CRAWFORD & CO
For the period ended Jun 30, 2024. Filed Aug 5, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 5, 2024
CRD-A$11.53-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-01.
0000950170-24-051333
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-05.
0000950170-24-090835
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 163 previous paragraphs and 170 current paragraphs.
85 unchanged; 69 reworded; 13 added; 9 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 20 previous and 30 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Overall, there was a decrease in cases received of (11.6)% for the three months ended June 30, 2024 and a decrease of (7.9)% for the six months ended June 30, 2024. Within our North America Loss Adjusting segment, the reduction in cases received for the 2024 second quarter and year-to-date periods was primarily due to the loss of a customer in the Contractor Connection service line in Canada. There was a decline in cases within our Broadspire segment for the second quarter and year-to-date periods related to the non-recurrence of takeover claims for a disability client within Claims Management. The decrease in Broadspire claims was partially offset by an increase in Medical Management referrals for the second quarter, and more than offset by an increase in Medical Management referrals for the year-to-date period. Within our Platform Solutions segment, there was a decrease in each period presented related to the Networks and the Contractor Connection service lines. These reductions were partially offset by increases in our International Operations segment, primarily in Latin America and Australia, due increases in high-frequency, low-severity cases. Australia also had an increase in weather-related cases for the year-to-date period as compared to the prior year.
Current report
Excluding centralized indirect support costs, gross profit increased from $13.4 million, or 17.5% of revenues before reimbursements in 2023, to $14.6 million, or 19.1% of revenues before reimbursements, in the three months ended June 30, 2024, due to better performance in Global Technical Services. For the six months ended June 30, 2024, gross profit decreased from $30.7 million or 19.9% of revenues before reimbursements in 2023 to $29.1 million, or 19.0% of revenues before reimbursements, due primarily to the revenue decrease in the U.S. and Canada, specifically in the first quarter, as compared to the prior year.
Current report
Revenues before reimbursements from our North America Loss Adjusting segment totaled $153.4 million in the six months ended June 30, 2024, compared with $154.0 million in the 2023 period. This slight decrease was due to a decrease in Canada and U.S. Field Operations, partially offset by an increase in U.S. Global Technical Services revenues. The change in exchange rates decreased our North America Loss Adjusting segment revenues by approximately (0.3)%, or $(0.4) million, for the six months ended June 30, 2024 as compared with the 2023 period. Absent foreign exchange rate fluctuations, North America Loss Adjusting segment revenues would have been $153.8 million for the six months ended June 30, 2024. There was a decrease in segment unit volume, measured principally by cases received, of (17.2)% for the six months ended June 30, 2024, compared with the 2023 period. This includes a decrease in high-frequency, low-severity cases received in Contractor Connection in Canada of 23,900 or 16.3% for which minimal revenue was received. Changes in product mix and in the rates charged for those services accounted for a 0.8% revenue increase for the six months ended June 30, 2024 compared with the same period in 2023, due to increases in pricing and average fee per case.
Current report
Reimbursements for out-of-pocket expenses incurred in our North America Loss Adjusting segment, which are included in total Company revenues, were $2.3 million and $2.4 million for the three months ended June 30, 2024 and 2023, respectively. Reimbursements were $4.3 million and $5.3 million for the six months ended June 30, 2024 and 2023, respectively. These decreases were due to the decrease in revenues and decrease in claims received in Canada.
Current report
Operating earnings in our International Operations segment were $5.7 million, or 5.6% of revenues before reimbursements, for the three months ended June 30, 2024, compared with $3.7 million, or 3.9% of revenues before reimbursements, in the 2023 period. For the six months ended June 30, 2024, our International Operations segment reported operating earnings of $7.4 million, or 3.7% of revenues before reimbursements, compared with operating earnings in 2023 of $6.8 million, or 3.6% of revenues before reimbursements. The increase in operating earnings in the 2024 periods was primarily due to increases in the U.K. and Europe.
Current report
Excluding centralized indirect support costs, gross profit increased from $17.0 million, or 17.9% of revenues before reimbursements in 2023, to $19.2 million, or 18.8% of revenues before reimbursements, in the three months ended June 30, 2024. For the six months ended June 30, 2024, gross profit increased from $32.7 million, or 17.5% of revenues before reimbursements in 2023, to $35.2 million, or 17.6% of revenues before reimbursements. The increase in gross profit in the 2024 periods was driven by the increase in revenues.
Current report
Revenues before reimbursements from our International Operations segment totaled $102.3 million in the three months ended June 30, 2024, compared with $95.3 million in the 2023 period. This increase was due to an increase in the U.K. and Europe. The change in exchange rates decreased our International Operations segment revenues by approximately (1.5)%, or $1.5 million, for the three months ended June 30, 2024 as compared with the 2023 period. Absent foreign exchange rate fluctuations, International Operations segment revenues would have been $103.7 million for the three months ended June 30, 2024. There was an increase in segment unit volume, measured principally by cases received, of 6.3% for the three months ended June 30, 2024, compared with the 2023 period. There was an increase in high-frequency, low-severity cases of 3,700, or (3.2)%. Revenues increased by $3.0 million, or 3.1%, related to severe storms in Australia for which cases were recorded in the first quarter. Changes in product mix and in the rates charged for those services accounted for a 2.6% revenue increase for the three months ended June 30, 2024 compared with the same period in 2023.
