford 2018 Annual Report TO OUR SHAREHOLDERS I am very pleased with the success that we achieved in 2018, positioning Crawford & Company® for a return to sustained revenue and earnings growth. We made purposeful investments in our people to drive market share, in technology to become more efficient and in product innovation to access large, untapped market opportunities. Our strategic investments have laid the foundation and positioned the Company to achieve our goal of delivering 5% revenue growth and 15% earnings growth, annually. Harsha V. Agadi President and Chief Executive Officer 03 Crawford 2018 Annual Report It was also an important year in Crawford’s 78-year investment has been recognized by the market, history; we celebrated our 50th year as a publicly as we retained 100% of our U.S. CAT clients in 2018. traded company. The board members and the senior management team joined together to ring the closing bell on the NYSE. It was a memorable event for all of us, both a celebration of our firmly planted roots in the industry and an expression of great optimism for our future. I am confident that 2019 holds even more promise for Crawford, and I continue to be humbled by the many opportunities we have to restore and enhance lives, businesses and communities. Cultural Renaissance In 2018, we initiated a cultural renaissance at Crawford. We needed to make changes that would facilitate a fundamental shift in ideology. We needed to become more entrepreneurial and agile, and we needed to reaffirm a clear and unwavering commitment to our clients. To initiate this shift in our culture, we developed and implemented a new mission — to restore and enhance lives, businesses and communities, and a new vision — to be the leading provider and most trusted source for expert assistance, serving those who insure and self-insure the risks of businesses and communities anywhere in the world. The mission and vision have defined our purpose and our go-to-market strategy. They inform every decision that we make, from developing partnerships to choosing talent. Crawford is more united than ever under these key principles. Our RESTORE values rounded out our cultural renaissance and shaped our response to the significant catastrophic events that impacted communities around the world in 2018, including hurricanes Florence and Michael in the U.S., the California wildfires, as well as the catastrophic typhoons, cyclones and earthquakes that devastated Southeast Asia. Our teams quickly responded to these events, working diligently to deliver on our mission to restore and enhance lives, businesses and communities. Our catastrophe (CAT) response is a solution that our clients turn to in their time of greatest need, when speed and accuracy of service is critical. We have invested in our catastrophe business over the last year to ensure that we remain the leading independent outsourced claims services provider globally, and I am pleased to report that our Supporting Employees and Communities Supporting and giving back to the communities in which we work and live is a key responsibility for Crawford. Through the Crawford Cares Foundation, our company provides support to Crawford employees affected by catastrophe or an unexpected loss. Using these funds, employees are able to offset temporary housing costs, repair damaged homes and replace food spoiled by loss of electricity. In addition, we are a significant contributor to the American Red Cross. Every October, we hold our Global Day of Service, when Crawford employees join together in service of their respective communities across the globe. In 2018, we celebrated the 10th anniversary of our Global Day of Service, and our teams participated in 55 humanitarian projects, each chosen by employees in their respective countries. From building homes for the homeless in Florida to providing support to victims of earthquakes and tsunamis in Indonesia, Crawford employees donated their time to restore and enhance lives, businesses and communities. Global Day of Service is also a manifestation of Crawford’s RESTORE values. We strive to embody these values as a collective group and as individuals in our work at Crawford and within our communities. When we work together as One Crawford, there is no limit to what we can accomplish for the greater good. The “T” in our RESTORE values refers to Training and is a constant reminder of our commitment to training talent within our industry. In 2018 alone, we conducted more than 65,000 hours of training. This included technical training for adjusters, nurses and clients, as well as career development training for Crawford employees, from early career professionals to executive managment. Our educational courses are uniquely designed to create skilled workers who execute our mission of restoring and enhancing lives, businesses and communities. 04 Crawford 2018 Annual Report Positioning Crawford to Exceed Clients’ Needs Another important step in our transformation was Investing to Drive Disruption and Growth We consistently strive to better understand our the successful completion of the reorganization into clients’ needs and develop solutions that help tackle Global Service Lines (GSLs) at the start of 2018. the complex challenges they face. As a result, The objective was to enable our team to deliver value we increased our pace of investment through 2018 to to our clients across all lines of business, while also develop solutions that include innovative technology, improving our depth of service in the key geographies such as drone capabilities, intuitive Looker® interfaces, we serve. This has been an important component the Internet of Things, virtual reality loss capture and to supporting Crawford’s return to growth, and our sales training, RENOVO (our proprietary adjuster portal), team is now empowered to deliver the full breadth robotic process automation, variance analytics and of Crawford’s products and services to our clients. our job track tool, to name a few. We are not waiting Our Global Service Lines are: for disruption. We are meeting disruption head on. Additionally, we are taking our disruptive solutions Crawford Claims Solutions (CCS) and seamlessly integrating them into our clients’ CCS is Crawford’s longest-standing service line solutions to help them meet their own customers’ and the core of Crawford’s claims-handling business. needs more effectively. From traditional, distributed field adjusting services to catastrophe response and modern innovations leveraging drone technology through WeGoLook®, CCS continues to disrupt the industry with services that