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United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended September 30, 2020

OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from ____ to ____

Commission file number 1-10356

CRAWFORD & COMPANY

(Exact name of Registrant as specified in its charter)

Georgia |  | 58-0506554
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
5335 Triangle Parkway |  |
Peachtree Corners, Georgia |  | 30092
(Address of principal executive offices) |  | (Zip Code)

(404) 300-1000

(Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Class A Common Stock — $1.00 Par Value | CRD-A | New York Stock Exchange, Inc.
Class B Common Stock — $1.00 Par Value | CRD-B | New York Stock Exchange, Inc.

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☐ |  | Accelerated filer | ☑
Non-accelerated filer | ☐ |  | Smaller reporting company | ☐
|  |  | Emerging growth company | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

The number of shares outstanding of each class of the Registrant's common stock, as of October 26, 2020, was as follows:

Class A Common Stock, $1.00 par value: 30,644,984

Class B Common Stock, $1.00 par value: 22,510,144

1

CRAWFORD & COMPANY

Quarterly Report on Form 10-Q

Quarter Ended September 30, 2020

Table of Contents

|  |  |  |  | Page
Part I. Financial Information |  |
Item 1. |  | Financial Statements: |  | 3
|  |  | Condensed Consolidated Statements of Operations (unaudited) for the three months ended September 30, 2020 and 2019 |  | 3
|  |  | Condensed Consolidated Statements of Operations (unaudited) for the nine months ended September 30, 2020 and 2019 |  | 4
|  |  | Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2020 and 2019 |  | 5
|  |  | Condensed Consolidated Balance Sheets (unaudited) as of September 30, 2020 and December 31, 2019 |  | 6
|  |  | Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2020 and 2019 |  | 8
|  |  | Condensed Consolidated Statements of Shareholders' Investment (unaudited) as of and for the three and nine months ended September 30, 2020 and 2019 |  | 9
|  |  | Notes to Condensed Consolidated Financial Statements (unaudited) |  | 11
|  |  | Report of Independent Registered Public Accounting Firm |  | 29
Item 2. |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 30
Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk |  | 49
Item 4. |  | Controls and Procedures |  | 49
Part II. Other Information |  |
Item 1A. |  | Risk Factors |  | 50
Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds |  | 50
Item 6. |  | Exhibits |  | 51
Signatures |  | 52

2

Part I — Financial Information

Item 1. Financial Statements

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

|  | Three Months Ended September 30, |
(In thousands, except per share amounts) |  | 2020 |  |  | 2019 |
Revenues: |  |  |  |  |  |  |  |
Revenues before reimbursements |  | $ | 253,124 |  |  | $ | 254,677 |
Reimbursements |  |  | 8,545 |  |  |  | 11,165 |
Total Revenues |  |  | 261,669 |  |  |  | 265,842 |
Costs and Expenses: |  |  |  |  |  |  |  |
Costs of services provided, before reimbursements |  |  | 177,061 |  |  |  | 180,849 |
Reimbursements |  |  | 8,545 |  |  |  | 11,165 |
Total costs of services |  |  | 185,606 |  |  |  | 192,014 |
Selling, general, and administrative expenses |  |  | 52,065 |  |  |  | 52,564 |
Corporate interest expense, net of interest income of $98 and $0, respectively |  |  | 1,599 |  |  |  | 3,162 |
Arbitration and claim settlements |  |  | — |  |  |  | 1,200 |
Gain on disposition of businesses, net |  |  | (14,104 | ) |  |  | — |
Total Costs and Expenses |  |  | 225,166 |  |  |  | 248,940 |
Other Expense, net |  |  | (65 | ) |  |  | (883 | )
Income Before Income Taxes |  |  | 36,438 |  |  |  | 16,019 |
Provision for Income Taxes |  |  | 11,729 |  |  |  | 5,328 |
Net Income |  |  | 24,709 |  |  |  | 10,691 |
Net (Income) Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests |  |  | (312 | ) |  |  | 355 |
Net Income Attributable to Shareholders of Crawford & Company |  | $ | 24,397 |  |  | $ | 11,046 |
Earnings Per Share - Basic: |  |  |  |  |  |  |  |
Class A Common Stock |  | $ | 0.46 |  |  | $ | 0.22 |
Class B Common Stock |  | $ | 0.46 |  |  | $ | 0.19 |
Earnings Per Share - Diluted: |  |  |  |  |  |  |  |
Class A Common Stock |  | $ | 0.46 |  |  | $ | 0.21 |
Class B Common Stock |  | $ | 0.46 |  |  | $ | 0.19 |
Weighted-Average Shares Used to Compute Basic Earnings Per Share: |  |  |  |  |  |  |  |
Class A Common Stock |  |  | 30,643 |  |  |  | 30,645 |
Class B Common Stock |  |  | 22,510 |  |  |  | 22,831 |
Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |  |  |  |  |  |  |  |
Class A Common Stock |  |  | 30,937 |  |  |  | 31,140 |
Class B Common Stock |  |  | 22,510 |  |  |  | 22,831 |

(See accompanying notes to condensed consolidated financial statements)

3

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

|  | Nine Months Ended September 30, |
(In thousands, except per share amounts) |  | 2020 |  |  | 2019 |
Revenues: |  |  |  |  |  |  |  |
Revenues before reimbursements |  | $ | 725,071 |  |  | $ | 758,616 |
Reimbursements |  |  | 25,519 |  |  |  | 31,449 |
Total Revenues |  |  | 750,590 |  |  |  | 790,065 |
Costs and Expenses: |  |  |  |  |  |  |  |
Costs of services provided, before reimbursements |  |  | 518,263 |  |  |  | 533,664 |
Reimbursements |  |  | 25,519 |  |  |  | 31,449 |
Total costs of services |  |  | 543,782 |  |  |  | 565,113 |
Selling, general, and administrative expenses |  |  | 163,327 |  |  |  | 171,407 |
Corporate interest expense, net of interest income of $131 and $539, respectively |  |  | 6,275 |  |  |  | 8,346 |
Goodwill impairment |  |  | 17,674 |  |  |  | — |
Restructuring costs |  |  | 5,714 |  |  |  | — |
Arbitration and claim settlements |  |  | — |  |  |  | 12,552 |
Gain on disposition of businesses, net |  |  | (13,763 | ) |  |  | — |
Total Costs and Expenses |  |  | 723,009 |  |  |  | 757,418 |
Other Expense, net |  |  | (355 | ) |  |  | (2,443 | )
Income Before Income Taxes |  |  | 27,226 |  |  |  | 30,204 |
Provision for Income Taxes |  |  | 9,554 |  |  |  | 11,120 |
Net Income |  |  | 17,672 |  |  |  | 19,084 |
Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests |  |  | 1,224 |  |  |  | 713 |
Net Income Attributable to Shareholders of Crawford & Company |  | $ | 18,896 |  |  | $ | 19,797 |
Earnings Per Share - Basic: |  |  |  |  |  |  |  |
Class A Common Stock |  | $ | 0.36 |  |  | $ | 0.39 |
Class B Common Stock |  | $ | 0.34 |  |  | $ | 0.33 |
Earnings Per Share - Diluted: |  |  |  |  |  |  |  |
Class A Common Stock |  | $ | 0.36 |  |  | $ | 0.39 |
Class B Common Stock |  | $ | 0.34 |  |  | $ | 0.33 |
Weighted-Average Shares Used to Compute Basic Earnings Per Share: |  |  |  |  |  |  |  |
Class A Common Stock |  |  | 30,575 |  |  |  | 30,701 |
Class B Common Stock |  |  | 22,533 |  |  |  | 23,071 |
Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |  |  |  |  |  |  |  |
Class A Common Stock |  |  | 30,810 |  |  |  | 31,116 |
Class B Common Stock |  |  | 22,533 |  |  |  | 23,071 |

(See accompanying notes to condensed consolidated financial statements)

4

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited

|  | Three Months Ended September 30, |
(In thousands) |  | 2020 |  |  | 2019 |
Net Income |  | $ | 24,709 |  |  | $ | 10,691 |
Other Comprehensive Income (Loss): |  |  |  |  |  |  |  |
Net foreign currency translation gain (loss), net of tax of $0 and $0, respectively |  |  | 11,845 |  |  |  | (3,017 | )
Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $676 and $673, respectively |  |  | 2,036 |  |  |  | 1,984 |
Other Comprehensive Income (Loss) |  |  | 13,881 |  |  |  | (1,033 | )
Comprehensive Income |  |  | 38,590 |  |  |  | 9,658 |
Comprehensive (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests |  |  | (247 | ) |  |  | 900 |
Comprehensive Income Attributable to Shareholders of Crawford & Company |  | $ | 38,343 |  |  | $ | 10,558 |

|  | Nine Months Ended September 30, |
(In thousands) |  | 2020 |  |  | 2019 |
Net Income |  | $ | 17,672 |  |  | $ | 19,084 |
Other Comprehensive Income: |  |  |  |  |  |  |  |
Net foreign currency translation gain (loss), net of tax of $0 and $0, respectively |  |  | 5,152 |  |  |  | (2,621 | )
Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $1,977 and $2,024, respectively |  |  | 5,849 |  |  |  | 5,976 |
Other Comprehensive Income |  |  | 11,001 |  |  |  | 3,355 |
Comprehensive Income |  |  | 28,673 |  |  |  | 22,439 |
Comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interests |  |  | 1,665 |  |  |  | 1,684 |
Comprehensive Income Attributable to Shareholders of Crawford & Company |  | $ | 30,338 |  |  | $ | 24,123 |

(See accompanying notes to condensed consolidated financial statements)

5

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

|  |  |  |  |  | * |
(In thousands) |  | September 30, 2020 |  |  | December 31, 2019 |
ASSETS |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 48,739 |  |  | $ | 51,802 |
Accounts receivable, less allowance for doubtful accounts of $9,476 and $9,348, respectively |  |  | 123,563 |  |  |  | 128,217 |
Unbilled revenues, at estimated billable amounts |  |  | 106,610 |  |  |  | 103,894 |
Income taxes receivable |  |  | 7,820 |  |  |  | 7,820 |
Prepaid expenses and other current assets |  |  | 26,641 |  |  |  | 23,476 |
Total Current Assets |  |  | 313,373 |  |  |  | 315,209 |
Net Property and Equipment |  |  | 34,160 |  |  |  | 31,425 |
Other Assets: |  |  |  |  |  |  |  |
Operating lease right-of-use assets, net |  |  | 107,956 |  |  |  | 102,354 |
Goodwill |  |  | 61,151 |  |  |  | 80,642 |
Intangible assets arising from business acquisitions, net |  |  | 66,223 |  |  |  | 75,083 |
Capitalized software costs, net |  |  | 64,130 |  |  |  | 66,445 |
Deferred income tax assets |  |  | 18,107 |  |  |  | 17,971 |
Other noncurrent assets |  |  | 74,522 |  |  |  | 70,884 |
Total Other Assets |  |  | 392,089 |  |  |  | 413,379 |
TOTAL ASSETS |  | $ | 739,622 |  |  | $ | 760,013 |

* | Derived from the audited Consolidated Balance Sheet

(See accompanying notes to condensed consolidated financial statements)

6

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS — CONTINUED

Unaudited

|  |  |  |  |  | * |
(In thousands, except par value amounts) |  | September 30, 2020 |  |  | December 31, 2019 |
LIABILITIES AND SHAREHOLDERS' INVESTMENT |  |  |  |  |  |  |  |
Current Liabilities: |  |  |  |  |  |  |  |
Short-term borrowings |  | $ | 3,028 |  |  | $ | 28,531 |
Accounts payable |  |  | 33,592 |  |  |  | 34,377 |
Accrued compensation and related costs |  |  | 74,681 |  |  |  | 68,499 |
Self-insured risks |  |  | 9,941 |  |  |  | 11,311 |
Income taxes payable |  |  | 7,022 |  |  |  | 3,030 |
Operating lease liabilities |  |  | 31,918 |  |  |  | 30,765 |
Other accrued liabilities |  |  | 34,117 |  |  |  | 31,449 |
Deferred revenues |  |  | 27,129 |  |  |  | 28,288 |
Current installments of finance leases |  |  | 49 |  |  |  | 15 |
Total Current Liabilities |  |  | 221,477 |  |  |  | 236,265 |
Noncurrent Liabilities: |  |  |  |  |  |  |  |
Long-term debt and finance leases, less current installments |  |  | 124,684 |  |  |  | 148,408 |
Operating lease liabilities |  |  | 91,963 |  |  |  | 87,064 |
Deferred revenues |  |  | 23,921 |  |  |  | 24,080 |
Accrued pension liabilities |  |  | 56,542 |  |  |  | 65,909 |
Other noncurrent liabilities |  |  | 38,749 |  |  |  | 33,410 |
Total Noncurrent Liabilities |  |  | 335,859 |  |  |  | 358,871 |
Redeemable Noncontrolling Interests |  |  | - |  |  |  | 2,310 |
Shareholders' Investment: |  |  |  |  |  |  |  |
Class A common stock, $1.00 par value; 50,000 shares authorized; 30,645 and 30,610 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively |  |  | 30,645 |  |  |  | 30,610 |
Class B common stock, $1.00 par value; 50,000 shares authorized; 22,510 and 22,671 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively |  |  | 22,510 |  |  |  | 22,671 |
Additional paid-in capital |  |  | 66,339 |  |  |  | 63,392 |
Retained earnings |  |  | 258,504 |  |  |  | 249,551 |
Accumulated other comprehensive loss |  |  | (195,002 | ) |  |  | (206,907 | )
Shareholders' Investment Attributable to Shareholders of Crawford & Company |  |  | 182,996 |  |  |  | 159,317 |
Noncontrolling interests |  |  | (710 | ) |  |  | 3,250 |
Total Shareholders' Investment |  |  | 182,286 |  |  |  | 162,567 |
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT |  | $ | 739,622 |  |  | $ | 760,013 |

* | Derived from the audited Consolidated Balance Sheet

(See accompanying notes to condensed consolidated financial statements)

7

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

|  | Nine Months Ended September 30, |
(In thousands) |  | 2020 |  |  | 2019 |
Cash Flows From Operating Activities: |  |  |  |  |  |  |  |
Net income |  | $ | 17,672 |  |  | $ | 19,084 |
Reconciliation of net income to net cash provided by operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 30,150 |  |  |  | 30,086 |
Goodwill impairment |  |  | 17,674 |  |  |  | — |
Gain on disposition of businesses, net |  |  | (13,763 | ) |  |  | — |
Stock-based compensation |  |  | 2,732 |  |  |  | 2,610 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Accounts receivable, net |  |  | 485 |  |  |  | 1,108 |
Unbilled revenues, net |  |  | (9,223 | ) |  |  | (8,740 | )
Accrued or prepaid income taxes |  |  | 2,462 |  |  |  | 443 |
Accounts payable and accrued liabilities |  |  | 16,097 |  |  |  | (4,361 | )
Deferred revenues |  |  | (1,491 | ) |  |  | 514 |
Accrued retirement costs |  |  | (6,101 | ) |  |  | 1,545 |
Prepaid expenses and other operating activities |  |  | 622 |  |  |  | 36 |
Net cash provided by operating activities |  |  | 57,316 |  |  |  | 42,325 |
Cash Flows From Investing Activities: |  |  |  |  |  |  |  |
Acquisitions of property and equipment |  |  | (10,850 | ) |  |  | (5,664 | )
Capitalization of computer software costs |  |  | (12,793 | ) |  |  | (7,276 | )
Cash proceeds from disposition of business, net of cash disposed |  |  | 19,273 |  |  |  | — |
Payments for business acquisitions, net of cash acquired |  |  | — |  |  |  | (2,296 | )
Net cash used in investing activities |  |  | (4,370 | ) |  |  | (15,236 | )
Cash Flows From Financing Activities: |  |  |  |  |  |  |  |
Cash dividends paid |  |  | (6,986 | ) |  |  | (9,894 | )
Proceeds from shares purchased under employee stock-based compensation plans |  |  | 811 |  |  |  | 1,909 |
Repurchases of common stock |  |  | (2,666 | ) |  |  | (25,673 | )
Increases in revolving credit facility borrowings |  |  | 76,876 |  |  |  | 65,449 |
Payments on revolving credit facility borrowings |  |  | (124,454 | ) |  |  | (64,962 | )
Payments on finance lease obligations |  |  | (33 | ) |  |  | (106 | )
Cash paid for equity investments |  |  | (603 | ) |  |  | — |
Dividends paid to noncontrolling interests |  |  | (196 | ) |  |  | (458 | )
Net cash used in financing activities |  |  | (57,251 | ) |  |  | (33,735 | )
Effects of exchange rate changes on cash and cash equivalents |  |  | 1,242 |  |  |  | (372 | )
Decrease in cash and cash equivalents |  |  | (3,063 | ) |  |  | (7,018 | )
Cash and cash equivalents at beginning of year |  |  | 51,802 |  |  |  | 53,119 |
Cash and cash equivalents at end of period |  | $ | 48,739 |  |  | $ | 46,101 |

(See accompanying notes to condensed consolidated financial statements)

8

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT

Unaudited

(In thousands, except per share amounts)

|  | Common Stock |  |  |  |  |  |  |  |  |  |  | Accumulated |  |  | Shareholders' Investment Attributable to |  |  |  |  |  |  |  |  |
2020 |  | Class A Non-Voting |  |  | Class B Voting |  |  | Additional Paid-In Capital |  |  | Retained Earnings |  |  | Other Comprehensive Loss |  |  | Shareholders of Crawford & Company |  |  | Noncontrolling Interests |  |  | Total Shareholders' Investment |
Balance at January 1, 2020 |  | $ | 30,610 |  |  | $ | 22,671 |  |  | $ | 63,392 |  |  | $ | 249,551 |  |  | $ | (206,907 | ) |  | $ | 159,317 |  |  | $ | 3,250 |  |  | $ | 162,567 |
Net (loss)/income (1) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (11,399 | ) |  |  | — |  |  |  | (11,399 | ) |  |  | 120 |  |  |  | (11,279 | )
Other comprehensive income/(loss) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,545 | ) |  |  | (1,545 | ) |  |  | 1 |  |  |  | (1,544 | )
Cash dividends paid (Class A - $0.07 per share, Class B - $0.05 per share) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,268 | ) |  |  | — |  |  |  | (3,268 | ) |  |  | — |  |  |  | (3,268 | )
Stock-based compensation |  |  | — |  |  |  | — |  |  |  | 880 |  |  |  | — |  |  |  | — |  |  |  | 880 |  |  |  | — |  |  |  | 880 |
Repurchases of common stock |  |  | (155 | ) |  |  | (161 | ) |  |  | — |  |  |  | (2,350 | ) |  |  | — |  |  |  | (2,666 | ) |  |  | — |  |  |  | (2,666 | )
Shares issued in connection with stock-based compensation plans, net |  |  | 64 |  |  |  | — |  |  |  | (54 | ) |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | — |  |  |  | 10 |
Decrease in value of noncontrolling interest due to acquisition |  |  | — |  |  |  | — |  |  |  | (269 | ) |  |  | — |  |  |  | 576 |  |  |  | 307 |  |  |  | (599 | ) |  |  | (292 | )
Adoption of Topic 326 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (607 | ) |  |  | — |  |  |  | (607 | ) |  |  | — |  |  |  | (607 | )
Balance at March 31, 2020 |  | $ | 30,519 |  |  | $ | 22,510 |  |  | $ | 63,949 |  |  | $ | 231,927 |  |  | $ | (207,876 | ) |  | $ | 141,029 |  |  | $ | 2,772 |  |  | $ | 143,801 |
Net income (1) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,898 |  |  |  | — |  |  |  | 5,898 |  |  |  | 481 |  |  |  | 6,379 |
Other comprehensive loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (959 | ) |  |  | (959 | ) |  |  | (377 | ) |  |  | (1,336 | )
Cash dividends paid (Class A - $0.03 per share, Class B - $0.03 per share) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,591 | ) |  |  | — |  |  |  | (1,591 | ) |  |  | — |  |  |  | (1,591 | )
Stock-based compensation |  |  | — |  |  |  | — |  |  |  | 1,118 |  |  |  | — |  |  |  | — |  |  |  | 1,118 |  |  |  | — |  |  |  | 1,118 |
Shares issued in connection with stock-based compensation plans, net |  |  | 4 |  |  |  | — |  |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Increase in value of noncontrolling interest due to disposition |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,249 |  |  |  | 1,249 |
Balance at June 30, 2020 |  | $ | 30,523 |  |  | $ | 22,510 |  |  | $ | 65,063 |  |  | $ | 236,234 |  |  | $ | (208,835 | ) |  | $ | 145,495 |  |  | $ | 4,125 |  |  | $ | 149,620 |
Net income (1) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 24,397 |  |  |  | — |  |  |  | 24,397 |  |  |  | 312 |  |  |  | 24,709 |
Other comprehensive income/(loss) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 13,946 |  |  |  | 13,946 |  |  |  | (65 | ) |  |  | 13,881 |
Cash dividends paid (Class A - $0.04 per share, Class B - $0.04 per share) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,127 | ) |  |  | — |  |  |  | (2,127 | ) |  |  | (196 | ) |  |  | (2,323 | )
Stock-based compensation |  |  | — |  |  |  | — |  |  |  | 734 |  |  |  | — |  |  |  | — |  |  |  | 734 |  |  |  | — |  |  |  | 734 |
Shares issued in connection with stock-based compensation plans, net |  |  | 122 |  |  |  | — |  |  |  | 679 |  |  |  | — |  |  |  | — |  |  |  | 801 |  |  |  | — |  |  |  | 801 |
Decrease in value of noncontrolling interest due to dispositions and acquisition |  |  | — |  |  |  | — |  |  |  | (137 | ) |  |  | — |  |  |  | (113 | ) |  |  | (250 | ) |  |  | (4,886 | ) |  |  | (5,136 | )
Balance at September 30, 2020 |  | $ | 30,645 |  |  | $ | 22,510 |  |  | $ | 66,339 |  |  | $ | 258,504 |  |  | $ | (195,002 | ) |  | $ | 182,996 |  |  | $ | (710 | ) |  | $ | 182,286 |

(1) | The total net (loss)/income presented in the condensed consolidated statements of shareholders' investment for the three months ended March 31, June 30 and September 30, 2020 excludes $1,880, $257 and $(0), respectively, in net loss (income) attributable to the redeemable noncontrolling interests.

