Crawford & Company (CRD-A) 10-Q 2020 Q1 Quarterly report

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 Form 10-Q

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

for the quarterly period ended March 31, 2020

OR

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

for the transition period from ____ to ____

Commission file number 1-10356

CRAWFORD & COMPANY

(Exact name of Registrant as specified in its charter)

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

(404) 300-1000

(Registrant's telephone number, including area code)

____________________________________________________________

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

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

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

Yes þ          Noo

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).                        Yes þ          Noo

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

Large accelerated filer	o	Accelerated filer	þ
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

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

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

Yeso          Noþ

The number of shares outstanding of each class of the Registrant's common stock, as of April 28, 2020, was as follows:

Class A Common Stock, $1.00 par value: 30,518,579

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

CRAWFORD & COMPANY

Quarterly Report on Form 10-Q

Quarter Ended March 31, 2020

Table of Contents

		Page
Part I. Financial Information
Item 1.	Financial Statements:	3
	Condensed Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2020 and 2019	3
	Condensed Consolidated Statements of Comprehensive (Loss) Income (unaudited) for the three months months ended March 31, 2020 and 2019	4
	Condensed Consolidated Balance Sheets (unaudited) as of March 31, 2020 and December 31, 2019	5
	Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2020 and 2019	7
	Condensed Consolidated Statements of Shareholders' Investment (unaudited) as of and for the three months ended March 31, 2020 and 2019	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
	Report of Independent Registered Public Accounting Firm	27
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44
Part II. Other Information
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 6.	Exhibits	46
Signatures		47

Part I — Financial Information

Item 1. Financial Statements

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

	Three Months Ended March 31,
(In thousands, except per share amounts)	2020			2019
Revenues:
Revenues before reimbursements	$	237,531		$	247,058
Reimbursements	8,515			9,319
Total Revenues	246,046			256,377
Costs and Expenses:
Costs of services provided, before reimbursements	177,604			177,888
Reimbursements	8,515			9,319
Total costs of services	186,119			187,207
Selling, general, and administrative expenses	55,754			58,659
Corporate interest expense, net of interest income of $111 and $350, respectively	2,224			2,716
Goodwill impairment	17,674			—
Restructuring costs	5,714			—
Total Costs and Expenses	267,485			248,582
Other (Expense) Income, net	(206		)	907
(Loss) Income Before Income Taxes	(21,645		)	8,702
(Benefit) Provision for Income Taxes	(8,486		)	2,933
Net (Loss) Income	(13,159		)	5,769
Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests	1,760			340
Net (Loss) Income Attributable to Shareholders of Crawford & Company	$	(11,399	)	$	6,109
(Loss) Earnings Per Share - Basic:
Class A Common Stock	$	(0.21	)	$	0.12
Class B Common Stock	$	(0.23	)	$	0.10
(Loss) Earnings Per Share - Diluted:
Class A Common Stock	$	(0.21	)	$	0.12
Class B Common Stock	$	(0.23	)	$	0.10
Weighted-Average Shares Used to Compute Basic Earnings Per Share:
Class A Common Stock	30,562			30,658
Class B Common Stock	22,578			23,367
Weighted-Average Shares Used to Compute Diluted Earnings Per Share:
Class A Common Stock	30,562			31,106
Class B Common Stock	22,578			23,367

(See accompanying notes to condensed consolidated financial statements)

3

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

Unaudited

	Three Months Ended March 31,
(In thousands)	2020			2019
Net (Loss) Income	$	(13,159	)	$	5,769
Other Comprehensive (Loss) Income:
Net foreign currency translation (loss) gain, net of tax of $0 and $0, respectively	(3,472		)	3,046
Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $651 and $690, respectively	1,928			2,011
Other Comprehensive (Loss) Income	(1,544		)	5,057
Comprehensive (Loss) Income	(14,703		)	10,826
Comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interests	1,759			356
Comprehensive (Loss) Income Attributable to Shareholders of Crawford & Company	$	(12,944	)	$	11,182

(See accompanying notes to condensed consolidated financial statements)

4

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

			*
(In thousands)	March 31, 2020		December 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents	$	83,110	$	51,802
Accounts receivable, less allowance for doubtful accounts of $9,374 and $9,348, respectively	121,230		128,217
Unbilled revenues, at estimated billable amounts	108,898		103,894
Income taxes receivable	13,289		7,820
Prepaid expenses and other current assets	23,470		23,476
Total Current Assets	349,997		315,209
Net Property and Equipment	30,680		31,425
Other Assets:
Operating lease right-of-use assets, net	108,974		102,354
Goodwill	62,883		80,642
Intangible assets arising from business acquisitions, net	72,625		75,083
Capitalized software costs, net	65,850		66,445
Deferred income tax assets	19,221		17,971
Other noncurrent assets	71,442		70,884
Total Other Assets	400,995		413,379
TOTAL ASSETS	$	781,672	$	760,013

*    Derived from the audited Consolidated Balance Sheet

(See accompanying notes to condensed consolidated financial statements)