expedite claims around the world. Industry Verticals and Integrated Solutions We are also investing in new capabilities and solutions to open large market opportunities that we are uniquely positioned to serve. The key to this is serving our clients through industry verticals and integrated solutions. Crawford TPA Solutions: Broadspire Our Total Construction Solution, launched in the first Crawford’s third party administration (TPA) services, quarter of 2018, is focused on the unique needs of the provided through our Broadspire® brand, specialize construction industry. Market acceptance has been in workers compensation, disability and absence excellent, and we now have a growing portfolio of over management, medical management services, accident 30 clients. Our Hospitality Solution, focused on the & health and liability. With expertise around the globe, lodging and restaurant industries, launched in July of Broadspire meets the needs of corporations, brokers 2018, and we are pleased to report that Crawford is and insurers in more than 15 countries. currently the leading claims management company in Crawford Specialty Solutions (CSS) CSS serves the global property and casualty insurance markets through two businesses: Contractor Connection® and Global Technical Services (GTS). Contractor Connection is the insurance industry’s largest and most trusted provider of managed repair services. Its network of over 6,000 certified professional the luxury hotel segment. Additionally, we launched our Transportation Solution in January of 2019 and plan to launch solutions targeting the Real Estate and Retail verticals in the second half of the year. These identified industries are where we expect continued growth and a higher frequency of losses, which will provide a favorable market backdrop for our solutions. contractors allows clients in the U.S., Canada, UK, Our goal is to drive innovation in the claims settlement Australia and Germany to deliver industry-leading, process to deliver value to our clients in the form of quality service to their customers. improved customer satisfaction and service. Our Crawford GTS employs the largest, most experienced team of complex technical adjusters in the world, and it is the definitive solution for large, specialty and complex claims. Covering virtually every industry and geographic region, Crawford GTS has more senior technical adjusters than any other independent adjusting resource. TruLook™ solution is an important example. All claims are funneled through TruLook’s triage mechanism, which ensures claims are routed to the appropriate team based on complexity. TruLook also leverages Contractor Connection for managed repair, thereby elevating the claims settlement process to a comprehensive end-to- end solution. Ultimately, this results in improved speed of service, accuracy, cost efficiency, and most importantly, client satisfaction. 05 Crawford 2018 Annual Report Another example of an innovative and integrated service at a significant discount to intrinsic value. Over the last offering is our Recall 360 Solution, focused on solving fifteen months, we have repurchased approximately the complex challenges of product recalls. Product 5.5% of average Company shares outstanding. Lastly, recalls are never planned, but when they occur, they we paid $13.5 million in dividends this past year, require an immediate response to protect insurers’ providing a meaningful and predictable yield to our customers, margins and brand reputation. Recall 360 shareholders. offers modular solutions to meet the demanding needs of risk managers, carriers and brokers. A scalable approach ensures that businesses have the specific tools and guidance they need to reduce exposure and recover rapidly. Looking to the Year Ahead For Crawford, 2018 was a year of great change, and in order to continue our positive momentum in 2019, we will continue to focus on initiatives that will position us for growth. Our 2019-2023 strategic plan emphasizes four Our industry verticals and innovative, integrated strategic priorities: solutions distinguish Crawford in the marketplace, providing more value to our clients and support our efforts to deliver world class claims service. In fact, our existing clients represent a large market opportunity, and we are investing in the education of the market as to the vast portfolio of services we offer. To drive better penetration, we are holding Innovation Expos for our clients, featuring Crawford’s groundbreaking, disruptive solutions. These events are creating a robust dialogue with our client partners about their unique challenges and how we can work together to develop solutions. The insights we gather from these events are helping us decide which innovations and opportunities to pursue as we work toward growth. Disciplined Capital Allocation The sale of Garden City Group, in June 2018, was a strategic decision made in support of our efforts to focus on our core business of providing outsourced claims solutions to carriers, brokers and corporates. This transaction freed up management’s time, resources and capital to invest in the segments with higher growth potential. Our management team is focused on improving the Company’s cash generation, while delivering value to shareholders through a disciplined capital allocation strategy. In 2018, we generated over $52 million in operating cash flow, which is a 29% increase over the nearly $41 million that we generated in 2017. We utilized this cash flow to strengthen the Company’s balance sheet as we paid down $35 million in debt in 2018 and ended the year with the lowest leverage in three years. In addition, we repurchased $10 million of our common shares through 2018 and were opportunistic in January 2019 when we repurchased an additional $16 million of shares, demonstrating our belief that our stock trades • Growth: We must increase the velocity of revenue growth through continuous innovation as we work to deliver our goal of 5% revenue growth and 15% earnings growth annually. • People Readiness: We will continue to attract, develop, engage and retain the caring and capable people who deliver our mission every day. • Systems Readiness: Prioritizing IT investments across the globe will position Crawford at the forefront of innovation and disruption. • Fiscal Responsibility: We will continue to focus on improving the Company’s free cash flow, while maintaining prudent expense management and the most conservative balance sheet in the industry. This will maximize our return on invested capital. These priorities have been communicated to Crawford employees