Current report
There was an increase in cases received of 6.8% for the six months ended June 30, 2024, compared with the 2023 period. There was a decrease in cases in the U.K., due to decreases in high-frequency, low-severity cases in third party administration. Cases increased in Europe due to an increase in high-frequency, low-severity cases in the Middle East and an increase in claims in Germany and the Netherlands, partially offset by a decrease in claims from Sweden. Australia increased due to an increase in weather-related cases as well as an increase in high-frequency, low-severity cases in Contractor Connection. The decrease in cases received in Asia was due to a reduction in high-frequency, low-severity cases in Malaysia and a reduction in Travel claims in Singapore. Latin America experienced an increase in high-frequency, low-severity cases received in Brazil as well as cases received in Chile.
Current report
International Operations expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $30.5 million for the three months ended June 30, 2024 compared with $29.2 million for the 2023 period. As a percentage of revenues before reimbursements, these expenses were 29.9% for the three months ended June 30, 2024 compared with 30.7% for the 2023 period. For the six months ended June 30, 2024, these expenses were $62.0 million, compared with $56.6 million for the 2023 period. As a percentage of revenues before reimbursements, these expenses were 30.9% for the six months ended June 30, 2024, compared with 30.3% for the 2023 period. The increase in the expense for the 2024 second quarter was due to an increase in revenues, while the percentage of revenues before reimbursements decreased due to improved operating leverage. The increase in the year-to-date expense and percent of revenues before reimbursements was due to increased IT application costs and increased self-insurance costs.
Current report
Overall case volumes decreased (3.4)% for the three months ended June 30, 2024 due primarily to the non-recurrence of 17,700 takeover claims for a disability client within Claims Management. This was offset by an increase in Medical Management referrals. Case volumes were 0.8% higher for the six months ended June 30, 2024 due to the increase of Medical Management referrals, partially offset by the non-recurring 17,700 takeover claims within Claims Management.
Current report
Excluding indirect support costs, gross profit in the second quarter decreased from $13.9 million, or 21.2% of revenues before reimbursements in 2023, to $7.3 million, or 18.8% of revenues before reimbursements, in 2024. For the six months ended June 30, 2024, gross profit decreased from $29.4 million, or 22.9% of revenues before reimbursements in 2023, to $14.5 million, or 20.6% of revenues before reimbursements in 2024. This decrease was primarily due to a reduction in revenues in our Networks service line due to increased weather-related activity in the prior year periods resulting in decreased need for staff augmentation services by our clients in the 2024 periods.
Current report
Revenues before reimbursements from our Platform Solutions segment totaled $38.8 million in the three months ended June 30, 2024, compared with $65.6 million in the 2023 period. This decrease was primarily due to a reduction in our Networks service line where we provide staff augmentation for our clients, along with a decrease in our Contractor Connection service line due to increased weather-related activity in the prior year period. There was a decrease in segment unit volume, measured principally by cases received, of (34.4)%, for the three months ended June 30, 2024, compared with the 2023 period. There was a reduction in low value inspection services cases within our Networks service line of 8,100 cases, or 6.9% in the three months ended June 30, 2024, compared to 2023. There was a decrease in revenues from higher average value staff argumentation services in our Networks service line which decreased revenues (12.6)% in the 2024 second quarter. Changes in product mix and in the rates charged for those services accounted for a (0.7)% revenue decrease for the 2024 three-month period compared with 2023, due to decreases in average case values.
Current report
Accrued taxes decreased by $6.7 million excluding foreign currency exchange impacts. This decrease was primarily due to the timing of tax payments.
Removed paragraphs (9)
Previous report
Overall, there was a decrease in cases received of (4.0)% for the three months ended March 31, 2024 due to a reduction of approximately 22,100 high-frequency, low-severity cases in our North America Loss Adjusting and Platform Solutions operating segments that were present in the 2023 first quarter that generated minimal revenues in the 2023 period. This includes 10,300 cases received in our North America Loss Adjusting segment in the 2023 first quarter related to Contractor Connection in Canada, as well as 11,800 cases received in our Platform Solutions segment in the 2023 first quarter related to the Networks service line.
Previous report
Excluding centralized indirect support costs, gross profit decreased from $17.3 million, or 22.4% of revenues before reimbursements in 2023, to $14.5 million, or 18.8% of revenues before reimbursements, in the three months ended March 31, 2024 due primarily to the decrease in revenues due to mild weather events.
Previous report
Operating earnings in our International Operations segment were $1.7 million, or 1.7% of revenues before reimbursements, for the three months ended March 31, 2024, compared with $3.0 million, or 3.3% of revenues before reimbursements, in the 2023 period. The decrease in operating earnings in the 2024 period was primarily due to Australia flood activity in the prior year first quarter and reductions in Legal Services productivity levels, partially offset by increases in Latin America and the U.K.
Previous report
Excluding centralized indirect support costs, gross profit slightly increased from $15.7 million, or 17.1% of revenues before reimbursements in 2023, to $16.0 million, or 16.3% of revenues before reimbursements, in the three months ended March 31, 2024. The increase in gross profit was driven by the $6.2 million increase in revenues, and the decrease in gross profit percentage was primarily due to the growth in direct expenses exceeding the increase in revenues.
Previous report
Reimbursements for out-of-pocket expenses incurred in our International Operations segment, which are included in total Company revenues, were $8.5 million and $7.5 million for the three months ended March 31, 2024 and 2023, respectively. The increase in the quarter was due to increased use of third parties in the current year first quarter.