5

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS — CONTINUED

Unaudited

				*
(In thousands, except par value amounts)	March 31, 2020			December 31, 2019
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings	$	39,784		$	28,531
Accounts payable	33,335			34,377
Accrued compensation and related costs	58,140			68,499
Self-insured risks	10,594			11,311
Income taxes payable	—			3,030
Operating lease liabilities	29,277			30,765
Other accrued liabilities	35,948			31,449
Deferred revenues	31,265			28,288
Current installments of finance leases	38			15
Total Current Liabilities	238,381			236,265
Noncurrent Liabilities:
Long-term debt and finance leases, less current installments	187,271			148,408
Operating lease liabilities	95,522			87,064
Deferred revenues	24,042			24,080
Accrued pension liabilities	60,548			65,909
Other noncurrent liabilities	31,677			33,410
Total Noncurrent Liabilities	399,060			358,871
Redeemable Noncontrolling Interests	430			2,310
Shareholders' Investment:
Class A common stock, $1.00 par value; 50,000 shares authorized; 30,519 and 30,610 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	30,519			30,610
Class B common stock, $1.00 par value; 50,000 shares authorized; 22,510 and 22,671 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	22,510			22,671
Additional paid-in capital	63,949			63,392
Retained earnings	231,927			249,551
Accumulated other comprehensive loss	(207,876		)	(206,907		)
Shareholders' Investment Attributable to Shareholders of Crawford & Company	141,029			159,317
Noncontrolling interests	2,772			3,250
Total Shareholders' Investment	143,801			162,567
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT	$	781,672		$	760,013

*    Derived from the audited Consolidated Balance Sheet

(See accompanying notes to condensed consolidated financial statements)

6

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

	Three Months Ended March 31,
(In thousands)	2020			2019
Cash Flows From Operating Activities:
Net (loss) income	$	(13,159	)	$	5,769
Reconciliation of net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	10,060			9,624
Goodwill impairment	17,674			—
Stock-based compensation	880			(247		)
Changes in operating assets and liabilities:
Accounts receivable, net	6,084			1,571
Unbilled revenues, net	(7,240		)	(8,361		)
Accrued or prepaid income taxes	(10,355		)	1,922
Accounts payable and accrued liabilities	(4,617		)	(8,257		)
Deferred revenues	2,898			1,578
Accrued retirement costs	(8,638		)	(3,393		)
Prepaid expenses and other operating activities	(1,565		)	317
Net cash (used in) provided by operating activities	(7,978		)	523
Cash Flows From Investing Activities:
Acquisitions of property and equipment	(2,708		)	(1,737		)
Capitalization of computer software costs	(4,803		)	(1,605		)
Net cash used in investing activities	(7,511		)	(3,342		)
Cash Flows From Financing Activities:
Cash dividends paid	(3,268		)	(3,282		)
Proceeds (payments) from shares purchased under employee stock-based compensation plans	10			(110		)
Repurchases of common stock	(2,666		)	(16,418		)
Increases in revolving credit facility borrowings	65,179			30,385
Payments on revolving credit facility borrowings	(11,910		)	(11,578		)
Increases in finance lease obligations	138			—
Payments on finance lease obligations	(2		)	(54		)
Acquisition of noncontrolling interests	(292		)	—
Dividends paid to noncontrolling interests	—			(84		)
Net cash provided by (used in) financing activities	47,189			(1,141		)
Effects of exchange rate changes on cash and cash equivalents	(392		)	515
Increase (decrease) in cash and cash equivalents	31,308			(3,445		)
Cash and cash equivalents at beginning of year	51,802			53,119
Cash and cash equivalents at end of period	$	83,110		$	49,674

(See accompanying notes to condensed consolidated financial statements)

7

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT

Unaudited

(In thousands, except per share amounts)

	Common Stock												Accumulated			Shareholders' Investment Attributable to
2020	Class A Non-Voting			Class B Voting			Additional Paid-In Capital			Retained Earnings			Other Comprehensive Loss			Shareholders of Crawford & Company			Noncontrolling Interests			Total Shareholders' Investment
Balance at January 1, 2020	$	30,610		$	22,671		$	63,392		$	249,551		$	(206,907	)	$	159,317		$	3,250		$	162,567
Net loss (1)	—			—			—			(11,399		)	—			(11,399		)	120			(11,279		)
Other comprehensive loss	—			—			—			—			(1,545		)	(1,545		)	1			(1,544		)
Cash dividends paid (Class A - $0.07 per share, Class B - $0.05 per share)	—			—			—			(3,268		)	—			(3,268		)	—			(3,268		)
Stock-based compensation	—			—			880			—			—			880			—			880
Repurchases of common stock	(155		)	(161		)	—			(2,350		)	—			(2,666		)	—			(2,666		)
Shares issued in connection with stock-based compensation plans, net	64			—			(54		)	—			—			10			—			10
Increase in value of noncontrolling interest due to acquisition	—			—			(269		)	—			576			307			(599		)	(292		)
Adoption of Topic 326	—			—			—			(607		)	—			(607		)	—			(607		)
Balance at March 31, 2020	$	30,519		$	22,510		$	63,949		$	231,927		$	(207,876	)	$	141,029		$	2,772		$	143,801

⁽¹⁾The total net loss presented in the condensed consolidated statements of shareholders' investment for the three months ended March 31, 2020 excludes $1,880 in net loss attributable to the redeemable noncontrolling interests.