(See accompanying notes to condensed consolidated financial statements)

9

|  | Common Stock |  |  |  |  |  |  |  |  |  |  | Accumulated |  |  | Shareholders' Investment Attributable to |  |  |  |  |  |  |  |  |
2019 |  | Class A Non-Voting |  |  | Class B Voting |  |  | Additional Paid-In Capital |  |  | Retained Earnings |  |  | Other Comprehensive Loss |  |  | Shareholders of Crawford & Company |  |  | Noncontrolling Interests |  |  | Total Shareholders' Investment |
Balance at January 1, 2019 |  | $ | 30,927 |  |  | $ | 24,408 |  |  | $ | 58,793 |  |  | $ | 273,607 |  |  | $ | (216,447 | ) |  | $ | 171,288 |  |  | $ | 4,158 |  |  |  | 175,446 |
Net income (2) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,109 |  |  |  | — |  |  |  | 6,109 |  |  |  | 37 |  |  |  | 6,146 |
Other comprehensive income/(loss) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,073 |  |  |  | 5,073 |  |  |  | (16 | ) |  |  | 5,057 |
Cash dividends paid (Class A - $0.07 per share, Class B - $0.05 per share) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,282 | ) |  |  | — |  |  |  | (3,282 | ) |  |  | (84 | ) |  |  | (3,366 | )
Stock-based compensation |  |  | — |  |  |  | — |  |  |  | (247 | ) |  |  | — |  |  |  | — |  |  |  | (247 | ) |  |  | — |  |  |  | (247 | )
Repurchases of common stock |  |  | (421 | ) |  |  | (1,377 | ) |  |  | — |  |  |  | (14,620 | ) |  |  | — |  |  |  | (16,418 | ) |  |  | — |  |  |  | (16,418 | )
Common stock activity, net |  |  | 115 |  |  |  | — |  |  |  | (225 | ) |  |  | — |  |  |  | — |  |  |  | (110 | ) |  |  | — |  |  |  | (110 | )
Balance at March 31, 2019 |  | $ | 30,621 |  |  | $ | 23,031 |  |  | $ | 58,321 |  |  | $ | 261,814 |  |  | $ | (211,374 | ) |  | $ | 162,413 |  |  | $ | 4,095 |  |  | $ | 166,508 |
Net income/(loss) (2) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,642 |  |  |  | — |  |  |  | 2,642 |  |  |  | (12 | ) |  |  | 2,630 |
Other comprehensive loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (260 | ) |  |  | (260 | ) |  |  | (409 | ) |  |  | (669 | )
Cash dividends paid (Class A - $0.07 per share, Class B - $0.05 per share) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,313 | ) |  |  | — |  |  |  | (3,313 | ) |  |  | (196 | ) |  |  | (3,509 | )
Stock-based compensation |  |  | — |  |  |  | — |  |  |  | 1,646 |  |  |  | — |  |  |  | — |  |  |  | 1,646 |  |  |  | — |  |  |  | 1,646 |
Repurchases of common stock |  |  | (280 | ) |  |  | (73 | ) |  |  | — |  |  |  | (2,814 | ) |  |  | — |  |  |  | (3,167 | ) |  |  | — |  |  |  | (3,167 | )
Common stock activity, net |  |  | 326 |  |  |  | — |  |  |  | 634 |  |  |  | — |  |  |  | — |  |  |  | 960 |  |  |  | — |  |  |  | 960 |
Balance at June 30, 2019 |  | $ | 30,667 |  |  | $ | 22,958 |  |  | $ | 60,601 |  |  | $ | 258,329 |  |  | $ | (211,634 | ) |  | $ | 160,921 |  |  | $ | 3,478 |  |  | $ | 164,399 |
Net income/(loss) (2) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11,046 |  |  |  | — |  |  |  | 11,046 |  |  |  | (84 | ) |  |  | 10,962 |
Other comprehensive loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (488 | ) |  |  | (488 | ) |  |  | (545 | ) |  |  | (1,033 | )
Cash dividends paid (Class A - $0.07 per share, Class B - $0.05 per share) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,299 | ) |  |  | — |  |  |  | (3,299 | ) |  |  | — |  |  |  | (3,299 | )
Stock-based compensation |  |  | — |  |  |  | — |  |  |  | 1,211 |  |  |  | — |  |  |  | — |  |  |  | 1,211 |  |  |  | — |  |  |  | 1,211 |
Repurchases of common stock |  |  | (402 | ) |  |  | (231 | ) |  |  | — |  |  |  | (5,455 | ) |  |  | — |  |  |  | (6,088 | ) |  |  | — |  |  |  | (6,088 | )
Common stock activity, net |  |  | 155 |  |  |  | — |  |  |  | 904 |  |  |  | — |  |  |  | — |  |  |  | 1,059 |  |  |  | — |  |  |  | 1,059 |
Dividends paid to noncontrolling interests |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (178 | ) |  |  | (178 | )
Balance at September 30, 2019 |  | $ | 30,420 |  |  | $ | 22,727 |  |  | $ | 62,716 |  |  | $ | 260,621 |  |  | $ | (212,122 | ) |  | $ | 164,362 |  |  | $ | 2,671 |  |  | $ | 167,033 |

(2) | The total net income presented in the condensed consolidated statements of shareholders' investment for the three months ended March 31, June 30 and September 2019 excludes $377, $6 and $271, respectively, in net loss attributable to the redeemable noncontrolling interests.

(See accompanying notes to condensed consolidated financial statements)

10

NOTES TO CONDENSED CONSOLID ATED FINANCIAL STATEMENTS

Unaudited

Based in Atlanta, Georgia, Crawford & Company ("Crawford" or "the Company") is the world's largest publicly listed independent provider of claims management and outsourcing solutions to carriers, brokers and corporates with an expansive global network serving clients in more than 70 countries.

Shares of the Company's two classes of common stock are traded on the New York Stock Exchange ("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% of the Class A Common Stock, voting as a class. The Company's website is www.crawco.com. The information contained on, or hyperlinked from, the Company's website is not a part of, and is not incorporated by reference into, this report.

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the United States Securities and Exchange Commission (the "SEC"). Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. Due to the impact of weather activity and the continued economic uncertainty resulting from the COVID-19 pandemic, the Company's operating results for the three and nine months ended September 30, 2020 and financial position as of September 30, 2020 are not necessarily indicative of the results or financial position that may be expected for the year ending December 31, 2020 or for other future periods. The financial results from the Company's operations outside of the U.S., Canada, the Caribbean, and certain subsidiaries in the Philippines, are reported and consolidated on a two-month delayed basis (fiscal year-end of October 31) as permitted by GAAP in order to provide sufficient time for accumulation of their results.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments (consisting only of normal recurring accruals and adjustments) considered necessary for a fair presentation have been included. There have been no material changes to our significant accounting policies and estimates from those disclosed in the Company's financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2019 other than as disclosed herein. The Company recognized a goodwill impairment in the 2020 first quarter within its Crawford Claims Solutions segment, due to lower forecasts in that reporting unit and the overall decline in market conditions from the COVID-19 pandemic. See Note 9, "Fair Value Measurements" of our accompanying consolidated financial statements for further discussion about goodwill impairment.

Certain prior period amounts among the segments have been reclassified to conform to the current presentation. These reclassifications had no effect on the Company's reported consolidated results. Significant intercompany transactions have been eliminated in consolidation.

The Condensed Consolidated Balance Sheet information presented herein as of December 31, 2019 has been derived from the audited consolidated financial statements as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

The Company consolidates the liabilities of its deferred compensation plan and the related assets, which are held in a rabbi trust and also considered a variable interest entity ("VIE") of the Company. The rabbi trust was created to fund the liabilities of the Company's deferred compensation plan. The Company is considered the primary beneficiary of the rabbi trust because the Company directs the activities of the trust and can use the assets of the trust to satisfy the liabilities of the Company's deferred compensation plan. At September 30, 2020 and December 31, 2019, the liabilities of the deferred compensation plan were $8,273,000 and $8,428,000, respectively, which represented obligations of the Company rather than of the rabbi trust, and the values of the assets held in the related rabbi trust were $16,247,000 and $16,527,000, respectively. These liabilities and assets are included in "Other noncurrent liabilities" and "Other noncurrent assets," respectively, on the Company's unaudited Condensed Consolidated Balance Sheets.

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The Company sold its 51% interest in Lloyd Warwick International Limited ("LWI") to a third party on June 12, 2020. Prior to the sale, LWI was considered a VIE to the Company. As the primary beneficiary of LWI, the Company consolidated the results of LWI because of its controlling ownership interest and because Crawford had the obligation to absorb LWI’s losses through the additional financial support that Crawford was obligated to provide. As a result of the sale, LWI is no longer considered a VIE of the Company, and the Company no longer consolidates the results of LWI nor is obligated to provide financial support to LWI. See Note 13, “Business Acquisition and Dispositions” of our accompanying consolidated financial statements for further discussion related to the sale of the Company’s interest in LWI.

Noncontrolling interests represent the minority shareholders' share of the net income or loss and shareholders' investment in consolidated subsidiaries. Noncontrolling interests are presented as a component of shareholders' investment in the unaudited Condensed Consolidated Balance Sheets and reflect the initial fair value of these investments by noncontrolling shareholders, along with their proportionate share of the income or loss of the subsidiaries, less any dividends or distributions. Noncontrolling interests that are redeemable at the option of the holder are presented outside of shareholders' investment as "Redeemable Noncontrolling Interests" and are recorded at either their initial fair value plus any profits or losses or estimated redemption value if an adjustment is required. On July 21, 2020, the Company acquired the remaining 15% membership interests of WeGoLook, LLC.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The Company has not applied for governmental loans from the CARES Act or any other governmental programs to support the Company’s operations. The Company is taking advantage of certain aspects of the CARES Act such as the deferral of payroll tax deposits.

The Canadian government enacted the Canada Emergency Wage Subsidy (“CEWS”) in 2020 to provide a wage subsidy to employers that suffered reductions in revenue resulting from the COVID-19 pandemic. The Company met the eligibility criteria to receive the wage subsidy in the second and third quarters. The wage subsidy is included in "Costs of services provided, before reimbursements” or “Selling, general, and administrative expenses” on the Company's unaudited Condensed Consolidated Statements of Operations, depending on the location of the employees, and is recorded as a reduction of compensation expense once the application is filed. The Company recognized $4,711,000 and $9,056,000 as a reduction of compensation expense for the three and nine months ended September 30, 2020, respectively. In July 2020, the Canadian government announced an extension of this program that may benefit the Company through end of 2020. The Company will continue to evaluate the impact of government subsidies each period.

2. Recently Issued Accounting Standards

Adoption of New Accounting Standards

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments" together with its subsequent related amendments in 2018 and 2019, collectively referred to as Topic 326. Topic 326 replaces the incurred loss methodology to record credit losses with a methodology that reflects the expected credit losses for financial assets not accounted for at fair value, including trade receivables, with gains and losses recognized through income. The Company estimates its expected credit losses based on past experience, current conditions and reasonable and supportable forecasts affecting collectability of these assets. We evaluate the risks related to our trade receivables and contract assets by considering customer type, geography, and aging. Topic 326 is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted Topic 326 on January 1, 2020 using a modified retrospective approach. As a result of adopting Topic 326, the Company recognized a cumulative effect adjustment to decrease the opening balance of retained earnings by $607,000.

The Company has included assumptions related to expected credit losses from the impact of the COVID-19 pandemic in its results of operations for the three months and nine months ended September 30, 2020.

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Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820).” This update amends the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, by removing and modifying certain disclosure requirements and adding others. This update removes the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements. This update requires the disclosure of the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Further, this update clarifies that transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities are required to be disclosed. These updates are effective for annual periods beginning after December 15, 2019, and interim periods thereafter. The Company adopted this guidance on January 1, 2020 with no material impact on disclosures related to fair value measurement.

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract

In August 2018, the FASB issued ASU 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40).” This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, including hosting arrangements that include an internal-use software license. This update also requires the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. Further, this update requires the presentation of the amortization expense in the statement of income, the presentation of the capitalized costs on the statement of financial position and the classification of payments for capitalized costs in the statement of cash flows related to capitalized implementation costs to be treated the same as the fees for service component of the associated hosting arrangement. The update is effective for annual periods beginning after December 15, 2019, and interim periods thereafter. The Company adopted this guidance on January 1, 2020 with no material impact on its results of operation, financial condition or cash flows.

Pending Adoption of Recently Issued Accounting Standards

Compensation-Retirement Benefits: Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued ASU 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20)." This update modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This update removes certain disclosure requirements including, but not limited to, the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and the amount and timing of plan assets expected to be returned to the employer. This update requires the disclosure of the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This update also clarifies requirements for entities that provide aggregate disclosures for two or more plans. The update is effective for annual periods beginning after December 15, 2020, and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effect this ASU will have on disclosures related to its retirement plans.

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 amends ASC 740 to simplify the accounting for income taxes by removing certain exceptions for foreign equity investments, intraperiod allocations and interim calculations, and adding guidance to reduce complexity in the accounting standard under the FASB’s simplification initiative. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. Upon adoption, the amendments in ASU 2019-12 should be applied on a prospective basis to all periods presented. Early adoption is permitted. The Company is currently assessing the impact of the adoption of the new guidance.

3. Revenue Recognition

As of January 1, 2018, the Company adopted Accounting Standards Codification ("ASC") 606 using the modified retrospective method for those contracts which were not substantially completed as of the transition date. The reported results for the three and nine months ended September 30, 2020 and 2019 reflect the application of ASC 606.

Revenue from Contracts with Customers

Revenues are recognized when control of the promised services is transferred to the Company's customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenues are recognized net of any sales, use or value added taxes collected from customers, which are subsequently remitted to governmental authorities. As the Company completes its performance obligations which are identified below, it has an unconditional right to consideration as outlined in the Company's contracts. Generally, the Company's accounts receivable are expected to be collected in less than two months, in accordance with the underlying payment terms.

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The Company's Crawford Claims Solutions segment generates revenue for adjusting services provided to insurance companies and self-insured entities related to property, casualty and catastrophe losses caused by physical damage to commercial and residential real property and certain types of personal property. The Company charges on a fee-per-claim basis for each optional purchase of the claims management services exercised by its customer. Revenue is recognized over time as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document and report the claim and control of these services is transferred to the customer. Revenue is recognized based on historical claim closure rates and claim type for fixed fee claims applied utilizing a portfolio approach based on time elapsed for these claims. For claims billed on a time and expense incurred basis, which are considered variable consideration, the Company recognizes revenue at the amount in which it has the right to invoice for services performed. These methods of revenue recognition are the most accurate depiction of the transfer of the claims management services to the customer. The Company also generates revenue by providing on-demand inspection, verification and other task specific field services for businesses and consumers. Task assignment services are single optional purchase performance obligations which are generally satisfied at a point in time when the control of the service is transferred to the customer. Therefore, revenue is recognized when the customer receives the service requested.

The following table presents Crawford Claims Solutions revenues before reimbursements disaggregated by geography for the three and nine months ended September 30, 2020 and 2019:

|  | Three Months Ended |  |  | Nine Months Ended |
(in thousands) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
U.S. |  | $ | 51,716 |  |  | $ | 35,982 |  |  | $ | 117,488 |  |  | $ | 103,743 |
U.K. |  |  | 15,394 |  |  |  | 15,123 |  |  |  | 47,033 |  |  |  | 47,325 |
Australia |  |  | 13,066 |  |  |  | 11,886 |  |  |  | 35,211 |  |  |  | 35,220 |
Canada |  |  | 8,272 |  |  |  | 12,008 |  |  |  | 26,382 |  |  |  | 36,276 |
Europe |  |  | 6,537 |  |  |  | 7,429 |  |  |  | 20,734 |  |  |  | 21,265 |
Rest of World |  |  | 3,384 |  |  |  | 3,822 |  |  |  | 10,559 |  |  |  | 11,743 |
Total Crawford Claims Solutions Revenues before Reimbursements |  | $ | 98,369 |  |  | $ | 86,250 |  |  | $ | 257,407 |  |  | $ | 255,572 |

The Crawford TPA Solutions segment is a third party administrator that generates revenue through its Claims Management and Medical Management service lines.

The Claims Management service line includes Workers' Compensation, Liability, Property and Disability Claims Management. This service line also performs additional services such as Accident & Health claims programs, including Affinity type claims, and disability and leave management services. Each claim referred by the customer is considered an additional optional purchase of claims management services under the agreement with the customer. The transaction price is specified in the contract and is fixed for each service. Revenue is recognized over time as services are provided as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document, and report the claim and control of these services is transferred to the customer. Revenue is recognized based on historical claim closure rates and claim type applied utilizing a portfolio approach based on time elapsed for these claims as the Company believes this is the most accurate depiction of the transfer of the claims management services to its customer. This service line also provides Risk Management Information Services. For non-claim services, revenue is recognized over time as services are provided and control of these services is transferred to the customer. Revenue is recognized as time elapses as this is the most accurate depiction of the transfer of the service to the customer.

The Company's obligation to manage claims under the Claims Management service line can range from less than one year, on a one- or two-year basis or for the lifetime of the claim. Under certain claims management agreements, the Company receives consideration from a customer at contract inception prior to transferring services to the customer, however, it would begin performing services immediately. The period between a customer’s payment of consideration and the completion of the promised services could be greater than one year. There is no difference between the amount of promised consideration and the cash selling price of the promised services. The fee is billed upfront by the Company in order to provide customers with simplified and predictable ways of purchasing its services and it is customary to invoice service fees when the claim is assigned. The Company considered whether a significant financing component exists and determined that there is not a significant financing component at the contract level.

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The Medical Management service line offers case managers who provide administration services by proactively managing medical treatment for claimants while facilitating an understanding of and participation in their rehabilitation process. Revenue for Medical Management services is recognized over time as the performance obligations are satisfied through the effort expended to manage the medical treatment for claimants and control of these services is transferred to the customer. Medical Management services are generally billed based on time incurred, are considered variable consideration, and revenue is recognized at the amount in which the Company has the right to invoice for services performed. This method of revenue recognition is the most accurate depiction of the transfer of the Medical Management service to the customer. Medical bill review services provide an analysis of medical charges for clients’ claims to identify opportunities for savings. Medical bill review services revenues are recognized over time as control of the service is transferred to the customer. Revenue is recognized based upon the transfer of the results of the medical bill review service to the customer as this is the most accurate depiction of the transfer of the service to the customer.

The following tables present Crawford TPA Solutions revenues before reimbursements disaggregated by service line and geography for the three and nine months ended September 30, 2020 and 2019:

|  | Three Months Ended September 30, 2020 |  |  | Three Months Ended September 30, 2019 |
(in thousands) |  | Claims Management Services |  |  | Medical Management Services |  |  | Total |  |  | Claims Management Services |  |  | Medical Management Services |  |  | Total |
U.S. |  | $ | 35,133 |  |  | $ | 35,593 |  |  | $ | 70,726 |  |  | $ | 37,352 |  |  | $ | 43,024 |  |  | $ | 80,376 |
U.K. |  |  | 2,522 |  |  |  | — |  |  |  | 2,522 |  |  |  | 2,730 |  |  |  | — |  |  |  | 2,730 |
Canada |  |  | 6,415 |  |  |  | — |  |  |  | 6,415 |  |  |  | 8,210 |  |  |  | — |  |  |  | 8,210 |
Europe and Rest of World |  |  | 7,547 |  |  |  | — |  |  |  | 7,547 |  |  |  | 8,179 |  |  |  | — |  |  |  | 8,179 |
Total Crawford TPA Solutions Revenues before Reimbursements |  | $ | 51,617 |  |  | $ | 35,593 |  |  | $ | 87,210 |  |  | $ | 56,471 |  |  | $ | 43,024 |  |  | $ | 99,495 |

|  | Nine Months Ended September 30, 2020 |  |  | Nine Months Ended September 30, 2019 |
(in thousands) |  | Claims Management Services |  |  | Medical Management Services |  |  | Total |  |  | Claims Management Services |  |  | Medical Management Services |  |  | Total |
U.S. |  | $ | 105,755 |  |  | $ | 112,237 |  |  | $ | 217,992 |  |  | $ | 109,700 |  |  | $ | 127,691 |  |  | $ | 237,391 |
U.K. |  |  | 8,150 |  |  |  | — |  |  |  | 8,150 |  |  |  | 8,243 |  |  |  | — |  |  |  | 8,243 |
Canada |  |  | 19,924 |  |  |  | — |  |  |  | 19,924 |  |  |  | 25,466 |  |  |  | — |  |  |  | 25,466 |
Europe and Rest of World |  |  | 24,804 |  |  |  | — |  |  |  | 24,804 |  |  |  | 25,707 |  |  |  | — |  |  |  | 25,707 |
Total Crawford TPA Solutions Revenues before Reimbursements |  | $ | 158,633 |  |  | $ | 112,237 |  |  | $ | 270,870 |  |  | $ | 169,116 |  |  | $ | 127,691 |  |  | $ | 296,807 |

The Company's Crawford Specialty Solutions segment principally generates revenues through its Global Technical Services and Contractor Connection service lines.

The Global Technical Services service line generates revenues for claims management services provided to insurance companies and self-insured entities related to large, complex losses with technical adjusting and industry experts servicing a broad range of industries. Revenue is recognized over time as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document and report the claim and control of these services is transferred to the customer. Revenue is recognized based on historical claim closure rates and claim type for fixed fee claims, applied utilizing a portfolio approach based on time elapsed for these claims. For claims billed on a time and expense incurred basis, which are considered variable consideration, the Company recognizes revenue at the amount in which it has the right to invoice for services performed. These methods of revenue recognition are the most accurate depiction of the transfer of the claims management services to the customer.

The Contractor Connection service line generates revenue through its independently managed contractor network. Contractor Connection primarily generates revenue by receiving a fee for each project that is sold by its network of contractors. Revenue is recognized at a point in time once the consumer accepts the contractor's proposal as Contractor Connection’s performance obligation of referring projects to its contractors has been completed and the Company is entitled to consideration at that time. The contractor takes control of the service upon the consumer’s acceptance of the contractor’s proposal.

