CRAWFORD & CO

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, 2026 and 2025, and as of March 31, 2026, and December 31, 2025, 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, 2025. 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, 2026 and 2025, and as of June 30, 2026, and December 31, 2025, 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, 2025. 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 $2.5 million, or (0.8)%, for the three months ended March 31, 2026, compared with the same period of 2025. This decrease was primarily driven by lower volumes in our U.S. Property & Casualty reportable segment. Changes in foreign exchange rates increased our consolidated revenues before reimbursements by $7.8 million, or 2.5%, for the three months ended March 31, 2026, 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, 2026.

Current wording

Consolidated revenues before reimbursements decreased $1.6 million, or (0.5)%, for the three months ended June 30, 2026, compared with the same period of 2025. This decrease was primarily driven by lower volumes in our U.S. Property & Casualty reportable segment, as well as revenue reductions due to the disposal of the Crawford Legal Services businesses in our International Operations reportable segment. Changes in foreign exchange rates increased our consolidated revenues before reimbursements by $7.7 million, or 2.4%, for the three months ended June 30, 2026 and increased revenues by $15.5 million, or 2.5%, for the six months ended June 30, 2026, 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, 2026.

Previous wording

Excluding foreign currency impacts, consolidated revenues before reimbursements decreased $10.3 million, or (3.3)%, for the three months ended March 31, 2026 compared with the same period of 2025. Revenues from the U.S. Property & Casualty segment decreased in the 2026 first quarter primarily due to revenue reductions in Catastrophe Services, Claims Solutions and Contractor Connection. Revenues from the Broadspire segment increased for the quarter due to an increase in Claims and Medical Management revenues, partially offset by a reduction in Subrogation revenues. Excluding foreign currency impacts, revenues from the International Operations segment decreased in the 2026 first quarter compared with the same period in 2025 due to reductions in the U.K., Europe and Latin America, partially offset by revenue increases in Australia, Canada, and Asia.

Current wording

Excluding foreign currency impacts, consolidated revenues before reimbursements decreased $9.3 million, or (2.9)%, for the three months ended June 30, 2026 and decreased $19.6 million, or (3.1)%, for the six months ended June 30, 2026 compared with the same periods of 2025. Revenues from the U.S. Property & Casualty segment decreased in the 2026 second quarter and year to date period primarily due to a continued decrease in staff augmentation and weather-driven services within our Catastrophe Services and Contractor Connection businesses. Revenues from the Broadspire segment increased for each of the 2026 periods due to an increase in Claims and Medical Management revenues, partially offset by a reduction in Subrogation revenues. Excluding foreign currency impacts, revenues from the International Operations segment decreased in the 2026 second quarter compared with the same period in 2025 due to reductions in the U.K. and Latin America, partially offset by revenue increases in Australia, Canada, and Asia. Excluding foreign currency impacts, revenues from the International Operations segment decreased in the six months ended June 30, 2026 as compared to the same period in 2025 due to reductions in the U.K., Europe, and Latin America, partially offset by revenue increases in Australia, Canada, and Asia.

Previous wording

Overall, there was an increase in cases received of 0.8% for the three months ended March 31, 2026. Within our U.S. Property & Casualty segment, cases decreased for the 2026 first quarter as a result of a weather-related reduction in all service lines other than Contractor Connection. There was an increase in cases within our Broadspire segment for the first quarter primarily due to an increase in new disability clients within Claims Management. Cases within our International Operations segment increased for the first quarter, primarily due to an increase in high-frequency, low-severity cases in Spain and weather-related activity in Australia, partially offset by reductions in low-severity cases in Brazil.

Current wording

Overall, there were slight increases in cases received of 0.1% and 0.4% for the three and six months ended June 30, 2026, respectively. Within our U.S. Property & Casualty segment, cases decreased for the three and six months ended June 30, 2026 as a result of a weather-related reduction in all service lines. There was a slight decrease in cases within our Broadspire segment for the three months ended June 30, 2026 as compared to the prior year period due to a decline in Subrogation cases. For the six months ended June 30, 2026, Broadspire cases increased due primarily to increases in new disability clients within our Claims Management service line, partially offset by a decline in Subrogation cases and decreased casualty claims within our Claims Management service line. Cases within our International Operations segment increased for the three and six months ended June 30, 2026, as compared to the prior year period, primarily due to an increase in high-frequency, low-severity cases in Spain.