(See accompanying notes to condensed consolidated financial statements)

	Common Stock												Accumulated			Shareholders' Investment Attributable to
2019	Class A Non-Voting			Class B Voting			Additional Paid-In Capital			Retained Earnings			Other Comprehensive Loss			Shareholders of Crawford & Company			Noncontrolling Interests			Total Shareholders' Investment
Balance at January 1, 2019	$	30,927		$	24,408		$	58,793		$	273,607		$	(216,447	)	$	171,288		$	4,158		$	175,446
Net income (2)	—			—			—			6,109			—			6,109			37			6,146
Other comprehensive income	—			—			—			—			5,073			5,073			(16		)	5,057
Cash dividends paid (Class A - $0.07 per share, Class B - $0.05 per share)	—			—			—			(3,282		)	—			(3,282		)	—			(3,282		)
Stock-based compensation	—			—			(247		)	—			—			(247		)	—			(247		)
Repurchases of common stock	(421		)	(1,377		)	—			(14,620		)	—			(16,418		)	—			(16,418		)
Common stock activity, net	115			—			(225		)	—			—			(110		)	—			(110		)
Dividends paid to noncontrolling interests	—			—			—			—			—			—			(84		)	(84		)
Balance at March 31, 2019	$	30,621		$	23,031		$	58,321		$	261,814		$	(211,374	)	$	162,413		$	4,095		$	166,508

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

(See accompanying notes to condensed consolidated financial statements)

8

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

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

Shares of the Company's two classes of common stock are traded on the New York Stock Exchange ("NYSE") under the symbols CRD-A and CRD-B, respectively. The Company's two classes of stock are substantially identical, except with respect to voting rights and the Company's ability to pay greater cash dividends on the non-voting Class A Common Stock than on the voting Class B Common Stock, subject to certain limitations. In addition, with respect to mergers or similar transactions, holders of Class A Common Stock must receive the same type and amount of consideration as holders of Class B Common Stock, unless different consideration is approved by the holders of 75% of the Class A Common Stock, voting as a class. The Company's website is www.crawco.com. The information contained on, or hyperlinked from, the Company's website is not a part of, and is not incorporated by reference into, this report.

1. Basis of Presentation

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

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

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

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

The Company consolidates the liabilities of its deferred compensation plan and the related assets, which are held in a rabbi trust and also considered a variable interest entity ("VIE") of the Company. The rabbi trust was created to fund the liabilities of the Company's deferred compensation plan. The Company is considered the primary beneficiary of the rabbi trust because the Company directs the activities of the trust and can use the assets of the trust to satisfy the liabilities of the Company's deferred compensation plan. At March 31, 2020 and December 31, 2019, the liabilities of the deferred compensation plan were $8,462,000 and $8,428,000, respectively, which represented obligations of the Company rather than of the rabbi trust, and the values of the assets held in the related rabbi trust were $16,414,000 and $16,527,000, respectively. These liabilities and assets are included in "Other noncurrent liabilities" and "Other noncurrent assets," respectively, on the Company's unaudited Condensed Consolidated Balance Sheets.

9

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

The Company owns 51% of the capital stock of Lloyd Warwick International Limited ("LWI"). The Company has also agreed to provide financial support to LWI of up to approximately $10,000,000. Because of this controlling financial interest, and because Crawford has the obligation to absorb certain of LWI's losses through the additional financial support that LWI may require, LWI is considered a VIE of the Company. LWI also does not meet the business scope exception, as Crawford provides more than half of its financial support, and because LWI lacks sufficient equity at risk to permit it to carry on its activities without this additional financial support. Creditors of LWI have no recourse to Crawford's general credit. Accordingly, Crawford is considered the primary beneficiary and consolidates LWI. Total assets and liabilities of LWI as of March 31, 2020 were $14,979,000 and $8,528,000, respectively. Total assets and liabilities of LWI as of December 31, 2019 were $14,686,000 and $9,176,000, respectively. Included in LWI's total liabilities is a loan from Crawford of $4,284,000 as of March 31, 2020 and December 31, 2019.

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

2. Recently Issued Accounting Standards

Adoption of New Accounting Standards

Measurement of Credit Losses on Financial Instruments

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

The Company has included assumptions related to expected credit losses from the impact of the COVID-19 pandemic in its results of operations for the quarter ended March 31, 2020.

Changes to the Disclosure Requirements for Fair Value Measurement

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

10

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

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

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

Pending Adoption of Recently Issued Accounting Standards

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

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

Simplifying the Accounting for Income Taxes

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

11

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

3. Revenue Recognition

As of January 1, 2018, the Company adopted Accounting Standards Codification ("ASC") 606 using the modified retrospective method for those contracts which were not substantially completed as of the transition date. The reported results for the three months ended March 31, 2020 and 2019 reflect the application of ASC 606.

Revenue from Contracts with Customers

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

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

The following table presents Crawford Claims Solutions revenues before reimbursements disaggregated by geography for the three months ended March 31, 2020 and 2019:

	Three Months Ended
(in thousands)	March 31, 2020		March 31, 2019
U.S.	$	31,428	$	33,936
U.K.	15,345		16,371
Canada	10,139		12,121
Australia	9,945		10,519
Europe	6,961		6,465
Rest of World	3,769		3,907
Total Crawford Claims Solutions Revenues before Reimbursements	$	77,587	$	83,319

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

12

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

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

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

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

The following tables present Crawford TPA Solutions revenues before reimbursements disaggregated by service line and geography for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31, 2020						Three Months Ended March 31, 2019
(in thousands)	Claims Management Services		Medical Management Services		Total		Claims Management Services		Medical Management Services		Total
U.S.	$	36,024	$	42,069	$	78,093	$	36,313	$	40,883	$	77,196
U.K.	2,865		—		2,865		2,530		—		2,530
Canada	7,463		—		7,463		9,372		—		9,372
Europe and Rest of World	8,514		—		8,514		8,696		—		8,696
Total Crawford TPA Solutions Revenues before Reimbursements	$	54,866	$	42,069	$	96,935	$	56,911	$	40,883	$	97,794