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The following table presents Crawford Specialty Solutions revenues before reimbursements disaggregated by service line and geography for the three and nine months ended September 30, 2020 and 2019:

|  | Three Months Ended September 30, 2020 |  |  | Three Months Ended September 30, 2019 |
(in thousands) |  | Global Technical Services |  |  | Contractor Connection |  |  | Total |  |  | Global Technical Services |  |  | Contractor Connection |  |  | Total |
U.S. |  | $ | 10,210 |  |  | $ | 20,075 |  |  | $ | 30,285 |  |  | $ | 10,202 |  |  | $ | 19,617 |  |  | $ | 29,819 |
U.K. |  |  | 10,805 |  |  |  | 1,339 |  |  |  | 12,144 |  |  |  | 11,728 |  |  |  | 1,263 |  |  |  | 12,991 |
Australia |  |  | 5,789 |  |  |  | 333 |  |  |  | 6,122 |  |  |  | 5,935 |  |  |  | 222 |  |  |  | 6,157 |
Canada |  |  | 5,793 |  |  |  | 1,787 |  |  |  | 7,580 |  |  |  | 6,294 |  |  |  | 1,838 |  |  |  | 8,132 |
Europe |  |  | 5,090 |  |  |  | 9 |  |  |  | 5,099 |  |  |  | 5,141 |  |  |  | 2 |  |  |  | 5,143 |
Rest of World |  |  | 6,315 |  |  |  | — |  |  |  | 6,315 |  |  |  | 6,690 |  |  |  | — |  |  |  | 6,690 |
Total Crawford Specialty Solutions Revenues before Reimbursements |  | $ | 44,002 |  |  | $ | 23,543 |  |  | $ | 67,545 |  |  | $ | 45,990 |  |  | $ | 22,942 |  |  | $ | 68,932 |

|  | Nine Months Ended September 30, 2020 |  |  | Nine Months Ended September 30, 2019 |
(in thousands) |  | Global Technical Services |  |  | Contractor Connection |  |  | Total |  |  | Global Technical Services |  |  | Contractor Connection |  |  | Total |
U.S. |  | $ | 30,311 |  |  | $ | 53,271 |  |  | $ | 83,582 |  |  | $ | 30,888 |  |  | $ | 60,270 |  |  | $ | 91,158 |
U.K. |  |  | 34,835 |  |  |  | 4,984 |  |  |  | 39,819 |  |  |  | 34,444 |  |  |  | 3,955 |  |  |  | 38,399 |
Australia |  |  | 16,379 |  |  |  | 651 |  |  |  | 17,030 |  |  |  | 16,881 |  |  |  | 608 |  |  |  | 17,489 |
Canada |  |  | 17,549 |  |  |  | 4,484 |  |  |  | 22,033 |  |  |  | 19,522 |  |  |  | 5,773 |  |  |  | 25,295 |
Europe |  |  | 15,354 |  |  |  | 24 |  |  |  | 15,378 |  |  |  | 14,793 |  |  |  | 3 |  |  |  | 14,796 |
Rest of World |  |  | 18,952 |  |  |  | — |  |  |  | 18,952 |  |  |  | 19,100 |  |  |  | — |  |  |  | 19,100 |
Total Crawford Specialty Solutions Revenues before Reimbursements |  | $ | 133,380 |  |  | $ | 63,414 |  |  | $ | 196,794 |  |  | $ | 135,628 |  |  | $ | 70,609 |  |  | $ | 206,237 |

In the normal course of business, the Company's operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by its customers. The Company controls the promised good or service before it is transferred to its customer, therefore it is a principal in the transaction. These out-of-pocket expenses and associated reimbursements are reported on a gross basis within expenses and revenues, respectively, in the Company's unaudited Condensed Consolidated Statements of Operations.

Arrangements with Multiple Performance Obligations

For claims management services, the Company typically has one performance obligation; however, it also provides the customer with an option to acquire additional services. The Company sells multiple lines of claims processing and different levels of processing depending on the complexity of the claims. The Company typically provides a menu of offerings from which the customer chooses to purchase at its option. The price of each service is separate and distinct and provides a separate and distinct value to the customer. Pricing is consistent for each service irrespective of the other services or quantities requested by the customer. For example, if the Company provides claims processing for both auto and general liability, those services are priced and delivered independently.

Contract Balances

The timing of revenue recognition, billings and cash collections result in billed accounts receivables, contract assets (reported as "Unbilled revenues at estimated billable amounts") and contract liabilities (reported as "Deferred revenues") on the Company’s unaudited Condensed Consolidated Balance Sheets. Unbilled revenues is a contract asset for revenue that has been recognized in advance of billing the customer, resulting from professional services delivered that the Company expects and is entitled to receive as consideration under certain contracts. Billing requirements vary by contract but substantially all unbilled revenues are billed within one year.

When the Company receives consideration from a customer prior to transferring services to the customer under the terms of certain claims management agreements, it records deferred revenues on the Company’s unaudited Condensed Consolidated Balance Sheets, which represents a contract liability. These fixed-fee service agreements typically result from the Crawford TPA Solutions segment and require the Company to handle claims on either a one- or two-year basis, or for the lifetime of the claim. In cases where it handles a claim on a non-lifetime basis, the Company typically receives an additional fee on each anniversary date that the claim remains open. For service agreements where it provides services for the life of the claim, the Company is paid one upfront fee regardless of the duration of the claim. The Company recognizes deferred revenues as revenues as it performs services and transfers control of the services to the customer and satisfies the performance obligation which it determines utilizing a portfolio approach.

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The Company's deferred revenues for claims handled for one or two years are not as sensitive to changes in claim closing rates since the performance obligations are satisfied within a fixed length of time. Deferred revenues for lifetime claim handling are more sensitive to changes in claim closing rates since the Company is obligated to handle these claims to conclusion with no additional fees received for long-lived claims. For all fixed fee service agreements, revenues are recognized over the expected service periods by type of claim. Based upon its historical averages, the Company closes approximately 98% of all cases referred to it under lifetime claim service agreements within five years from the date of referral. Also, within that five-year period, the percentage of cases remaining open in any one particular year has remained relatively consistent from period to period. Each quarter the Company evaluates its historical case closing rates by type of claim utilizing a portfolio approach and makes adjustments to deferred revenues as necessary. As a portfolio approach is utilized to recognize deferred revenues, any changes in estimates will impact the timing of revenue recognition and any changes in estimates are recognized in the period in which they are determined.

The table below presents the deferred revenues balance as of January 1, 2020 and the significant activity affecting deferred revenues during the nine months ended September 30, 2020:

(In Thousands) |  |  |  |
Customer Contract Liabilities |  | Deferred Revenue |
Balance at January 1, 2020 |  | $ | 52,368 |
Quarterly additions |  |  | 22,226 |
Revenue recognized from the prior periods |  |  | (14,293 | )
Revenue recognized from current quarter additions |  |  | (4,994 | )
Balance as of March 31, 2020 |  | $ | 55,307 |
Quarterly additions |  |  | 15,389 |
Revenue recognized from the prior periods |  |  | (15,407 | )
Revenue recognized from current quarter additions |  |  | (3,568 | )
Balance as of June 30, 2020 |  | $ | 51,721 |
Quarterly additions |  |  | 17,600 |
Revenue recognized from the prior periods |  |  | (14,134 | )
Revenue recognized from current quarter additions |  |  | (4,137 | )
Balance as of September 30, 2020 |  | $ | 51,050 |

Remaining Performance Obligations

As of September 30, 2020, the Company had $88,565,000 of remaining performance obligations related to claims and non-claims services in which the price is fixed. Remaining performance obligations consist of deferred revenues as well as certain unbilled receivables that are considered contract assets. The Company expects to recognize approximately 70% of our remaining performance obligations as revenues within one year and the remaining balance thereafter.

Costs to Obtain a Contract

The Company has a sales incentive compensation program where remuneration is based on the revenues recognized in the period and does not represent an incremental cost to the Company which provides a future benefit expected to be longer than one year and would meet the criteria to be capitalized and presented as a contract asset on the Company's unaudited Condensed Consolidated Balance Sheets.

Practical Expedients Elected

As a practical expedient, the Company does not adjust the consideration in a contract for the effects of a significant financing component it expects, at contract inception, when the period between a customer’s payment of consideration and the transfer of promised services to the customer will be one year or less.

For claims management services that are billed on a time and expense incurred or per unit basis and revenue is recognized over time, the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

The Company does not disclose the value of remaining performance obligations for (i) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed, and (ii) contracts with variable consideration allocated entirely to a single performance obligation.

4. Lease Commitments

During the three months ended March 31, 2020, the Company entered into a lease in Allen, TX, related to a new client contract. This lease had an opening ROU asset and lease liability balance of $11,455,000. The Company has included the below annual lease disclosures for comparability between reporting periods.

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The Company determines if an arrangement is a lease at inception. The Company's and its subsidiaries' leases include office space, computer equipment, and automobiles under operating and finance leases. These lease agreements have remaining lease terms of 1 to 11 years. Some of these lease agreements include options to extend the leases for up to 5 years, options to terminate the leases within 1 year, rental escalation clauses and periodic adjustments for inflation, all of which are considered in the determination of lease payments. These lease agreements do not contain any material residual value guarantees or material restrictive covenants.

For leases with terms greater than 12 months, the Company records the related right-of-use asset and lease liability at the present value of the fixed lease payments over the term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability. The Company does not separate nonlease components from lease components and instead accounts for each as a single lease component for all classes of its assets. The Company applies a portfolio approach to effectively account for the right-of-use asset and lease liability for certain equipment leases.

When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company's leases do not provide a readily determinable implicit rate. Therefore, the Company estimates its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

The Company, as sublessor, subleases certain office space which mostly consists of a two-building office complex in Plantation, Florida in which the terms of the primary lease and the related subleases end in December 2021. Under all of its executed sublease arrangements, the sublessees are obligated to pay the Company sublease payments of $1,100,000 during the remainder of 2020, $4,200,000 in 2021 and $100,000 in 2022.

The Company's finance leases are not material for the three and nine months ended September 30, 2020 and are excluded from the disclosures below. The following table presents the lease-related assets and liabilities recorded on the Company's unaudited Condensed Consolidated Balance Sheets related to its operating leases:

(in thousands) |  | Classification on Balance Sheet |  | September 30, 2020 |  |  | December 31, 2019 |
Assets: |  |  |  |  |  |  |  |  |  |
Operating lease |  | Operating lease right-of-use assets, net |  | $ | 107,956 |  |  | $ | 102,354 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Current operating lease liabilities |  | Current operating lease liabilities |  |  | 31,918 |  |  |  | 30,765 |
Noncurrent operating lease liabilities |  | Noncurrent operating lease liabilities |  |  | 91,963 |  |  |  | 87,064 |
Total operating lease liabilities |  |  |  | $ | 123,881 |  |  | $ | 117,829 |
Weighted-Average Remaining Lease Term |  |  |  | 6.04 Years |  |  | 5.72 years |
Weighted-Average Discount Rate (1) |  |  |  |  | 5.3 | % |  |  | 5.4 | %

(1) | Upon adoption of Topic 842, discount rates used for existing leases were established at the transition date.

The components of operating lease costs within the Company's unaudited Condensed Consolidated Statements of Operations consisted of the following for the three and nine months ended September 30, 2020:

|  | Three Months Ended |  |  | Nine Months Ended |
(in thousands) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
Operating lease cost |  | $ | 9,381 |  |  | $ | 9,298 |  |  | $ | 28,770 |  |  | $ | 28,410 |
Variable lease cost |  |  | 2,094 |  |  |  | 2,078 |  |  |  | 6,317 |  |  |  | 5,849 |
Sublease income |  |  | 982 |  |  |  | 1,114 |  |  |  | 3,085 |  |  |  | 3,086 |

Supplemental cash flow information related to operating leases for the three and nine months ended September 30, 2020 were as follows:

|  | Three Months Ended |  |  | Nine Months Ended |
(in thousands) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating cash flows for operating leases |  | $ | 9,418 |  |  | $ | 9,806 |  |  | $ | 27,933 |  |  | $ | 29,220 |
Right-of-use assets obtained in exchange for lease obligations (1) |  | $ | 8,204 |  |  | $ | 1,294 |  |  | $ | 31,061 |  |  | $ | 13,310 |

(1) | Amount excludes $122,300,000 of right-of-use assets recognized upon adoption of Topic 842.

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Future undiscounted operating lease payments reconciled to total operating lease liabilities are as follows:

(in thousands) |  | September 30, 2020 |
2020 |  | $ | 8,746 |
2021 |  |  | 36,930 |
2022 |  |  | 23,696 |
2023 |  |  | 16,422 |
2024 |  |  | 13,329 |
Thereafter |  |  | 46,586 |
Total undiscounted lease payments |  |  | 145,709 |
Less imputed interest |  |  | (21,828 | )
Present value of future lease payments |  | $ | 123,881 |

The Company has entered into operating lease agreements that have not yet commenced as of September 30, 2020 with legally binding minimum lease payments of $2,395,000. The leases are expected to commence during the three months ended March 31, 2021, and have lease terms between 5 years and 10 years.

5. Income Taxes

The Company's consolidated effective income tax rate may change periodically due to changes in enacted tax rates, fluctuations in the mix of income earned from the Company's various domestic and international operations, which are subject to income taxes at different rates, the Company's ability to utilize net operating loss and tax credit carryforwards, and amounts related to uncertain income tax positions. The provision for income taxes on consolidated income before income taxes totaled $11,729,000 and $5,328,000 for the three months ended September 30, 2020 and 2019, respectively.

The provision for income taxes on consolidated income before income taxes totaled $9,554,000 and $11,120,000 for the nine months ended September 30, 2020 and 2019, respectively. The overall effective tax rate decreased to 35.1% for the nine months ended September 30, 2020 compared with 36.8% for the 2019 period primarily due to the impact of goodwill impairment and LWI disposition in 2020 and an arbitration settlement in 2019.

6. Defined Benefit Pension Plans

Net periodic cost related to all of the Company's defined benefit pension plans recognized in the Company's unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019 included the following components:

|  | Three Months Ended |  |  | Nine Months Ended |
(in thousands) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
Service cost |  | $ | 315 |  |  | $ | 332 |  |  | $ | 946 |  |  | $ | 1,004 |
Interest cost |  |  | 4,092 |  |  |  | 5,565 |  |  |  | 12,330 |  |  |  | 16,763 |
Expected return on assets |  |  | (6,936 | ) |  |  | (7,371 | ) |  |  | (20,899 | ) |  |  | (22,214 | )
Amortization of actuarial loss |  |  | 2,614 |  |  |  | 2,689 |  |  |  | 7,848 |  |  |  | 8,073 |
Net periodic cost |  | $ | 85 |  |  | $ | 1,215 |  |  | $ | 225 |  |  | $ | 3,626 |

For the three months ended September 30, 2020 and 2019, the non-service components of net periodic pension (benefit) cost of $(230,000) and $883,000, respectively, are included in "Other (Expense) Income, net" on the unaudited Condensed Consolidated Statement of Operations. For the nine months ended September 30, 2020 and 2019, the non-service components of net periodic pension (benefit) cost of $(721,000) and $2,622,000, respectively, are included in "Other (Expense) Income, net" on the unaudited Condensed Consolidated Statement of Operations. For the nine months ended September 30, 2020, the Company made contributions of $3,000,000 and $455,000 to the U.S. and U.K. defined benefit pension plans, respectively, compared with no contributions to the U.S. defined benefit plan and $527,000 to the U.K. defined benefit pension plans during the nine months ended September 30, 2019. The Company has made an additional contribution of $6,000,000 to its U.S. plan during the fourth quarter of 2020 but does not expect to make additional contributions to its U.K. plans during the remainder of 2020.

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7. Net Income Attributable to Shareholders of Crawford & Company per Common Share

The Company computes earnings per share of its non-voting Class A Common Stock ("CRD-A") and voting Class B Common Stock ("CRD-B") using the two-class method, which allocates the undistributed earnings in 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 the CRD-A shares than on the CRD-B shares, 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 per share for CRD-A and CRD-B. During the second and third quarters of 2020, the Board of Directors declared the same dividend on CRD-A and CRD-B, while during the first quarter of 2020, and the first three quarters of 2019, the Board of Directors declared a higher dividend on CRD-A than on CRD-B.

The computations of basic net income attributable to shareholders of Crawford & Company per common share were as follows:

|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
(in thousands, except per share amounts) |  | CRD-A |  |  | CRD-B |  |  | CRD-A |  |  | CRD-B |  |  | CRD-A |  |  | CRD-B |  |  | CRD-A |  |  | CRD-B |
Earnings per share - basic: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Numerator: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allocation of undistributed earnings |  | $ | 12,839 |  |  | $ | 9,431 |  |  | $ | 4,439 |  |  | $ | 3,308 |  |  | $ | 6,857 |  |  | $ | 5,053 |  |  | $ | 5,654 |  |  | $ | 4,249 |
Dividends paid |  |  | 1,226 |  |  |  | 901 |  |  |  | 2,157 |  |  |  | 1,142 |  |  |  | 4,281 |  |  |  | 2,705 |  |  |  | 6,449 |  |  |  | 3,445 |
Net income attributable to common shareholders, basic |  | $ | 14,065 |  |  | $ | 10,332 |  |  | $ | 6,596 |  |  | $ | 4,450 |  |  | $ | 11,138 |  |  | $ | 7,758 |  |  | $ | 12,103 |  |  | $ | 7,694 |
Denominator: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted-average common shares outstanding, basic |  |  | 30,643 |  |  |  | 22,510 |  |  |  | 30,645 |  |  |  | 22,831 |  |  |  | 30,575 |  |  |  | 22,533 |  |  |  | 30,701 |  |  |  | 23,071 |
Earnings per share - basic |  | $ | 0.46 |  |  | $ | 0.46 |  |  | $ | 0.22 |  |  | $ | 0.19 |  |  | $ | 0.36 |  |  | $ | 0.34 |  |  | $ | 0.39 |  |  | $ | 0.33 |

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The computations of diluted net income attributable to shareholders of Crawford & Company per common share were as follows:

|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
(in thousands, except per share amounts) |  | CRD-A |  |  | CRD-B |  |  | CRD-A |  |  | CRD-B |  |  | CRD-A |  |  | CRD-B |  |  | CRD-A |  |  | CRD-B |
Earnings per share - diluted: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Numerator: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allocation of undistributed earnings |  | $ | 12,891 |  |  | $ | 9,379 |  |  | $ | 4,470 |  |  | $ | 3,277 |  |  | $ | 6,879 |  |  | $ | 5,031 |  |  | $ | 5,687 |  |  | $ | 4,216 |
Dividends paid |  |  | 1,226 |  |  |  | 901 |  |  |  | 2,157 |  |  |  | 1,142 |  |  |  | 4,281 |  |  |  | 2,705 |  |  |  | 6,449 |  |  |  | 3,445 |
Net income attributable to common shareholders, diluted |  | $ | 14,117 |  |  | $ | 10,280 |  |  | $ | 6,627 |  |  | $ | 4,419 |  |  | $ | 11,160 |  |  | $ | 7,736 |  |  | $ | 12,136 |  |  | $ | 7,661 |
Denominator: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted-average common shares outstanding, basic |  |  | 30,643 |  |  |  | 22,510 |  |  |  | 30,645 |  |  |  | 22,831 |  |  |  | 30,575 |  |  |  | 22,533 |  |  |  | 30,701 |  |  |  | 23,071 |
Weighted-average effect of dilutive securities |  |  | 294 |  |  |  | — |  |  |  | 495 |  |  |  | — |  |  |  | 235 |  |  |  | — |  |  |  | 415 |  |  |  | — |
Weighted-average common shares outstanding, diluted |  |  | 30,937 |  |  |  | 22,510 |  |  |  | 31,140 |  |  |  | 22,831 |  |  |  | 30,810 |  |  |  | 22,533 |  |  |  | 31,116 |  |  |  | 23,071 |
Earnings per share - diluted |  | $ | 0.46 |  |  | $ | 0.46 |  |  | $ | 0.21 |  |  | $ | 0.19 |  |  | $ | 0.36 |  |  | $ | 0.34 |  |  | $ | 0.39 |  |  | $ | 0.33 |

Listed below are the shares excluded from the denominator in the preceding computation of diluted earnings per share for CRD-A because their inclusion would have been antidilutive:

|  | Three Months Ended |  |  | Nine Months Ended |
(in thousands) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
Shares underlying stock options excluded |  |  | 2,014 |  |  |  | 572 |  |  |  | 2,014 |  |  |  | 592 |
Performance stock grants excluded because performance conditions have not been met (1) |  |  | 1,335 |  |  |  | 1,094 |  |  |  | 1,197 |  |  |  | 1,041 |

(1) | Compensation cost is recognized for these performance stock grants based on expected achievement rates; however, no consideration is given to these performance stock grants when calculating diluted earnings per share until the performance measurements have been achieved.

The following table details shares issued during the three and nine months ended September 30, 2020 and 2019. These shares are included from their dates of issuance in the weighted-average common shares used to compute basic and diluted earnings per share for CRD-A in the table above. There were no shares of CRD-B issued during any of these periods.

|  | Three Months Ended |  |  | Nine Months Ended |
(in thousands) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
CRD-A issued under the Non-Employee Director Stock Plan |  |  | 3 |  |  |  | 2 |  |  |  | 70 |  |  |  | 87 |
CRD-A issued under the U.K. ShareSave Scheme |  |  | 1 |  |  |  | 14 |  |  |  | 2 |  |  |  | 280 |
CRD-A issued under the Executive Stock Bonus Plan |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 30 |
CRD-A issued under the 2016 Omnibus Stock and Incentive Plan |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 62 |
CRD-A issued under the Employee Stock Purchase Plan |  |  | 114 |  |  |  | 131 |  |  |  | 114 |  |  |  | 131 |
CRD-A issued under the International Plan |  |  | 4 |  |  |  | 4 |  |  |  | 4 |  |  |  | 4 |

The Company's share repurchase authorization, approved in July 2017 (the "2017 Repurchase Authorization"), provided the Company with the ability to repurchase up to 2,000,000 shares of CRD-A or CRD-B (or both). The 2017 Repurchase Authorization was terminated on May 8, 2019.

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Effective May 9, 2019, the Company's Board of Directors authorized the repurchase of up to 2,000,000 shares of CRD-A or CRD-B (or a combination of the two) through December 31, 2020 (the "2019 Repurchase Authorization"). Under the 2019 Repurchase Authorization, repurchases may be made for cash, in the open market or privately negotiated transactions at such times and for such prices as management deems appropriate, subject to applicable contractual and regulatory restrictions. At September 30, 2020, the Company had remaining authorization to repurchase 642,097 shares under the 2019 Repurchase Authorization.

During the three months ended September 30, 2020, the Company did not repurchase shares of CRD-A or CRD-B. During the three months ended September 30, 2019, the Company repurchased 401,892 shares of CRD-A and 231,137 shares of CRD-B at an average cost of $9.72 and $9.43, respectively.

During the nine months ended September 30, 2020, the Company repurchased 155,351 shares of CRD-A and 161,459 shares of CRD-B at an average cost of $8.42 for each share. During the nine months ended September 30, 2019, the Company repurchased 1,103,398 shares of CRD-A at an average cost of $9.33 and 1,680,377 shares of CRD-B at an average cost of $9.16 for each share, of which 421,427 shares of CRD-A and 1,376,889 shares of CRD-B were purchased pursuant to a stock purchase agreement authorized by the Board of Directors separate from the 2017 Repurchase Authorization and the 2019 Repurchase Authorization.

