Crawford Q2’23 Earnings: Key highlights & market trends
Crawford & Company hosted its Q2’23 earnings call on Aug 4, 2023. Select highlights:
- Crawford has been expanding its business with various complementary services in the claims sector. Operating on a global scale, they manage claims worth over $18 billion annually and employ around 10,000 staff, supplemented by field resources.
- There’s a rising demand for their specialized services due to increased natural disasters, with a trend towards outsourcing complex claims in response to market pressures.
- Q2 results marked 11th consecutive quarter of revenue growth.
- The International segment showed progress with Q2 revenue at $95.3 million and operating earnings at $3.7 million, marking a $4 million increase year-over-year.
- Medical management services grew by 7% in revenue, driven by increased sales in alternative markets and enhanced data services. The company’s use of data analytics and predictive modeling contributed to this growth. The platform solutions segment also showed positive results with a 22% revenue growth this year.
- The company has strengthened its ties with two leading carriers in the property and flood sectors and is now engaging with a third carrier. Successful pricing strategies, better utilization, and consistent market expansion played a role in this growth.
- The subrogation department had a good quarter.
- Company-wide revenues before reimbursements in Q2’23 were $320.7 million, up 9% from $293.3 million in the prior year second quarter.
- With the rise of severe storms in the US, there’s an increasing demand on claims adjusters within organizations to address them. Often, these claims are extensive and intricate due to their prolonged nature. Another contributing factor is the sheer increase in significant claims. For instance, the number of buildings valued at $1 billion or more has grown compared to a few years ago, indicating a rise in claim frequency. Lastly, claim complexity is on the rise, not just in terms of value but also in the way they’re structured. Insurance contracts nowadays often involve multiple carriers using quota shares or layers, unlike in the past when the capacity allocation was more straightforward. These three factors combined are driving a surge in the outsourcing of substantial and intricate claims.
- The business landscape is witnessing a shift towards alternative markets, which encompass MGAs, MGUs, captives, and other tools used by risk-bearing entities for both distribution and risk transfer. Many of these newer entrants lack in-house claims capabilities and thus turn to providers for those services. The company believes this segment holds potential. Moreover, they view it as less price-sensitive compared to the corporate segment, with a greater emphasis on technology and value. The company feels confident in its position to cater effectively to this segment.
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