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

13

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

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

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

The following table presents Crawford Specialty Solutions revenues before reimbursements disaggregated by service line and geography for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31, 2020						Three Months Ended March 31, 2019
(in thousands)	Global Technical Services		Contractor Connection		Total		Global Technical Services		Contractor Connection		Total
U.S.	$	9,601	$	15,326	$	24,927	$	10,271	$	18,187	$	28,458
U.K.	12,015		2,157		14,172		11,157		1,531		12,688
Canada	6,137		1,481		7,618		6,711		1,680		8,391
Australia	4,848		130		4,978		5,143		174		5,317
Europe	5,152		7		5,159		4,759		—		4,759
Rest of World	6,155		—		6,155		6,332		—		6,332
Total Crawford Specialty Solutions Revenues before Reimbursements	$	43,908	$	19,101	$	63,009	$	44,373	$	21,572	$	65,945

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

Arrangements with Multiple Performance Obligations

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

Contract Balances

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

14

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

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

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

The table below presents the deferred revenues balance as of January 1, 2020 and the significant activity affecting deferred revenues during the three months ended March 31, 2020:

(In Thousands)
Customer Contract Liabilities	Deferred Revenue
Balance at January 1, 2020	$	52,368
Quarterly additions	22,226
Revenue recognized from the prior periods	(14,293		)
Revenue recognized from current quarter additions	(4,994		)
Balance as of March 31, 2020	$	55,307

Remaining Performance Obligations

As of March 31, 2020, the Company had $95.0 million of remaining performance obligations related to claims and non-claims services in which the price is fixed. Remaining performance obligations consist of deferred revenues as well as certain unbilled receivables that are considered contract assets. The Company expects to recognize approximately 70% of our remaining performance obligations as revenues within one year and the remaining balance thereafter.

Costs to Obtain a Contract

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

15

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Practical Expedients Elected

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

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

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

4. Lease Commitments

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

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

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

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

The Company, as sublessor, subleases certain office space which mostly consists of a two-building office complex in Plantation, Florida in which the terms of the primary lease and the related subleases end in December 2021. Under all of its executed sublease arrangements, the sublessees are obligated to pay the Company sublease payments of $3.2 million during the remainder of 2020, $4.2 million in 2021 and $0.1 million in 2022.

The Company's finance leases are not material for the three months ended as of March 31, 2020 and are excluded from the disclosures below. The following table presents the lease-related assets and liabilities recorded on the Company's unaudited Condensed Consolidated Balance Sheets related to its operating leases:

(in thousands)	Classification on Balance Sheet	March 31, 2020			December 31, 2019
Assets:
Operating lease	Operating lease right-of-use assets, net	$	108,974		$	102,354
Liabilities:
Current operating lease liabilities	Current operating lease liabilities	29,277			30,765
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	95,522			87,064
Total operating lease liabilities		$	124,799		$	117,829
Weighted-Average Remaining Lease Term		6.14 years			5.72 years
Weighted-Average Discount Rate (1)		5.3		%	5.4		%

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

16

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

The components of operating lease costs within the Company's unaudited Condensed Consolidated Statements of Operations consisted of the following for the three months ended March 31, 2020:

	Three Months Ended		Three Months Ended
(in thousands)	March 31, 2020		March 31, 2019
Operating lease cost	$	9,535	$	9,394
Variable lease cost	2,193		2,009
Sublease income	1,099		943

Supplemental cash flow information related to operating leases for the three months ended March 31, 2020 were as follows:

	Three Months Ended		Three Months Ended
(in thousands)	March 31, 2020		March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	9,495	$	9,596
Right-of-use assets obtained in exchange for lease obligations (1)	$	16,173	$	4,220

⁽¹⁾Amount excludes $122.3 million of right-of-use assets recognized upon adoption of Topic 842.

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

(in thousands)	March 31, 2020
2020	$	25,883
2021	32,656
2022	20,461
2023	14,540
2024	11,289
Thereafter	43,035
Total undiscounted lease payments	147,864
Less imputed interest	(23,064		)
Present value of future lease payments	$	124,799

5. Income Taxes

The Company's consolidated effective income tax rate may change periodically due to changes in enacted tax rates, fluctuations in the mix of income earned from the Company's various domestic and international operations, which are subject to income taxes at different rates, the Company's ability to utilize net operating loss and tax credit carryforwards, and amounts related to uncertain income tax positions. The provision for income taxes on consolidated income before income taxes totaled a benefit of $(8.5) million and a provision of $2.9 million for the three months ended March 31, 2020 and 2019, respectively. The overall effective tax rate increased to 39.2% for the three months ended March 31, 2020 compared with 33.7% for the 2019 period primarily due to the impact of goodwill impairment.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). We do not intend to apply for governmental loans from the CARES Act or any other governmental programs to support the Company’s operations. We are taking advantage of certain aspects of the CARES Act such as the deferral of payroll tax deposits and continuing to evaluate the other provisions of the CARES Act. In addition, there are numerous international legislative responses that we continue to evaluate, such as the Canadian Emergency Wage Subsidy program, among other enactments.