8. Accumulated Other Comprehensive Loss

Comprehensive income (loss) for the Company consists of the total of net income, foreign currency translation adjustments, and accrued pension and retiree medical liability adjustments. Foreign currency translation adjustments include the net realized gains from intra-entity loans that are long-term in nature of $793,000 for the three months ended September 30, 2020, and losses of $(4,150,000) for the nine months ended September 30, 2020. The changes in components of "Accumulated other comprehensive loss" ("AOCL"), net of taxes and noncontrolling interests, included in the Company's unaudited condensed consolidated financial statements were as follows:

|  | Three Months Ended September 30, 2020 |  |  | Nine Months Ended September 30, 2020 |
(in thousands) |  | Foreign currency translation adjustments |  |  | Retirement liabilities (1) |  |  | AOCL attributable to shareholders of Crawford & Company |  |  | Foreign currency translation adjustments |  |  | Retirement liabilities (1) |  |  | AOCL attributable to shareholders of Crawford & Company |
Beginning balance |  | $ | (41,591 | ) |  | $ | (167,244 | ) |  | $ | (208,835 | ) |  | $ | (35,850 | ) |  | $ | (171,057 | ) |  | $ | (206,907 | )
Other comprehensive loss before reclassifications |  |  | 11,910 |  |  |  | — |  |  |  | 11,910 |  |  |  | 5,593 |  |  |  | — |  |  |  | 5,593 |
Amounts reclassified from accumulated other comprehensive income |  |  | — |  |  |  | 2,036 |  |  |  | 2,036 |  |  |  | — |  |  |  | 5,849 |  |  |  | 5,849 |
Net current period other comprehensive loss |  |  | 11,910 |  |  |  | 2,036 |  |  |  | 13,946 |  |  |  | 5,593 |  |  |  | 5,849 |  |  |  | 11,442 |
(Disposition)/acquisition of noncontrolling interest |  |  | (113 | ) |  |  | — |  |  |  | (113 | ) |  |  | 463 |  |  |  | — |  |  |  | 463 |
Ending balance |  | $ | (29,794 | ) |  | $ | (165,208 | ) |  | $ | (195,002 | ) |  | $ | (29,794 | ) |  | $ | (165,208 | ) |  | $ | (195,002 | )

|  | Three Months Ended September 30, 2019 |  |  | Nine Months Ended September 30, 2019 |
(in thousands) |  | Foreign currency translation adjustments |  |  | Retirement liabilities (1) |  |  | AOCL attributable to shareholders of Crawford & Company |  |  | Foreign currency translation adjustments |  |  | Retirement liabilities (1) |  |  | AOCL attributable to shareholders of Crawford & Company |
Beginning balance |  | $ | (35,531 | ) |  | $ | (176,103 | ) |  | $ | (211,634 | ) |  | $ | (36,352 | ) |  | $ | (180,095 | ) |  | $ | (216,447 | )
Other comprehensive loss before reclassifications |  |  | (2,472 | ) |  |  | — |  |  |  | (2,472 | ) |  |  | (1,651 | ) |  |  | — |  |  |  | (1,651 | )
Amounts reclassified from accumulated other comprehensive income |  |  | — |  |  |  | 1,984 |  |  |  | 1,984 |  |  |  | — |  |  |  | 5,976 |  |  |  | 5,976 |
Net current period other comprehensive (loss) income |  |  | (2,472 | ) |  |  | 1,984 |  |  |  | (488 | ) |  |  | (1,651 | ) |  |  | 5,976 |  |  |  | 4,325 |
Ending balance |  | $ | (38,003 | ) |  | $ | (174,119 | ) |  | $ | (212,122 | ) |  | $ | (38,003 | ) |  | $ | (174,119 | ) |  | $ | (212,122 | )

(1) | Retirement liabilities reclassified to net income are related to the amortization of actuarial losses and are included in "Other Expense, net" in the Company's unaudited Condensed Consolidated Statements of Operations. See Note 6, "Defined Benefit Pension Plans" for additional details.

The other comprehensive loss amounts attributable to noncontrolling interests presented in the Company's unaudited Condensed Consolidated Statements of Shareholders' Investment are foreign currency translation adjustments.

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9. Fair Value Measurements

The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:

|  |  |  |  |  | Fair Value Measurements at September 30, 2020 |
|  |  |  |  |  |  |  |  |  | Significant Other |  |  | Significant |
|  |  |  |  |  | Quoted Prices in |  |  | Observable |  |  | Unobservable |
|  |  |  |  |  | Active Markets |  |  | Inputs |  |  | Inputs |
(in thousands) |  | Total |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds (1) |  | $ | 10,027 |  |  | $ | 10,027 |  |  | $ | — |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent earnout liability (2) |  |  | 386 |  |  |  | — |  |  |  | — |  |  |  | 386 |

(1) | The fair values of the money market funds were based on recently quoted market prices and reported transactions in an active marketplace. Money market funds are included in the Company's unaudited Condensed Consolidated Balance Sheets as "Cash and cash equivalents."

(2) | The contingent earnout liability relates to business acquisitions by the Crawford Specialty Solutions operating segment. The fair value of the contingent earnout liability was estimated using internally-prepared revenue projections, which is Level 3 data, with the maximum possible earnout of $551,000. As such, the fair value is not expected to vary materially. The fair value of the contingent earnout liability is included in "Other accrued liabilities" and "Other noncurrent liabilities" on the Company's unaudited Condensed Consolidated Balance Sheets, based upon the term of each contingent earnout agreement.

Fair Value Disclosures

There were no transfers of assets between fair value levels during the three and nine months ended September 30, 2020. The categorization of assets and liabilities within the fair value hierarchy and the measurement techniques are reviewed quarterly. Any transfers between levels are deemed to have occurred at the end of the quarter.

The fair values of accounts receivable, unbilled revenues, accounts payable and short-term borrowings approximate their respective carrying values due to the short-term maturities of the instruments. The interest rate on the Company's variable rate long-term debt resets at least every 90 days; therefore, the recorded value approximates fair value. These assets and liabilities are measured within Level 2 of the fair value hierarchy.

Nonrecurring Fair Value Disclosures

In June 2020, the Company sold its 51% interest in Crawford Compliance Inc. in exchange for a note receivable which is measured at estimated fair value.

Goodwill is an asset that represents the excess of the purchase price over the fair value of the separately identifiable net assets (tangible and intangible) acquired in certain business combinations. Indefinite-lived intangible assets consist of trade names associated with acquired businesses. Goodwill and indefinite-lived intangible assets are not amortized, but are subject to impairment testing at least annually. Other long-lived assets consist primarily of property and equipment, deferred income tax assets, capitalized software, and amortizable intangible assets related to customer relationships, technology, and trade names with finite lives. Other long-lived assets are evaluated for impairment when impairment indicators are identified.

Subsequent to a business acquisition in which goodwill and indefinite-lived intangibles are recorded as assets, post-acquisition accounting requires that both be tested to determine whether there has been an impairment. The Company performs an impairment test of goodwill and indefinite-lived intangible assets at least annually on October 1 of each year. The Company regularly evaluates whether events and circumstances have occurred which indicate potential impairment of goodwill or indefinite-lived intangible assets. When factors indicate that such assets should be evaluated for possible impairment between the scheduled annual impairment tests, the Company performs an interim impairment test.

Goodwill impairment testing is performed on a reporting unit basis. If the fair value of the reporting unit exceeds its carrying value, including goodwill, goodwill is considered not impaired. If the carrying value of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The loss recognized cannot subsequently be reversed.

The Company currently has four reporting units for goodwill impairment purposes. These reporting units are the Crawford Claims Solutions and Crawford TPA Solutions operating segments and the Global Technical Services and Contractor Connection service lines.

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The carrying value of the reporting unit, including goodwill, is compared with the estimated fair value of the reporting unit as determined utilizing a combination of the income and market approaches. The income approach, which is a level 3 fair value measurement, is based on projected debt-free cash flow which is discounted to the present value using discount factors that consider the timing and risk of the cash flows. The market approach is based on the Guideline Public Company Method, which uses market pricing metrics to select multiples to value the Company's reporting units. The resulting estimated fair values of the combined reporting units are reconciled to the Company's market capitalization including an estimated implied control premium. The Company believes that the combination of these approaches is appropriate because it provides a fair value estimate based upon the combination of the reporting unit's expected long-term operating cash flow performance and multiples with which similar publicly traded companies are valued. The Company weights the income and market approaches equally.

During the first quarter of 2020, the Company identified a goodwill impairment indicator in its Crawford Claims Solutions reporting unit as a result of lower operating results and the overall decline in market conditions as a result of the COVID-19 pandemic. As a result, the Company recognized a goodwill impairment of $17,674,000, reducing the goodwill carrying value of Crawford Claims Solutions to $0 as of March 31, 2020. Cumulative goodwill impairment in the Crawford Claims Solutions reporting unit is $55,565,000. The Company intends to continue to monitor the performance of its other three reporting units for potential indicators of impairment. If impairment indicators exist, the Company will perform an interim goodwill impairment analysis.

The key assumptions used in estimating the fair value of the CCS reporting unit utilizing the income approach include the discount rate and the terminal growth rate. The discount rates utilized in estimating the fair value of the CCS reporting unit in 2020 was 17.5%, reflecting the Company's assessment of a market participant's view of the risks associated with the projected cash flows. The terminal growth rate used in the analysis was 2.0%. The assumptions used in estimating the fair values are based on currently available data and management's best estimates of revenues and cash flows and, accordingly, a change in market conditions or other factors could have a material effect on the estimated values. There are inherent uncertainties related to the assumptions used and to management's application of these assumptions.

If changes to the Company's reporting structure impact the composition of its reporting units, existing goodwill is reallocated to the revised reporting units based on their relative estimated fair values as determined by a combination of the income and market approaches. If all of the assets and liabilities of an acquired business are assigned to a specific reporting unit, the goodwill associated with that acquisition is assigned to that reporting unit at acquisition unless another reporting unit is also expected to benefit from the acquisition.

For impairment testing of indefinite-lived intangible assets, the carrying value is compared with the estimated fair value, which is estimated based on the present value of the after-tax cash flows attributable solely to the asset. If carrying value exceeds the estimated fair value, an impairment is recognized based on the excess. The fair values of the Company's trade names are established using the relief-from-royalty method, a form of the income approach. This method recognizes that, by virtue of owning the trade name as opposed to licensing it, a company or reporting unit is relieved from paying a royalty, usually expressed as a percentage of net sales, for the asset's use. The present value of the after-tax costs savings (i.e., royalty relief) at an appropriate discount rate including a tax amortization benefit indicates the value of the trade name. The Company determined the discount rate based on its performance compared to similar market participants, factored by risk in forecasting using a modified capital asset pricing model.

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10. Segment Information

Financial information for the three and nine months ended September 30, 2020 and 2019 related to the Company's reportable segments, including a reconciliation from segment operating earnings to income before income taxes, the most directly comparable GAAP financial measure, is presented below:

|  | Three Months Ended |  |  | Nine Months Ended |
(in thousands) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions |  | $ | 98,369 |  |  | $ | 86,250 |  |  | $ | 257,407 |  |  | $ | 255,572 |
Crawford TPA Solutions |  |  | 87,210 |  |  |  | 99,495 |  |  |  | 270,870 |  |  |  | 296,807 |
Crawford Specialty Solutions |  |  | 67,545 |  |  |  | 68,932 |  |  |  | 196,794 |  |  |  | 206,237 |
Total segment revenues before reimbursements |  |  | 253,124 |  |  |  | 254,677 |  |  |  | 725,071 |  |  |  | 758,616 |
Reimbursements |  |  | 8,545 |  |  |  | 11,165 |  |  |  | 25,519 |  |  |  | 31,449 |
Total revenues |  | $ | 261,669 |  |  | $ | 265,842 |  |  | $ | 750,590 |  |  | $ | 790,065 |
Segment Operating Earnings |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions |  | $ | 7,219 |  |  | $ | 2,661 |  |  | $ | 6,329 |  |  | $ | 4,058 |
Crawford TPA Solutions |  |  | 4,414 |  |  |  | 9,347 |  |  |  | 13,870 |  |  |  | 21,106 |
Crawford Specialty Solutions |  |  | 17,390 |  |  |  | 13,301 |  |  |  | 38,340 |  |  |  | 38,108 |
Total segment operating earnings |  |  | 29,023 |  |  |  | 25,309 |  |  |  | 58,539 |  |  |  | 63,272 |
(Deduct)/Add: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unallocated corporate and shared costs, net |  |  | (968 | ) |  |  | (1,649 | ) |  |  | (5,227 | ) |  |  | (2,393 | )
Net corporate interest expense |  |  | (1,599 | ) |  |  | (3,162 | ) |  |  | (6,275 | ) |  |  | (8,346 | )
Stock option expense |  |  | (457 | ) |  |  | (450 | ) |  |  | (1,033 | ) |  |  | (1,348 | )
Amortization of customer-relationship intangible assets |  |  | (3,665 | ) |  |  | (2,829 | ) |  |  | (9,153 | ) |  |  | (8,429 | )
Goodwill impairment |  |  | — |  |  |  | — |  |  |  | (17,674 | ) |  |  | — |
Restructuring costs |  |  | — |  |  |  | — |  |  |  | (5,714 | ) |  |  | — |
Arbitration and claim settlements |  |  | — |  |  |  | (1,200 | ) |  |  | — |  |  |  | (12,552 | )
Gain on disposition of businesses, net |  |  | 14,104 |  |  |  | — |  |  |  | 13,763 |  |  |  | — |
Income before income taxes |  | $ | 36,438 |  |  | $ | 16,019 |  |  | $ | 27,226 |  |  | $ | 30,204 |

Operating earnings is the primary financial performance measure used by the Company's senior management and chief operating decision maker ("CODM") to evaluate the financial performance of the Company's three operating segments and make resource allocation and certain compensation decisions. The Company believes this measure is useful to investors in that it allows them to evaluate segment operating performance using the same criteria used by the Company's senior management and CODM. Operating earnings will differ from net income computed in accordance with GAAP since operating earnings represent 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 impairment, restructuring costs, gain on disposition of business, arbitration and claim settlements, income taxes, and net income or loss attributable to noncontrolling interests and redeemable noncontrolling interests.

Segment operating earnings includes allocations of certain corporate and shared costs. If the Company changes its allocation methods or changes the types of costs that are allocated to its three operating segments, prior period amounts presented in the current period financial statements are adjusted to conform to the current allocation process.

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Intersegment transactions are not material for any period presented.

Revenues before reimbursements by major service line in the Crawford TPA Solutions segment, which operates under the Broadspire brand globally, and the Crawford Specialty Solutions segment are shown in the following table. The Company considers all Crawford Claims Solutions revenues to be derived from one service line.

|  | Three Months Ended |  |  | Nine Months Ended |
(in thousands) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
Crawford TPA Solutions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Claims Management Services |  | $ | 51,617 |  |  | $ | 56,471 |  |  | $ | 158,633 |  |  | $ | 169,116 |
Medical Management Services |  |  | 35,593 |  |  |  | 43,024 |  |  |  | 112,237 |  |  |  | 127,691 |
Total Revenues before Reimbursements--Crawford TPA Solutions |  | $ | 87,210 |  |  | $ | 99,495 |  |  | $ | 270,870 |  |  | $ | 296,807 |
Crawford Specialty Solutions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Technical Services |  | $ | 44,002 |  |  | $ | 45,990 |  |  | $ | 133,380 |  |  | $ | 135,628 |
Contractor Connection |  |  | 23,543 |  |  |  | 22,942 |  |  |  | 63,414 |  |  |  | 70,609 |
Total Revenues before Reimbursements--Crawford Specialty Solutions |  | $ | 67,545 |  |  | $ | 68,932 |  |  | $ | 196,794 |  |  | $ | 206,237 |

11. Commitments and Contingencies

As part of the Company's credit facility, the Company maintains a letter of credit facility to satisfy certain of its own contractual requirements. At September 30, 2020, the aggregate committed amount of letters of credit outstanding under the credit facility was $11,512,000.

In the normal course of its business, the Company is sometimes named as a defendant or responsible party in suits or other actions by insureds or claimants contesting decisions made by the Company or its clients with respect to the settlement of claims. Additionally, certain clients of the Company have in the past brought, and may, in the future bring, claims for indemnification on the basis of alleged actions by the Company, its agents, or its employees in rendering services to clients. The majority of these claims are of the type covered by insurance maintained by the Company. However, the Company is responsible for the deductibles and self-insured retentions under various insurance coverages. In the opinion of Company management, adequate provisions have been made for such known and foreseeable risks.

The Company is subject to numerous federal, state, and foreign labor, employment, worker health and safety, antitrust and competition, environmental and consumer protection, import/export, anti-corruption, and other laws. From time to time the Company faces claims and investigations by employees, former employees, and governmental entities under such laws or employment contracts with such employees or former employees. Such claims, investigations, and any litigation involving the Company could divert management's time and attention from the Company's business operations and could potentially result in substantial costs of defense, settlement or other disposition, which could have a material adverse effect on the Company's results of operations, financial position, and cash flows. In the opinion of Company management, adequate provisions have been made for any items that are probable and reasonably estimable.

12. Restructuring Costs

Total restructuring costs were $5,714,000 for the nine months ended September 30, 2020. There were no restructuring costs for the three months ended September 30, 2020 or the three and nine months ended September 30, 2019.

Restructuring costs incurred during the nine months ended September 30, 2020 related primarily to severance and other termination costs in an effort to consolidate and streamline various functions of our workforce. Costs associated with these activities were incurred in each of the Company's operating segments and in administrative functions. Asset impairments were incurred for obsolete software.

The following table shows the restructuring costs incurred by type of activity:

|  | Three months ended |  |  | Nine Months Ended |  |
(in thousands) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |  |
Personnel related costs |  | $ | — |  |  | $ | — |  |  | $ | 5,076 |  |  | $ | — |
Asset impairments |  |  | — |  |  |  | — |  |  |  | 638 |  |  |  | — |
Total restructuring costs |  | $ | — |  |  | $ | — |  |  | $ | 5,714 |  |  | $ | — |

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As of September 30, 2020, the following liabilities remained on the Company's unaudited Condensed Consolidated Balance Sheets related to restructuring costs. The rollforward of these liabilities to September 30, 2020 were as follows:

|  | Three months ended September 30, 2020 |
(in thousands) |  | Accrued compensation and related costs |  |  | Other accrued liabilities |  |  | Total |
Beginning balance, June 30, 2020 |  | $ | 2,427 |  |  | $ | 5 |  |  | $ | 2,432 |
Additions |  |  | — |  |  |  | — |  |  |  | — |
Adjustments to accruals |  |  | 799 |  |  |  | (5 | ) |  |  | 794 |
Cash payments |  |  | (1,866 | ) |  |  | — |  |  |  | (1,866 | )
Ending balance, September 30, 2020 |  | $ | 1,360 |  |  | $ | — |  |  | $ | 1,360 |

|  | Nine Months Ended September 30, 2020 |
|  | Accrued compensation and related costs |  |  | Other accrued liabilities |  |  | Total |
Beginning balance, December 31, 2019 |  | $ | 342 |  |  | $ | 472 |  |  | $ | 814 |
Additions |  |  | 5,076 |  |  |  | — |  |  |  | 5,076 |
Adjustments to accruals |  |  | 131 |  |  |  | (472 | ) |  |  | (341 | )
Cash payments |  |  | (4,189 | ) |  |  | — |  |  |  | (4,189 | )
Ending balance, September 30, 2020 |  | $ | 1,360 |  |  | $ | — |  |  | $ | 1,360 |

13. Business Acquisitions and Dispositions

Dispositions

On June 1, 2020, the Company sold its 51% interest in Crawford Compliance Inc. to a third party in exchange for a note receivable. The Company recognized a loss on the disposal of this entity of $912,000 in 2020. The results of Crawford Compliance Inc. were not material to the Company.

On June 12, 2020, the Company sold its 51% interest in Lloyd Warwick International (“LWI”) to a third party for cash proceeds of $19,600,000 and payment of $3,600,000 to settle intercompany indebtedness. The Company recognized an additional $700,000 related to net working capital adjustments under the terms of the acquisition agreement, which increased the purchase price to $20,300,000. Due to the Company’s two-month reporting lag for reporting its international results, this disposition was recorded in the quarter ended September 30, 2020. The net working capital adjustment of $700,000 is included in "Prepaid expenses and other current assets on the Company's unaudited Condensed Consolidated Balance Sheets as of September 30, 2020. The Company recognized a total gain of $14,700,000 ($11,700,000 net of tax) on the disposition in the quarter ended September 30, 2020.

Acquisitions

On July 21, 2020, the Company acquired the remaining 15% membership interests of WeGoLook, LLC for $310,000. The Company accounted for this subsequent acquisition as an equity transaction in accordance with ASC 810-10, “Consolidation”. The non-compete agreements with the former minority members were terminated under the terms of the purchase agreement. As a result, the Company recognized $1,100,000 of accelerated amortization on the non-compete agreement in the third quarter of 2020.

14. Subsequent Events

On October 1, 2020, the Company acquired the remaining 85% equity interests in Crawford Carvallo and its subsidiaries. Crawford Carvallo is a leading provider of loss adjusting, claims management solutions and legal services in Chile. The Company held a 15% interest in Crawford Carvallo prior to this acquisition.

The purchase price includes an initial lump-sum payment of $11,600,000 and a maximum of $11,700,000 payable over the next six years based on achieving certain EBITDA performance goals as set forth in the purchase agreement. The acquisition was funded primarily through additional borrowings under the Company's credit facility.

The Company does not anticipate the operations of Crawford Carvallo will have a material impact on the Company’s consolidated results of operations or its earnings per share during 2020.

On November 1, 2020, the Company acquired 100% of HBA Group in Australia, including 100% of the stock in each of HBA Group’s entities HBA Legal, Pillion and Paratus. HBA Legal is a legal services provider that will complement the Company’s Crawford TPA Solutions segment in Australia. The purchase price includes an initial lump-sum payment of $5,000,000 and a maximum $3,200,000 payable over the next four years based on achieving certain revenue and EBITDA performance goals.

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These acquisitions will be accounted for under the guidance of ASC 805-10, as a business combination under the acquisition method.

Based upon the timing of these acquisitions, the initial accounting for the acquisitions is not yet complete as the Company gathers additional information related to the assets acquired, liabilities and noncontrolling interests assumed, including intangible assets, other assets, accrued liabilities, deferred taxes, and uncertain tax positions. The Company is in the process of obtaining final third-party valuations of certain intangible assets. The preliminary application of acquisition accounting to the assets acquired, and liabilities and noncontrolling interests assumed, as well as the results of operations of Crawford Carvallo including noncontrolling interest, will first be reflected in the Company's audited consolidated financial statements as of and for the year ending December 31, 2020. The preliminary application of acquisition accounting to the assets acquired, and liabilities assumed, as well as the results of operations of HBA Group, will first be reflected in the Company's consolidated financial statements as of and for the quarter ending March 31, 2021.