Previous report
International Operations expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $31.4 million for the three months ended March 31, 2024 compared with $27.4 million for the 2023 period. As a percentage of revenues before reimbursements, expenses other than direct compensation, fringe benefits, and non-employee labor expenses were 32.0% for the three months ended March 31, 2024 compared with 29.8% for the 2023 period. The increase in the first quarter expense and percent of revenues before reimbursements was due to increased IT application costs.
Previous report
Overall case volumes were 5.4% higher for the three months ended March 31, 2024 due primarily to an increase in Medical Management referrals. There was a decrease in Claims Management cases due to a reduction in accident and health cases that impacted the mix of cases received resulting in an increase in the average fee per case.
Previous report
Excluding indirect support costs, gross profit in the first quarter decreased from $15.5 million, or 24.7% of revenues before reimbursements in 2023, to $7.2 million, or 22.7% of revenues before reimbursements, in 2024. This decrease was primarily due to a reduction in revenues in our Networks service line.
Previous report
Accounts receivable decreased $6.3 million excluding foreign currency exchange impacts. This decrease was primarily due to U.S. Field Operations and Canada in the North America Loss Adjusting segment.
Reworded paragraphs (69)
Previous wording
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 months ended March 31, 2024 and 2023, and as of March 31, 2024, and December 31, 2023, 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, 2023. 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.
Current wording
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 six months ended June 30, 2024 and 2023, and as of June 30, 2024, and December 31, 2023, 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, 2023. 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.
Previous wording
Consolidated revenues before reimbursements decreased $14.7 million, or (4.6)%, for the three months ended March 31, 2024, compared with the same period of 2023. The decrease in the 2024 first quarter was primarily due to decreases in our Platform Solutions operating segment. Changes in foreign exchange rates increased our consolidated revenues before reimbursements by $0.9 million, or 0.3%, for the three months ended March 31, 2024 as compared with the prior year period. To illustrate this impact, segment revenues are presented below, using a constant exchange rate, for the three months ended March 31, 2024.
Current wording
Consolidated revenues before reimbursements decreased $10.3 million, or (3.2)%, for the three months ended June 30, 2024 and $25.0 million, or (3.9)%, for the six months ended June 30, 2024, compared with the same periods of 2023. This decrease was primarily due to decreases in our Platform Solutions operating segment in the 2024 three and six month periods. Changes in foreign exchange rates decreased our consolidated revenues before reimbursements by $1.9 million, or (0.6)%, for the three months ended June 30, 2024 and $1.0 million, or (0.1)%, for the six months ended June 30, 2024, as compared with the prior year periods. To illustrate this impact, segment revenues are presented below, using a constant exchange rate, for the three and six months ended June 30, 2024.
Previous wording
Excluding foreign currency impacts, consolidated revenues before reimbursements decreased $15.6 million, or (4.9)%, for the three months ended March 31, 2024 compared to the prior year first quarter. Revenues from the North America Loss Adjusting segment decreased slightly in the 2024 first quarter due to a decrease in weather-related activity. Revenues from the International Operations segment increased in the 2024 first quarter primarily due to increases in the U.K., Europe, and Latin America, partially offset by a reduction in Australia. Revenues from the Broadspire segment increased for the quarter due to an increase in Claims and Medical Management revenues. Revenues from the Platform Solutions segment decreased in the first quarter primarily due to a reduction in our Networks service line as we were completing claims related to Hurricane Ian in the 2023 period.
Current wording
Excluding foreign currency impacts, consolidated revenues before reimbursements decreased $8.5 million, or (2.6)%, for the three months ended June 30, 2024, and decreased $24.1 million, or (3.8)%, for the six months ended June 30, 2024 compared with the same periods of 2023. Revenues from the North America Loss Adjusting segment decreased slightly in the 2024 second quarter, however, excluding foreign currency impacts, improved slightly in comparison to the 2023 quarter. North America Loss Adjusting decreased slightly in the 2024 year-to-date period due to increased weather-related activity in the prior year period. Revenues from the International Operations segment increased in the 2024 second quarter and year-to-date periods, excluding the impacts of foreign currency, primarily due to increases in the U.K., Europe, and Latin America. Revenues from the Broadspire segment increased for the quarter and year-to-date due to an increase in Claims and Medical Management revenues. Revenues from the Platform Solutions segment decreased in the second quarter and year-to-date periods primarily due to increased weather-related activity in the prior year periods in our Networks service line.
Previous wording
Cases received are presented below by segment for the three months ended March 31, 2024 and 2023:
Current wording
Cases received are presented below by segment for the three and six months ended June 30, 2024 and 2023:
Previous wording
To illustrate exposure to the impact of changes in foreign currencies, revenues before reimbursements are presented below by denominated currency for the three months ended March 31, 2024:
Current wording
To illustrate exposure to the impact of changes in foreign currencies, revenues before reimbursements are presented below by denominated currency for the three and six months ended June 30, 2024:
Previous wording
Costs of services provided, before reimbursements, decreased $12.7 million, or 5.6%, for the three months ended March 31, 2024 as compared with the 2023 period. This decrease was primarily due to a decrease in compensation expense and other costs in the Platform Solutions segment resulting from the lower revenues, partially offset by increases in compensation expense and other costs in our three other operating segments.
Current wording
Costs of services provided, before reimbursements, decreased $11.8 million, or (5.0)%, for the three months ended June 30, 2024, and decreased $24.5 million, or (5.3)% for the six months ended June 30, 2024 as compared with the 2023 periods. These decreases were primarily due to a decrease in compensation expense and other costs in the Platform Solutions segment resulting from the lower revenues, partially offset by increases in compensation expense and other costs in our three other operating segments.