17

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

6. Defined Benefit Pension Plans

Net periodic cost related to all of the Company's defined benefit pension plans recognized in the Company's unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019 included the following components:

	Three Months Ended
(in thousands)	March 31, 2020			March 31, 2019
Service cost	$	320		$	316
Interest cost	4,141			5,584
Expected return on assets	(7,018		)	(7,471		)
Amortization of actuarial loss	2,620			2,722
Net periodic cost	$	63		$	1,151

For the three months ended March 31, 2020 and 2019, the non-service components of net periodic pension (benefit) cost of $(257,000) and $835,000, respectively, are included in "Other (Expense) Income, net" on the unaudited Condensed Consolidated Statement of Operations. For the three month period ended March 31, 2020, the Company made contributions of $3,000,000 and $156,000 to the U.S. and U.K. defined benefit pension plans, respectively, compared with no contributions to the U.S. defined benefit plan and $193,000 to the U.K. defined benefit pension plans during the three month period ended March 31, 2019. The Company does not expect to make any additional contributions to its U.S. and U.K. plans during the remainder of 2020.

18

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

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

The Company computes earnings per share of its non-voting Class A Common Stock ("CRD-A") and voting Class B Common Stock ("CRD-B") using the two-class method, which allocates the undistributed (loss) earnings in each period to each class on a proportionate basis. The Company's Board of Directors has the right, but not the obligation, to declare higher dividends on the CRD-A shares than on the CRD-B shares, subject to certain limitations. In periods when the dividend is the same for CRD-A and CRD-B or when no dividends are declared or paid to either class, the two-class method generally will yield the same (loss) earnings per share for CRD-A and CRD-B. During the first quarter of 2020 and 2019, the Board of Directors declared a higher dividend on CRD-A than on CRD-B.

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

	Three Months Ended
	March 31, 2020						March 31, 2019
(in thousands, except per share amounts)	CRD-A			CRD-B			CRD-A		CRD-B
(Loss) earnings per share - basic:
Numerator:
Allocation of undistributed (loss) earnings	$	(8,436	)	$	(6,232	)	$	1,604	$	1,223
Dividends paid	2,140			1,129			2,131		1,151
Net (loss) income attributable to common shareholders, basic	$	(6,296	)	$	(5,103	)	$	3,735	$	2,374
Denominator:
Weighted-average common shares outstanding, basic	30,562			22,578			30,658		23,367
(Loss) earnings per share - basic	$	(0.21	)	$	(0.23	)	$	0.12	$	0.10

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

	Three Months Ended
	March 31, 2020						March 31, 2019
(in thousands, except per share amounts)	CRD-A			CRD-B			CRD-A		CRD-B
(Loss) earnings per share - diluted:
Numerator:
Allocation of undistributed (loss) earnings	$	(8,436	)	$	(6,232	)	$	1,614	$	1,213
Dividends paid	2,140			1,129			2,131		1,151
Net (loss) income attributable to common shareholders, diluted	$	(6,296	)	$	(5,103	)	$	3,745	$	2,364
Denominator:
Weighted-average common shares outstanding, basic	30,562			22,578			30,658		23,367
Weighted-average effect of dilutive securities	—			—			448		—
Weighted-average common shares outstanding, diluted	30,562			22,578			31,106		23,367
(Loss) earnings per share - diluted	$	(0.21	)	$	(0.23	)	$	0.12	$	0.10

19

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

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

	Three Months Ended
(in thousands)	March 31, 2020	March 31, 2019
Shares underlying stock options excluded	1,904	931
Performance stock grants excluded because performance conditions have not been met (1)	932	1,144

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

The following table details shares issued during the three months ended March 31, 2020 and March 31, 2019. These shares are included from their dates of issuance in the weighted-average common shares used to compute basic and diluted (loss) earnings per share for CRD-A in the table above. There were no shares of CRD-B issued during any of these periods.

	Three Months Ended
(in thousands)	March 31, 2020	March 31, 2019
CRD-A issued under Non-Employee Director Stock Plan	81	76
CRD-A issued under the U.K. ShareSave Scheme	1	9
CRD-A issued under Executive Stock Bonus Plan	—	30

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

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

During the three months ended March 31, 2020, the Company repurchased 155,351 shares of CRD-A and 161,459 shares of CRD-B at an average cost of $8.42 for each share. During the three months ended March 31, 2019, the Company repurchased 421,427 shares of CRD-A and 1,376,889 shares of CRD-B at an average cost of $9.13 for each share. All shares repurchased during the three months ended March 31, 2019 were purchased pursuant to a stock purchase agreement authorized by the Board of Directors separate from the 2017 Repurchase Authorization and the 2019 Repurchase Authorization.