across the globe, and our goal is to operate as One Crawford, all working toward the same goals and mission, to enhance lives, businesses and communities. We will continue to reinforce the importance of this message and these priorities in 2019. I anticipate even more change and growth for Crawford & Company this year as a result of the positive momentum that we created in 2018. In conclusion, I consider it a true privilege to serve our employees, clients and shareholders as we restore and enhance lives, businesses and communities around the world. Harsha V. Agadi President and Chief Executive Officer 06 Crawford 2018 Annual Report RESTORING AND ENHANCING THROUGH Global Expertise As the world’s largest publicly listed independent provider of claims management and outsourcing solutions, we bring together thoughtful experts from over 70 countries to offer comprehensive, intelligent solutions to our clients. This global expertise enables us to address the challenges of carriers, corporations and brokers today, while anticipating the needs of tomorrow. 07 Crawford 2018 Annual Report 1. 2. 1. Loss Adjusting 2. Third Party Administration From minor damage to catastrophic events, Managing risks, claims and losses in multiple Crawford has the right team, the right locations around the world requires a technology and the right processes to significant investment in infrastructure and help businesses and communities restore resources. As a trusted partner, Crawford and rebuild. Through our global network helps organizations of every size and type, of expert employees, we have experience and in every geography, meet the needs handling any type of loss – from simple of their customers while helping to reduce to large and complex – in virtually costs and overhead through a variety of third every industry. party administration (TPA) activities. 47% U.S. Fortune 250 corporations served 08 Crawford 2018 Annual Report 3. 4. 3. Managed Repair 4. Medical Management With over 6,000 rigorously-vetted contractors, Crawford’s Broadspire brand offers a Crawford’s Contractor Connection comprehensive set of end-to-end clinical brand maintains the largest independently- management programs to support our TPA managed network of contractors in the services and improve outcomes for both world. Through our proven managed repair claimants and insurers. Broadspire’s clinical model, we reduce time-in-process, cut claims professionals understand the value of the handling expenses and improve estimate right care, utilizing best-fit services and accuracy while delivering a world-class personalized solutions to restore lives of customer experience from first notice of those who suffer from illness or injury. loss all the way through to finished repair. 6K Contractors in network 30% Decrease in average days of disability 09 Crawford 2018 Annual Report 6. 5. 5. Catastrophe Response 6. On-Demand Services With one of the largest trained and Crawford’s WeGoLook brand combines credentialed field forces in the industry, technology with an on-demand workforce of Crawford is ready to respond to natural over 40,000 Lookers to help businesses and and man-made disasters in virtually every individuals gather and validate information location around the world. Our teams of anytime and anywhere. From insurance adjusters are unmatched in experience claim inspections to fleet assessment and and depth and are supported by ongoing franchise monitoring, we help our clients innovations such as RENOVO, our enhance their businesses with accurate and proprietary, state-of-the-art adjuster portal, timely information at a fraction of the cost of and WeGoLook, our on-demand field force. traditional offerings. 175K Catastrophe calls handled annually 70% Faster cycle times vs. industry 10 Crawford 2018 Annual Report 70 Countries 9K Employees worldwide 50K Field resources $14B Annual claims payments KEY Crawford Reach Office Location Global Support Center 11 Crawford 2018 Annual Report RESTORING AND ENHANCING Around the World Global coverage means very little if it is not supported by local knowledge. Crawford has a presence in over 70 countries with global solutions that are executed locally. By combining local insight with global cohesiveness, we restore and enhance the lives, business and communities of those affected by losses whenever and wherever they occur. 12 Crawford 2018 Annual Report KEY VERTICALS LAUNCHING IN 2019 Construction Hospitality Oil & Energy Transportation Aviation Retail Real Estate RESTORING AND ENHANCING THROUGH Tailored Industry Verticals Through the strategic application of our global capabilities and services, Crawford currently offers tailored solutions to manage the unique risks and challenges of businesses in many industries. From construction to transportation to hospitality and beyond, our ability to harness expertise and product depth from across our company allows us to solve unique challenges, accelerate our growth and reduce cost for our clients. 13 Crawford 2018 Annual Report Industry Highlight: Construction Our construction solution represents the most comprehensive offering available to this industry. Leveraging Crawford’s suite of services and solutions, it covers the full spectrum of construction industry claims including dedicated construction account management, builder’s risk, jurisdiction-specific workers compensation, forensic accounting capabilities, contractor emergency services and large loss repair solutions. We work with general contractors, trade contractors, project structures, owner-controlled insurance programs (OCIPs), and contractor- controlled insurance programs (CCIPs) to consult on risk-related issues, drive claims handling efficiencies and increase customer satisfaction. 14 Crawford 2018 Annual Report RESTORING AND ENHANCING THROUGH Integrated Solutions Crawford leverages its global expertise and ongoing innovations to deliver value to clients in all industries through integrated solutions. With a focus on exponentially improving returns in time and cost, these solutions are driven by data and executed by experts globally. TruLook Recall 360 Leveraging our claims triage processes Operating as an extension of our clients, and cutting-edge technologies, TruLook Recall 360 provides comprehensive, delivers the right process for every claim, customizable product recall support that every time. By integrating mobile self-service, helps plan for, respond to, and mitigate the on-demand field services, drones, quality impact of any product recall. By leveraging assurance and desktop adjusting, TruLook our long history of handling losses and can escalate as needed to streamline claims our global network of dedicated experts, processes – reducing time-in process from Crawford is uniquely qualified to respond weeks to days and lowering overall claims quickly and deftly to product recalls in handling costs by up to 30%. any industry. 