Previous wording
Selling, general, and administrative expenses increased $10.6 million, or 15.9%, in the three months ended March 31, 2024 as compared with the 2023 period. The increase was primarily due to professional fees, IT costs, bad debt expense, and compensation expense, including taxes and benefits.
Current wording
Selling, general, and administrative ("SG&A") expenses increased $1.8 million, or 2.6%, in the three months ended June 30, 2024 as compared with the 2023 period. The increase was primarily due to professional fees, IT costs, and compensation expense, including taxes and benefits. SG&A expenses increased $12.4 million, or 9.0%, in the six months ended June 30, 2024 as compared with the 2023 period, primarily due to professional fees, IT costs, bad debt expense, and compensation expense, including taxes and benefits.
Previous wording
We believe operating earnings is a measure that is useful for others to evaluate segment operating performance using the same criteria used by our senior management and CODM. Segment operating earnings represents 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 acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, income taxes, and net income or loss attributable to noncontrolling interests.
Current wording
We believe operating earnings is a measure that is useful for others to evaluate segment operating performance using the same criteria used by our senior management and CODM. Segment operating earnings represents 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 acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, income taxes, and net loss attributable to noncontrolling interests.
Previous wording
Operating earnings in our North America Loss Adjusting segment totaled $4.5 million, or 5.8% of revenues before reimbursements, for the three months ended March 31, 2024, compared with 2023 operating earnings of $8.1 million, or 10.4% of revenues before reimbursements. The decrease in operating earnings in the 2024 first quarter was primarily due to the decrease in revenues in Canada and U.S. Field Operations and reduced staff utilization related to the decrease in weather-related activity.
Current wording
Operating earnings in our North America Loss Adjusting segment totaled $4.9 million, or 6.4% of revenues before reimbursements, for the three months ended June 30, 2024, compared with 2023 operating earnings of $3.9 million, or 5.1% of revenues before reimbursements. For the six months ended June 30, 2024, our North American Loss Adjusting segment reported operating earnings of $9.4 million, or 6.1% of revenues before reimbursements, compared with 2023 operating earnings of $12.0 million, or 7.8% of revenues before reimbursements. The increase in operating earnings in the 2024 second quarter was due to an increase in productivity in Global Technical Services. The decrease in year-to-date operating earnings was due to the decrease in revenues in Canada and U.S. Field Operations and reduced staff utilization related to the increased weather-related activity in the prior year period.
Previous wording
Operating results for our North America Loss Adjusting segment, including gross profit, for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
Operating results for our North America Loss Adjusting segment, including gross profit, for the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
North America Loss Adjusting segment revenues are primarily derived from the property and casualty insurance company markets in the U.S. and Canada. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
North America Loss Adjusting segment revenues are primarily derived from the property and casualty insurance company markets in the U.S. and Canada. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
Revenues before reimbursements from our North America Loss Adjusting segment totaled $77.4 million in the three months ended March 31, 2024, compared with $77.6 million in the 2023 period. This slight decrease was due to a decrease in Canada and U.S. Field Operations, partially offset by an increase in U.S. Global Technical Services revenues. There was a decrease in segment unit volume, measured principally by cases received, of (15.2)% for the three months ended March 31, 2024, compared with the 2023 period. This was partially offset by a decrease in high-frequency, low-severity cases received in Contractor Connection in Canada of 10,300 or 14.2%. Changes in product mix and in the rates charged for those services accounted for a 0.7% revenue increase for the three months ended March 31, 2024 compared with the same period in 2023, due to increases in pricing and average fee per case.
Current wording
Revenues before reimbursements from our North America Loss Adjusting segment totaled $76.0 million in the three months ended June 30, 2024, compared with $76.4 million in the 2023 period. This slight decrease was due to a decrease in Canada and U.S. Field Operations, partially offset by an increase in U.S. Global Technical Services revenues. The change in exchange rates decreased our North America Loss Adjusting segment revenues by approximately (0.5)%, or $(0.4) million, for the three months ended June 30, 2024 as compared with the 2023 period. Absent foreign exchange rate fluctuations, North America Loss Adjusting segment revenues would have been $76.4 million for the three months ended June 30, 2024. There was a decrease in segment unit volume, measured principally by cases received, of (19.2)% for the three months ended June 30, 2024, compared with the 2023 period. This includes a decrease in high-frequency, low-severity cases received in Contractor Connection in Canada of 13,500 or 18.3% for which minimal revenue was received. Changes in product mix and in the rates charged for those services accounted for a 1.0% revenue increase for the three months ended June 30, 2024 compared with the same period in 2023, due to increases in pricing and average fee per case.
Previous wording
The increase in revenues in the U.S. for the three months ended March 31, 2024 was due to an increase in in Global Technical Services revenues from an increase in expert adjusting staff and increased business from new and existing clients offset by a decrease in U.S. Field Operations as a result of a decrease in weather-related activity.
Current wording
The increase in revenues in the U.S. for the three and six months ended June 30, 2024 was due to an increase in in Global Technical Services revenues from an increase in expert adjusting staff and increased business from new and existing clients offset by a decrease in U.S. Field Operations due to increased weather-related activity in the prior year period.