20

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

8. Accumulated Other Comprehensive Loss

Comprehensive income (loss) for the Company consists of the total of net income, foreign currency translation adjustments, and accrued pension and retiree medical liability adjustments. The changes in components of "Accumulated other comprehensive loss" ("AOCL"), net of taxes and noncontrolling interests, included in the Company's unaudited condensed consolidated financial statements were as follows:

	Three Months Ended March 31, 2020
(in thousands)	Foreign currency translation adjustments			Retirement liabilities (1)			AOCL attributable to shareholders of Crawford & Company
Beginning balance	$	(35,850	)	$	(171,057	)	$	(206,907	)
Other comprehensive loss before reclassifications	(3,473		)	—			(3,473		)
Amounts reclassified from accumulated other comprehensive income	—			1,928			1,928
Net current period other comprehensive (loss) income	(3,473		)	1,928			(1,545		)
Acquisition of noncontrolling interest	576			—			576
Ending balance	$	(38,747	)	$	(169,129	)	$	(207,876	)

	Three Months Ended March 31, 2019
(in thousands)	Foreign currency translation adjustments			Retirement liabilities (1)			AOCL attributable to shareholders of Crawford & Company
Beginning balance	$	(36,352	)	$	(180,095	)	$	(216,447	)
Other comprehensive income before reclassifications	3,062			—			3,062
Amounts reclassified from accumulated other comprehensive income	—			2,011			2,011
Net current period other comprehensive income	3,062			2,011			5,073
Ending balance	$	(33,290	)	$	(178,084	)	$	(211,374	)

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

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

21

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

9. Fair Value Measurements

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

			Fair Value Measurements at March 31, 2020
					Significant Other		Significant
			Quoted Prices in		Observable		Unobservable
			Active Markets		Inputs		Inputs
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds (1)	$	10,021	$	10,021	$	—	$	—
Liabilities:
Contingent earnout liability (2)	440		—		—		440

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

⁽²⁾  The contingent earnout liability relates to recent business acquisitions by the Crawford Specialty Solutions operating segment. The fair value of the contingent earnout liability was estimated using internally-prepared revenue projections, which is Level 3 data, with the maximum possible earnout of $813,000. As such, the fair value is not expected to vary materially. The fair value of the contingent earnout liability is included in "Other accrued liabilities" and "Other noncurrent liabilities" on the Company's unaudited Condensed Consolidated Balance Sheets, based upon the term of each contingent earnout agreement.

Fair Value Disclosures

There were no transfers of assets between fair value levels during the three months ended March 31, 2020. The categorization of assets and liabilities within the fair value hierarchy and the measurement techniques are reviewed quarterly. Any transfers between levels are deemed to have occurred at the end of the quarter.

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

Nonrecurring Fair Value Disclosures

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

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

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

22

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

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

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

During the first quarter of 2020, the Company identified a goodwill impairment indicator in its Crawford Claims Solutions reporting unit as a result of lower operating results and the overall decline in market conditions as a result of the COVID-19 pandemic. As a result, the Company recognized a goodwill impairment of $17,674,000, reducing the goodwill carrying value of Crawford Claims Solutions to $0 as of March 31, 2020. During the fourth quarter of 2019, as part the Company's 2019 annual assessment, the Company recognized a goodwill impairment of $17,484,000 in the Crawford Claims Solutions segment, due to lower forecasts in that reporting unit. Cumulative goodwill impairment in the Crawford Claims Solutions reporting unit is $55,565,000. The Company intends to continue to monitor the performance of its other three reporting units for potential indicators of impairment. If impairment indicators exist, the Company will perform an interim goodwill impairment analysis.

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

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

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

23

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

10. Segment Information

Financial information for the three months ended March 31, 2020 and 2019 related to the Company's reportable segments, including a reconciliation from segment operating earnings to income before income taxes, the most directly comparable GAAP financial measure, is presented below.

	Three Months Ended
(in thousands)	March 31, 2020			March 31, 2019
Revenues:
Crawford Claims Solutions	$	77,587		$	83,319
Crawford TPA Solutions	96,935			97,794
Crawford Specialty Solutions	63,009			65,945
Total segment revenues before reimbursements	237,531			247,058
Reimbursements	8,515			9,319
Total revenues	$	246,046		$	256,377
Segment Operating Earnings
Crawford Claims Solutions	$	(3,679	)	$	(313	)
Crawford TPA Solutions	6,285			6,733
Crawford Specialty Solutions	6,957			12,195
Total segment operating earnings	9,563			18,615
Deduct:
Unallocated corporate and shared costs, net	(2,550		)	(3,914		)
Net corporate interest expense	(2,224		)	(2,716		)
Stock option expense	(290		)	(485		)
Amortization of customer-relationship intangible assets	(2,756		)	(2,798		)
Goodwill impairment	(17,674		)	—
Restructuring costs	(5,714		)	—
(Loss) Income before income taxes	$	(21,645	)	$	8,702

Operating earnings is the primary financial performance measure used by the Company's senior management and chief operating decision maker ("CODM") to evaluate the financial performance of the Company's three operating segments and make resource allocation and certain compensation decisions. The Company believes this measure is useful to investors in that it allows them to evaluate segment operating performance using the same criteria used by the Company's senior management and CODM. Operating earnings will differ from net income computed in accordance with GAAP since operating earnings represent segment earnings before certain unallocated corporate and shared costs and credits, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, goodwill impairment, restructuring costs, income taxes, and net income or loss attributable to noncontrolling interests and redeemable noncontrolling interests.

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

Intersegment transactions are not material for any period presented.

24

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

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

	Three Months Ended
(in thousands)	March 31, 2020		March 31, 2019
Crawford TPA Solutions
Claims Management Services	$	54,866	$	56,911
Medical Management Services	42,069		40,883
Total Revenues before Reimbursements--Crawford TPA Solutions	$	96,935	$	97,794
Crawford Specialty Solutions
Global Technical Services	$	43,908	$	44,373
Contractor Connection	19,101		21,572
Total Revenues before Reimbursements--Crawford Specialty Solutions	$	63,009	$	65,945

11. Commitments and Contingencies

As part of the Company's credit facility, the Company maintains a letter of credit facility to satisfy certain of its own contractual requirements. At March 31, 2020, the aggregate committed amount of letters of credit outstanding under the credit facility was $11,636,000.