20- 30% In cost savings with TruLook vs. traditional models 15 Crawford 2018 Annual Report Escape of Water Crawford launched its Escape of Water solution in the UK in early 2018 to help our clients address the rising costs and complexity of water damage claims. Escape of water has been a growing concern to insurance carriers and risk managers and is one of the largest causes of non-catastrophe losses. Crawford’s Escape of Water solution has since evolved to become the industry’s first smart water detection and mitigation claims solution, delivering a rapid and effective response initiated by wireless sensors that detect unusual moisture within seconds of a leak. Upon notification from sensor alert or through traditional first notice of loss, Crawford’s specially trained adjusters take a process- driven approach that is fully integrated with Crawford Contractor Connection to include mitigation contractors for a rapid 24/7/365 on-site response. 17% Reduction in average water damage mitigation 16 Crawford 2018 Annual Report RESTORING AND ENHANCING THROUGH Innovation To support new innovations that make claims processing faster, more responsive and accurate, we established Crawford Innovative Ventures (CIV) in 2016. This Drone inspections Virtual reality (VR) for adjuster training and loss documentation strategic catalyst focuses on uncovering new The Internet of Things (IoT) technologies and implementing practical, RPA (Robotic process automation) 2,200 Licensed drone operators in Crawford’s on-demand services network intelligent solutions that accelerate our mission of restoring and enhancing lives, businesses and communities. At Crawford, Artificial intelligence (AI) Predictive analytics we’re not just embracing change, we’re Self-service mobile apps leading it, and we will continue to evolve to meet the demands of the market. 30.7B Estimated IoT devices by 2020 17 Crawford 2018 Annual Report “ We are at the forefront of incorporating drone technology and IoT devices to enhance our claims handling models. These advancements are delivering efficiencies our clients never thought possible.” Michael Michael Beverly Property Product Manager Crawford Claims Solutions Michael’s recent innovation projects include the integration of our drone network into the claims workflow, as well as the creation of a claims model focused around IoT and its capabilities for first notice of loss and rapid loss mitigation. 18 Crawford 2018 Annual Report RESTORING AND ENHANCING THROUGH Customization Terminix® is one of the largest pest control To help Terminix make the transition to an companies in the world, operating in 47 outsourced TPA model, our team of claims states in the United States and 22 countries. handling experts leveraged a Crawford With their internal, self-administered, enterprise approach, designing and third-party liability model, they faced two implementing a solution that reduced the challenges. First, there was a significant time needed for claim resolution, the cost time commitment for local Terminix branch per claim and the litigation rate. Integrating managers to inspect alleged termite our field, TPA and property repair network damage claims. Second, Terminix had to capabilities, we delivered a TPA model for manage third-party contractors to perform Terminix that has achieved remarkable necessary repairs. success verses their previous solution. “ It’s our job to make the experience as easy and pain-free as possible for the client and the homeowner.” 19 Crawford 2018 Annual Report Omar Omar Hurtado de Mendoza Sr. Customer Service Manager Crawford Contractor Connection Omar’s role is to understand the client’s needs, enhance brand image and ensure expectations are exceeded with the Terminix program. 30 DAYS Average decrease in life of claim* *U.S. Gulf Region 20 Crawford 2018 Annual Report Maria Maria C. Armas Claims Examiner II – California Service Center Workers Compensation Claims Crawford TPA Solutions: Broadspire Maria is a member of a dedicated team of claims specialists helping 99 Cents Only Stores achieve ongoing success with its safety and workers compensation programs. “ I am proud to be part of a team that has achieved so much to help our client succeed.” 21 Crawford 2018 Annual Report RESTORING AND ENHANCING WITH Compassion As a premier extreme discount retailer with and drive down costs. 99 Cents Only more than 390 stores in four states, 99 Stores developed an innovative program Cents Only Stores sought a partner to help to administer first aid at on-site clinics and, it manage the risks associated with 17,000 with Broadspire’s support, the company 46% Reduction in open claims employees in a thriving retail environment. reduced lost work days by 52%, and lowered Like most retailers, 99 Cents Only Stores’ the total incurred costs by 44% since 2016. employees are highly engaged and physically Additionally, over a three year period, the active throughout the day, which can result in number of open claims decreased by 46%. a disproportionate number of injuries due to overexertion, repetitive strain, slips, falls, The company’s “culture of safety” is now cuts and breaks. firmly embedded into its operational DNA. By taking a strong stance on early claim Crawford’s Broadspire brand and Beecher intervention and focusing on the 20% of Carlson, the company’s broker, partnered open claims that incur 80% of the costs, 99 with 99 Cents Only Stores to implement a Cents Only Stores is now well equipped for series of programs to mitigate the frequency ongoing success in its safety and workers and severity of claims, reduce claim duration compensation programs. 