Previous wording

Cases received are presented below by segment for the three months ended March 31, 2026 and 2025:

Current wording

Cases received are presented below by segment for the three and six months ended June 30, 2026 and 2025:

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, 2026:

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, 2026:

Previous wording

Costs of services provided, before reimbursements, decreased $0.5 million, or (0.2)%, for the three months ended March 31, 2026, as compared to the 2025 period. As a percentage of revenues before reimbursements, costs of services decreased consistent with the decrease in revenues.

Current wording

Costs of services provided, before reimbursements, increased $1.7 million, or 0.8%, for the three months ended June 30, 2026 and increased $1.2 million, or 0.3%, for the six months ended June 30, 2026, as compared to the 2025 periods. As a percentage of revenues before reimbursements, costs of services decreased consistent with the decrease in revenues.

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) 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, loss on disposal of businesses, net, software impairment, and net (income) loss attributable to noncontrolling interests.

Previous wording

Operating earnings in our U.S. Property & Casualty segment totaled $7.6 million, or 10.4% of revenues before reimbursements, for the three months ended March 31, 2026, compared with 2025 operating earnings of $9.8 million, or 11.9% of revenues before reimbursements. The decrease in operating earnings in the 2026 first quarter was driven by a decline in revenues within the Catastrophe Services, Claims Solutions, and Contractor Connection service lines, offsetting benefits from improved operating efficiency within Global Technical Services.

Current wording

Operating earnings in our U.S. Property & Casualty segment totaled $7.2 million, or 9.7% of revenues before reimbursements, for the three months ended June 30, 2026, compared with 2025 operating earnings of $7.5 million, or 9.0% of revenues before reimbursements. For the six months ended June 30, 2026, our U.S. Property & Casualty segment reported operating earnings of $14.8 million, or 10.1% of revenues before reimbursements, compared with 2025 operating earnings of $17.2 million, or 10.5% of revenues before reimbursements. The decrease in operating earnings in the three and six months ended June 30, 2026 as compared to the prior year periods was driven by a decline in revenues within the Catastrophe Services and Contractor Connection service lines, offsetting benefits from reduced centralized indirect support costs.

Previous wording

Excluding centralized indirect support costs, gross profit decreased from $23.1 million, or 28.1% of revenues before reimbursements in 2025, to $20.6 million, or 28.3% of revenues before reimbursements, in the three months ended March 31, 2026, primarily due to revenue declines within the Claims Solutions and Contractor Connection service line, partially offset by improvements in operational efficiencies within Global Technical Services.

Current wording

Excluding centralized indirect support costs, gross profit decreased from $21.3 million, or 25.8% of revenues before reimbursements in 2025, to $19.2 million, or 25.9% of revenues before reimbursements, in the three months ended June 30, 2026. For the six months ended June 30, 2026, gross profit decreased from $44.4 million or 26.9% of revenues before reimbursements in 2025 to $39.8 million, or 27.1% of revenues before reimbursements, primarily due to revenue declines within the Catastrophe Services and Contractor Connection service lines.

Previous wording

Operating results for our U.S. Property & Casualty segment, including gross profit, for the three months ended March 31, 2026 and 2025 were as follows:

Current wording

Operating results for our U.S. Property & Casualty segment, including gross profit, for the three and six months ended June 30, 2026 and 2025 were as follows:

Previous wording

U.S. Property & Casualty segment revenues are primarily derived from the property and casualty insurance company markets within the U.S. Revenues before reimbursements by service line for the three months ended March 31, 2026 and 2025 were as follows:

Current wording

U.S. Property & Casualty segment revenues are primarily derived from the property and casualty insurance company markets within the U.S. Revenues before reimbursements by service line for the three and six months ended June 30, 2026 and 2025 were as follows:

Previous wording

Revenues before reimbursements from our U.S. Property & Casualty segment totaled $72.9 million in the three months ended March 31, 2026, compared with $82.2 million in the 2025 period. This decrease was primarily driven by a continued decrease in weather-driven services within our Claims Solutions and Catastrophe Services businesses. There was a decrease in segment unit volume, measured principally by cases received, of (16.9)% for the three months ended March 31, 2026, compared with the 2025 period. This includes a decrease in low value inspection services cases, of 10,800 or (11.1)%. The decrease in revenues from weather-driven activity in our Catastrophe Services business resulted in a decrease in revenues of $4.0 million, or (4.9)%, for which there are minimal cases related. Changes in product mix and in the rates charged for those services accounted for a (0.6)% revenue decrease for the three months ended March 31, 2026 compared with the same period in 2025.