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

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

25

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

12. Restructuring Costs

Total restructuring costs for the three months ended March 31, 2020 were $5,714,000. There were no restructuring costs for the three months ended March 31, 2019.

Restructuring costs incurred during the three months ended March 31, 2020, related primarily to severance and other termination costs in an effort to consolidate and streamline various functions of our workforce. Costs associated with these activities were incurred in each of the Company's operating segments and in administrative functions. Asset impairments were incurred for obsolete software.

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

	Three months ended
(in thousands)	March 31, 2020		March 31, 2019
Personnel related costs	$	5,076	$	—
Asset impairments	638		—
Total restructuring costs	$	5,714	$	—

As of March 31, 2020, the following liabilities remained on the Company's unaudited Condensed Consolidated Balance Sheets related to restructuring costs. The rollforward of these liabilities to March 31, 2020 were as follows:

	Three months ended March 31, 2020
(in thousands)	Accrued compensation and related costs			Other accrued liabilities			Total
Beginning balance, December 31, 2019	$	342		$	472		$	814
Additions	5,076			—			5,076
Adjustments to accruals	(372		)	(467		)	(839		)
Cash payments	(1,264		)	—			(1,264		)
Ending balance, March 31, 2020	$	3,782		$	5		$	3,787

26

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

Crawford & Company

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of Crawford & Company (the Company) as of March 31, 2020, the related condensed consolidated statements of operations, comprehensive (loss) income, cash flows, and shareholders’ investment for the three-month periods ended March 31, 2020 and 2019, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

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

Basis for Review Results

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

/s/ Ernst & Young LLP

May 5, 2020

27

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

Cautionary Statement Concerning Forward-Looking Statements

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

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

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

• changes in global economic conditions,

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

• changes in interest rates,

• changes in foreign currency exchange rates,

• changes in regulations and practices of various governmental authorities,

• changes in our competitive environment,

• changes in the financial condition of our clients,

• the loss of any material customer,

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

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

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

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

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

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

• our ability to attract and retain qualified personnel,

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

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

• continued availability of funding under our financing agreements,

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

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

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

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

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

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

• risks associated with our having a controlling shareholder, and

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

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

28

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, 2020 and 2019, and as of March 31, 2020, and December 31, 2019, contained in Item 1 of this Quarterly Report on Form 10-Q, and (ii) our Annual Report on Form 10-K for the year ended December 31, 2019. As described in Note 1, "Basis of Presentation," the financial results of our operations outside of the U.S., Canada, the Caribbean, and certain subsidiaries in the Philippines are included in our consolidated financial statements on a two-month delayed basis (fiscal year-end of October 31) as permitted by U.S. generally accepted accounting principles ("GAAP") in order to provide sufficient time for accumulation of their results.

Business Overview

Based in Atlanta, Georgia, Crawford & Company (www.crawco.com) is the world's largest publicly listed independent provider of claims management and outsourcing solutions to carriers, brokers and corporates with an expansive global network serving clients in more than 70 countries. Shares of the Company's two classes of common stock are traded on the New York Stock Exchange under the symbols CRD-A and CRD-B, respectively. The Company's two classes of stock are substantially identical, except with respect to voting rights and the Company's ability to pay greater cash dividends on the non-voting Class A Common Stock than on the voting Class B Common Stock, subject to certain limitations. In addition, with respect to mergers or similar transactions, holders of Class A Common Stock must receive the same type and amount of consideration as holders of Class B Common Stock, unless different consideration is approved by the holders of 75% of the Class A Common Stock, voting as a class.

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

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

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

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

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

29

Results of Operations

Executive Summary

Consolidated revenues before reimbursements decreased $9.5 million, or 3.9%, for the three months ended March 31, 2020 compared to the same period of 2019. This reduction was due to a decline in revenues in each of our operating segments, primarily due to a reduction in weather related activity and the initial economic impact of the COVID-19 pandemic in the U.S. and Canada. Changes in foreign exchange rates decreased our consolidated revenues by $1.3 million, or 0.6%, for the three months ended March 31, 2020 as compared to 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, 2020.

	Three Months Ended						Three Months Ended
							Based on exchange rates for three months ended March 31, 2019
(in thousands, except percentages)	March 31, 2020		March 31, 2019		Variance		March 31, 2020		% Variance
Revenues:
Crawford Claims Solutions	$	77,587	$	83,319	(6.9	)%	$	78,211	(6.1	)%
Crawford TPA Solutions	96,935		97,794		(0.9	)%	97,278		(0.5	)%
Crawford Specialty Solutions	63,009		65,945		(4.5	)%	63,310		(4.0	)%
Total revenues before reimbursements	237,531		247,058		(3.9	)%	238,799		(3.3	)%
Reimbursements	8,515		9,319		(8.6	)%	8,576		(8.0	)%
Total Revenues	$	246,046	$	256,377	(4.0	)%	$	247,375	(3.5	)%

Excluding foreign currency implications, consolidated revenues before reimbursements decreased $8.3 million, or 3.3%, for the three months ended March 31, 2020. Revenues from the Crawford Claims Solutions segment decreased in the three months ended March 31, 2020 primarily due to a decrease in cases as a result of benign weather in the U.S. and Canada. Revenues from the Crawford TPA Solutions segment decreased due to a decrease in cases received in Canada. Revenues from the Crawford Specialty Solutions segment decreased primarily due to a decrease in the Contractor Connection service line due to a reduction in weather related case activity.