52% Reduction in lost work days 22 Crawford 2018 Annual Report RESTORING AND ENHANCING WITH Experience After the powerful hurricanes of 2017, two of the Caribbean’s most elegant resorts — Belmond La Samanna in St. Martin and Belmond Cap Juluca in Anguilla — were left devastated by the high winds and sea surges. These two sister properties suffered significant property damage and business interruption losses, and as major employers in the local communities, they needed to be restored as soon as possible. With Crawford’s deep experience in helping the hospitality industry handle large-scale complex claims in the aftermath of weather-related catastrophes, we quickly implemented an integrated Crawford enterprise solution. Our response was led by Crawford Global Technical Services® who introduced the specialist skills of Crawford Forensic Accounting Services and WeGoLook. The drone capabilities of WeGoLook, our on-demand field force, captured footage of the resort properties the day after they were struck by the hurricanes. This drone footage proved invaluable as post-hurricane communication in the area was difficult. We were able to supply Belmond with meaningful information so they were immediately aware of the scale of the losses and the resources needed to restore the properties. Our Global Technical Services adjuster led the claims management project team and managed all the parties involved to provide support and guidance throughout the claim. With Crawford’s expert knowledge and skills, along with a full understanding of the insurance coverage, we were able to support a swift settlement of Belmond’s insurance claims. As a result, both luxury resorts were able to re-open in 2018. 23 Crawford 2018 Annual Report “ After recovering from such devastation on two properties simultaneously, we are very pleased to have partnered with the experts from Crawford.” Abigail Hunt Vice President, Legal Belmond (UK) Limited 24 Crawford 2018 Annual Report Our mission to restore and enhance lives, businesses and communities is embedded in our values – to RESTORE is a part of everything we do. Respect A culture where we practice integrity and ethical behavior, embrace each individual’s unique talents, honor diverse life and work styles, and promote a spirit of cooperation. Empowerment An engaged Crawford where employees are emboldened to advance the company mission, take ownership of their career progression, contribute ideas to meet industry challenges and hold themselves and others accountable. Sustainability A focus on corporate social responsibility, giving back and being good stewards in our communities. Training An environment where employees are stimulated, knowledgeable and satisfied. One Crawford A global mindset that’s inclusive, mission-focused, customer-focused and on the move. Recognition An ecosystem of recognition and reward for our employees’ hard work. Entrepreneurial Spirit A shared passion to succeed, outpace competitors and innovate. RESTORING AND ENHANCING WITH Responsibility Crawford serves clients in more than 70 volunteers participating in over 50 service countries, and that worldwide footprint projects worldwide. Our commitment provides the backdrop for our commitment is also reflected through the Crawford Cares to give back to the communities we foundation. The foundation is funded 100% serve. This level of commitment is best by Crawford, Crawford employees and board demonstrated through actions. For instance, members to provide support to Crawford Crawford's annual Global Day of Service employees affected by catastrophe or an brings employees and their families together unexpected event or loss. After the 2017 on one day in October to support charities hurricanes, for example, we provided and outreach efforts in their own region. financial assistance to more than 100 In 2018, Crawford’s Global Day of Service employees to help offset temporary celebrated its 10th year with over 1,000 housing costs and repair damaged homes. 50+ Service projects 25 Countries 10+ Years of Global Day of Service 26 Crawford 2018 Annual Report Global Executive Management Team 1. Harsha V. Agadi President and Chief Executive Officer 4. Kieran Rigby 7. W. Bruce Swain 9. Greta G. Van Global President, Crawford Claims Solutions Chief Financial Officer Chief Strategy Officer 2. Joseph O. Blanco General Counsel 5. Bonnie C. Sawdey Chief People Officer 3. Danielle M. Lisenbey Global President, TPA Solutions: Broadspire 6. Hilton Sturisky Chief Information Officer 8. Larry C. Thomas Global President, Crawford Specialty Solutions 10. Rohit Verma Global Chief Operating Officer NOTE: Should we reorder like done on board? 8 7 4 6 2 5 1 3 9 10 27 Crawford 2018 Annual Report 2018 Financial Highlights (dollars in millions, except per share amounts) (unaudited) FOR THE YEARS ENDED DECEMBER 31, Revenues Before Reimbursements(1) Net Income Attributable to Shareholders of Crawford & Company Consolidated Operating Earnings(1) Consolidated Adjusted EBITDA(1) Diluted Earnings per Share – CRD-A Diluted Earnings per Share – CRD-B 2018 1,071.0 26.0 89.5 127.2 0.50 0.42 $ $ $ $ $ $ 2017 1,105.8 27.7 94.6 130.9 0.52 0.45 $ $ $ $ $ $ Return on Average Shareholders’ Investment 14.7% 16.5% Percentage of Total Company Revenues Before Reimbursement by Business Segment 33.7% Crawford Claims Solutions 37.9% Crawford TPA Solutions: Broadspire 28.4% Crawford Specialty Solutions . 9 2 4 1 1 $ , . 4 0 7 1 1 $ , . 3 9 0 1 1 $ , . 8 5 0 1 1 $ , . 0 1 7 0 1 $ , . 1 3 7 $ . 4 0 7 $ . 1 2 9 $ . 6 4 9 $ . 5 9 8 $ . 3 4 0 1 $ . 2 7 0 1 $ . 2 6 2 1 $ . 9 0 3 1 $ . 2 7 2 1 $ 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Revenues before(1) Reimbursements ($ in millions) Consolidated Operating Earnings (1) ($ in millions) Consolidated Adjusted EBITDA(1) ($ in millions) . 9 4 5 5 1 , . 6 0 0 6 1 , . 8 4 0 5 1 , . 2 8 8 6 1 , . 6 7 9 6 1 , . 7 1 1 $ . 5 3 1 $ . 6 3 1 $ . 7 3 1 $ . 5 3 1 $ . 4 4 0 1 $ . 2 1 7 1 $ . 4 6 0 1 $ . 7 1 7 1 $ . 3 7 3 1 $ 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Cases Received (in thousands) Total Cash Dividends Paid ($ in millions) Net Debt(1) ($ in millions) (1) Measurements of financial performance not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comparable to other similarly-titled measurements employed by other companies. For additional information about the non-GAAP financial information presented herein, see the Appendix shown on our website at http://investors.crawfordandcompany.com/phoenix.zhtml?c=83420&p=quarterlyearnings. 2018 and 2017 exclude the impact of the disposed GCG business. 2014 - 2016 not adjusted for the GCG business. 