Current wording

Revenues before reimbursements from our U.S. Property & Casualty segment totaled $74.1 million in the three months ended June 30, 2026, compared with $82.5 million in the 2025 period. This decrease was primarily driven by a continued decrease in weather-driven services within our Catastrophe Services and Contractor Connection businesses. There was a decrease in segment unit volume, measured principally by cases received, of (16.5)% for the three months ended June 30, 2026, compared with the 2025 period. This includes a decrease in low value inspection services cases, of 4,150 or (4.5)%. The decrease in revenues in our Catastrophe Services business of $(5.4) million, or (6.6)%, for which there are minimal cases, is primarily due to a continued decrease in staff augmentation and weather-driven services. During the second quarter of 2025, there was an increase in complex claims of 2,250, or 2.4%, within Global Technical Services for which revenue is expected to be recognized in future periods. Changes in product mix and in the rates charged for those services accounted for a 6.0% revenue increase for the three months ended June 30, 2026 compared with the same period in 2025.

Previous wording

Revenue variance components for our U.S. Property & Casualty segment, for the three months ended March 31, 2026 are summarized as follows:

Current wording

Revenue variance components for our U.S. Property & Casualty segment, for the three and six months ended June 30, 2026 are summarized as follows:

Previous wording

Reimbursements for out-of-pocket expenses incurred in our U.S. Property & Casualty segment, which are included in total Company revenues, were $1.8 million for each of the three months ended March 31, 2026 and 2025.

Current wording

Reimbursements for out-of-pocket expenses incurred in our U.S. Property & Casualty segment, which are included in total Company revenues, were $1.6 million and $1.8 million for each of the three months ended June 30, 2026 and 2025, respectively. Reimbursements were $3.4 million and $3.6 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

U.S. Property & Casualty segment unit volumes by service line, measured by cases received, for the three months ended March 31, 2026 and 2025 were as follows:

Current wording

U.S. Property & Casualty segment unit volumes by service line, measured by cases received, for the three and six months ended June 30, 2026 and 2025 were as follows:

Previous wording

Overall, there was a decrease in cases of (16.9)% in the three months ended March 31, 2026, compared to the same period in 2025. The decrease in Claims Solutions volumes in the 2026 first quarter was primarily due to the decrease in low value inspection services of 10,800 cases. There was a decrease in Catastrophe Services in the 2026 first quarter primarily due to less weather-driven activity, as compared with the 2025 period.

Current wording

Overall, there was a decrease in cases of (16.5)% in the three months ended June 30, 2026, compared to the same period in 2025. Global Technical Services declined primarily due to 2,250 cases received in the prior year for a specific complex event and a decrease in claim referrals from specialized programs. The decrease in Claims Solutions volumes in the 2026 second quarter was primarily due to the decrease in low value inspection services of 4,150 cases. There were decreases in Contractor Connection and Catastrophe Services in the 2026 second quarter primarily due to less weather-driven activity, as compared with the 2025 period.

Previous wording

The most significant expense in our U.S. Property & Casualty 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 62.6% for the three months ended March 31, 2026 compared with 61.8% for the 2025 period. The total dollar amount of these expenses decreased to $45.6 million for the three months ended March 31, 2026 from $50.8 million for the comparable 2025 period. The first quarter decrease was primarily in line with the reduction of revenues, driven by the reduction of costs affiliated with Catastrophe Services, as well as a reduction of claims within Claims Solution and Global Technical Services. There was an average of 1,637 full-time equivalent employees in this segment in the three months ended March 31, 2026 compared with an average of 1,811 in the 2025 period.

Current wording

The most significant expense in our U.S. Property & Casualty 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 61.2% for the three months ended June 30, 2026 compared with 61.8% for the 2025 period. For the six months ended June 30, 2026, these expenses were 61.9% compared with 61.8% for the 2025 period. The total dollar amount of these expenses decreased to $45.3 million for the three months ended June 30, 2026 from $51.0 million for the comparable 2025 period, and were $91.0 million for the six months ended June 30, 2026, decreasing from $101.8 million in 2025. The decreases were primarily in line with the reduction of revenues, driven by the reduction of costs associated with Catastrophe Services, as well as a reduction of claims within Claims Solution and Global Technical Services for each of the periods presented. There was an average of 1,631 full-time equivalent employees in this segment in the six months ended June 30, 2026 compared with an average of 1,817 in the 2025 period.

