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Segment Information
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Segment Information

10. Segment Information

The Company has four reportable segments consisting of North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions. The Company's reportable segments are comprised of the following:

•
North America Loss Adjusting, which services the North American property and casualty market. This is comprised of Loss Adjusting operations in the U.S. and Canada, including Global Technical Services. The Canadian operations include all operations within that country including third party administration and Contractor Connection.
•
International Operations, which services the global property and casualty market outside North America. This is comprised of Loss Adjusting operations in the U.K., Europe, Australia, Asia and Latin America, and includes Crawford Legal Services. International Operations includes all operations within the respective countries, including Loss Adjusting, Global Technical Services, Legal Services, third party administration, and where applicable, Contractor Connection services.
•
Broadspire, which provides third party administration for workers' compensation, auto and liability, disability absence management, medical management, and accident and health to corporations, brokers and insurers in the U.S.
•
Platform Solutions, which consists of the Contractor Connection, Networks, and Subrogation service lines in the U.S. The Networks service line includes Catastrophe operations.

The Platform Solutions reportable segment represents the aggregation of certain service line operating segments. Intersegment sales are recorded at cost and are not material.

Effective January 1, 2024, the Company combined the operating segments within North America Loss Adjusting and International Operations, and accordingly, there are no operating segments within these reportable segments to aggregate.

The Company's four reportable segments represent components of the business for which separate financial information is available, and which is evaluated regularly by the chief operating decision maker ("CODM"). The Company’s CEO, Mr. Rohit Verma, is considered the CODM as he is responsible for strategic decisions including the allocation of resources to each reporting segment and the assessment of their performance. Specifically, he assesses the financial health of each segment, reviews budgeting and resource allocation, directs all strategic planning, reviews investments for new products and technology allocations, evaluates pricing strategies and cash flow management, and oversees risk management for each segment. Mr. Verma regularly meets with the segment managers to discuss financial performance, operational issues and revenue forecasts. Additionally, the segment managers create segment-level budgets and forecasts and receive incentive compensation derived from the operating results of the segments. These financial packages are discussed in the meetings with Mr. Verma.

Operating earnings is the primary financial performance measure used by the Company's senior management and the CODM to evaluate the financial performance of the Company's operating segments and make resource allocation 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. The CODM considers revenues before reimbursements and operating earnings when making decisions about the allocation of operating and capital resources. 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 acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, income taxes, and net income or loss attributable to 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 four reportable segments, prior period amounts presented in the current period financial statements are adjusted to conform to the current allocation process.

In the normal course of its business, the Company sometimes pays for certain out-of-pocket expenses that are thereafter reimbursed by its clients. Under GAAP, these out-of-pocket expenses and associated reimbursements are required to be included when reporting expenses and revenues, respectively, in the Company's consolidated results of operations. However, in evaluating segment results, Company management excludes these reimbursements and related expenses from segment results, as they offset each other.

Financial information as of and for the three months ended March 31, 2025 and 2024 related to the Company's reportable segments is presented below:

 

 

 

Three Months Ended March 31, 2025

 

 

 

North America
Loss Adjusting

 

International
Operations

 

Broadspire

 

Platform
Solutions

 

Total

 

 

 

(In thousands)

 

Revenues before reimbursements

 

$

79,740

 

$

104,394

 

$

96,384

 

$

31,514

 

$

312,032

 

Less:

 

 

 

 

 

 

 

 

 

 

 

Segment Expenses:

 

 

 

 

 

 

 

 

 

 

 

     Compensation

 

 

45,261

 

 

52,418

 

 

44,983

 

 

14,773

 

 

157,435

 

     Benefits and payroll taxes

 

 

9,310

 

 

9,719

 

 

9,101

 

 

2,578

 

 

30,708

 

     Non-employee labor

 

 

1,447

 

 

8,441

 

 

4,267

 

 

693

 

 

14,848

 

Total Compensation

 

 

56,018

 

 

70,578

 

 

58,351

 

 

18,044

 

 

202,991

 

     Office rent and occupancy

 

 

1,037

 

 

3,435

 

 

2,109

 

 

956

 

 

7,537

 

     Other office operating expense (1)

 

 

4,542

 

 

6,938

 

 

4,417

 

 

1,814

 

 

17,711

 

