Crawford & Company

will follow at that time. Should anyone need assistance at any time during this conference, please press star zero and an operator will assist you. As a reminder, ladies and gentlemen, this conference is being recorded today, Tuesday, August 6, 2024. Now I would like to introduce Tammy Stevenson, Crawford & Company's General Counsel.

Thank you, Julie. Some of the matters to be discussed in this conference call and in the supplementary financial presentation may include forward-looking statements that involve risks and uncertainties. These statements may relate to, among other things, our expected future operating results and financial condition, our ability to grow revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plans, collectability of our billed and unbilled account receivable, financial results from our recently completed acquisitions, our continued compliance with the financial and other covenants contained in our financing agreements, our long-term capital resource and liquidity requirements, and our ability to pay dividends in the future. The company's actual results achieved in future quarters could differ materially from the results that may be implied by such forward-looking statements. The company undertakes no obligation to publicly release revisions to any forward-looking statements made in this conference call to reflect events or circumstances occurring after the date of the call, or to reflect the occurrence of unanticipated events. In addition, you are reminded that operating results for any historical period are not necessarily indicative of results to be expected for any future period. For a complete discussion regarding factors which could affect the company's financial performance, please refer to the company's form 10-Q for the quarter end of June 30, 2024, filed with the Securities and Exchange Commission. Particularly the information under the headings risk factors and management's discussion and analysis of financial condition and results of operations, as well as subsequent company filings with the SEC. This presentation also includes certain non-GAAP financial measures as defined under the SEC rules. As required, a reconciliation is provided for those measures to the most directly comparable GAAP measures. I would like now to introduce Mr. Rohit Verma, Chief Executive Officer of Crawford & Company. Rohit, you may begin.

Thank you, Tammy. Good morning and welcome to our second quarter 2024 earnings call. Joining me today is Bruce Swain, our chief financial officer and Tammy Stevenson, our general counsel. Before we start today, the board and I would like to give a warm welcome to our new director, Joel Murphy. Additionally, we would like to thank departing board members, Charlie Ogburn and Michelle Gerard for their service to Crawford and Company. We look forward to collaborating with Joel and wish Charlie and Michelle very well. The second quarter 2024 demonstrated the continued strength of our core non-weather businesses, which delivered strong performances. Although we did continue to see the impact of benign weather reflected in revenues of weather-related business, today I will take you through the operational highlights of the quarter and then I will turn over to Bruce for a deeper review of the financial results for the second quarter. As most of you know, Crawford is the leading publicly traded claims management provider handling over $20 billion in claims annually across 70 countries, and we serve a well-known base of clients, including some of the most recognizable names in the industry. With a workforce of around 10,000 skilled professionals and tens of thousands of field resources, our extensive scale and global reach distinguish us in a fragmented market. positioning us as a preferred partner for top carriers, many of whom are long standing customers. Crawford is an organization with more than 80 years of history, and our focus is on building long term and sustained value for all stakeholders. We have faced a lot of different market dynamics since the company's founding and continue to strategically evolve the model to perform and thrive in all market environments. Extreme weather events are becoming more severe and more frequent globally, driving long term growth in weather related claims revenue for Crawford. Despite relatively benign weather in the last nine months, our catastrophe specific teams remain crucial in supporting carriers and policyholders when severe weather hits. While our weather related revenue can fluctuate, experts believe that claims associated with extreme weather are likely to increase for the foreseeable future. underscoring the importance of our dedicated catastrophe teams in the face of rising long-term demand. Second, Crawford is ideally suited to meet the demand of increased outsourcing of claims processing through our ability to provide capacity, expertise, and scale for the efficient and cost-effective management of outsourced claims. Third, we are gaining share in the fragmented U.S. independent loss adjusting market and continue to build and strengthen our partnerships across all our verticals. Finally, our proprietary insurance technology saves our clients time and money, and we continuously invest in developing, enhancing, and deploying advanced technology solutions around the world. Turning to our quarterly performance, we continue to demonstrate strength in our core business with growth in three of our four segments this quarter. However, our overall consolidated results were impacted by the benign weather trend we have seen over the last nine months. Damage resulting from severe convective storm activity and catastrophic events was at an unusually high level in 2023, and many of these events did not repeat in the second quarter of 2024. As a result, second quarter revenue decreased to $314 million compared to $325 million in the second quarter of 2023. Our operating earnings of $22.1 million also came in just slightly below the second quarter of 2023. Importantly, our non-weather businesses performed well this quarter, underscoring the balance and resilience of Crawford's business platform. By growing and strengthening our operations, we are well positioned to meet our clients' diverse needs during all weather patterns. Broadspire achieved significant growth again this quarter, setting a new quarterly revenue and earnings record. Our GTS service line also had a record revenue this quarter, and we saw solid growth in our international operations. Our efforts to improve efficiencies across our business are yielding results, with operating earnings growth in three segments this quarter. And as a result of the hard work of our talented staff and proven success fostering client relationships, we added a total of $23 million in new and enhanced business this quarter. As always, our conservative approach to capital management is reflected in the strength of our balance sheet. As we discussed last quarter, our weather-related business faces a difficult comparison to elevated catastrophe activity in the first half of 2023. As shown by the chart on the left, at Crawford, we achieved 6% growth in our non-weather business this quarter, which reflects the continued traction we are getting in our growth strategy that is diversifying our revenue mix. Our weather-related business, which includes U.S. CAT, U.S. loss adjusting in Australia, decreased 21%. The middle chart shows our network business. As a reminder, networks serve our largest clients with their catastrophe specific claims handling needs. Similar to the first quarter of this year, this segment saw a decrease in revenues from claims management services frequently tied to storm activity. Our network service lines saw a revenue decline of 65% this quarter directly related to reduced weather related claims. Reduced losses associated with storm activity have been observed across the industry. Profiled on the chart on the right, Gallagher-Reed reported a 21% decrease in insured losses from U.S. severe convective storms in the first half of 2024, consistent with the decrease we have seen in our weather-related business. This may sound surprising given the significant weather events in the news, including last month's Hurricane Beryl, one of the earliest storms in the U.S. However, insured damage from Beryl was lower than similar storms in prior years. Given the available capacity at carriers due to benign weather patterns seen over the last nine months, we expect minimum revenue impact from Beryl. To date in 2024, carriers have largely managed claims in-house. However, our teams stand ready to provide crucial support assisting carriers in managing increased claims volumes and aiding in the rebuilding of severely affected communities when severe storm activity picks up. Our capital allocation strategy focuses on investing in innovation and technology to enhance claims handling and pursuing strategic acquisitions and partnerships to expand market share. We are disciplined in our approach to capital allocation, and our balanced approach is centered on driving sustainable long-term growth and delivering enhanced value to shareholders. Our leverage ratio remains low at 2.09 times EBITDA, giving us significant financial flexibility and liquidity. Additionally, we prioritize returning capital to shareholders via regular dividends, reflecting our strong balance sheet. We continued our quarterly dividend of $0.07 for CRDA and CRDB shares in the second quarter of 2024. With that, let me turn the call over to Bruce for a deeper look at our operational and financial performance.