Previous wording

Operating results for our Broadspire segment, including gross profit, for the three months ended March 31, 2026 and 2025 were as follows:

Current wording

Operating results for our Broadspire segment, including gross profit, for the three and six months ended June 30, 2026 and 2025 were as follows:

Previous wording

Broadspire revenues are derived from the property, 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, 2026 and 2025 were as follows:

Current wording

Broadspire revenues are derived from the property, 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, 2026 and 2025 were as follows:

Previous wording

Revenues before reimbursements from our Broadspire segment totaled $104.8 million in the three months ended March 31, 2026 compared with $103.7 million in the 2025 period. This increase was primarily due to an increase in cases in the Claims Management and Medical Management service lines. There was an increase in segment unit volume, measured principally by cases received, of 8.7% for the three months ended March 31, 2026 compared with the same period of 2025. This was primarily due to an increase high-frequency, low-severity claims within our Claims Management service line of 14,900, or 10.2%, primarily related to new disability clients. Revenues were negatively impacted by a $(1.0) million decrease 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 (0.9)% decrease in revenues. There was also a $0.3 million increase in revenues within our Medical Management service line for which no cases are received, or a 0.2% increase in revenues. Changes in product mix and in the rates charged for those services accounted for a 3.2% revenue increase for the 2026 first quarter compared with the 2025 period.

Current wording

For the six months ended June 30, 2026, revenues before reimbursements from our Broadspire segment totaled $214.2 million compared with $211.8 million in the 2025 period. This increase was primarily due to an increase in cases in the Claims Management and Medical Management service lines. There was an increase in segment unit volume, measured principally by cases received, of 4.2% for the six months ended June 30, 2026 compared with the same period of 2025. This was primarily due to an increase of high-frequency, low-severity claims within our Claims Management service line of 21,200, or 7.1%, primarily related to new disability clients. Revenues were negatively impacted by a $(2.1) million decrease 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 (1.0)% decrease in revenues. There was also a $1.7 million increase in revenues within our Medical Management service line for which no cases are received, or a 0.8% increase in revenues. Changes in product mix and in the rates charged for those services accounted for a 4.2% revenue increase for the six months ended June 30, 2026 compared with the 2025 period.

Previous wording

Revenue variance components for our Broadspire segment, for the three months ended March 31, 2026 are summarized as follows:

Current wording

Revenue variance components for our Broadspire segment, for the three and six months ended June 30, 2026 are summarized as follows:

Previous wording

Reimbursements for out-of-pocket expenses incurred in our Broadspire segment were $0.7 million and $0.8 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

Reimbursements for out-of-pocket expenses incurred in our Broadspire segment were $0.7 million for each of the three months ended June 30, 2026 and 2025. Reimbursements were $1.4 million and $1.5 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Broadspire unit volumes by service line, as measured by cases received, for the three months ended March 31, 2026 and 2025 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, 2026 and 2025 were as follows:

Previous wording

Overall case volumes increased 8.7% for the three months ended March 31, 2026 due primarily to an increase in new disability clients within our Claims Management service line, increases in physician review services and utilization management claims within Medical Management, partially offset by a decrease in Subrogation cases due to the loss of a customer.

Current wording

Overall case volumes decreased (0.1)% for the three months ended June 30, 2026 due primarily to a decline in Subrogation cases due to the loss of a customer, a reduction in utilization management claims within Medical Management, and decreased casualty claims within our Claims Management service line, offset by increases in new disability clients within our Claims Management service line.