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

Crawford & Company

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of Crawford & Company (the Company) as of September 30, 2020, the related condensed consolidated statements of operations, comprehensive income, and shareholders’ investment for the three-month and nine-month periods ended September 30, 2020 and 2019, the condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2020 and 2019 and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2019, the related consolidated statements of operations, comprehensive income, cash flows, and shareholders’ investment for the year then ended, and the related notes (not presented herein); and in our report dated March 5, 2020, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2019, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Ernst & Young LLP

November 2, 2020

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Concerning Forward-Looking Statements

This report contains forward-looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Statements contained in this report that are not statements of historical fact are forward-looking statements made pursuant to the "safe harbor" provisions thereof. These statements may relate to, among other things, our expected future operating results and financial condition, including the impact of COVID-19, our ability to grow our revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plans, collectability of our billed and unbilled accounts receivable, financial results from our recently completed acquisitions, our continued compliance with the financial and other covenants contained in our financing agreements, and our other long-term capital resource and liquidity requirements. These statements may also relate to our business strategies, goals and expectations concerning our market position, future operations, margins, case and project volumes, profitability, contingencies, liquidity position, and capital resources. The words "anticipate", "believe", "could", "would", "should", "estimate", "expect", "intend", "may", "plan", "goal", "strategy", "predict", "project", "will" and similar terms and phrases, or the negatives thereof, identify forward-looking statements contained in this report.

Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations and the forward-looking statements related to our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially adversely affect our financial condition and results of operations, and whether the forward-looking statements ultimately prove to be correct. Included among the risks and uncertainties we face are risks related to the following:

| • | a decline in cases referred to us for any reason, including changes in the degree to which property and casualty insurance carriers outsource their claims handling functions,

| • | changes in global economic conditions,

| • | the impact of global pandemics, such as COVID-19, on claim volumes,

| • | changes in interest rates,

| • | changes in foreign currency exchange rates,

| • | changes in regulations and practices of various governmental authorities,

| • | changes in our competitive environment,

| • | changes in the financial condition of our clients,

| • | the loss of any material customer,

| • | our ability to successfully integrate the operations of acquired businesses,

| • | regulatory changes related to funding of defined benefit pension plans,

| • | our U.S., U.K. and other international defined benefit pension plans and our future funding obligations thereunder,

| • | our ability to complete any transaction involving the acquisition or disposition of assets on terms and at times acceptable to us,

| • | our ability to identify new revenue sources not tied to the insurance underwriting cycle,

| • | our ability to develop or acquire information technology resources to support and grow our business,

| • | our ability to attract and retain qualified personnel,

| • | our ability to renew existing contracts with clients on satisfactory terms,

| • | our ability to collect amounts due from our clients and others,

| • | continued availability of funding under our financing agreements,

| • | general risks associated with doing business outside the U.S., including changes in tax rates,

| • | our ability to comply with the covenants in our financing or other agreements,

| • | changes in the frequency or severity of man-made or natural disasters,

| • | the ability of our third-party service providers, used for certain aspects of our internal business functions, to meet expected service levels,

| • | our ability to prevent or detect cybersecurity breaches and cyber incidents,

| • | our ability to achieve targeted integration goals with the consolidation and migration of multiple software platforms,

| • | risks associated with our having a controlling shareholder, and

| • | impairments of goodwill or our other indefinite-lived intangible assets.

As a result, undue reliance should not be placed on any forward-looking statements. Actual results and trends in the future may differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements speak only as of the date they are made and we undertake no obligation to publicly update any of these forward-looking statements in light of new information or future events.

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The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with (i) our unaudited condensed consolidated financial statements and accompanying notes thereto for the three and nine months ended September 30, 2020 and 2019, and as of September 30, 2020, and December 31, 2019, contained in Item 1 of this Quarterly Report on Form 10-Q, and (ii) our Annual Report on Form 10-K for the year ended December 31, 2019. As described in Note 1, "Basis of Presentation," the financial results of our operations outside of the U.S., Canada, the Caribbean, and certain subsidiaries in the Philippines are included in our consolidated financial statements on a two-month delayed basis (fiscal year-end of October 31) as permitted by U.S. generally accepted accounting principles ("GAAP") in order to provide sufficient time for accumulation of their results.

Business Overview

Based in Atlanta, Georgia, Crawford & Company (www.crawco.com) is the world's largest publicly listed independent provider of claims management and outsourcing solutions to carriers, brokers and corporates with an expansive global network serving clients in more than 70 countries. Shares of the Company's two classes of common stock are traded on the New York Stock Exchange 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% of the Class A Common Stock, voting as a class.

The Company delivers services to its clients through a global service line reporting structure consisting of three operating segments: (i) Crawford Claims Solutions; (ii) Crawford TPA Solutions (formerly referred to as "Crawford TPA Solutions: Broadspire"), which operates under the Broadspire brand globally; and (iii) Crawford Specialty Solutions. Crawford Claims Solutions serves the global property and casualty insurance company markets. Crawford TPA Solutions serves the global casualty, disability and self-insurance marketplace worldwide. Crawford Specialty Solutions serves the global property and casualty insurance company markets.

As discussed in more detail in subsequent sections of this MD&A, our three operating segments represent components of our Company for which separate financial information is available, and which is evaluated regularly by our chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing operating performance.

Insurance companies rely on us for certain services such as field investigation and the evaluation of property and casualty insurance claims. Self-insured entities typically rely on us for a broader range of services. In addition to field investigation and claims evaluation, we may also provide initial loss reporting services for their claimants, loss mitigation services such as medical bill review, medical case management and vocational rehabilitation, risk management information services, and loss fund administration to pay their claims. Our Contractor Connection service line provides a managed contractor network to insurance carriers and consumer markets.

The global claims management services market is highly competitive and comprised of a large number of companies that vary in size and that offer a varied scope of services. The demand from insurance companies and self-insured entities for services provided by independent claims service firms like us is largely dependent on industry-wide claims volumes, which are affected by, among other things, the insurance underwriting cycle, weather related events, general economic activity, overall employment levels and workplace injury rates. Demand is also impacted by decisions insurance companies and self-insured entities make with respect to the level of claims outsourced to independent claim service firms as opposed to those handled by their own in-house claims adjusters. In addition, our ability to retain clients and maintain or increase case referrals is also dependent in part on our ability to continue to provide high-quality, competitively priced services and effective sales efforts.

We typically earn our revenues on an individual fee-per-claim basis for claims management services that we provide to insurance companies and self-insured entities. Accordingly, the volume of claim referrals to us is a key driver of our revenues. We cannot predict the future trend of case volumes for a number of reasons, including the frequency and severity of weather related cases and the occurrence of natural and man-made disasters, which are a significant source of cases for us and are not subject to accurate forecasting, as well as the economic impact that COVID-19 may have on global case volumes and the duration of any such impact.

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Results of Operations

Executive Summary

Consolidated revenues before reimbursements decreased $1.6 million, or 0.6%, for the three months ended September 30, 2020 and $33.5 million, or 4.4%, for the nine months ended September 30, 2020 compared to the same periods of 2019. These decreases were due to a decline in revenues in our Crawford TPA Solutions and Crawford Specialty Solutions operating segments, primarily due to the economic impact of the COVID-19 pandemic in the U.S. and Canada, partially offset by an increase in revenues in our Crawford Claims Solutions segment, due to an increase in weather related activity and an increase in new clients in the U.S. Changes in foreign exchange rates decreased our consolidated revenues before reimbursements by $2.1 million, or 0.8%, for the three months ended September 30, 2020 and $9.2 million, or 1.2% for the nine months ended September 30, 2020 as compared to the prior year periods. To illustrate this impact, segment revenues are presented below, using a constant exchange rate, for the three and nine months ended September 30, 2020.

| Three Months Ended |  |  | Three Months Ended |
|  |  |  | Based on exchange rates for the three months ended September 30, 2019 |
(in thousands, except percentages) | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | % Variance |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions | $ | 98,369 |  |  | $ | 86,250 |  |  |  | 14.1 | % |  | $ | 99,228 |  |  |  | 15.0 | %
Crawford TPA Solutions |  | 87,210 |  |  |  | 99,495 |  |  |  | (12.3 | )% |  |  | 87,528 |  |  |  | (12.0 | )%
Crawford Specialty Solutions |  | 67,545 |  |  |  | 68,932 |  |  |  | (2.0 | )% |  |  | 68,488 |  |  |  | (0.6 | )%
Total revenues before reimbursements |  | 253,124 |  |  |  | 254,677 |  |  |  | (0.6 | )% |  |  | 255,244 |  |  |  | 0.2 | %
Reimbursements |  | 8,545 |  |  |  | 11,165 |  |  |  | (23.5 | )% |  |  | 8,742 |  |  |  | (21.7 | )%
Total Revenues | $ | 261,669 |  |  | $ | 265,842 |  |  |  | (1.6 | )% |  | $ | 263,986 |  |  |  | (0.7 | )%

| Nine Months Ended |  |  | Nine Months Ended |
|  |  |  | Based on exchange rates for the nine months ended September 30, 2019 |
(in thousands, except percentages) | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | % Variance |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions | $ | 257,407 |  |  | $ | 255,572 |  |  |  | 0.7 | % |  | $ | 261,691 |  |  |  | 2.4 | %
Crawford TPA Solutions |  | 270,870 |  |  |  | 296,807 |  |  |  | (8.7 | )% |  |  | 272,409 |  |  |  | (8.2 | )%
Crawford Specialty Solutions |  | 196,794 |  |  |  | 206,237 |  |  |  | (4.6 | )% |  |  | 200,191 |  |  |  | (2.9 | )%
Total revenues before reimbursements |  | 725,071 |  |  |  | 758,616 |  |  |  | (4.4 | )% |  |  | 734,291 |  |  |  | (3.2 | )%
Reimbursements |  | 25,519 |  |  |  | 31,449 |  |  |  | (18.9 | )% |  |  | 26,099 |  |  |  | (17.0 | )%
Total Revenues | $ | 750,590 |  |  | $ | 790,065 |  |  |  | (5.0 | )% |  | $ | 760,390 |  |  |  | (3.8 | )%

Excluding foreign currency impacts, consolidated revenues before reimbursements increased $0.6 million, or 0.2%, for the three months ended September 30, 2020, but decreased $24.3 million, or 3.2%, for the nine months ended September 30, 2020. Revenues from the Crawford Claims Solutions segment increased in the three months ended September 30, 2020 due to an increase in weather related cases resulting from the hurricanes in the U.S., and revenues from new client growth, partially offset by the impact of COVID-19. Revenues from the Crawford TPA Solutions segment decreased for both the quarter and year-to-date period due to a decrease in the U.S., Canada and rest of world as a result of the economic impact of COVID-19. Revenues from the Crawford Specialty Solutions segment decreased primarily due to the 2020 third quarter sale of Lloyd Warwick International (“LWI”) in our Global Technical Services service line on June 12, 2020.

We estimate that COVID-19 negatively impacted our revenues in the range of $21.0 to $25.0 million in the three months ended September 30, 2020, and negatively impacted our revenues in the range of $46.0 to $54.0 million in the nine months ended September 30, 2020. We expect the ongoing global economic slowdown resulting from COVID-19 could have a material impact to our results of operations, financial condition, and cash flows in one or more future quarters.

Overall, there was an increase in cases received of 1.3% for the three months ended September 30, 2020 compared to the 2019 period, due to the increase in weather related activity in the U.S. There was a decrease of 4.1% for the nine months ended September 30, 2020, primarily due to the economic impact of COVID-19. As a result of the economic contraction from the COVID-19 pandemic, cases received in future quarters could be materially negatively impacted, unless offset by the impact of cases received from new clients or weather related activity.

32

Cases received are presented below by segment for the three and nine months ended September 30, 2020 and 2019:

|  | Three Months Ended |  |  | Nine Months Ended |
(whole numbers, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |
Crawford Claims Solutions |  |  | 141,381 |  |  |  | 117,296 |  |  |  | 20.5 | % |  |  | 362,000 |  |  |  | 358,272 |  |  |  | 1.0 | %
Crawford TPA Solutions |  |  | 193,234 |  |  |  | 213,028 |  |  |  | (9.3 | )% |  |  | 581,254 |  |  |  | 611,735 |  |  |  | (5.0 | )%
Crawford Specialty Solutions |  |  | 83,270 |  |  |  | 82,330 |  |  |  | 1.1 | % |  |  | 228,657 |  |  |  | 252,367 |  |  |  | (9.4 | )%
Total Crawford Cases Received |  |  | 417,885 |  |  |  | 412,654 |  |  |  | 1.3 | % |  |  | 1,171,911 |  |  |  | 1,222,374 |  |  |  | (4.1 | )%

To illustrate exposure to the impact of changes in foreign currencies, revenues before reimbursements are presented below by denominated currency for the three and nine months ended September 30, 2020:

|  |  |  | Three Months Ended |
|  |  |  | September 30, 2020 |  |  | September 30, 2019 |
(in thousands) |  |  |  | USD equivalent |  |  | % of total |  |  | USD equivalent |  |  | % of total |
U.S. |  | USD |  | $ | 152,728 |  |  |  | 60.3 | % |  | $ | 146,177 |  |  |  | 57.4 | %
U.K. |  | GBP |  |  | 30,060 |  |  |  | 11.9 | % |  |  | 30,844 |  |  |  | 12.1 | %
Canada |  | CAD |  |  | 22,267 |  |  |  | 8.8 | % |  |  | 28,350 |  |  |  | 11.1 | %
Australia |  | AUD |  |  | 19,946 |  |  |  | 7.9 | % |  |  | 18,649 |  |  |  | 7.3 | %
Europe |  | EUR |  |  | 12,730 |  |  |  | 5.0 | % |  |  | 13,817 |  |  |  | 5.4 | %
Rest of World |  |  |  |  | 15,393 |  |  |  | 6.1 | % |  |  | 16,840 |  |  |  | 6.7 | %
Total Revenues, before reimbursements |  |  |  | $ | 253,124 |  |  |  |  |  |  | $ | 254,677 |  |  |  |  |

|  |  |  | Nine Months Ended |
|  |  |  | September 30, 2020 |  |  | September 30, 2019 |
(in thousands) |  |  |  | USD equivalent |  |  | % of total |  |  | USD equivalent |  |  | % of total |
U.S. |  | USD |  | $ | 419,064 |  |  |  | 57.8 | % |  | $ | 432,292 |  |  |  | 57.0 | %
U.K. |  | GBP |  |  | 95,003 |  |  |  | 13.1 | % |  |  | 93,967 |  |  |  | 12.4 | %
Canada |  | CAD |  |  | 68,339 |  |  |  | 9.4 | % |  |  | 87,037 |  |  |  | 11.5 | %
Australia |  | AUD |  |  | 54,270 |  |  |  | 7.5 | % |  |  | 54,223 |  |  |  | 7.1 | %
Europe |  | EUR |  |  | 40,137 |  |  |  | 5.5 | % |  |  | 40,002 |  |  |  | 5.3 | %
Rest of World |  |  |  |  | 48,258 |  |  |  | 6.7 | % |  |  | 51,095 |  |  |  | 6.7 | %
Total Revenues, before reimbursements |  |  |  | $ | 725,071 |  |  |  |  |  |  | $ | 758,616 |  |  |  |  |

Costs of services provided, before reimbursements, decreased $3.8 million, or 2.1%, for the three months ended September 30, 2020, and decreased $15.4 million, or 2.9%, for the nine months ended September 30, 2020 as compared to the same periods of 2019. These decreases were primarily due to a decrease in compensation expense, including incentive compensation, travel and entertainment, and other costs in each of our operating segments related to the year-to-date reduction in revenues.

Selling, general, and administrative ("SG&A") expenses decreased $0.5 million, or 0.9% in the three months ended September 30, 2020 and decreased $8.1 million, or 4.7% for the nine months ended September 30, 2020 compared with the same periods of 2019. These decreases were due to a decrease in compensation expense, travel and entertainment, and other administrative support costs, partially offset by CEO transition costs in the year-to-date period.

We received a benefit from the Canada Emergency Wage Subsidy totaling $4.7 million and $9.1 million in the three months and nine months ended September 30, 2020, respectively. This subsidy is recorded as a credit within Direct Compensation, Fringe Benefits and Non-Employee Labor and is included in "Costs of services provided, before reimbursements” or “Selling, general, and administrative expenses” on the Company's unaudited Condensed Consolidated Statements of Operations, depending on classification of the employees.

We recognized a pretax non-cash goodwill impairment in the 2020 first quarter totaling $17.7 million related to our Crawford Claims Solutions reporting unit. This expense was partially offset by a $1.7 million credit in noncontrolling interest expense.

We recognized pretax restructuring costs totaling $5.7 million in the 2020 first quarter, related primarily to severance and other termination costs in an effort to consolidate and streamline various functions of our workforce. The restructuring costs was comprised of $5.1 million severance expense and related payroll taxes, and $0.6 million asset impairment.

33

During the three months ended September 30, 2020, we recognized a pretax gain on disposal totaling $14.1 million related to the disposal of the LWI business in our Crawford Spe cialty Solutions reporting unit, net of an additional loss on the disposal of Crawford Compliance originally recorded in the 2020 second quarter. For the nine months ended September 30, 2020, we recognized a net pretax gain on disposal of business es totaling $1 3.8 million. See N ote 13, “Business Acquisitions and Dispositions” of our accompanying consolidated financial statements for further discussion about these transactions.

During the three months and nine months ended September 30, 2019, we recognized pretax expense for an arbitration and claim settlements totaling $1.2 million and $12.6 million related to additional payments awarded to former executives of our former Garden City Group related to their departure in 2015. There were no other potential claimants related to this matter.

Operating Earnings of our Operating Segments

We believe that a discussion and analysis of the segment operating earnings of our three operating segments is helpful in understanding the results of our operations. Operating earnings is our segment measure of profitability presented in conformity with the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") Topic 280 "Segment Reporting." Operating earnings is the primary financial performance measure used by our senior management and CODM to evaluate the financial performance of our operating segments and make resource allocation and certain compensation decisions.

We believe operating earnings is a measure that is useful to others in that it allows them to evaluate segment operating performance using the same criteria used by our senior management and CODM. Segment operating earnings represent segment earnings, including the direct and indirect costs of certain administrative functions required to operate our business, but excludes unallocated corporate and shared costs and credits, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, goodwill impairment, restructuring costs, loss on disposal of business, arbitration and claim settlements, income taxes, and net income or loss attributable to noncontrolling interests and redeemable noncontrolling interests.

Administrative functions such as finance, human resources, information technology, quality and compliance, exist in both a centralized shared-service arrangement and within certain operations. Each of these functions is managed by centralized management and we allocate the costs of those services to the segments as indirect costs based on usage.

Gross profit is defined as segment revenues, less segment direct costs, which exclude centralized indirect administrative support costs allocated to the business.

Income taxes, net corporate interest expense, stock option expense, and amortization of customer-relationship intangible assets are recurring components of our net income, but they are not considered part of our segment operating earnings because they are managed on a corporate-wide basis. Income taxes are calculated for the Company on a consolidated basis based on statutory rates in effect in the various jurisdictions in which we provide services, and vary significantly by jurisdiction. Net corporate interest expense results from capital structure decisions made by senior management and the Board of Directors, affecting the Company as a whole. Stock option expense represents the non-cash costs generally related to stock options and employee stock purchase plan expenses which are not allocated to our operating segments. Amortization expense is a non-cash expense for finite-lived customer-relationship and trade name intangible assets acquired in business combinations. None of these costs relate directly to the performance of our services or operating activities and, therefore, are excluded from segment operating earnings in order to better assess the results of each segment's operating activities on a consistent basis.

Unallocated corporate and shared costs and credits include expenses and credits related to our chief executive officer and Board of Directors, certain provisions for bad debt allowances or subsequent recoveries such as those related to bankrupt clients, defined benefit pension costs or credits for our frozen U.S. pension plan, certain unallocated professional fees, and certain self-insurance costs and recoveries that are not allocated to our individual operating segments.

Restructuring costs arise from time to time from events (such as internal restructurings, losses on subleases, establishment of new operations, and asset impairments) that are not allocated to any particular segment since they historically have not regularly impacted our performance and are not expected to impact our future performance on a regular basis.

Additional discussion and analysis of our income taxes, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, unallocated corporate and shared costs and credits, goodwill impairment, restructuring costs, gain on disposal of business, and arbitration and claim settlements follows the discussion and analysis of the results of operations of our three operating segments.

Segment Revenues

In the normal course of business, our operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under GAAP, these out-of-pocket expenses and associated reimbursements are reported on a gross basis when reporting revenues and expenses, respectively, in our unaudited Condensed Consolidated Statements of Operations. In the discussion and analysis of results of operations which follows, we do not include a gross up of expenses and revenues for these pass-through reimbursed expenses. The amounts of reimbursed expenses and related revenues offset each other in our results of operations with no impact to our net income or operating earnings. A reconciliation of revenues before reimbursements to consolidated revenues determined in accordance with GAAP is self-evident from the face of the accompanying unaudited Condensed Consolidated Statements of Operations.

34

Our segment results are impacted by changes in foreign exchange rates. We believe that a non-GAAP discussion and analysis of segment revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, is helpful in understanding the results of our segment operations.

Segment Operating Expenses

Our discussion and analysis of segment operating expenses is comprised of two components: "Direct Compensation, Fringe Benefits & Non-Employee Labor" and "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor."

"Direct Compensation, Fringe Benefits & Non-Employee Labor" includes direct compensation, payroll taxes, and benefits provided to the employees of each segment, as well as payments to outsourced service providers that augment our staff in each segment. As a service company, these costs represent our most significant and variable operating expenses.

Costs of administrative functions, including direct compensation, payroll taxes, and benefits, are managed centrally and considered indirect costs. The allocated indirect costs of our shared-services infrastructure are allocated to each segment based on usage and reflected within "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor" of each segment.

In addition to allocated corporate and shared costs, "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor" includes travel and entertainment, office rent and occupancy costs, automobile expenses, office operating expenses, data processing costs, cost of risk, professional fees, and amortization and depreciation expense other than amortization of customer-relationship intangible assets.

In addition, we believe that a non-GAAP discussion and analysis of segment gross profit is helpful in understanding the results of our segment operations, excluding indirect centralized administrative support costs. Our discussion and analysis of segment gross profit includes the revenues and direct expenses of each segment.

Unless noted in the following discussion and analysis, revenue amounts exclude reimbursements for out-of-pocket expenses and expense amounts exclude reimbursed out-of-pocket expenses.

Segment Performance Indicators

We typically earn our revenues on an individual fee-per-claim basis for claims management services we provide to carriers, brokers and corporates. Accordingly, the volume of claim referrals to us is a key driver of our revenues. We believe that a discussion and analysis of the segment unit volumes, as measured by cases received, is helpful in understanding the results of our operations.