28 Crawford 2018 Annual Report Consolidated Statements of Operations (unaudited) (In thousands, except per share amounts) FOR THE YEARS ENDED DECEMBER 31, Revenues from Services: Revenues before reimbursements Reimbursements Total Revenues Costs and Expenses: Costs of services provided, before reimbursements Reimbursements Total costs of services Selling, general, and administrative expenses Corporate interest expense, net of interest income of $1,290, $847, and $749, respectively Goodwill and intangible asset impairment charges Restructuring and special charges Loss on disposition of business line Total Costs and Expenses Other Income (Expense) Income Before Income Taxes Provision for Income Taxes Net Income Net Loss (Income) Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests 2018 2017 2016 $ 1,070,971 $ 1,105,832 $ 1,109,286 52,008 57,877 68,302 1,122,979 1,163,709 1,177,588 755,997 52,008 808,005 242,421 784,290 57,877 842,167 781,810 68,302 850,112 239,840 239,852 10,109 1,056 — 20,270 9,062 19,598 12,084 – 9,185 — 9,490 – 1,081,861 1,122,751 1,108,639 3,013 44,131 18,542 25,589 1,304 42,262 15,039 27,223 (5,708) 63,241 25,565 37,676 389 442 (1,710) Net Income Attributable to Shareholders of Crawford & Company $ 25,978 $ 27,665 $ 35,966 Earnings Per Share - Basic: Class A Common Stock Class B Common Stock Earnings Per Share - Diluted: Class A Common Stock Class B Common Stock Weighted-Average Shares Used to Compute Basic Earnings Per Share: Class A Common Stock Class B Common Stock Weighted-Average Shares Used to Compute Diluted Earnings Per Share: Class A Common Stock Class B Common Stock Cash Dividends Per Share: Class A Common Stock Class B Common Stock $ $ $ $ 0.51 0.43 0.50 0.42 $ $ $ $ 0.53 0.45 0.52 0.45 $ $ $ $ 30,805 24,449 31,434 24,449 31,322 24,606 32,158 24,606 0.68 0.60 0.67 0.60 30,793 24,690 31,530 24,690 $ $ 0.28 0.20 $ $ 0.28 0.20 $ $ 0.28 0.20 This financial information should be read with the Company’s audited consolidated financial statements and notes thereto, and related risks included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission. 29 Crawford 2018 Annual Report Consolidated Statements of Comprehensive Income (loss) (unaudited) (In thousands) FOR THE YEARS ENDED DECEMBER 31, Net Income Other Comprehensive (Loss) Income: 2018 2017 2016 $ 25,589 $ 27,223 $ 37,676 Net foreign currency translation (loss) income, net of tax benefit of $0, $0, and $0, respectively Amounts reclassified into net income for defined benefit pension plans, net of tax provision of $2,686, $3,432 and $4,563 respectively Net unrealized (loss) gain on defined benefit plans arising during the year, net of tax benefit (provision) of $5,333, $236, and ($5,175), respectively Other Comprehensive (Loss) Income Comprehensive Income (10,830) 6,323 (10,620) 8,076 7,501 8,623 (18,014) (20,768) 4,821 666 14,490 41,713 11,337 9,340 47,016 Comprehensive loss (income) attributable to noncontrolling interests and redeemable noncontrolling interests Comprehensive Income Attributable to Shareholders of Crawford & Company 1,187 1,248 (192) $ 6,008 $ 42,961 $ 46,824 This financial information should be read with the Company’s audited consolidated financial statements and notes thereto, and related risks included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission. 30 Crawford 2018 Annual Report Consolidated Statements of Cash Flows (unaudited) (In thousands) FOR THE YEARS ENDED DECEMBER 31, Cash Flows from Operating Activities: Net income Reconciliation of net income to net cash provided by operating activities: 2018 2017 2016 $ 25,589 $ 27,223 $ 37,676 Depreciation and amortization Goodwill and intangible asset impairment charges Deferred income taxes Loss on disposition of business line Stock-based compensation costs Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: Accounts receivable, net Unbilled revenues, net Accrued or prepaid income taxes Accounts payable and accrued liabilities Deferred revenues Accrued retirement costs Prepaid expenses and other operating activities Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Acquisitions of property and equipment Capitalization of computer software costs Cash proceeds from disposition of business line Payments for business acquisitions, net of cash acquired Other investing activities Net Cash Provided by (Used In) Investing Activities Cash Flows from Financing Activities: Cash dividends paid Payments related to shares received for withholding taxes under stock-based compensation plans Proceeds from shares purchased under employee stock-based compensation plans Decrease in note payable for share repurchase Repurchases of common stock Increases in short-term and revolving credit facility borrowings Payments on short-term and revolving credit facility borrowings Payments on capital lease obligations Capitalized loan costs Dividends paid to noncontrolling interests Net Cash (Used In) Provided by Financing Activities Effects of exchange rate changes on cash and cash equivalents (Decrease) Increase in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year 44,079 1,056 7,947 20,270 6,196 7,844 (18,588) 2,270 (8,952) (4,969) (25,896) (4,427) 52,419 (14,052) (15,968) 39,187 (2,500) (218) 6,449 41,658 19,598 (2,358) – 6,661 (14,844) (2,644) (508) (14,678) (3,482) (15,364) (505) 40,757 (19,044) (25,867) – (36,029) (926) (81,866) 40,743 — 10,531 – 5,252 2,781 (7,782) 1,755 17,120 (8,846) (9,046) 8,680 98,864 (10,354) (18,845) – (3,672) (95) (32,966) (13,528) (13,700) (13,565) (1,110) (1,933) (1,342) 1,387 1,154 1,743 — — (2,206) (10,409) 101,428 (135,433) (477) (23) (574) (58,739) (1,021) (892) 54,011 (7,422) 94,407 (58,490) (1,233) (1,926) (514) 10,343 3,208 (27,558) 81,569 $ 53,119 $ 54,011 $ — 80,164 (118,044) (1,508) (12) (381) (55,151) (5,244) 5,503 76,066 81,569 This financial information should be read with the Company’s audited consolidated financial statements and notes thereto, and related risks included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission. Consolidated Balance Sheets (unaudited) (In thousands, except par value amounts) FOR THE YEARS ENDED DECEMBER 31, ASSETS Current Assets: Cash and cash equivalents Accounts receivable, less allowance for doubtful accounts of $9,625 and $12,588, respectively Unbilled revenues, at estimated billable amounts Income taxes receivable Prepaid expenses and other current assets Total Current Assets Net Property and Equipment Other Assets: Goodwill Intangible assets arising from business acquisitions, net Capitalized software costs, net Deferred income tax assets Other noncurrent assets Total Other Assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS’ INVESTMENT Current Liabilities: Short-term borrowings Accounts payable Accrued compensation and related costs Self-insured risks Income taxes payable Deferred rent Other accrued liabilities Deferred revenues Current installments of capital leases Total Current Liabilities Noncurrent Liabilities: Long-term debt and capital leases, less current installments Deferred revenues Accrued pension liabilities Other noncurrent liabilities Total Noncurrent Liabilities Redeemable Noncontrolling Interests Shareholders’ Investment: Class A common stock, $1.00 par value, 50,000 shares authorized; 30,927 and 31,439 shares issued and