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. These expenses totaled $60.4 million for the three months ended March 31, 2026, compared to $58.3 million for the 2025 period. As a percent of the related revenues before reimbursements, these expenses increased from 56.3% in the 2025 first quarter to 57.6% in 2026 first quarter. The increase in cost and as a percentage of revenues before reimbursements for the 2026 first quarter was primarily due to increased employees and average wages related to the increase in revenues, as well as product mix changes. Average full-time equivalent employees in this segment totaled 2,935 in the three months ended March 31, 2026, compared with 2,841 in the 2025 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 $60.6 million for the three months ended June 30, 2026, compared to $60.7 million for the 2025 period. As a percent of the related revenues before reimbursements, these expenses decreased from 56.1% in the 2025 second quarter to 55.4% in the 2026 second quarter. For the six months ended June 30, 2026, these expenses totaled $120.9 million, compared to $119.0 million in 2025. For the six months ended June 30, 2026, these expenses, as a percent of the related revenues before reimbursements, increased from 56.2% for the six months ended June 30, 2025 to 56.5% for the 2026 period. The increase in costs as a percentage of revenues before reimbursements for the 2026 three and six month periods was primarily due to increased employees and average wages related to the increase in revenues, as well as product mix changes. Average full-time equivalent employees in this segment totaled 2,931 in the six months ended June 30, 2026, compared with 2,860 in the 2025 period.

Previous wording

Broadspire segment expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor as a percent of revenues before reimbursements decreased slightly to 32.0% for the three months ended March 31, 2026, from 32.2% in the 2025 period. The amount of these expenses increased slightly from $33.4 million for the three months ended March 31, 2025 to $33.5 million in 2026. The slight decrease in the 2026 first quarter expenses as a percentage of revenues before reimbursements was due to improved operating leverage.

Current wording

Broadspire segment expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor as a percent of revenues before reimbursements decreased slightly to 30.3% for the three months ended June 30, 2026, from 30.8% in the 2025 period. The amount of these expenses decreased slightly from $33.3 million for the three months ended June 30, 2025 to $33.1 million in 2026. These expenses were $66.6 million for each of the six months ended June 30, 2026 and 2025. As a percentage of revenues before reimbursements, these expenses were 31.1% for the six months ended June 30, 2026, compared with 31.4% for the 2025 period. The slight decrease in the 2026 three and six months ended June 30, 2026 expenses as a percentage of revenues before reimbursements was due to improved operating leverage and lower centralized indirect support costs.

Previous wording

Operating earnings in our International Operations segment were $4.0 million, or 3.0% of revenues before reimbursements, for the three months ended March 31, 2026, compared with $2.2 million, or 1.8% of revenues before reimbursements, in the 2025 period. The increase in operating earnings in the 2026 period was primarily due to improved operating results in Canada, Australia, and Asia, partially offset by a reduction in operating earnings within the U.K. and Latin America.

Current wording

Operating earnings in our International Operations segment were $10.9 million, or 7.9% of revenues before reimbursements, for the three months ended June 30, 2026, compared with $7.3 million, or 5.5% of revenues before reimbursements, in the 2025 period. For the six months ended June 30, 2026, our International Operations segment reported operating earnings of $14.9 million, or 5.5% of revenues before reimbursements, compared with operating earnings of $9.6 million, or 3.7% of revenues before reimbursements in 2025. The increase in operating earnings in the three months ended June 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia and Asia, partially offset by a reduction in operating earnings within the U.K. and Europe. The increase in operating earnings for the six months ended June 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia, and Asia, partially offset by a reduction in operating earnings within the U.K., Europe, and Latin America.

Previous wording

Excluding centralized indirect support costs, gross profit increased slightly from $22.3 million, or 17.7% of revenues before reimbursements in 2025, to $22.5 million, or 17.1% of revenues before reimbursements, in the three months ended March 31, 2026. The slight increase in gross profit in the 2026 period was primarily due to improved operating results in Canada, Australia, and Asia, partially offset by an reduction in earnings within the U.K. and Latin America.

Current wording

Excluding centralized indirect support costs, gross profit increased slightly from $27.0 million, or 20.4% of revenues before reimbursements in 2025, to $30.9 million, or 22.4% of revenues before reimbursements, in the three months ended June 30, 2026. For the six months ended June 30, 2026, gross profit increased from $49.3 million, or 19.1% of revenues before reimbursements in 2025, to $53.4 million, or 19.8% of revenues before reimbursements. The increase in gross profit in the three months ended June 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia and Asia, partially offset by a reduction in operating earnings within the U.K. and Europe. The increase in gross profit for the six months ended June 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia, and Asia, partially offset by a reduction in earnings within the U.K., Europe, and Latin America.