35

Operating results for our Crawford Claims Solutions, Crawford TPA Solutions, and Crawford Specialty Solutions segments reconciled to net income before income taxes and net income attributable to shareholders of Crawford & Company were follows:

|  | Three Months Ended |  |  | Nine Months Ended |
(in thousands, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions |  | $ | 98,369 |  |  | $ | 86,250 |  |  | $ | 257,407 |  |  | $ | 255,572 |
Crawford TPA Solutions |  |  | 87,210 |  |  |  | 99,495 |  |  |  | 270,870 |  |  |  | 296,807 |
Crawford Specialty Solutions |  |  | 67,545 |  |  |  | 68,932 |  |  |  | 196,794 |  |  |  | 206,237 |
Total Revenues before reimbursements |  |  | 253,124 |  |  |  | 254,677 |  |  |  | 725,071 |  |  |  | 758,616 |
Reimbursements |  |  | 8,545 |  |  |  | 11,165 |  |  |  | 25,519 |  |  |  | 31,449 |
Total Revenues |  | $ | 261,669 |  |  | $ | 265,842 |  |  | $ | 750,590 |  |  | $ | 790,065 |
Direct Compensation, Fringe Benefits & Non-Employee Labor: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions |  | $ | 65,673 |  |  | $ | 56,985 |  |  | $ | 171,107 |  |  | $ | 168,951 |
% of related revenues before reimbursements |  |  | 66.8 | % |  |  | 66.1 | % |  |  | 66.5 | % |  |  | 66.1 | %
Crawford TPA Solutions |  |  | 53,613 |  |  |  | 58,594 |  |  |  | 166,243 |  |  |  | 177,911 |
% of related revenues before reimbursements |  |  | 61.5 | % |  |  | 58.9 | % |  |  | 61.4 | % |  |  | 59.9 | %
Crawford Specialty Solutions |  |  | 32,928 |  |  |  | 35,993 |  |  |  | 102,677 |  |  |  | 106,003 |
% of related revenues before reimbursements |  |  | 48.7 | % |  |  | 52.2 | % |  |  | 52.2 | % |  |  | 51.4 | %
Total |  | $ | 152,214 |  |  | $ | 151,572 |  |  | $ | 440,027 |  |  | $ | 452,865 |
% of Revenues before reimbursements |  |  | 60.1 | % |  |  | 59.5 | % |  |  | 60.7 | % |  |  | 59.7 | %
Expenses Other than Direct Compensation, Fringe Benefits & Non-Employee Labor: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions |  | $ | 25,477 |  |  | $ | 26,604 |  |  | $ | 79,971 |  |  | $ | 82,563 |
% of related revenues before reimbursements |  |  | 25.9 | % |  |  | 30.8 | % |  |  | 31.1 | % |  |  | 32.3 | %
Crawford TPA Solutions |  |  | 29,183 |  |  |  | 31,554 |  |  |  | 90,757 |  |  |  | 97,790 |
% of related revenues before reimbursements |  |  | 33.5 | % |  |  | 31.7 | % |  |  | 33.5 | % |  |  | 32.9 | %
Crawford Specialty Solutions |  |  | 17,227 |  |  |  | 19,638 |  |  |  | 55,777 |  |  |  | 62,126 |
% of related revenues before reimbursements |  |  | 25.5 | % |  |  | 28.5 | % |  |  | 28.3 | % |  |  | 30.1 | %
Total before reimbursements |  |  | 71,887 |  |  |  | 77,796 |  |  |  | 226,505 |  |  |  | 242,479 |
% of Revenues before reimbursements |  |  | 28.4 | % |  |  | 30.5 | % |  |  | 31.2 | % |  |  | 32.0 | %
Reimbursements |  |  | 8,545 |  |  |  | 11,165 |  |  |  | 25,519 |  |  |  | 31,449 |
Total |  | $ | 80,432 |  |  | $ | 88,961 |  |  | $ | 252,024 |  |  | $ | 273,928 |
% of Revenues |  |  | 30.7 | % |  |  | 33.5 | % |  |  | 33.6 | % |  |  | 34.7 | %
Segment Operating Earnings: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions |  | $ | 7,219 |  |  | $ | 2,661 |  |  | $ | 6,329 |  |  | $ | 4,058 |
% of related revenues before reimbursements |  |  | 7.3 | % |  |  | 3.1 | % |  |  | 2.5 | % |  |  | 1.6 | %
Crawford TPA Solutions |  |  | 4,414 |  |  |  | 9,347 |  |  |  | 13,870 |  |  |  | 21,106 |
% of related revenues before reimbursements |  |  | 5.1 | % |  |  | 9.4 | % |  |  | 5.1 | % |  |  | 7.1 | %
Crawford Specialty Solutions |  |  | 17,390 |  |  |  | 13,301 |  |  |  | 38,340 |  |  |  | 38,108 |
% of related revenues before reimbursements |  |  | 25.7 | % |  |  | 19.3 | % |  |  | 19.5 | % |  |  | 18.5 | %
Deduct: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unallocated corporate and shared costs, net |  |  | (968 | ) |  |  | (1,649 | ) |  |  | (5,227 | ) |  |  | (2,393 | )
Net corporate interest expense |  |  | (1,599 | ) |  |  | (3,162 | ) |  |  | (6,275 | ) |  |  | (8,346 | )
Stock option expense |  |  | (457 | ) |  |  | (450 | ) |  |  | (1,033 | ) |  |  | (1,348 | )
Amortization of customer-relationship intangible assets |  |  | (3,665 | ) |  |  | (2,829 | ) |  |  | (9,153 | ) |  |  | (8,429 | )
Goodwill impairment |  |  | — |  |  |  | — |  |  |  | (17,674 | ) |  |  | — |
Restructuring costs |  |  | — |  |  |  | — |  |  |  | (5,714 | ) |  |  | — |
Arbitration and claim settlements |  |  | — |  |  |  | (1,200 | ) |  |  | — |  |  |  | (12,552 | )
Gain on disposition of businesses, net |  |  | 14,104 |  |  |  | — |  |  |  | 13,763 |  |  |  | — |
Income before income taxes |  |  | 36,438 |  |  |  | 16,019 |  |  |  | 27,226 |  |  |  | 30,204 |
Provision for income taxes |  |  | (11,729 | ) |  |  | (5,328 | ) |  |  | (9,554 | ) |  |  | (11,120 | )
Net income |  |  | 24,709 |  |  |  | 10,691 |  |  |  | 17,672 |  |  |  | 19,084 |
Net (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests |  |  | (312 | ) |  |  | 355 |  |  |  | 1,224 |  |  |  | 713 |
Net income attributable to shareholders of Crawford & Company |  | $ | 24,397 |  |  | $ | 11,046 |  |  | $ | 18,896 |  |  | $ | 19,797 |

36

The table below, read together with the reconciliation on the previous page, represents gross profit for our segments reconciled to Segment operating earnings:

|  | Three Months Ended |  |  | Nine Months Ended |
(in thousands, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | September 30, 2020 |  |  | September 30, 2019 |
Revenues Before Reimbursements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions |  | $ | 98,369 |  |  | $ | 86,250 |  |  | $ | 257,407 |  |  | $ | 255,572 |
Crawford TPA Solutions |  |  | 87,210 |  |  |  | 99,495 |  |  |  | 270,870 |  |  |  | 296,807 |
Crawford Specialty Solutions |  |  | 67,545 |  |  |  | 68,932 |  |  |  | 196,794 |  |  |  | 206,237 |
Total Revenues before reimbursements |  | $ | 253,124 |  |  | $ | 254,677 |  |  | $ | 725,071 |  |  | $ | 758,616 |
Direct Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions |  | $ | 75,689 |  |  | $ | 66,498 |  |  | $ | 201,936 |  |  | $ | 199,190 |
% of related revenues before reimbursements |  |  | 76.9 | % |  |  | 77.1 | % |  |  | 78.5 | % |  |  | 77.9 | %
Crawford TPA Solutions |  |  | 66,937 |  |  |  | 72,785 |  |  |  | 207,594 |  |  |  | 220,956 |
% of related revenues before reimbursements |  |  | 76.8 | % |  |  | 73.2 | % |  |  | 76.6 | % |  |  | 74.4 | %
Crawford Specialty Solutions |  |  | 39,306 |  |  |  | 44,130 |  |  |  | 124,470 |  |  |  | 133,771 |
% of related revenues before reimbursements |  |  | 58.2 | % |  |  | 64.0 | % |  |  | 63.2 | % |  |  | 64.9 | %
Total segment direct expenses |  | $ | 181,932 |  |  | $ | 183,413 |  |  | $ | 534,000 |  |  | $ | 553,917 |
% of related revenues before reimbursements |  |  | 71.9 | % |  |  | 72.0 | % |  |  | 73.6 | % |  |  | 73.0 | %
Segment Gross Profit: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions |  | $ | 22,680 |  |  | $ | 19,752 |  |  | $ | 55,471 |  |  | $ | 56,382 |
% of related revenues before reimbursements |  |  | 23.1 | % |  |  | 22.9 | % |  |  | 21.5 | % |  |  | 22.1 | %
Crawford TPA Solutions |  |  | 20,273 |  |  |  | 26,710 |  |  |  | 63,276 |  |  |  | 75,851 |
% of related revenues before reimbursements |  |  | 23.2 | % |  |  | 26.8 | % |  |  | 23.4 | % |  |  | 25.6 | %
Crawford Specialty Solutions |  |  | 28,239 |  |  |  | 24,802 |  |  |  | 72,324 |  |  |  | 72,466 |
% of related revenues before reimbursements |  |  | 41.8 | % |  |  | 36.0 | % |  |  | 36.8 | % |  |  | 35.1 | %
Total segment gross profit |  | $ | 71,192 |  |  | $ | 71,264 |  |  | $ | 191,071 |  |  | $ | 204,699 |
% of related revenues before reimbursements |  |  | 28.1 | % |  |  | 28.0 | % |  |  | 26.4 | % |  |  | 27.0 | %
Segment Indirect Costs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions |  | $ | 15,461 |  |  | $ | 17,091 |  |  | $ | 49,142 |  |  | $ | 52,324 |
% of related revenues before reimbursements |  |  | 15.7 | % |  |  | 19.8 | % |  |  | 19.1 | % |  |  | 20.5 | %
Crawford TPA Solutions |  |  | 15,859 |  |  |  | 17,363 |  |  |  | 49,406 |  |  |  | 54,745 |
% of related revenues before reimbursements |  |  | 18.2 | % |  |  | 17.5 | % |  |  | 18.2 | % |  |  | 18.4 | %
Crawford Specialty Solutions |  |  | 10,849 |  |  |  | 11,501 |  |  |  | 33,984 |  |  |  | 34,358 |
% of related revenues before reimbursements |  |  | 16.1 | % |  |  | 16.7 | % |  |  | 17.3 | % |  |  | 16.7 | %
Total segment indirect costs |  | $ | 42,169 |  |  | $ | 45,955 |  |  | $ | 132,532 |  |  | $ | 141,427 |
% of related revenues before reimbursements |  |  | 16.7 | % |  |  | 18.0 | % |  |  | 18.3 | % |  |  | 18.6 | %
Segment Operating Earnings (Loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crawford Claims Solutions |  | $ | 7,219 |  |  | $ | 2,661 |  |  | $ | 6,329 |  |  | $ | 4,058 |
% of related revenues before reimbursements |  |  | 7.3 | % |  |  | 3.1 | % |  |  | 2.5 | % |  |  | 1.6 | %
Crawford TPA Solutions |  |  | 4,414 |  |  |  | 9,347 |  |  |  | 13,870 |  |  |  | 21,106 |
% of related revenues before reimbursements |  |  | 5.1 | % |  |  | 9.4 | % |  |  | 5.1 | % |  |  | 7.1 | %
Crawford Specialty Solutions |  |  | 17,390 |  |  |  | 13,301 |  |  |  | 38,340 |  |  |  | 38,108 |
% of related revenues before reimbursements |  |  | 25.7 | % |  |  | 19.3 | % |  |  | 19.5 | % |  |  | 18.5 | %

37

CRAWFORD CLAIMS SOLUTIONS SEGMENT

Operating earnings in our Crawford Claims Solutions segment increased to $7.2 million, or 7.3% of revenues before reimbursements, for the three months ended September 30, 2020, compared with 2019 operating earnings of $2.7 million, or 3.1% of revenues before reimbursements. For the nine months ended September 30, 2020, our Crawford Claims Solutions segment reported operating earnings of $6.3 million, or 2.5% of revenues before reimbursements, compared with 2019 operating earnings of $4.1 million, or 1.6% of revenues before reimbursements. The increase in operating earnings in the third quarter of 2020 was due to an increase in weather related cases and new client growth, and a reduction in administrative support expenses. The increase in year-to-date operating earnings was also due to an increase in weather related cases and new client growth in the third quarter, partially offset by the negative economic impact of COVID-19. There was a $1.4 million and $2.3 million expense benefit in the three months and nine months ended September 30, 2020, respectively, as a result of the Canada Emergency Wage Subsidy.

Excluding centralized indirect support costs, gross profit increased from $19.8 million, or 22.9% of revenues before reimbursements in 2019, to $22.7 million, or 23.1% of revenues before reimbursements, in the three months ended September 30, 2020, due to the increase in revenues. For the nine months period, gross profit decreased from $56.4 million, or 22.1% of revenues before reimbursements in 2019, to $55.5 million, or 21.5%, as a result of investments related to new client implementations in the 2020 period.

Revenues before Reimbursements

Crawford Claims Solutions segment revenues are primarily derived from the global property and casualty insurance company markets in the U.S., U.K., Canada, Australia, Europe and Rest of World. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three and nine months ended September 30, 2020 and 2019 were as follows:

|  | Three Months Ended |
|  | Based on actual exchange rates |  |  | Based on exchange rates for the three months ended September 30, 2019 |
(in thousands, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | Variance |
U.S. |  | $ | 51,716 |  |  | $ | 35,982 |  |  |  | 43.7 | % |  | $ | 51,716 |  |  |  | 43.7 | %
U.K. |  |  | 15,394 |  |  |  | 15,123 |  |  |  | 1.8 | % |  |  | 15,590 |  |  |  | 3.1 | %
Australia |  |  | 13,066 |  |  |  | 11,886 |  |  |  | 9.9 | % |  |  | 13,370 |  |  |  | 12.5 | %
Canada |  |  | 8,272 |  |  |  | 12,008 |  |  |  | (31.1 | )% |  |  | 8,354 |  |  |  | (30.4 | )%
Europe |  |  | 6,537 |  |  |  | 7,429 |  |  |  | (12.0 | )% |  |  | 6,725 |  |  |  | (9.5 | )%
Rest of World |  |  | 3,384 |  |  |  | 3,822 |  |  |  | (11.5 | )% |  |  | 3,473 |  |  |  | (9.1 | )%
Total Crawford Claims Solutions Revenues before Reimbursements |  | $ | 98,369 |  |  | $ | 86,250 |  |  |  | 14.1 | % |  | $ | 99,228 |  |  |  | 15.0 | %

|  | Nine Months Ended |
|  | Based on actual exchange rates |  |  | Based on exchange rates for the nine months ended September 30, 2019 |
(in thousands, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | Variance |
U.S. |  | $ | 117,488 |  |  | $ | 103,743 |  |  |  | 13.2 | % |  | $ | 117,488 |  |  |  | 13.2 | %
U.K. |  |  | 47,033 |  |  |  | 47,325 |  |  |  | (0.6 | )% |  |  | 47,592 |  |  |  | 0.6 | %
Australia |  |  | 35,211 |  |  |  | 35,220 |  |  |  | (0.0 | )% |  |  | 37,384 |  |  |  | 6.1 | %
Canada |  |  | 26,382 |  |  |  | 36,276 |  |  |  | (27.3 | )% |  |  | 26,819 |  |  |  | (26.1 | )%
Europe |  |  | 20,734 |  |  |  | 21,265 |  |  |  | (2.5 | )% |  |  | 21,654 |  |  |  | 1.8 | %
Rest of World |  |  | 10,559 |  |  |  | 11,743 |  |  |  | (10.1 | )% |  |  | 10,754 |  |  |  | (8.4 | )%
Total Crawford Claims Solutions Revenues before Reimbursements |  | $ | 257,407 |  |  | $ | 255,572 |  |  |  | 0.7 | % |  | $ | 261,691 |  |  |  | 2.4 | %

38

Revenues before reimbursements from our Crawford Claims Solutions segment totaled $98.4 million in the three months ended September 30, 2020, compared with $86.3 million in the 2019 period. This in crease was due to an increase in weather related cases resulting from hurricanes in the U.S. in 2020, and new client growth. Changes in foreign exchange rates resulted in a decrease of our Crawford Claims Solutions segment revenues by approximately 0.9%, or $0.9 million, for the three months ended September 30, 2020 as compared with the 2019 period. Absent foreign exchange rate fluctuations, Crawford Claims Solutions segment revenues would have been $99.2 million for the three months ended September 30, 2020. There was a n in crease in segment unit volume, measured principally by cases received, of 20.5% for the three months ended September 30, 2020, compared with the 2019 period. 11.2% of this increase was due to an increase of 13,194 high-frequency, low-severity cases received in our WeGoLook service line. Excluding these WeGoLook cases, there was an increase in segment unit volume of 10,891, or 9.3% of the increase in Crawford Claims Solutions cases received. Revenues in our U.S. Crawford Claims Solutions segment include revenues from a new client and expanding services from an existing client where we provide staff augmentation for our clients, which resulted in $7.2 million of revenues in the third quarter, or a n 8.3% increase in Crawford Claims Solutions revenue. T he revenues from these clients do not typically result in cases received. Changes in product mix and in the rates charged for those services accounted for a 2.6% revenue de crease for the three months ended September 30, 2020 compared with the same period in 2019.

For the nine months ended September 30, 2020, revenues before reimbursements from our Crawford Claims Solutions segment totaled $257.4 million, compared with $255.6 million in the 2019 period. This increase was primarily due to the weather related cases received in the third quarter and new client growth, partially offset by the negative economic impact of COVID-19. Changes in foreign exchange rates resulted in a decrease of our Crawford Claims Solutions segment revenues by approximately 1.7%, or $4.3 million, for the nine months ended September 30, 2020 as compared with the 2019 period. Absent foreign exchange rate fluctuations, Crawford Claims Solutions segment revenues would have been $261.7 million for the nine months ended September 30, 2020. There was an increase in segment unit volume, measured principally by cases received, of 1.0% for the nine months ended September 30, 2020, compared with the 2019 period. The revenue increase for clients where we are providing staff augmentation for our clients represented $14.2 million, or a 5.6% increase in Crawford Claims Solutions revenues. Changes in product mix and in the rates charged for those services accounted for a 4.2% revenue decrease for the nine months ended September 30, 2020 compared with the same period in 2019, due to the increase in high-frequency, low-severity WeGoLook cases.

The increase in revenues in the U.S. for the three months ended September 30, 2020 was due to the increase in weather related cases in the third quarter and an increase in new client growth, partially offset during the nine months ended September 30, 2020 by the negative economic impact of COVID-19. Based on constant foreign exchange rates, there was an increase in revenues in the U.K. for 2020 compared with 2019 due to an increase in weather related activity and expanding new services. Revenues in Canada decreased in the 2020 periods due to the impact of COVID-19. There were revenue increases in Australia due to an increase in weather related cases. There was a decrease in revenues in Europe in the third quarter due to a change in the mix of services provided in Germany and Norway, although a slight increase for the year-to-date period. The decrease in revenues in Rest of World for the three and nine months ended September 30, 2020, compared with the 2019 periods, was primarily due to a reduction in case volumes in Asia.

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our Crawford Claims Solutions segment, which are included in total Company revenues, were $4.9 million and $5.6 million for the three months ended September 30, 2020 and 2019, respectively. Reimbursements were $13.7 million and $15.4 million for the nine months ended September 30, 2020 and 2019, respectively. The decrease in reimbursed expenses was consistent with the change in revenues in the 2020 periods compared to 2019, excluding the impact of revenues where we are providing staff augmentation which do not involve reimbursed expenses.

Case Volume Analysis

Crawford Claims Solutions segment unit volumes by geographic region, measured by cases received, for the three and nine months ended September 30, 2020 and 2019 were as follows:

|  | Three Months Ended |  |  | Nine Months Ended |
(whole numbers, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |
U.S. |  |  | 100,770 |  |  |  | 72,463 |  |  |  | 39.1 | % |  |  | 234,657 |  |  |  | 218,124 |  |  |  | 7.6 | %
U.K. |  |  | 15,015 |  |  |  | 13,312 |  |  |  | 12.8 | % |  |  | 42,701 |  |  |  | 40,589 |  |  |  | 5.2 | %
Australia |  |  | 9,548 |  |  |  | 7,887 |  |  |  | 21.1 | % |  |  | 34,406 |  |  |  | 29,721 |  |  |  | 15.8 | %
Europe |  |  | 7,523 |  |  |  | 10,067 |  |  |  | (25.3 | )% |  |  | 24,542 |  |  |  | 27,326 |  |  |  | (10.2 | )%
Canada |  |  | 5,805 |  |  |  | 8,911 |  |  |  | (34.9 | )% |  |  | 16,332 |  |  |  | 29,302 |  |  |  | (44.3 | )%
Rest of World |  |  | 2,720 |  |  |  | 4,656 |  |  |  | (41.6 | )% |  |  | 9,362 |  |  |  | 13,210 |  |  |  | (29.1 | )%
Total Crawford Claims Solutions Cases Received |  |  | 141,381 |  |  |  | 117,296 |  |  |  | 20.5 | % |  |  | 362,000 |  |  |  | 358,272 |  |  |  | 1.0 | %

39

Overall, there w ere in crease s in cases received of 20.5% and 1.0% for the three and nine months ended September 30, 2020, respectively, compared to the 2019 period s. 11.2% of this third quarter increase and 2.7% of the year-to-date increase was due to an increase of 13,194 high-frequency, low-severity cases received in our WeGoLook service line in the third quarter. Excluding these WeGoLook cases, there was an increase in segment unit volume of 10,891, or 9.3% of the increase in Crawford Claims Solutions cases received in the third quarter and a decrease of 1.7% for the year-to-date period. The in crease in U.S. case volumes w as due to an increase in weather related activity due to the hurricanes in the third quarter. A portion of the increase in revenues in the U.S. is the result of new client growth, however the revenues gene rated for these clients consist of us providing dedicated employees which is not measured by cases, and accordingly there is no increase in cases received to match the increase in revenues. The U.K. case volumes were higher in the 2020 periods due to a n in crease in weather related activity and expanding new services. The decrease in Canada was due to the impact of COVID-19, a reduction in weather related activity, and a change in the mix of services provided. There w ere increase s in cases in Australia due to an increase in weather related activity in the current year. There w ere de crease s in cases received in Europe in 2020 due to a change in the mix of services provided. There w ere decrease s in cases received in Rest of World due to a decline in high-frequency, low-complexity property cases in Asia.