     Depreciation

 

 

1,015

 

 

966

 

 

1,443

 

 

1,673

 

 

5,097

 

     Professional fees

 

 

410

 

 

2,345

 

 

3,982

 

 

626

 

 

7,363

 

     Cost of risk

 

 

152

 

 

(431

)

 

1,302

 

 

112

 

 

1,135

 

     Other, net (2)

 

 

739

 

 

1,642

 

 

281

 

 

471

 

 

3,133

 

Total Other Operating Expense

 

 

7,895

 

 

14,895

 

 

13,534

 

 

5,652

 

 

41,976

 

Allocated corporate, shared services, and administrative costs (3)

 

 

10,351

 

 

15,465

 

 

12,296

 

 

4,891

 

 

43,003

 

Total Segment Expenses

 

 

74,264

 

 

100,938

 

 

84,181

 

 

28,587

 

 

287,970

 

Segment Operating Earnings

 

$

5,476

 

$

3,456

 

$

12,203

 

$

2,927

 

$

24,062

 

Reconciliation of segment operating earnings:

 

 

 

 

 

 

 

 

 

 

 

Unallocated corporate administrative costs (4)

 

 

 

 

 

 

 

 

 

 

(6,218

)

Net corporate interest expense

 

 

 

 

 

 

 

 

 

 

(3,944

)

Stock option expense

 

 

 

 

 

 

 

 

 

 

(184

)

Amortization of acquisition-related intangible assets

 

 

 

 

 

 

 

 

 

 

(1,800

)

Non-service pension costs

 

 

 

 

 

 

 

 

 

 

(2,333

)

Contingent earnout adjustments

 

 

 

 

 

 

 

 

 

 

(363

)

Income before income taxes

 

 

 

 

 

 

 

 

 

 

9,220

 

Income taxes

 

 

 

 

 

 

 

 

 

 

(2,480

)

Net Income

 

 

 

 

 

 

 

 

 

 

6,740

 

Net Income Attributable to Noncontrolling Interests

 

 

 

 

 

 

 

 

 

 

(56

)

Net Income Attributable to Shareholders of Crawford & Company

 

 

 

 

 

 

 

 

 

$

6,684

 

 

 

 

 

Three Months Ended March 31, 2024

 

 

North America
Loss Adjusting

International
Operations

Broadspire

Platform
Solutions

Total

 

 

(In thousands)

Revenues before reimbursements

 

$77,365

$98,092

$94,298

$31,899

$301,654

Less:

 

 

 

 

 

 

Segment Expenses:

 

 

 

 

 

 

     Compensation

 

45,083

50,085

43,958

15,324

154,450

     Benefits and payroll taxes

 

9,234

9,464

8,942

2,705

30,345

     Non-employee labor

 

1,150

5,430

4,357

901

11,838

Total Compensation

 

55,467

64,979

57,257

18,930

196,633

     Office rent and occupancy

 

1,255

3,735

2,289

976

8,255

     Other office operating expense (1)

 

3,667

7,037

4,075

1,701

16,480

     Depreciation

 

837

796

1,275

1,643

4,551

     Professional fees

 

331

2,712

4,109

498

7,650

     Cost of risk

 

486

811

708

226

2,231

     Other, net (2)

 

1,076

2,041

280

705

4,102

Total Other Operating Expense

 

7,652

17,132

12,736

5,749

43,269

Allocated corporate, shared services, and administrative costs (3)

 

9,767

14,291

11,501

6,105

41,664

Total Segment Expenses

 

72,886

96,402

81,494

30,784

281,566

Segment Operating Earnings

 

$4,479

$1,690

$12,804

$1,115

$20,088

Reconciliation of segment operating earnings:

 

 

 

 

 

 

Unallocated corporate administrative costs (4)

 

 

 

 

 

(8,007)

Net corporate interest expense

 

 

 

 

 

(3,596)

Stock option expense

 

 

 

 

 

(167)

Amortization of acquisition-related intangible assets

 

 

 

 

 

(1,868)

Non-service pension costs

 

 

 

 

 

(2,473)

Contingent earnout adjustments

 

 

 

 

 

(151)

Income before income taxes

 

 

 

 

 

3,826

Income taxes

 

 

 

 

 

(1,047)

Net Income

 

 

 

 