Previous wording

Operating results for our International Operations segment, including gross profit, for the three months ended March 31, 2026 and 2025 were as follows:

Current wording

Operating results for our International Operations segment, including gross profit, for the three and six months ended June 30, 2026 and 2025 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, Canada, 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, 2026 and 2025 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, Canada, 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, 2026 and 2025 were as follows:

Previous wording

Revenues before reimbursements from our International Operations segment totaled $131.9 million in the three months ended March 31, 2026, compared with $126.2 million in the 2025 period. The change in exchange rates increased our International Operations segment revenues by approximately 6.2%, or $7.8 million, for the three months ended March 31, 2026 as compared with the 2025 period. Absent foreign exchange rate fluctuations, International Operations segment revenues would have been $124.0 million for the three months ended March 31, 2026. There was an increase in segment unit volume, measured principally by cases received, of 4.9% for the three months ended March 31, 2026, compared with the 2025 period. There was a net increase in high-frequency, low-severity cases of 3,500, or 2.5%, primarily in Spain and Finland, offset by a decrease in Brazil. In addition, revenues decreased by $3.2 million or 2.5% in the current year within Australia and the U.K. within our legal services business. In the Middle East, revenue was $1.5 million or 1.2% lower due to revenues related to weather activity recorded in 2025 for cases received at the end of 2024. Changes in product mix and in the rates charged for those services accounted for a 3.3% revenue increase for the three months ended March 31, 2026 compared with the same period in 2025.

Current wording

Revenues before reimbursements from our International Operations segment totaled $138.0 million in the three months ended June 30, 2026, compared with $132.3 million in the 2025 period. The change in exchange rates increased our International Operations segment revenues by approximately 5.8%, or $7.7 million, for the three months ended June 30, 2026 as compared with the 2025 period. Absent foreign exchange rate fluctuations, International Operations segment revenues would have been $130.3 million for the three months ended June 30, 2026. There was an increase in segment unit volume, measured principally by cases received, of 11.6% for the three months ended June 30, 2026, compared with the 2025 period. There was a net increase in high-frequency, low-severity cases of 17,900, or 13.2%, primarily in Spain, Canada, and the Netherlands, partially offset by a decreases in Germany and Brazil. In addition, revenues decreased by $(4.2) million or (3.2)% in the current year due to the disposition of Crawford Legal Services businesses. In Australia, storm related cases recorded in the prior year second quarter with revenues recorded in future periods decreased by 6,000, or (4.4)%. Changes in product mix and in the rates charged for those services accounted for a (1.2)% revenue decrease for the three months ended June 30, 2026 compared with the same period in 2025.

Previous wording

Based on constant foreign exchange rates, revenues decreased by $2.1 million. Excluding foreign currencies, revenues decreased in the U.K. for the 2026 first quarter due a reduction in higher-value third-party administration claims as well as a reduction in legal services as compared to the prior year first quarter. There was a decrease in revenues in Europe in the 2026 period, compared with 2025, due to a reduction in flood related revenues in the Middle East. There was an increase in Australia in the 2026 first quarter, compared with 2025, due to increased weather-related activity, partially offset by the sale of the legal services division. Canada increased in the 2026 first quarter, compared with 2025, related to a new client in third-party administration. There was an increase in revenues in Asia in the 2026 first quarter, compared with 2025, due to earthquakes in Thailand in 2025 that continue to generate revenues in the current year, as well as increases in Hong Kong and Taiwan. The decrease in revenues in Latin America in the 2026 period was primarily driven by a reduction in weather-related cases in Chile.

Current wording

Excluding the impact of foreign currencies, revenues decreased in the U.K. for the three and six month periods due to a reduction in higher-value third-party administration claims as well as a reduction in legal services. There was an increase in revenues in Europe in the 2026 periods, compared with 2025, due to new clients in Spain, Norway, and the Netherlands, partially offset by a reduction in flood related revenues in the Middle East. There was an increase in Australia in the three and six months ended June 30, 2026, compared with the prior year periods, due to increased weather-related activity, partially offset by the sale of the legal services division. Canada increased in each period due to a new client in third-party administration. There was an increase in revenues in Asia for the three and six month periods, compared with 2025, due to earthquakes in Thailand in 2025 that continue to generate revenues in the current year, as well as improved results in Malaysia. The decrease in revenues in Latin America in the 2026 periods was primarily driven by a reduction in weather-related cases in Chile.