Previous wording
Revenue variance components for our North America Loss Adjusting segment, for the three months ended March 31, 2024 are summarized as follows:
Current wording
Revenue variance components for our North America Loss Adjusting segment, for the three and six months ended June 30, 2024 are summarized as follows:
Previous wording
North America Loss Adjusting segment unit volumes by geographic region, measured by cases received, for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
North America Loss Adjusting segment unit volumes by geographic region, measured by cases received, for the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
Overall, there was a decrease in cases of (15.2)% in the three months ended March 31, 2024, compared to the same period in 2023. The decrease in U.S. case volumes in the 2024 first quarter was due to less weather-related activity partially offset by an increase in Global Technical Services. There was a decrease in cases in Canada in the 2024 first quarter due to 10,300 less high-frequency, low-severity Contractor Connection cases related to the loss of a customer, as compared with the 2023 period.
Current wording
Overall, there was a decrease in cases of (19.2)% in the three months ended June 30, 2024, compared to the same period in 2023. The decrease in U.S. case volumes in the 2024 second quarter was due to increased weather-related activity in the prior year period partially offset by an increase in Global Technical Services. There was a decrease in cases in Canada in the 2024 second quarter primarily due to 13,500 less high-frequency, low-severity Contractor Connection cases related to the loss of a customer, as compared with the 2023 period.
Previous wording
The most significant expense in our North America Loss Adjusting 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 71.7% for the three months ended March 31, 2024 compared with 69.8% for the 2023 period. The total dollar amount of these expenses increased to $55.5 million for the three months ended March 31, 2024 from $54.2 million for the comparable 2023 period. The increase was due to an increase in employees in Global Technical Services. The increase in the percentage of revenues before reimbursements is due to the reduced revenues and lower staff utilization in U.S. Field Operations and Canada, compared to the 2023 period. There was an average of 2,046 full-time equivalent employees in this segment in the three months ended March 31, 2024 compared with an average of 2,091 in the 2023 period.
Current wording
The most significant expense in our North America Loss Adjusting 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, these expenses were 72.0% for the three months ended June 30, 2024 compared with 71.5% for the 2023 period. For the six months ended June 30, 2024, these expenses were 71.8% compared with 70.7% for the 2023 period. The total dollar amount of these expenses increased slightly to $54.7 million for the three months ended June 30, 2024 from $54.6 million for the comparable 2023 period, and were $110.2 million for the six months ended June 30, 2024 increasing from $108.8 million in 2023. The year-to-date increase was due to an increase in employees in U.S. Global Technical Services. The increase in the percentage of revenues before reimbursements is due to lower staff utilization in U.S. Field Operations and Canada, compared to the 2023 periods. There was an average of 2,029 full-time equivalent employees in this segment in the six months ended June 30, 2024 compared with an average of 2,073 in the 2023 period.
Previous wording
North America Loss Adjusting expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $17.4 million for the three months ended March 31, 2024 compared with $15.4 million for the 2023 period. As a percentage of revenues before reimbursements, expenses other than direct compensation, fringe benefits, and non-employee labor expenses were 22.5% for the three months ended March 31, 2024 compared with 19.8% for the 2023 period. The increase in the current year amounts was due to higher technology investments, auto expenses, and self-insurance costs. The increase in the expense as a percentage of revenues before reimbursements is due to decreased revenues.
Current wording
North America Loss Adjusting expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $16.4 million for the three months ended June 30, 2024 compared with $17.8 million for the 2023 period. As a percentage of revenues before reimbursements, these expenses were 21.6% for the three months ended June 30, 2024 compared with 23.4% for the 2023 period. For the six months ended June 30, 2024, these expenses were $33.9 million, compared with $33.2 million for the 2023 period. As a percentage of revenues before reimbursements, these expenses were 22.1% for the six months ended June 30, 2024 compared with 21.6% for the 2023 period. The decrease in the 2024 second quarter expenses and percentage of revenues before reimbursements was due improvements in the allowance for estimated credit losses as compared to the 2023 period. The increase in the 2024 year-to-date amounts and percentage of revenues before reimbursements was due to higher technology investments, auto expenses, and self-insurance costs, which offset the second quarter decrease.
Previous wording
Operating results for our International Operations segment, including gross profit, for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
Operating results for our International Operations segment, including gross profit, for the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
International Operations segment revenues are primarily derived from the global property and casualty insurance company markets in the U.K, Europe, Australia, Asia and Latin America. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
International Operations segment revenues are primarily derived from the global property and casualty insurance company markets in the U.K, Europe, Australia, Asia and Latin America. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
Revenues before reimbursements from our International Operations segment totaled $98.1 million in the three months ended March 31, 2024, compared with $91.9 million in the 2023 period. This increase was due to an increase in the U.K., Europe, and Latin America. The change in exchange rates increased our International Operations segment revenues by approximately 1.0%, or $0.9 million, for the three months ended March 31, 2024 as compared with the 2023 period. Absent foreign exchange rate fluctuations, International Operations segment revenues would have been $97.2 million for the three months ended March 31, 2024. There was an increase in segment unit volume, measured principally by cases received, of 7.2% for the three months ended March 31, 2024, compared with the 2023 period. Cases received increased by 9,000 or 7.1% in the three months ended March 31, 2024, driven by severe storms in Australia, for which revenues are expected to be recognized primarily in future quarters. This was partially offset by a decrease in high-frequency, low-severity cases received in the U.K. of 3,500 or (2.8%). Changes in product mix and in the rates charged for those services accounted for a 2.9% revenue increase for the three months ended March 31, 2024 compared with the same period in 2023.