 

2,779

Net Loss Attributable to Noncontrolling Interests

 

 

 

 

 

58

Net Income Attributable to Shareholders of Crawford & Company

 

 

 

 

 

$2,837

 

 

(1)
Other office and operating expenses include travel and entertainment, automobile expenses, office operating expenses and data processing costs.
(2)
Other, net primarily includes bank service charges and advertising expenses.
(3)
Allocated corporate, shared services, and administrative costs, comprise of expenses for administrative functions, including direct compensation, payroll taxes, and benefits which are allocated to each segment based on usage.
(4)
Unallocated corporate and shared costs and credits represent expenses for the Company's Chief Executive Officer and Board of Directors, certain adjustments to self-insured liabilities, certain unallocated legal and professional fees, and certain adjustments and recoveries to the Company's allowances for estimated credit losses.

 

Segment assets consist of accounts receivable, less allowance for expected credit losses, unbilled revenues at estimated billable amounts, goodwill and intangible assets arising from business acquisitions, net. Assets at March 31, 2025 and December 31, 2024 were as follows:

 

 

 

North America Loss Adjusting

 

International Operations

 

Broadspire

 

Platform
Solutions

 

Total

 

 

(In thousands)

March 31, 2025

 

 

 

 

 

 

 

 

 

 

Assets

 

$119,451

 

$151,381

 

$71,331

 

$76,970

 

$419,133

December 31, 2024

 

 

 

 

 

 

 

 

 

 

Assets

 

106,657

 

149,441

 

73,114

 

94,845

 

424,057

 

 

Revenues by geographic region and major service line for the North America Loss Adjusting, International Operations, Broadspire and Platform Solutions segments are shown in Note 2, "Revenue Recognition."

 

Capital expenditures for the three months ended March 31, 2025 and 2024 are shown in the following table:

 

Three Months Ended March 31,

 

2025

 

2024

 

 

(In thousands)

North America Loss Adjusting

 

$2,142

 

$1,197

International Operations

 

156

 

55

Broadspire

 

3,452

 

3,494

Platform Solutions

 

926

 

1,120

Corporate

 

2,647

 

3,684

Total capital expenditures

 

$9,323

 

$9,550

 

The total of the Company's reportable segments' revenues before reimbursements reconciled to total consolidated revenues for the three months ended March 31, 2025 and 2024 was as follows:

 

Three Months Ended March 31,

 

2025

 

2024

 

 

(In thousands)

Segments' revenues before reimbursements

 

$312,032

 

$301,654

Reimbursements

 

11,307

 

11,419

Total consolidated revenues

 

$323,339

 

$313,073

 

The Company's reportable segments' total operating earnings reconciled to consolidated income before income taxes for the three months ended March 31, 2025 and 2024 were as follows:

 

Three Months Ended March 31,

 

2025

 

2024

 

 

(In thousands)

Operating earnings of all reportable segments

 

$24,062

 

$20,088

Unallocated corporate and shared costs and credits

 

(6,218)

 

(8,007)

Net corporate interest expense

 

(3,944)

 

(3,596)

Stock option expense

 

(184)

 

(167)

Amortization of acquisition-related intangible assets

 

(1,800)

 

(1,868)

Non-service pension costs

 

(2,333)

 

(2,473)

Contingent earnout adjustments

 

(363)

 

(151)

Income before income taxes

 

$9,220

 

$3,826

 

The Company's reportable segments' total assets reconciled to consolidated total assets of the Company at March 31, 2025 and December 31, 2024 are presented in the following table:

 

 

 

March 31,
2025

 

December 31,
2024

 

 

(In thousands)

Assets of reportable segments

 

$419,133

 

$424,057

Corporate assets:

 

 

 

 

Cash and cash equivalents

 

57,367

 

55,412

Income taxes receivable

 

4,803

 

5,337

Prepaid expenses and other current assets

 

39,931

 

40,334

Net property and equipment

 

19,040

 

20,554

Operating lease right-of-use asset, net

 

72,419

 

78,808

Capitalized software costs, net

 

113,530

 

111,854

Deferred income tax assets

 

23,962

 

25,305

Other noncurrent assets

 

42,074

 

42,094

Total corporate assets

 

373,126

 

379,698

Total assets

 

$792,259

 

$803,755