As a result of the economic contraction from the COVID-19 pandemic, cases received in future quarters could be materially negatively impacted, unless offset by the impact of cases received from new client programs or weather related activity.

Direct Compensation, Fringe Benefits & Non-Employee Labor

The most significant expense in our Crawford Claims Solutions segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. As a percentage of revenues before reimbursements, direct compensation, fringe benefits, and non-employee labor expenses were 66.8% for the three months ended September 30, 2020 compared to 66.1% for the 2019 period. For the nine months ended September 30, 2020, direct compensation, fringe benefits, and non-employee labor expenses were 66.5%, compared with 66.1% in 2019. The total dollar amount of these expenses increased to $65.7 million for the three months ended September 30, 2020 from $57.0 million for the comparable 2019 period, and were $171.1 million for the nine months ended September 30, 2020 compared to $169.0 million in 2019. These increases were due to an increase in costs for the new client growth and to provide staff to handle the hurricane related revenues in the third quarter. There was a benefit of $1.4 million and $2.3 million in the three months and nine months ended September 30, 2020, respectively, as a result of the Canada Emergency Wage Subsidy. There was an average of 2,806 full-time equivalent employees in this segment in the nine months ended September 30, 2020 compared with an average of 2,908 in the 2019 period.

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor

Crawford Claims Solutions expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $25.5 million for the three months ended September 30, 2020 compared with $26.6 million for the 2019 period. As a percentage of revenues before reimbursements, expenses other than direct compensation, fringe benefits, and non-employee labor expenses were 25.9% for the three months ended September 30, 2020 compared with 30.8% for the 2019 period. These decreases were due to cost reduction initiatives in 2020 that resulted in lower travel and entertainment expenses and lower allowance for doubtful accounts expense. For the nine months ended September 30, 2020, expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $80.0 million, compared with $82.6 million for the 2019 period. As a percentage of revenues before reimbursements, expenses other than direct compensation, fringe benefits, and non-employee labor expenses were 31.1% for the nine months ended September 30, 2020 compared with 32.3% for the 2019 period. The decrease in overall expense was due to cost reduction initiatives and lower administrative support expenses in 2020.

CRAWFORD TPA SOLUTIONS SEGMENT

Our Crawford TPA Solutions segment, which operates under the Broadspire brand globally, reported operating earnings of $4.4 million, or 5.1% of revenues before reimbursements, for the three months ended September 30, 2020 as compared to $9.3 million, or 9.4% of revenues before reimbursements, for the third quarter of 2019. For the nine months ended September 30, 2020, operating earnings in our Crawford TPA Solutions segment decreased to $13.9 million, or 5.1% of revenues before reimbursements, compared with 2019 operating earnings of $21.1 million, or 7.1% of revenues before reimbursements. This decrease was due to lower revenues resulting from the economic impact of COVID-19 in the U.S. and Canada, partly offset by lower administrative costs. There was a benefit of $0.4 million and $1.1 million in the three months and nine months ended September 30, 2020, respectively, as a result of the Canada Emergency Wage Subsidy.

Excluding centralized indirect support costs, third quarter gross profit decreased from $26.7 million, or 26.8% of revenues before reimbursements, in 2019 to $20.3 million, or 23.2% of revenues before reimbursements, in 2020. For the nine month periods, gross profit decreased from $75.9 million, or 25.6% of revenues before reimbursements in 2019, to $63.3 million, or 23.4%, due primarily to the revenue decline.

40

Revenues before Reimbursements

Crawford TPA Solutions revenues are derived from the global casualty and disability insurance and self-insured markets in the U.S., U.K., Canada and Europe and Rest of World. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three and nine months ended September 30, 2020 and 2019 were as follows:

|  | Three Months Ended |
|  | Based on actual exchange rates |  |  | Based on exchange rates for the three months ended September 30, 2019 |
(in thousands, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | Variance |
U.S. |  | $ | 70,726 |  |  | $ | 80,376 |  |  |  | (12.0 | )% |  | $ | 70,726 |  |  |  | (12.0 | )%
Europe and Rest of World |  |  | 7,547 |  |  |  | 8,179 |  |  |  | (7.7 | )% |  |  | 7,772 |  |  |  | (5.0 | )%
Canada |  |  | 6,415 |  |  |  | 8,210 |  |  |  | (21.9 | )% |  |  | 6,478 |  |  |  | (21.1 | )%
U.K. |  |  | 2,522 |  |  |  | 2,730 |  |  |  | (7.6 | )% |  |  | 2,552 |  |  |  | (6.5 | )%
Total Crawford TPA Solutions Revenues before Reimbursements |  | $ | 87,210 |  |  | $ | 99,495 |  |  |  | (12.3 | )% |  | $ | 87,528 |  |  |  | (12.0 | )%

|  | Nine Months Ended |
|  | Based on actual exchange rates |  |  | Based on exchange rates for the nine months ended September 30, 2019 |
(in thousands, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | Variance |
U.S. |  | $ | 217,992 |  |  | $ | 237,391 |  |  |  | (8.2 | )% |  | $ | 217,992 |  |  |  | (8.2 | )%
Europe and Rest of World |  |  | 24,804 |  |  |  | 25,707 |  |  |  | (3.5 | )% |  |  | 25,928 |  |  |  | 0.9 | %
Canada |  |  | 19,924 |  |  |  | 25,466 |  |  |  | (21.8 | )% |  |  | 20,253 |  |  |  | (20.5 | )%
U.K. |  |  | 8,150 |  |  |  | 8,243 |  |  |  | (1.1 | )% |  |  | 8,236 |  |  |  | (0.1 | )%
Total Crawford TPA Solutions Revenues before Reimbursements |  | $ | 270,870 |  |  | $ | 296,807 |  |  |  | (8.7 | )% |  | $ | 272,409 |  |  |  | (8.2 | )%

Revenues before reimbursements from our Crawford TPA Solutions segment totaled $87.2 million in the three months ended September 30, 2020 compared with $99.5 million in the 2019 period. This decrease was primarily due to a decrease in the U.S. and Canada due to the impact of COVID-19 and a decline in Medical Management revenues. Changes in foreign exchange rates resulted in a decrease of our Crawford TPA Solutions segment revenues by approximately 0.3%, or $0.3 million, as compared with the 2019 period. Revenues were negatively impacted by a decrease in unit volumes, measured principally by cases received, of 9.3% for the three months ended September 30, 2020 compared with the same period of 2019. Changes in product mix and in the rates charged for those services accounted for a 2.7% revenue decrease for the 2020 third quarter compared with the 2019 period.

For the nine months ended September 30, 2020, revenues before reimbursements from our Crawford TPA Solutions segment totaled $270.9 million, compared with $296.8 million in the comparable 2019 period. This decrease was primarily due to a decrease in case volumes in the U.S. and Canada due to the impact of COVID-19. Changes in foreign exchange rates resulted in a decrease of our Crawford TPA Solutions segment revenues by approximately 0.5%, or $1.5 million, for the nine months ended September 30, 2020 as compared with the 2019 period. Absent foreign exchange rate fluctuations, Crawford TPA Solutions segment revenues would have been $272.4 million for the nine months ended September 30, 2020. There was a decrease in segment unit volume, measured principally by cases received, of 5.0% for the nine months ended September 30, 2020, compared with the 2019 period. Changes in product mix and in the rates charged for those services accounted for a 3.2% revenue decrease for the nine months ended September 30, 2020 compared with the same period in 2019.

The decrease in revenues in the U.S. for the three and nine months ended September 30, 2020 was due to a decrease in case volumes as a result of COVID-19 economic conditions and a reduction of Medical Management utilization. Based on constant foreign exchange rates, there was a decrease in revenues in the U.K. due to client case volume decreases and a change in the mix of services provided. Revenues in Canada decreased in the current year due to a decrease in case volumes as a result of COVID-19 economic conditions. Revenues decreased in Europe and Rest of World in the third quarter due to a change in the mix of services provided, although there was an increase in the year-to-date period.

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our Crawford TPA Solutions segment were $1.7 million for the three months ended September 30, 2020, compared with $3.1 million in the comparable 2019 period. Reimbursements were $5.4 million and $8.7 million for the nine months ended September 30, 2020 and 2019, respectively. The reduction in reimbursed expenses were due to the lower revenues in the 2020 periods.

41

Case Volume Analysis

Crawford TPA Solutions unit volumes by geographic region, as measured by cases received, for the three and nine months ended September 30, 2020 and 2019 were as follows:

|  | Three Months Ended |  |  | Nine Months Ended |
(whole numbers, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |
U.S. |  |  | 130,272 |  |  |  | 130,718 |  |  |  | (0.3 | )% |  |  | 358,169 |  |  |  | 369,751 |  |  |  | (3.1 | )%
Europe and Rest of World |  |  | 43,029 |  |  |  | 54,082 |  |  |  | (20.4 | )% |  |  | 144,692 |  |  |  | 156,535 |  |  |  | (7.6 | )%
Canada |  |  | 11,243 |  |  |  | 17,817 |  |  |  | (36.9 | )% |  |  | 47,397 |  |  |  | 56,975 |  |  |  | (16.8 | )%
U.K. |  |  | 8,690 |  |  |  | 10,411 |  |  |  | (16.5 | )% |  |  | 30,996 |  |  |  | 28,474 |  |  |  | 8.9 | %
Total Crawford TPA Solutions Cases Received |  |  | 193,234 |  |  |  | 213,028 |  |  |  | (9.3 | )% |  |  | 581,254 |  |  |  | 611,735 |  |  |  | (5.0 | )%

Overall case volumes were 9.3% lower for the three months ended September 30, 2020, compared with 2019, due to decreases in Canada and Europe. The decrease in the U.S. was primarily driven by COVID-19 economic conditions. The decreases in Canada and the U.K. were also due to COVID-19 economic conditions. The decrease in cases received in Europe and Rest of World was due to a decrease in high-frequency, low-complexity cases received in Germany.

Overall case volumes were 5.0% lower for the nine months ended September 30, 2020 due to decreases in the U.S., Canada and Europe. The decrease in the U.S. was primarily driven by COVID-19 economic conditions that affected Claims Management, Medical Management, and Accident & Health case volumes. There was an increase in 2020 in the U.K. due to an increase in high-frequency, low-severity cases from new clients. Canada case volumes were negatively impacted by COVID-19. The decrease in cases received in Europe and Rest of World was due to a decrease in high-frequency, low-complexity cases received in Germany.

Crawford TPA Solutions unit volumes, particularly in the U.S., are sensitive to overall employment levels and workplace reported injuries. As a result of the increased level of unemployment in the U.S. due to the economic contraction from the COVID-19 pandemic, as well as economic contraction globally which could impact other geographic regions, future case referrals could be materially negatively impacted unless offset by new client programs.

Direct Compensation, Fringe Benefits & Non-Employee Labor

The most significant expense in our Crawford TPA Solutions segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. For the three months ended September 30, 2020, direct compensation, fringe benefits, and non-employee labor, as a percent of the related revenues before reimbursements, increased from 58.9% in 2019 to 61.5% in 2020. For the nine months ended September 30, 2020, direct compensation, fringe benefits, and non-employee labor expenses were 61.4%, compared with 59.9% in 2019. The total dollar amount of these expenses decreased to $53.6 million for the three months ended September 30, 2020 from $58.6 million for the comparable 2019 period, and were $166.2 million for the nine months ended September 30, 2020 compared to $177.9 million in 2019. This reduction was due to a decrease in average full-time equivalent employees and a reduction in incentive compensation. The increase in expense as a percent of revenues before reimbursements is because the decrease in expenses did not offset the decrease in revenues. There was a benefit of $0.4 million and $1.1 million in the three months and nine months ended September 30, 2020, respectively, as a result of the Canada Emergency Wage Subsidy. Average full-time equivalent employees in this segment totaled 3,085 in the first nine months ended September 30, 2020, down from 3,176 in the comparable 2019 period, decreasing as a result of the cost reduction initiatives in light of the decrease in revenues.

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor

Crawford TPA Solutions segment expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor as a percent of revenues before reimbursements were 33.5% for the three months ended September 30, 2020, compared with 31.7% in the comparable 2019 period. The amount of these expenses decreased from $31.6 million for the three months ended September 30, 2019 to $29.2 million in 2020. The decrease in expenses as a percent of revenues in the third quarter was due to lower revenues and expense controls implemented in 2020. For the nine months ended September 30, 2020, compared with 2019, expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $90.8 million, or 33.5% of revenues before reimbursements, compared to $97.8 million, or 32.9% of revenues before reimbursements in 2019, due to the lower revenues and lower administrative support expenses.

42

CRAWFORD SPECIALTY SOLUTIONS SEGMENT

Our Crawford Specialty Solutions segment reported operating earnings of $17.4 million for the three months ended September 30, 2020, increasing over operating earnings of $13.3 million in the comparable 2019 period. The related segment operating margin increased from 19.3% for the three months ended September 30, 2019, to 25.7% in the comparable 2020 period. For the nine months ended September 30, 2020, operating earnings in our Crawford Specialty Solutions segment increased slightly to $38.3 million, or 19.5% of revenues before reimbursements, compared with 2019 operating earnings of $38.1 million, or 18.5% of revenues before reimbursements. This increase was primarily due to an increase in revenues in our Contractor Connection service line and cost reduction initiatives. There was a benefit of $1.0 million and $1.7 million in the three months and nine months ended September 30, 2020, respectively, as a result of the Canada Emergency Wage Subsidy.

Excluding indirect support costs, gross profit in the third quarter increased from $24.8 million, or 36.0% of revenues before reimbursements in 2019 to $28.2 million, or 41.8% of revenues before reimbursements, in 2020. For the nine month period, gross profit decreased slightly from $72.5 million, or 35.1% of revenues before reimbursements in 2019, to $72.3 million, or 36.8%, due to the lower revenues, although there was an improvement in gross margin as a result of cost reduction initiatives in 2020.

Revenues before Reimbursements

Crawford Specialty Solutions segment revenues are primarily derived from the global property and casualty insurance company markets in the U.S., U.K., Canada, Australia, Europe and Rest of World. Revenues before reimbursements by major region, based on actual exchange rates, using a constant exchange rate for the three and nine months ended September 30, 2020 and 2019 were as follows:

|  | Three Months Ended |
|  | Based on actual exchange rates |  |  | Based on exchange rates for the three months ended September 30, 2019 |
(in thousands, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | Variance |
U.S. |  | $ | 30,285 |  |  | $ | 29,819 |  |  |  | 1.6 | % |  | $ | 30,285 |  |  |  | 1.6 | %
U.K. |  |  | 12,144 |  |  |  | 12,991 |  |  |  | (6.5 | )% |  |  | 12,425 |  |  |  | (4.4 | )%
Canada |  |  | 7,580 |  |  |  | 8,132 |  |  |  | (6.8 | )% |  |  | 7,648 |  |  |  | (6.0 | )%
Rest of World |  |  | 6,315 |  |  |  | 6,690 |  |  |  | (5.6 | )% |  |  | 6,633 |  |  |  | (0.9 | )%
Australia |  |  | 6,122 |  |  |  | 6,157 |  |  |  | (0.6 | )% |  |  | 6,269 |  |  |  | 1.8 | %
Europe |  |  | 5,099 |  |  |  | 5,143 |  |  |  | (0.9 | )% |  |  | 5,228 |  |  |  | 1.7 | %
Total Crawford Specialty Solutions Revenues before Reimbursements |  | $ | 67,545 |  |  | $ | 68,932 |  |  |  | (2.0 | )% |  | $ | 68,488 |  |  |  | (0.6 | )%

|  | Nine Months Ended |
|  | Based on actual exchange rates |  |  | Based on exchange rates for the nine months ended September 30, 2019 |
(in thousands, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | Variance |
U.S. |  | $ | 83,582 |  |  | $ | 91,158 |  |  |  | (8.3 | )% |  | $ | 83,582 |  |  |  | (8.3 | )%
U.K. |  |  | 39,819 |  |  |  | 38,399 |  |  |  | 3.7 | % |  |  | 40,574 |  |  |  | 5.7 | %
Canada |  |  | 22,033 |  |  |  | 25,295 |  |  |  | (12.9 | )% |  |  | 22,405 |  |  |  | (11.4 | )%
Rest of World |  |  | 18,952 |  |  |  | 19,100 |  |  |  | (0.8 | )% |  |  | 19,674 |  |  |  | 3.0 | %
Australia |  |  | 17,030 |  |  |  | 17,489 |  |  |  | (2.6 | )% |  |  | 18,109 |  |  |  | 3.5 | %
Europe |  |  | 15,378 |  |  |  | 14,796 |  |  |  | 3.9 | % |  |  | 15,847 |  |  |  | 7.1 | %
Total Crawford Specialty Solutions Revenues before Reimbursements |  | $ | 196,794 |  |  | $ | 206,237 |  |  |  | (4.6 | )% |  | $ | 200,191 |  |  |  | (2.9 | )%

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Revenues before reimbursements from our Crawford Specialty Solutions segment totaled $67.5 million in the three months ended September 30, 2020, compared with $68.9 million in the 2019 period. This decrease was primarily due to the sale of Lloyd Warwick International (“LWI”) in our Global Technical Services service line, which resulted in a $2.0 million, or 2.9% net reduction in Crawford Specialty Solutions revenues in the third quarter. Changes in foreign exchange rates resulted in a decrease of our Crawford Specialty Solutions segment revenues by approximately 1.4%, or $0.9 million, for the three months ended September 30, 2020, as compared with 2019. Absent foreign exchange rate fluctuations, Crawford Specialty Solutions segment revenues would have been $68.5 million for the three months ended September 30, 2020. Overall case volumes were 1.1% higher for the three months ended September 30, 2020, compared with the same period of 2019. Changes in product mix and in the rates charged for those services accounted for a 1.2% revenue in crease for the three months ended September 30, 2020 compared with the same period in 2019.

For the nine months ended September 30, 2020, revenues before reimbursements from our Crawford Specialty Solutions segment totaled $196.8 million, compared with $206.2 million in the 2019 period. This decrease was primarily due to a decrease in case volumes due to the impact of COVID-19, partially offset by an increase in weather-related cases in the third quarter. Changes in foreign exchange rates resulted in a decrease of our Crawford Specialty Solutions segment revenues by approximately 1.7%, or $3.4 million, for the nine months ended September 30, 2020 as compared with the 2019 period. Absent foreign exchange rate fluctuations, Crawford Specialty Solutions segment revenues would have been $200.2 million for the nine months ended September 30, 2020. There was a decrease in segment unit volume, measured principally by cases received, of 9.4% for the nine months ended September 30, 2020, compared with the 2019 period. The reduction of LWI revenues resulted in a 1.0% decrease in segment revenues for the year-to-date period. Changes in product mix and in the rates charged for those services accounted for a 7.5% revenue increase for the nine months ended September 30, 2020 compared with the same period in 2019, due primarily to a reduction in Contractor Connection cases in the year-to-date period.

The increase in revenues in the U.S. for the three months ended September 30, 2020 was due to an increase in our Contractor Connection service line, although there was a reduction for the three and nine months ended September 30, 2020 due to the impact of COVID-19 compared with the 2019 periods. On a constant currency basis, there was a revenue decrease in the U.K. in the third quarter, although for the nine months ended September 30, 2020 due to an increase in our Contractor Connection service line. Revenues in Canada decreased in the 2020 periods compared with 2019 due to a decrease in case volumes as a result of COVID-19. There was an increase in revenues in Australia due to an increase in weather related cases. There was a revenue increase in Europe due to increased revenues in our Global Technical Services service line. The increase in revenues in Rest of World for the year-to-date period was primarily due to an increase in weather related activity in Asia.

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our Crawford Specialty Solutions segment were $1.9 million for the three months ended September 30, 2020 compared with $2.5 million in the comparable 2019 period. Reimbursements were $6.4 million and $7.3 million for the nine months ended September 30, 2020 and 2019, respectively, consistent with the revenues between periods.

Case Volume Analysis

Crawford Specialty Solutions unit volumes by geographic region, as measured by cases received, for the three and nine months ended September 30, 2020 and 2019 were as follows:

|  | Three Months Ended |  |  | Nine Months Ended |
(whole numbers, except percentages) |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |  |  | September 30, 2020 |  |  | September 30, 2019 |  |  | Variance |
U.S. |  |  | 54,555 |  |  |  | 53,420 |  |  |  | 2.1 | % |  |  | 147,938 |  |  |  | 162,737 |  |  |  | (9.1 | )%
Canada |  |  | 15,249 |  |  |  | 16,418 |  |  |  | (7.1 | )% |  |  | 41,704 |  |  |  | 52,528 |  |  |  | (20.6 | )%
Rest of World |  |  | 5,253 |  |  |  | 5,584 |  |  |  | (5.9 | )% |  |  | 15,459 |  |  |  | 15,694 |  |  |  | (1.5 | )%
U.K. |  |  | 3,367 |  |  |  | 3,613 |  |  |  | (6.8 | )% |  |  | 10,233 |  |  |  | 9,889 |  |  |  | 3.5 | %
Europe |  |  | 3,070 |  |  |  | 2,033 |  |  |  | 51.0 | % |  |  | 8,719 |  |  |  | 7,225 |  |  |  | 20.7 | %
Australia |  |  | 1,776 |  |  |  | 1,262 |  |  |  | 40.7 | % |  |  | 4,604 |  |  |  | 4,294 |  |  |  | 7.2 | %
Total Crawford Specialty Solutions Cases Received |  |  | 83,270 |  |  |  | 82,330 |  |  |  | 1.1 | % |  |  | 228,657 |  |  |  | 252,367 |  |  |  | (9.4 | )%

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Overall case volumes were 1.1% higher in the three and nine months ended September 30, 2020 service line, but 9.4% lower in the nine month period co mpared with 2019 due to the economic impact of COVID-19. The in crease in U.S. case volumes in the three months ended September 30, 2020 was primarily due to a n in crease in our Contractor Connection service line, although there was a decrease in the year-to-date period compared to the 2019 period due to the impact of COVID-19. The U.K. case volumes were lower in the third quarter due to the impact of COVID-19, although higher in the nine months ended September 30, 2020 d ue to an increase in assignments to the Contractor Connection service line. There was a decrease in cases received in Canada due to the COVID-19 impact in the current year. The in crease in Australia cases was due to a n increase in high-frequency, low-complexity property cases. The in crease in cases in Europe was primarily due to a n in crease in Global Technical Services. Cases received in Rest of World was lower in the third quarter and nine months ended September 30, 2020 due to a n increase in weather related cases in Asia nine months ended September 30, 2020.

As a result of the economic contraction from the COVID-19 pandemic, cases received in future quarters could be materially negatively impacted, unless offset by the impact of cases received from new client programs or weather related activity.