Current wording
Revenues before reimbursements from our International Operations segment totaled $200.4 million in the six months ended June 30, 2024, compared with $187.2 million in the 2023 period. This increase was primarily due to increases in the U.K, Europe, and Latin America. The change in exchange rates decreased our International Operations segment revenues by approximately (0.3)%, or $0.6 million, for the six months ended June 30, 2024 as compared with 2023. Absent foreign exchange rate fluctuations, International Operations segment revenues would have been $200.9 million for the six months ended June 30, 2024. There was an increase in segment unit volume, measured principally by cases received, of 6.8% for the six months ended June 30, 2024, compared with the 2023 period. There was an increase in high-frequency, low-severity cases of 3,500, or (1.5)%. Changes in product mix and in the rates charged for those services accounted for a 2.1% revenue increase for the six months ended June 30, 2024 compared with the same period in 2023.
Previous wording
Based on constant foreign exchange rates, the increase in revenues in the U.K. for the 2024 first quarter period was due to an increase in property and third party administration revenues driven by higher value claims. There was an increase in revenues in Europe in the 2024 period, compared with 2023, due to increases in Spain and Norway. There was a decrease in revenues in Australia in the quarter due to the continued handling of weather-related case activity during the first quarter of 2023 from the 2022 flooding catastrophe. There was a decrease in revenues in Asia in the 2024 first quarter, compared with 2023, due to decreased large loss claims in Thailand and reduced weather-related activity in the Philippines. The increase in revenues in Latin America in the 2024 first quarter was primarily driven by increased volumes across third-party administration and loss adjusting.
Current wording
Based on constant foreign exchange rates, the increase in revenues in the U.K. for the 2024 second quarter and year-to-date periods was due to an increase in property and third party administration revenues driven by higher value claims. There was an increase in revenues in Europe in the 2024 periods, compared with 2023, due to increases in Netherlands and Germany. There was a decrease in revenues in Australia for the year-to-date period due to a large flooding event in 2022 that continued to provide revenues into 2023. There was a decrease in revenues in Asia in the 2024 second quarter, compared with 2023, due to decreased large loss claims in Thailand and increased weather-related activity in the prior year period in the Philippines. The increase in revenues in Latin America in the 2024 periods was primarily driven by increased volumes across third-party administration and loss adjusting.
Previous wording
Revenue variance components for our International Operations segment, for the three months ended March 31, 2024 are summarized as follows:
Current wording
Revenue variance components for our International Operations segment, for the three and six months ended June 30, 2024 are summarized as follows:
Previous wording
Reimbursements for out-of-pocket expenses incurred in our North America Loss Adjusting segment, which are included in total Company revenues, were $1.9 million and $2.9 million for the three months ended March 31, 2024 and 2023, respectively.
Current wording
Reimbursements for out-of-pocket expenses incurred in our International Operations segment, which are included in total Company revenues, were $8.7 million and $9.1 million for the three months ended June 30, 2024 and 2023, respectively. Reimbursements were $17.2 million and $16.7 million for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
International Operations segment unit volumes by geographic region, measured by cases received, for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
International Operations segment unit volumes by geographic region, measured by cases received, for the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
Overall, there was an increase in cases received of 7.2% for the three months ended March 31, 2024, compared with the 2023 period. There was a decrease in the U.K. in the first quarter due to decreases in high-frequency, low-severity cases in third party administration. Cases declined slightly in Europe due to a decrease in claims in Sweden. There was an increase of 9,000 high-frequency, low-severity weather-related cases in Australia, although revenues are expected to be recognized across multiple quarters as services are performed. The increase in cases received in Asia was due to an increase in high-frequency, low-severity activity in Singapore. Latin America experienced an increase in cases received in Chile.
Current wording
Overall, there was an increase in cases received of 6.3% for the three months ended June 30, 2024, compared with the 2023 period. There was a decrease in the U.K. in the second quarter due to decreases in high-frequency, low-severity cases in third party administration. Cases increased in Europe due to an increase in high-frequency, low-severity cases in the Middle East and an increase in claims in Germany and the Netherlands. Cases increased in Australia due to an increase in high-frequency, low-severity cases in Contractor Connection. The decrease in cases received in Asia was due to a reduction in high-frequency, low-severity cases in Malaysia and a reduction in Travel claims in Singapore. Latin America experienced an increase in high-frequency, low-severity cases received in Brazil.
Previous wording
The most significant expense in our International Operations 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 was 66.2% for the three months ended March 31, 2024 compared with 66.9% for the 2023 period. The total dollar amount of these expenses was $65.0 million for the three months ended March 31, 2024, compared to $61.4 million for the 2023 period. The increase was due to increases in compensation expense, including incentive compensation. The decrease in the percentage of revenues before reimbursements is due to higher revenues in the 2024 first quarter and improved staff utilization. There was an average of 3,611 full-time equivalent employees in this segment in the three months ended March 31, 2024, compared with an average of 3,693 in the comparable 2023 period.
Current wording
The most significant expense in our International Operations 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, these expenses were 64.6% for the three months ended June 30, 2024 compared with 65.4% for the 2023 period. The total dollar amount of these expenses was $66.0 million for the three months ended June 30, 2024, compared to $62.3 million for the 2023 period. For the six months ended June 30, 2024, these expenses were 65.4%, compared with 66.1% in 2023, and were $131.0 million for the six months ended June 30, 2024 compared to $123.8 million in 2023. The increase was due to increases in compensation expense, including incentive compensation. The decrease in the percentage of revenues before reimbursements is due to higher revenues in the 2024 periods and improved staff utilization. There was an average of 3,623 full-time equivalent employees in this segment in the six months ended June 30, 2024, compared with an average of 3,668 in the comparable 2023 period.