outstanding, respectively Class B common stock, $1.00 par value, 50,000 shares authorized; 24,408 and 24,502 shares issued and outstanding, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive loss Shareholders’ Investment Attributable to Shareholders of Crawford & Company Noncontrolling interests Total Shareholders’ Investment TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT 31 Crawford 2018 Annual Report 2018 2017 $ 53,119 $ 54,011 131,117 174,172 108,291 4,084 24,237 320,848 34,303 96,890 85,023 72,210 22,146 70,022 108,745 7,987 25,452 370,367 41,664 96,916 97,147 89,824 24,359 67,659 346,291 375,905 $ 701,442 $ 787,936 $ 23,195 $ 37,834 66,530 15,246 3,145 15,919 32,391 30,961 89 24,641 49,303 75,892 13,407 2,703 15,717 36,563 37,794 571 225,310 256,591 167,126 21,713 74,323 32,024 295,186 5,500 200,460 22,515 87,035 27,596 337,606 6,775 30,927 31,439 24,408 58,793 273,607 (216,447) 171,288 4,158 175,446 24,502 53,170 269,686 (196,477) 182,320 4,644 186,964 $ 701,442 $ 787,936 This financial information should be read with the Company’s audited consolidated financial statements and notes thereto, and related risks included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission. 32 Crawford 2018 Annual Report Consolidated Statements of Shareholders’ Investment Common Stock Shareholders’ Accumulated Investment Other Attributable to (In thousands) Class A Non-Voting Class B Voting Additional Paid-In Capital Compre- Shareholders Non- Total Retained hensive of Crawford & controlling Shareholders’ Earnings (Loss) Income Company Interests Investment Balance at December 31, 2015 $ 30,537 $ 24,690 $ 41,936 $ 239,161 $ (222,631) $ 113,693 $ 10,658 $ 124,351 Net income Other comprehensive income (loss) Cash dividends paid Stock-based compensation Shares issued in connection with stock-based compensation plans, net Decrease in value of noncontrolling interest due to sale of controlling interest Dividends paid to noncontrolling interests Balance at December 31, 2016 Net income (loss) (1) Other comprehensive income (loss) Cash dividends paid Stock-based compensation Repurchases of common stock Shares issued in connection with stock-based compensation plans, net Increase in value of noncontrolling interest due to acquisition of controlling interest Dividends paid to noncontrolling interests — — — 35,966 — 35,966 1,710 37,676 — — — — — — — — (13,565) — 10,858 5,252 — — — 10,858 (13,565) 5,252 (1,518) — — 9,340 (13,565) 5,252 759 — (368) — — 1,288 — — — 391 — 391 — 1,288 (5,088) (3,800) — 31,296 — 24,690 — — 48,108 261,562 — (211,773) — — 27,665 — — 15,296 — 153,883 27,665 15,296 (381) 5,381 526 (806) (381) 159,264 28,191 14,490 (701) (188) – (6,533) — (13,700) 6,661 — — — — (13,700) 6,661 (7,422) — (13,700) — — 6,661 (7,422) — — — — — — — — 844 — (1,623) 692 — — 24 — — — (87) — (87) 24 57 81 — 31,439 — — — — Balance at December 31, 2017 Net income (loss) (1) Other comprehensive income (loss) Cash dividends paid Stock-based compensation Repurchases of common stock Shares issued in connection with stock-based compensation plans, net Increase in value of noncontrolling interest due to acquisition of controlling interest Dividends paid to noncontrolling interests — Balance at December 31, 2018 $ 30,927 632 — (1,144) — 24,502 — — 53,170 269,686 — (196,477) — 182,320 (514) 4,644 (514) 186,964 — — 25,978 — 25,978 886 26,864 — — — — — 6,196 — (13,528) — (19,970) — — (19,970) (13,528) 6,196 (798) — — (20,768) (13,528) 6,196 (94) – (9,171) — (355) 642 — (218) — — — — (10,409) — (10,409) 919 — 919 (218) – (218) — $ 24,408 — — $ 58,793 $ 273,607 — — $ (216,477) $ 171,288 (574) 4,158 (574) $ 175,446 $ This financial information should be read with the Company’s audited consolidated financial statements and notes thereto, and related risks included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission. (1) The total net income presented in the consolidated statement of shareholders’ investment for the years ended December 31, 2017 and December 31, 2018 excludes $968 and $1,275 respectively, in net loss attributable to the redeemable noncontrolling interests. 33 Crawford 2018 Annual Report Condensed Selected Financial Data (unaudited) The following selected financial data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements and notes thereto contained in Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. (In thousands, except per share amounts and percentages) FOR THE YEARS ENDED DECEMBER 31, 2018 2017 2016 2015 2014 Revenues before Reimbursements $ 1,070,971 $ 1,105,832 $ 1,109,286 $ 1,170,385 $ 1,142,851 Reimbursements Total Revenues Total Costs of Services Crawford Claims Solutions Operating Earnings (1) Crawford TPA Solutions: Broadspire Operating Earnings (1) Crawford Specialty Solutions Operating Earnings (1) Unallocated Corporate and Shared Costs and Credits, Net Net Corporate Interest Expense Stock Option Expense Amortization of Customer-Relationship Intangible Assets Goodwill and Intangible Asset Impairment Charges Restructuring and Special Charges Loss on disposition of business line Income Taxes Net Loss (Income) Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests Net Income (Loss) Attributable to Shareholders of Crawford & Company Earnings (Loss) Per Share - Basic (2): CRD-A CRD-B Earnings (Loss) Per Share - Diluted (2): CRD-A CRD-B Current Assets Total Assets Current Liabilities Long-Term Debt and Capital Leases, Less Current Installments Total Debt Shareholders’ Investment Attributable to Shareholders of Crawford & Company Total Capital Current Ratio Total Debt to Total Capital Ratio Return on Average Shareholders’ Investment Cash Provided by Operating Activities Cash Provide by (Used In) Investing Activities Cash (Used In) Provided by Financing Activities Shareholders’ Investment Attributable to Share- Holders of Crawford & Company Per Diluted Share Cash Dividends Per Share: CRD-A CRD-B Weighted-Average Shares and Share-Equivalents: Basic Diluted 52,008 1,122,979 808,005 9,836 57,877 1,163,709 842,167 17,527 36,909 51,036 (9,321) (10,109) (1,742) 38,224 53,418 (13,463) (9,062) (1,718) 68,302 1,177,588 850,112 14,371 36,520 65,641 (24,403) (9,185) (621) 71,135 1,241,520 940,352 5,708 33,915 49,956 (19,159) (8,383) (433) 74,112 1,216,963 914,814 1,375 21,063 59,314 (8,633) (6,031) (859) (11,152) (10,982) (9,592) (9,668) (6,341) (1,056) – (20,270) (18,542) (19,598) (12,084) – — (9,490) – (49,314) (34,395) – — — — (15,039) (25,565) (13,832) (28,780) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 389 442 (1,710) 117 (484) 25,978 $ 27,665 $ 35,966 $ (45,488) $ 30,624 0.51 0.43 0.50 0.42 320,848 701,442 