Direct Compensation, Fringe Benefits & Non-Employee Labor

Crawford Specialty Solutions direct compensation, fringe benefits, and non-employee labor expenses as a percent of revenues before reimbursements were 48.7% in the 2020 third quarter compared to 52.2% in the 2019 third quarter. The dollar amount of these expenses was $32.9 million for the 2020 third quarter and $36.0 million for the comparable 2019 period. For the nine months ended September 30, 2020, direct compensation, fringe benefits, and non-employee labor in our Crawford Specialty Solutions segment decreased to $102.7 million, or 52.2% of revenues before reimbursements, compared with $106.0 million, or 51.4% of revenues before reimbursements in 2019. The decrease in costs was due to the lower revenues in the year-to-date period. The decrease in the percentage of revenues before reimbursements in the third quarter was due to the revenue increase. The increase in the year-to-date period was due to increased compensation expense in 2020 to support client growth. There was a benefit of $1.0 million and $1.7 million in the three months and nine months ended September 30, 2020, respectively, as a result of the Canada Emergency Wage Subsidy. There was an average of 1,406 full-time equivalent employees in Crawford Specialty Solutions in the 2020 nine month period, compared with an average of 1,488 for the comparable 2019 nine month period.

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor

Expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were 25.5% of Crawford Specialty Solutions revenues before reimbursements for the three months ended September 30, 2020 compared with 28.5% for the comparable period in 2019. The dollar amount of these expenses decreased to $17.2 million in the 2020 third quarter as compared with $19.6 million in the 2019 period. For the nine months ended September 30, 2020, expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor in our Crawford Specialty Solutions segment decreased to $55.8 million, or 28.3% of revenues before reimbursements, compared with $62.1 million, or 30.1% of revenues before reimbursements in 2019. The decrease in both the expense and the expense as a percent of revenues before reimbursements in 2020 is due to a decrease in the allowance for doubtful accounts, a reduction of travel and entertainment expense, and other administrative support costs.

EXPENSES AND CREDITS EXCLUDED FROM SEGMENT OPERATING EARNINGS

Income Taxes

Our consolidated effective income tax rate may change periodically due to changes in enacted tax rates, fluctuations in the mix of income earned from our various domestic and international operations, which are subject to income taxes at different rates, our ability to utilize net operating loss and tax credit carryforwards, and amounts related to uncertain income tax positions. After considering goodwill and intangible asset impairments and the impact of expected operating losses in certain international operations, we estimate that our effective income tax rate for 2020 will be approximately 33% to 35% after considering known discrete items as of September 30, 2020.

The provision for income taxes on consolidated income before income tax totaled $11.7 million and $5.3 million for the three months ended September 30, 2020 and 2019, respectively. The provision for income taxes on consolidated income before income taxes totaled $9.6 million and $11.1 million for the nine months ended September 30, 2020 and 2019. The overall effective tax rate decreased to 35.1% for the nine months ended September 30, 2020 compared with 36.8% for the 2019 period primarily due to the impact of goodwill impairment and LWI disposition in 2020 and an arbitration settlement in 2019.

Net Corporate Interest Expense

Net corporate interest expense consists of interest expense that we incur on our short- and long-term borrowings, partially offset by any interest income we earn on available cash balances and short-term investments. These amounts vary based on interest rates, borrowings outstanding and the amounts of invested cash. Corporate interest expense totaled $1.7 million and $3.2 million for the three months ended September 30, 2020 and 2019, respectively. There was $0.1 million interest income during the three months ended September 30, 2020, while no interest income was recorded for the nine months ended September 30, 2019. Corporate interest expense totaled $6.4 million and $8.9 million for the nine months ended September 30, 2020 and 2019, respectively. Interest income totaled $0.1 million and $0.5 million for the nine months ended September 30, 2020 and 2019, respectively.

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Stock Option Expense

Stock option expense, a component of stock-based compensation, is comprised of non-cash expenses related to stock options granted under our various stock option and employee stock purchase plans. Stock option expense is not allocated to our operating segments. Stock option expense totaled $0.5 million and $0.5 million for the three months ended September 30, 2020 and 2019, respectively. Stock option expense totaled $1.0 million and $1.3 million for the nine months ended September 30, 2020 and 2019, respectively.

Amortization of Customer-Relationship Intangible Assets

Amortization of customer-relationship intangible assets represents the non-cash amortization expense for finite-lived customer-relationship and trade name intangible assets. Amortization expense associated with these intangible assets totaled $3.7 million and $2.8 million for the three months ended September 30, 2020 and 2019, respectively. Amortization expense associated with these intangible assets totaled $9.2 million and $8.4 million for the nine months ended September 30, 2020 and 2019, respectively. This amortization expense is included in "Selling, general, and administrative expenses" in our unaudited Condensed Consolidated Statements of Operations.

Unallocated Corporate and Shared Costs, Net

Certain unallocated corporate and shared costs are excluded from the determination of segment operating earnings. For the three and nine months ended September 30, 2020 and 2019, unallocated corporate and shared costs and credits represented costs of our frozen U.S. defined benefit pension plan, expenses for our chief executive officer and our Board of Directors, certain adjustments to our self-insured liabilities, certain unallocated legal costs and professional fees, and certain adjustments and recoveries to our allowances for doubtful accounts receivable.

Unallocated corporate and shared costs were $1.0 million and $1.6 million for the three months ended September 30, 2020 and 2019, respectively. The decrease for the third quarter was due to a decrease in self-insurance expenses and $1.9 million credit from the Canada Emergency Wage Subsidy, partially offset by an increase in incentive compensation. For the nine months ended September 30, 2020 and 2019, unallocated corporate and shared costs were $5.2 million and $2.4 million, respectively. The increase for the nine months ended September 30, 2020 was due to CEO transition costs, severance costs, and an increase in self-insurance expenses, partially offset by $4.0 million credit from the Canada Emergency Wage Subsidy and a decrease in defined benefit pension expense.

Goodwill Impairment

We recognized a pretax non-cash goodwill impairment in the 2020 first quarter totaling $17.7 million related to our Crawford Claims Solutions reporting unit. This expense was partially offset by a $1.7 million credit in noncontrolling interest expense. There was no goodwill impairment in the 2019 nine month period. See Note 9, "Fair Value Measurements" of our accompanying consolidated financial statements for further discussion about goodwill impairment.

Restructuring Costs

We recognized pretax restructuring costs totaling $5.7 million in the 2020 first quarter, related primarily to severance and other termination costs in an effort to consolidate and streamline various functions of our workforce. The restructuring cost was comprised of $5.1 million severance expense and related payroll taxes, and $0.6 million asset impairment. See Note 12, "Restructuring Costs" of our accompanying consolidated financial statements for further discussion about restructuring costs.

Gain on Disposition of Businesses, net

During the three months ended September 30, 2020, we recognized a pretax gain on disposal totaling $14.1 million related to the disposal of the LWI business in our Crawford Specialty Solutions reporting unit, net of an additional loss on the disposal of Crawford Compliance originally recorded in the 2020 second quarter. For the nine months ended September 30, 2020, we recognized a net pretax gain on disposal of businesses totaling $13.8 million. See Note 13, “Business Acquisitions and Dispositions” of our accompanying consolidated financial statements for further discussion about these transactions.

Arbitration and Claim Settlements

During the three months and nine months ended September 30, 2019, we recognized $1.2 million and $12.6 million pretax expense, respectively, for an arbitration settlement related to additional payments awarded to former executives of our former Garden City Group related to their departure in 2015. There were no other potential claimants related to this matter.

LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL CONDITION

At September 30, 2020, our working capital balance (current assets less current liabilities) was approximately $91.9 million, an increase of $13.0 million from the working capital balance at December 31, 2019. Our cash and cash equivalents were $48.7 million at September 30, 2020, compared with $51.8 million at December 31, 2019.

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Cash and cash equivalents as of September 30, 2020 consisted of $28.4 million held in the U.S. and $20.3 million held in our foreign subsidiaries. All of the cash and cash equivalents held by o ur foreign subsidiaries is available for general corporate purposes. The Company generally does not provide for additional U.S. and foreign income taxes on undistributed earnings of foreign subsidiaries because they are considered to be indefinitely reinvested. The Company's current expectation is that such earnings will be reinvested by the subsidiaries or will be repatriated only when it would be tax effective or otherwise strategically beneficial to the Company such as if a very unusual event or project generated profits significantly in excess of ongoing business reinvestment needs. If such an event were to occur, we would analyze the potential tax impact and our anticipated investment needs in that region and provide for U.S. taxes for earnings that are not expected to be indefinitely reinvested. Other historical earnings and future foreign earnings necessary for business reinvestment are expected to remain indefinitely reinvested and will be used to provide working capital for these operations, fund defined benefit pension plan obligations, repay non-U.S. debt, fund capital improvements, and fund future acquisitions.

We currently believe that funds expected to be generated from our U.S. operations, along with potential borrowing capabilities in the U.S., will be sufficient to fund our U.S. operations and other obligations, including our funding obligations under our U.S. defined benefit pension plan, for the foreseeable future and, therefore, except in limited circumstances such as those described above, we do not foresee a need to repatriate cash held by our foreign subsidiaries in a taxable transaction to fund our U.S. operations. However, if at a future date or time these funds are necessary for our operations in the U.S. or we otherwise believe it is in our best interests to repatriate all or a portion of such funds, we may be required to accrue and pay U.S. taxes to repatriate these funds. No assurances can be provided as to the amount or timing thereof, the tax consequences related thereto, or the ultimate impact any such action may have on our results of operations or financial condition.

No additional income or withholding taxes have been provided for any undistributed foreign earnings, nor have any taxes been provided for outside basis difference inherent in these entities as these amounts continue to be indefinitely reinvested in foreign operations. Additionally, due to withholding tax, basis computations, and other related tax considerations, it is not practicable to estimate any taxes to be provided on outside basis differences at this time.

Cash Provided by Operating Activities

Cash provided by operating activities was $57.3 million for the nine months ended September 30, 2020, compared with $42.3 million of cash provided in the comparable period of 2019. The increase in cash provided by operating activities was primarily due to deferred payroll tax filings in the U.S. and the Canada Emergency Wage Subsidy, partially offset by an increase in pension contributions in 2020, compared with the same period of 2019. We have deferred payroll tax filings of $8.1 million as allowed by the CARES Act, which will be paid in 2021 and 2022. We have received a cash inflow of $9.2 million related to the Canada Emergency Wage Subsidy in the 2020 period.

Cash Used in Investing Activities

Cash used in investing activities was $4.4 million for the nine months ended September 30, 2020, compared with $15.2 million used in the first nine months of 2019. The decrease in use for 2020 was due to proceeds of $19.4 million from the sale of LWI. This was partially offset by an increase in capital expenditures in the 2020 period due to an increase in capitalized software to support initiatives in our operating segments.

Cash Used in Financing Activities

Cash used in financing activities was $57.3 million for the nine months ended September 30, 2020, compared with $33.7 million used in financing activities for the 2019 period. We paid $7.0 million in dividends in the nine months ended September 30, 2020 compared to $9.9 million in the 2019 period. During the first nine months of 2020, we decreased net borrowing from our revolving credit facility by $47.6 million, compared with a net increase during the first nine months of 2019 of $0.5 million. Share repurchases totaled $2.7 million in the 2020 period, compared to $25.7 million for the first nine months of 2019.

Other Matters Concerning Liquidity and Capital Resources

As a component of our credit facility, we maintain a letter of credit facility to satisfy certain contractual obligations. Including $11.5 million of undrawn letters of credit issued under the letter of credit facility, the available balance under our credit facility totaled $311.0 million at September 30, 2020. Our short-term debt obligations typically peak during the first half of each year due to the annual payment of incentive compensation, contributions to retirement plans, working capital fluctuations, and certain other recurring payments, and generally decline during the balance of the year. However, certain events, such as the COVID-19 pandemic, could impact the level and timing of our short-term debt obligations in the future. The balance of short-term borrowings represents amounts under our credit facility that we expect, but are not required, to repay in the next twelve months. Long- and short-term borrowings outstanding, including current installments and finance leases, totaled $127.8 million as of September 30, 2020 compared with $177.0 million at December 31, 2019.

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Our liquidity is defined as cash on hand and borrowing capacity under our Amended and Restated Credit Agreement with Wells Fargo, as amended (the “Credit Agreement”) based on our trailing twelve month EBITDA, as defined in our Credit Agreement. At September 30, 2020, we had $48.7 million of cash on hand an d, based on trailing twelve month EBITDA, additional borrowing capacity of $201.1 million, res ulting in total liquidity of $2 49.8 million at September 30, 2020. In response to the COVID-19 pandemic, we have taken a number of steps to enhance our liquidity including reducing our planned capital expenditures, pausing our discretionary U.S. defined benefit pension plan contributions, suspending share repurchases under our 10b5-1 repurchase plan, and adjusting our employment levels through furloughs and reductions in force. We have not appl ied for governmental loans to support the Company’s operations but are continuing to evaluate the CARES Act and are taking advantage of certain aspects of the CARES Act such as the deferral of payroll tax deposits. In addition, there are numerous international legislative responses that we continue to evaluate, such as the Canadian Emergency Wage Subsidy program where we have received a benefit during 2020, among other enactments.

On September 18, 2020, we amended the Credit Agreement. Pursuant to the amendment, (a) we are permitted to make, in addition to the other investments permitted under the Credit Agreement prior to the amendment, investments of an unrestricted nature up to the aggregate outstanding amount not to exceed $5,000,000 at any time and (b) the terms of LIBOR replacement when that benchmark is no longer available have been modified.

Defined Benefit Pension Funding and Cost

We sponsor a qualified defined benefit pension plan in the U.S. (the "U.S. Qualified Plan"), three defined benefit plans in the U.K., and defined benefit pension plans in the Netherlands, Norway, Germany, and the Philippines. Effective December 31, 2002, we froze our U.S. Qualified Plan. Our frozen U.S. Qualified Plan and U.K. plans were underfunded by $63.5 million and overfunded by $35.0 million, respectively, at December 31, 2019, based on accumulated benefit obligations of $440.5 million and $262.0 million for the U.S. Qualified Plan and the U.K. plans, respectively.

For the nine months ended September 30, 2020, the Company made contributions of $3.0 million to its U.S. defined benefit pension plan and $0.5 million to its U.K. defined benefit pension plans, respectively. During the comparable period in 2019 no contributions were made to the U.S. defined benefit pension plan and $0.5 million was contributed to the U.K. defined benefit plans. The Company has made a $6.0 million additional contributions to its U.S. plan during the fourth quarter of 2020, but does not expect to make any additional contributions to its U.K. plans during the remainder of 2020. Anticipated funding for the other international plans is not significant.

Dividend Payments

Our Board of Directors makes dividend decisions from time to time based in part on an assessment of current and projected earnings and cash flows. During the nine months ended September 30, 2020, we paid $7.0 million in dividends. Our ability to pay future dividends could be impacted by many factors including the funding requirements of our defined benefit pension plans, repayments of outstanding borrowings, levels of cash expected to be generated by our operating activities, the impact of the COVID-19 pandemic on our business, and covenants and other restrictions contained in any credit facilities or other financing agreements. The covenants in our existing credit facility limit dividend payments to shareholders.

Financial Condition

Other significant changes on our unaudited Condensed Consolidated Balance Sheet as of September 30, 2020, compared with our unaudited Condensed Consolidated Balance Sheet as of December 31, 2019 were as follows:

| • | Unbilled revenues increased $9.2 million excluding foreign currency exchange impacts and the adoption of Topic 326. This increase was primarily due to the Crawford Claims Solutions segment, which had increases due to weather related activity in the U.S. in the third quarter.

| • | Accrued retirement costs decreased $6.1 million excluding foreign exchange impacts. The decrease is related to increased contributions to our pension plan and lower cost in the current year.

| • | Accounts payable and accrued liabilities increased $16.1 million excluding foreign exchange impacts. The increase is primarily due to the deferral of payroll tax deposits as part of the CARES Act as well as other increases in payroll accruals related to U.S. weather related activity.

At September 30, 2020, we were not a party to any off-balance sheet arrangements which we believe could materially impact our operations, financial condition, or cash flows.

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, we have certain material obligations under operating lease agreements to which we are a party. As discussed in Note 4, "Lease Commitments" of our accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q, the Company records operating lease-related assets and liabilities on our unaudited Condensed Consolidated Balance Sheets.

We also maintain funds in various trust accounts to administer claims for certain clients. These funds are not available for our general operating activities and, as such, have not been recorded in the accompanying unaudited Condensed Consolidated Balance Sheets. We have concluded that we do not have a material off-balance sheet risk related to these funds.

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APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Except as set forth below, there have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.

New Accounting Standards Adopted

Additional information related to adoption of accounting standards is provided in Notes 2 and 4 to the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.

Pending Adoption of New Accounting Standards

Additional information related to pending adoption of recently issued accounting standards is provided in Note 2 to the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a discussion of quantitative and qualitative disclosures about the Company's market risk, see Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," of our Annual Report on Form 10-K for the year ended December 31, 2019. Our exposures to market risk have increased since December 31, 2019 due to an anticipated decreased demand for our services as a result of global economic contraction resulting from the COVID-19 pandemic, and increased credit risk in our unbilled revenues and accounts receivable balances from certain customers who may be experiencing financial difficulty.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applies its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives. The Company's management, including the Chief Executive Officer and the Chief Financial Officer, does not expect that our disclosure controls and procedures can prevent all possible errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. There are inherent limitations in all control systems, including the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of one or more persons. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and, while our disclosure controls and procedures are designed to be effective under circumstances where they should reasonably be expected to operate effectively, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in any control system, misstatements due to possible errors or fraud may occur and not be detected.

As of the end of the period covered by this report, we performed an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). Based upon the foregoing, the Chief Executive Officer along with the Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at providing reasonable assurance that all information relating to the Company (including its consolidated subsidiaries) required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported in a timely manner.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1A. Risk Factors

In addition to the other information set forth in this report, the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019 could materially affect our business, financial condition, or results of operations. The risks described in this report and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or results of operations.

Our results of operations have been adversely affected and could in the future be materially adversely impacted by the COVID-19 coronavirus pandemic.

The global spread of the COVID-19 coronavirus has created significant volatility, uncertainty and economic disruption. The extent to which the COVID-19 pandemic impacts our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict, including:

| • | the duration and scope of the pandemic;

| • | governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic;

| • | the impact of the pandemic on economic activity and actions taken in response;

| • | the effect on our clients and client demand for our services and solutions;

| • | our ability to sell and provide our services and solutions, including as a result of travel restrictions and employees working from home;

| • | the ability of our clients to pay for our services and solutions;

| • | the impact on our third party vendors;

| • | any closures of our and our clients’ offices and facilities, and

| • | any restrictions on our ability to provide services at a claim site or the location of a claimant whether for purposes of evaluating the claim, managing the repair or delivering services.

The closure of offices or restrictions inhibiting our employees’ ability to travel or interact with claimants and access claim sites, has disrupted, and could in the future disrupt our ability to provide our services and solutions and result in, among other things, terminations of client contracts, delay in our ability to perform services, an altering of the mix of services requested by clients and claimants, and other losses of revenue. Clients may also slow down decision making, delay planned work or seek to terminate existing agreements. Any of these events could cause or contribute to the risks and uncertainties enumerated in the Annual Report and could materially adversely affect our business, financial condition, results of operations and/or stock price.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company's share repurchase authorization, approved on May 9, 2019 by the Company's Board of Directors, provided the Company with the ability to repurchase up to 2,000,000 shares of CRD-A or CRD-B (or a combination of the two) through December 31, 2020 (the "2019 Repurchase Authorization"). Under the 2019 Repurchase Authorization, repurchases may be made for cash, in the open market or privately negotiated transactions at such times and for such prices as management deems appropriate, subject to applicable contractual and regulatory restrictions. Since December 31, 2019, the Company has purchased 316,810 shares pursuant to the 2019 Repurchase Authorization. As of September 30, 2020, the Company was authorized to repurchase 642,097 shares under the 2019 Repurchase Authorization. The Company did not repurchase any shares of CRD-A or CRD-B during the three months ended September 30, 2020.

Period |  | Total Number of Shares Purchased |  |  | Average Price Paid Per Share |  |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  |  | Maximum Number of Shares That May be Purchased Under the Plans or Programs |
Balance as of June 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 642,097 |
July 1, 2020 - July 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CRD-A |  |  | — |  |  | $ | — |  |  |  | — |  |  |  |  |
CRD-B |  |  | — |  |  | $ | — |  |  |  | — |  |  |  |  |
Totals of July 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 642,097 |
August 1, 2020 - August 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CRD-A |  |  | — |  |  | $ | — |  |  |  | — |  |  |  |  |
CRD-B |  |  | — |  |  | $ | — |  |  |  | — |  |  |  |  |
Totals of August 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 642,097 |
September 1, 2020 - September 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CRD-A |  |  | — |  |  | $ | — |  |  |  | — |  |  |  |  |
CRD-B |  |  | — |  |  | $ | — |  |  |  | — |  |  |  |  |
Totals as of September 30, 2020 |  |  | — |  |  |  |  |  |  |  | — |  |  |  | 642,097 |

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Item 5. Other Information

On October 28th, the Company amended the employment agreement of Larry Thomas, Executive Vice President and Global President – Crawford Specialty Solutions and on October 29th, the Company amended the employment agreement of Bruce Swain, Executive Vice President - Chief Financial Officer. The amendments brought the Agreement terms in line with other executive agreements in the Company. The amended employment agreements are filed herewith as Exhibits 10.1 and 10.2 and incorporated herein by reference.

Item 6. Exhibits

Exhibit |  |
No. |  | Description
10.1 |  | Amended Employment Agreement between Larry Thomas and Crawford & Company, dated October 28, 2020
10.2 |  | Amended Employment Agreement between Bruce Swain and Crawford & Company, dated October 29, 2020
15 |  | Letter of Ernst & Young LLP
31.1 |  | Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 |  | Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 |  | Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 |  | Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS |  | XBRL Instance Document the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH |  | XBRL Taxonomy Extension Schema Document
101.CAL |  | XBRL Taxonomy Calculation Linkbase Document
101.DEF |  | XBRL Taxonomy Extension Definition Linkbase Document
101.LAB |  | XBRL Taxonomy Label Linkbase Document
101.PRE |  | XBRL Taxonomy Presentation Linkbase Document
104 |  | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document and included in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  |  | Crawford & Company |
|  |  | (Registrant) |
Date: | November 2, 2020 |  | /s/ Rohit Verma |
|  |  | Rohit Verma |
|  |  | Chief Executive Officer |
|  |  | (Principal Executive Officer) |
Date: | November 2, 2020 |  | /s/ W. Bruce Swain |
|  |  | W. Bruce Swain |
|  |  | Executive Vice President and Chief Financial Officer |
|  |  | (Principal Financial Officer) |

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