Previous wording
Our Broadspire segment reported operating earnings of $12.8 million, or 13.6% of revenues before reimbursements, for the three months ended March 31, 2024 as compared with $7.9 million, or 9.4% of revenues before reimbursements, for the first quarter of 2023. The increase in the 2024 first quarter was due to an increase in revenues resulting from new client programs, increased medical management usage, and pricing improvements.
Current wording
Our Broadspire segment reported operating earnings of $15.1 million, or 15.5% of revenues before reimbursements, for the three months ended June 30, 2024 as compared with $8.1 million, or 9.3% of revenues before reimbursements, for the second quarter of 2023. For the six months ended June 30, 2024, our Broadspire segment reported operating earnings of $27.9 million, or 14.6% of revenues before reimbursements, compared with 2023 operating earnings of $16.1 million, or 9.4% of revenues before reimbursements. The increase in the 2024 second quarter and year-to-date periods was due to an increase in revenues resulting from new client programs, increased medical management usage, and pricing improvements.
Previous wording
Excluding centralized indirect support costs, first quarter gross profit increased from $19.2 million, or 22.9% of revenues before reimbursements, in 2023 to $24.3 million, or 25.8% of revenues before reimbursements in 2024. This increase was due to the increased revenues and improved staff utilization.
Current wording
Excluding centralized indirect support costs, second quarter gross profit increased from $19.8 million, or 22.6% of revenues before reimbursements, in 2023 to $26.3 million, or 27.1% of revenues before reimbursements in 2024. For the six months ended June 30, 2024, gross profit increased from $39.0 million, or 22.8% of revenues before reimbursements in 2023, to $50.6 million, or 26.5% of revenues before reimbursements. This increase was due to the increased revenues and improved staff utilization.
Previous wording
Operating results for our Broadspire segment, including gross profit, for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
Operating results for our Broadspire segment, including gross profit, for the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
Broadspire revenues are derived from the casualty and disability insurance and self-insured markets in the U.S. Revenues before reimbursements by service line for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
Broadspire revenues are derived from the casualty and disability insurance and self-insured markets in the U.S. Revenues before reimbursements by service line for the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
Revenues before reimbursements from our Broadspire segment totaled $94.3 million in the three months ended March 31, 2024 compared with $84.1 million in the 2023 period. This increase was primarily due to an increase in new client growth and an increase in average fees across both service lines. Revenues were positively impacted by an increase in unit volumes, measured principally by cases received, of 5.4% for the three months ended March 31, 2024 compared with the same period of 2023. This is partly due to a $2.8 million increase in revenues within our Medical Management service line for which no cases are received, or 3.3% of the increase in revenues. There was also a $1.2 million increase in revenues within our Claims Management service line related to income earned which offsets the costs of managing the funds maintained to administer claims for our customers, for which no cases are received, or 1.4% of the increase in revenues. Changes in product mix and in the rates charged for those services accounted for a 2.1% revenue increase for the 2024 first quarter compared with the 2023 period, primarily due to an increase in workers compensation cases and an increase in the average fee per case.
Current wording
Revenues before reimbursements from our Broadspire segment totaled $97.1 million in the three months ended June 30, 2024 compared with $87.2 million in the 2023 period. This increase was primarily due to an increase in new client growth across both service lines. There was a decrease in segment unit volume, measured principally by cases received, of (3.4)% for the three months ended June 30, 2024 compared with the same period of 2023. This was primarily due to takeover claims for a disability client in the prior year second quarter, which resulted in 17,700 claims, or 12.3%, with minimal revenues which did not recur in 2024. Revenues were positively impacted by $1.1 million increase in revenues within our Claims Management service line related to income earned which offsets the costs of managing the funds maintained to administer claims for our customers, for which no cases are received, or 1.3% of the increase in revenues. There was also a $2.5 million increase in revenues within our Medical Management service line for which no cases are received, or 2.8% of the increase in revenues. Changes in product mix and in the rates charged for those services accounted for a (1.7)% revenue decrease for the 2024 second quarter compared with the 2023 period.
Previous wording
Revenue variance components for our Broadspire segment, for the three months ended March 31, 2024 are summarized as follows:
Current wording
Revenue variance components for our Broadspire segment, for the three and six months ended June 30, 2024 are summarized as follows:
Previous wording
Reimbursements for out-of-pocket expenses incurred in our Broadspire segment were $0.9 million and $0.7 million for the three months ended March 31, 2024 and 2023, respectively. The increase in the 2024 period was primarily due to the increased revenues in the current period.
Current wording
Reimbursements for out-of-pocket expenses incurred in our Broadspire segment were $1.0 million and $0.9 million for the three months ended June 30, 2024 and 2023, respectively. Reimbursements were $1.9 million and $1.7 million for the six months ended June 30, 2024 and 2023, respectively. The increase in the 2024 periods was primarily due to the increased revenues in the current period.
Previous wording
Broadspire unit volumes by service line, as measured by cases received, for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
Broadspire unit volumes by service line, as measured by cases received, for the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
The most significant expense in our Broadspire 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. Direct compensation, fringe benefits, and non-employee labor totaled $57.3 million for the three months ended March 31, 2024, compared to $52.6 million for the comparable 2023 period. Direct compensation, fringe benefits, and non-employee labor, as a percent of the related revenues before reimbursements, decreased from 62.6% in the 2023 first quarter to 60.7% in 2024 first quarter, primarily due to the increased revenues. Average full-time equivalent employees in this segment totaled 2,669 in the three months ended March 31, 2024, compared with 2,591 in the 2023 period.