225,310 167,126 190,410 171,288 361,698 $ $ $ $ $ $ $ $ $ $ $ 1.4:1 52.6% 14.7% 52,419 6,449 $ $ 0.53 0.45 0.52 0.45 370,367 787,936 256,591 200,460 225,672 182,320 407,992 $ $ $ $ $ $ $ $ $ $ $ 1.4:1 55.3% 16.5% 0.68 0.60 0.67 0.60 364,731 735,859 230,287 187,002 188,014 153,883 341,897 1.6:1 $ $ $ $ $ $ $ $ $ $ $ (0.79) $ (0.87) $ (0.79) $ (0.87) $ 370,177 783,406 258,348 225,365 247,282 113,693 360,975 1.4:1 $ $ $ $ $ $ $ 55.0% 26.9% 68.5% (31.7)% 0.59 0.52 0.57 0.52 367,583 789,319 259,559 154,046 156,811 172,937 329,748 1.4:1 47.6% 16.4% 40,757 $ 98,864 $ 61,655 $ 6,606 (81,866) $ (32,966) $ (101,178) $ (31,767) (58,739) $ 10,343 $ (55,151) $ 67,889 $ 4,532 3.07 $ 3.21 $ 2.74 $ 2.06 $ 3.11 0.28 0.20 $ $ 0.28 0.20 $ $ 0.28 0.20 $ $ 0.28 0.20 $ $ 55,254 55,882 55,928 56,764 55,483 56,220 55,286 55,286 0.24 0.18 54,927 55,673 (1) This is a segment financial measure calculated in accordance with ASC Topic 280, “Segment Reporting,” and representing segment earnings before certain unallocated corporate and shared costs and credits, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, goodwill and intangible asset impairment charges, restructuring and special charges, loss on disposition of business line, income taxes, and net income or loss attributable to noncontrolling interests and redeemable noncontrolling interests. (2) The Company computes earnings (loss) per share of CRD-A and CRD-B using the two-class method, which allocates the undistributed earnings (loss) for each period to each class on a proportionate basis. The Company’s Board of Directors has the right, but not the obligation, to declare higher dividends on CRD-A than on CRD-B, subject to certain limitations. In periods when the dividend is the same for CRD-A and CRD-B or when no dividends are declared or paid to either class, the two-class method generally will yield the same earnings (loss) per share for CRD-A and CRD-B. 34 Crawford 2018 Annual Report Board of Directors 1. Harsha V. Agadi President and Chief Executive Officer, Crawford & Company 2. Rahul Patel Partner King & Spalding, LLP 3. D. Richard Williams Non-Executive Chairman of the Board, Primerica, Inc. 4. Michelle Jarrard 7. Joia M. Johnson President BioCircuit Technologies, Inc. 5. James D. Edwards* Retired Partner, Arthur Andersen, LLP 6. Jesse C. Crawford Chief Executive Officer, Crawford Media Services, Inc. Executive Vice President, General Counsel and Corporate Secretary, Hanesbrands, Inc. 8. P. George Benson Professor of Decision Sciences and former President of the College of Charleston 9. Jesse C. Crawford, Jr Independent Investor 10. Charles H. Ogburn Non-Executive Chairman of the Board, Crawford & Company 2 3 *Emeritus Board Member 5 8 6 4 1 7 9 10 CORPORATE INFORMATION Corporate Headquarters 5335 Triangle Parkway, NW Peachtree Corners, GA 30092 404.300.1000 Inquiries Individuals seeking financial data should contact: W. Bruce Swain Investor Relations Chief Financial Officer 404.300.1051 Form 10-K A copy of the Company’s annual report on Form 10-K as filed with the Securities and Exchange Commission is available without charge upon request to: Joseph O. Blanco General Counsel Crawford & Company 5335 Triangle Parkway, NW Peachtree Corners, GA 30092 404.300.1021 Our Form 10-K is also available online at either www.sec.gov or in the Investor Relations section at www.crawco.com Annual Meeting The Annual Meeting of shareholders will be held at 2 p.m. on May 8, 2019, at the corporate headquarters of: Crawford & Company 5335 Triangle Parkway, NW Peachtree Corners, GA 30092 404.300.1000 Company Stock Shares of the Company’s two classes of common stock are traded on the NYSE under the symbols CRD-A and CRD-B, respectively. The Company’s two classes of stock are substantially identical, except with respect to voting rights and the Company’s ability to pay greater cash dividends on the non-voting Class A Common Stock than on the voting Class B Common Stock, subject to certain limitations. In addition, with respect to mergers or similar transactions, holders of Class A Common Stock must receive the same type and amount of consideration as holders of Class B Common Stock, unless different consideration is approved by the holders of 75 percent of the Class A Common Stock, voting as a class. Transfer Agent EQ Shareowner Services P.O. Box 64854 St. Paul, MN 55164-0854 1.800.468.9716 www.shareowneronline.com Internet Address www.crawco.com Certifications In 2018, Crawford & Company’s chief executive officer (CEO) provided to the New York Stock Exchange the annual CEO certification regarding Crawford’s compliance with the New York Stock Exchange’s corporate governance listing standards. In addition, Crawford’s CEO and chief financial officer filed with the U.S. Securities and Exchange Commission all required certifications regarding the quality of Crawford’s public disclosures in its fiscal 2018 reports. Financial Information The financial information contained herein should not be considered a substitute for the Company’s audited financial statements, inclusive of footnotes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s annual report on Form 10-K, as filed with the Securities and Exchange Commission. The Form 10-K also contains detailed discussions of certain major uncertainties, contingencies, risks, and other issues the Company faces. A copy of the Form 10-K including the full financial statements, can be obtained by calling 404.300.1021 or accessing it online at either www.sec.gov or in the Investor Relations section at www.crawco.com. Forward-Looking Statements This report contains forward-looking statements, including statements about the future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quantitative, that are not statements of historical fact may be “forward- looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from historical experience or Crawford & Company’s present expectations. Accordingly, no one should place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Crawford & Company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise or not arise after the date the forward-looking statements are made. For further information regarding Crawford & Company, and the risks and uncertainties involved in forward-looking statements, please read Crawford & Company’s reports filed with the SEC and available at www.sec.gov or in the Investor Relations section of Crawford & Company’s website at www.crawco.com. Crawford & Company 5335 Triangle Parkway, NW Peachtree Corners, GA 30092 An equal opportunity employer www.crawco.com 

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