Previous wording

Revenue variance components for our International Operations segment, for the three months ended March 31, 2026 are summarized as follows:

Current wording

Revenue variance components for our International Operations segment, for the three and six months ended June 30, 2026 are summarized as follows:

Previous wording

Reimbursements for out-of-pocket expenses incurred in our International Operations segment, which are included in total Company revenues, were $8.4 million and $8.6 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

Reimbursements for out-of-pocket expenses incurred in our International Operations segment, which are included in total Company revenues, were $6.3 million and $9.1 million for the three months ended June 30, 2026 and 2025, respectively. Reimbursements were $14.7 million and $17.8 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

International Operations segment unit volumes by geographic region, measured by cases received, for the three months ended March 31, 2026 and 2025 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, 2026 and 2025 were as follows:

Previous wording

Overall, there was an increase in cases received of 4.9% for the three months ended March 31, 2026, compared with the 2025 period. The increases were primarily related to high-frequency, low-severity cases within Europe, where Spain had an increase of 10,000 cases and Finland increased by 1,600 cases. In addition, Australia volume improved by 3,100 cases. These increases were offset by Latin America where high-frequency, low-value cases received in Brazil decreased by 8,100 cases from the 2025 period.

Current wording

Overall, there was an increase in cases received of 11.6% for the three months ended June 30, 2026, compared with the 2025 period. The increases were primarily related to high-frequency, low-severity cases within Europe, where Spain had an increase of 16,000 cases and the Netherlands increased by 3,000 cases. In addition, Canada volume improved due to the addition of a new client with high-frequency, low-severity cases. Australia had a decrease in claims primarily due to 6,000 storm claims added in the prior year second quarter, offset by additions related to 2026 weather-related activity. U.K had a decline in third-party administration cases. Latin America also had decreased cases due to a reduction in high-frequency, low-value cases received in Brazil of 2,000 cases.

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, these expenses were 68.5% for each of the three months ended March 31, 2026 and 2025. The total dollar amount of these expenses was $90.4 million for the three months ended March 31, 2026, compared to $86.5 million for the 2025 period. The increase in cost was due to an increase in compensation expense, related to the increase in revenues, including incentive compensation, partially offset by a decrease in non-employee labor. There was an average of 4,219 full-time equivalent employees in this segment in the three months ended March 31, 2026, compared with an average of 4,430 in the comparable 2025 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 64.5% and 66.6% for the three months ended June 30, 2026 and 2025, respectively. The total dollar amount of these expenses was $89.0 million for the three months ended June 30, 2026, compared to $88.2 million for the 2025 period. The fluctuation in exchange rates resulted in an increase to these expenses by $4.9 million. The decrease as a percentage of revenues before reimbursements was due to lower administrative compensation costs and non-employee labor within the region. For the six months ended June 30, 2026, these expenses were 66.5%, compared with 67.6% in 2025, and were $179.3 million for the six months ended June 30, 2026 compared to $174.6 million in 2025. The fluctuation in exchange rates resulted in an increase to these expenses by $10.3 million. The decrease as a percentage of revenues before reimbursements was due to lower administrative compensation costs and non-employee labor within the region. There was an average of 4,195 full-time equivalent employees in this segment in the six months ended June 30, 2026, compared with an average of 4,418 in the comparable 2025 period.

Previous wording

The provision for income taxes on consolidated income before income tax totaled $2.4 million and $2.5 million for the three months ended March 31, 2026 and 2025, respectively. The overall effective tax rate increased to 32.6% for the three months ended March 31, 2026 compared with 26.9% for the 2025 period primarily due to changes in the mix of income and U.S. taxation of foreign subsidiary profits in the 2026 results.

Current wording

The provision for income taxes on consolidated income before income tax totaled $6.2 million and $5.8 million for the three months ended June 30, 2026 and 2025, respectively. The overall effective tax rate decreased to 31.7% for the three months ended June 30, 2026 compared with 42.8% for the 2025 period primarily due to a one-time expense of $1.3 million relating to administrative guidance issued by a foreign tax authority in 2025.

Previous wording

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 $3.4 million and $4.8 million for the three months ended March 31, 2026 and 2025, respectively. Interest income was $0.8 million for each of the three months ended March 31, 2026 and 2025.

Current wording

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 $3.6 million and $4.7 million for the three months ended June 30, 2026 and 2025, respectively. Interest income was $0.8 million for each of the three months ended June 30, 2026 and 2025. Corporate interest expense totaled $7.0 million and $9.4 million for the six months ended June 30, 2026 and 2025, respectively. Interest income was $1.5 million and $1.6 million for the six months ended June 30, 2026 and 2025, respectively.