Current wording
The most significant expense in our Broadspire 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. These expenses totaled $58.2 million for the three months ended June 30, 2024, compared to $54.5 million for the 2023 period. As a percent of the related revenues before reimbursements, these expenses decreased from 62.5% in the 2023 second quarter to 59.9% in 2024 second quarter. For the six months ended June 30, 2024, these expenses totaled $115.4 million, compared to $107.1 million in 2023. For the six months ended June 30, 2024, these expenses, as a percent of the related revenues before reimbursements, decreased from 62.5% in 2023 to 60.3% in 2024. The increase in cost in the second quarter and year-to-date periods was primarily due to increased employees, average wages, and incentive compensation. Improved efficiency with higher revenues combined for lower percentages of revenues before reimbursements. Average full-time equivalent employees in this segment totaled 2,674 in the six months ended June 30, 2024, compared with 2,602 in the 2023 period.
Previous wording
Broadspire segment expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor as a percent of revenues before reimbursements were 25.7% for the three months ended March 31, 2024, compared with 27.9% in the 2023 period. The amount of these expenses increased from $23.5 million for the three months ended March 31, 2023 to $24.2 million in 2024 related to the increased business activity. The decrease in the expense as a percent of revenues before reimbursements was due to the increased revenues.
Current wording
Broadspire segment expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor as a percent of revenues before reimbursements were 24.5% for the three months ended June 30, 2024, compared with 28.2% in the 2023 period. The amount of these expenses decreased from $24.6 million for the three months ended June 30, 2023 to $23.8 million in 2024 related to lower amortization and indirect support costs. For each of the six months ended June 30, 2024 and June 30, 2023, these expenses were $48.1 million. As a percentage of revenues before reimbursements, these expenses were 25.1% for the six months ended June 30, 2024, compared with 28.1% for the 2023 period. The decrease in the expense as a percent of revenues before reimbursements was due to the increased revenues and operating efficiencies.
Previous wording
Our Platform Solutions segment reported operating earnings of $1.1 million for the three months ended March 31, 2024, compared with operating earnings of $10.0 million in the 2023 period. The segment operating margin decreased from 15.9% for the three months ended March 31, 2023, to 3.5% in the comparable 2024 period. This decrease was primarily due to a reduction in revenues in our Networks service line as we were completing claims related to Hurricane Ian in the 2023 period.
Current wording
Our Platform Solutions segment reported operating earnings of $1.5 million for the three months ended June 30, 2024, compared with operating earnings of $8.1 million in the 2023 period. The segment operating margin decreased from 12.3% for the three months ended June 30, 2023, to 3.8% in the comparable 2024 period. For the six months ended June 30, 2024, our Platform Solutions segment reported operating earnings of $2.6 million, or 3.7% of revenues before reimbursements, compared with 2023 operating earnings of $18.1 million, or 14.1% of revenues before reimbursements. The decrease was primarily due to a reduction in revenues in our Networks service line due to increased weather-related activity in the prior year period resulting in decreased need for staff augmentation services in the 2024 periods.
Previous wording
Operating results for our Platform Solutions segment, including gross profit, for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
Operating results for our Platform Solutions segment, including gross profit, for the three and six months ended June 30, 2024 and 2023 were as follows:
Previous wording
Platform Solutions segment revenues are primarily derived from the property and casualty insurance company markets in the U.S. Revenues before reimbursements by service line for the three months ended March 31, 2024 and 2023 were as follows:
Current wording
Platform Solutions segment revenues are primarily derived from the property and casualty insurance company markets in the U.S. Revenues before reimbursements by service line for the three and six months ended June 30, 2024 and 2023 were as follows:
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Current report — wording carried from elsewhere
There was a decrease in cases of (17.2)% in the six months ended June 30, 2024, compared to the same period in 2023. The decrease in U.S. case volumes in the 2024 year-to-date period was due to increased weather-related activity in the prior year period partially offset by an increase in Global Technical Services. There was a decrease in cases in Canada in the 2024 year-to-date period primarily due to 23,900 less high-frequency, low-severity Contractor Connection cases related to the loss of a customer, as compared with the 2023 period.
Current report — wording carried from elsewhere
For the six months ended June 30, 2024, revenues before reimbursements from our Broadspire segment totaled $191.4 million compared with $171.3 million in the 2023 period. This increase was primarily due to an increase in new client growth across both service lines. There was an increase in segment unit volume, measured principally by cases received, of 0.8% for the six months ended June 30, 2024 compared with the same period of 2023. There was a decrease in claims related to the prior year takeover claims for a disability client in the prior year second quarter, which resulted in 17,700 claims, or 6.5%, with minimal revenues which did not recur in 2024. Revenues were positively impacted by $2.3 million increase in revenues within our Claims Management service line related to income earned which offsets the costs of managing the funds maintained to administer claims for our customers, for which no cases are received, or 1.4% of the increase in revenues. There was also a $5.3 million increase in revenues within our Medical Management service line for which no cases are received, or 3.1% of the increase in revenues. Changes in product mix and in the rates charged for those services accounted for a (0.1)% revenue decrease for the 2024 six-month period compared with the 2023 period,
Current report — wording carried from elsewhere
The provision for income taxes on consolidated income before income tax totaled $5.5 million and $10.5 million for the six months ended June 30, 2024 and 2023, respectively. The overall effective tax rate decreased to 32.9% for the six months ended June 30, 2024 compared with 35.5% for the 2023 period primarily due to one-time discrete tax items in the prior year period.