We estimate that COVID-19 negatively impacted our revenues by $3.5 million and operating earnings by $1.8 million in the three months ended March 31, 2020 in the U.S. and Canada. There was minimal impact in the first quarter for other international operations due to the two-month reporting lag for reporting their financial results. We expect the ongoing global economic slowdown resulting from COVID-19 could have a material impact to our results of operations, financial condition, and cash flows in one or more future quarters.

Overall, there was a decrease in cases received of 5.3% for the three months ended March 31, 2020 compared to the 2019 period, primarily due to a reduction in weather related activity in 2020 and the initial economic impact of COVID-19 in the U.S. and Canada. As a result of the economic contraction from the COVID-19 pandemic, cases received in future quarters could be materially below first quarter levels, unless offset by the impact of cases received from new clients or weather related activity.

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, 2020:

		Three Months Ended
		March 31, 2020				March 31, 2019
(in thousands)		USD equivalent		% of total		USD equivalent		% of total
U.S.	USD	$	134,448	56.6	%	$	139,598	56.5	%
U.K.	GBP	32,382		13.6	%	31,581		12.8	%
Canada	CAD	25,220		10.6	%	29,884		12.1	%
Australia	AUD	15,545		6.6	%	16,255		6.6	%
Europe	EUR	13,389		5.6	%	12,865		5.2	%
Rest of World		16,547		7.0	%	16,875		6.8	%
Total Revenues, before reimbursements		$	237,531			$	247,058

30

Costs of services provided, before reimbursements, decreased $0.3 million, or 0.2%, for the three months ended March 31, 2020 as compared to the same period of 2019. The decrease in the first quarter was primarily due to a decrease in Crawford Claims Solutions related to the reduction in revenues.

Selling, general, and administrative ("SG&A") expenses decreased $2.9 million, or 5.0% in the three months ended March 31, 2020 compared with the same period of 2019. The decrease in the first quarter was due to a decrease in incentive compensation and other administrative costs.

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

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

Operating Earnings of our Operating Segments

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

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

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

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

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

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

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

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

31

Segment Revenues

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

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

Segment Operating Expenses

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

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

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

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

In addition, we believe that a non-GAAP discussion and analysis of segment gross profit is helpful in understanding the

results of our segment operations, excluding indirect centralized administrative support costs. Our discussion and analysis of

segment gross profit includes the revenues and direct expenses of each segment.

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

Segment Performance Indicators

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

32

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

	Three Months Ended
(in thousands, except percentages)	March 31, 2020			March 31, 2019
Revenues:
Crawford Claims Solutions	$	77,587		$	83,319
Crawford TPA Solutions	96,935			97,794
Crawford Specialty Solutions	63,009			65,945
Total Revenues before reimbursements	237,531			247,058
Reimbursements	8,515			9,319
Total Revenues	$	246,046		$	256,377
Direct Compensation, Fringe Benefits & Non-Employee Labor:
Crawford Claims Solutions	$	53,380		$	55,901
% of related revenues before reimbursements	68.8		%	67.1		%
Crawford TPA Solutions	58,929			58,381
% of related revenues before reimbursements	60.8		%	59.7		%
Crawford Specialty Solutions	35,871			34,958
% of related revenues before reimbursements	56.9		%	53.0		%
Total	$	148,180		$	149,240
% of Revenues before reimbursements	62.4		%	60.4		%
Expenses Other than Direct Compensation, Fringe Benefits & Non-Employee Labor:
Crawford Claims Solutions	$	27,886		$	27,731
% of related revenues before reimbursements	35.9		%	33.3		%
Crawford TPA Solutions	31,721			32,680
% of related revenues before reimbursements	32.7		%	33.4		%
Crawford Specialty Solutions	20,181			18,792
% of related revenues before reimbursements	32.0		%	28.5		%
Total before reimbursements	79,788			79,203
% of Revenues before reimbursements	33.6		%	32.1		%
Reimbursements	8,515			9,319
Total	$	88,303		$	88,522
% of Revenues	35.9		%	34.5		%
Segment Operating (Loss) Earnings:
Crawford Claims Solutions	$	(3,679	)	$	(313	)
% of related revenues before reimbursements	(4.7		)%	(0.4		)%
Crawford TPA Solutions	6,285			6,733
% of related revenues before reimbursements	6.5		%	6.9		%
Crawford Specialty Solutions	6,957			12,195
% of related revenues before reimbursements	11.0		%	18.5		%
Deduct:
Unallocated corporate and shared costs, net	(2,550		)	(3,914		)
Net corporate interest expense	(2,224		)	(2,716		)
Stock option expense	(290		)	(485		)
Amortization of customer-relationship intangible assets	(2,756		)	(2,798		)
Goodwill impairment	(17,674		)	—
Restructuring costs	(5,714		)	—
(Loss) income before income taxes	(21,645		)	8,702
Provision for income taxes	8,486			(2,933		)
Net (loss) income	(13,159		)	5,769
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests	1,760			340
Net (loss) income attributable to shareholders of Crawford & Company	$	(11,399	)	$	6,109

33

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

	Three Months Ended
(in thousands, except percentages)	March 31, 2020			March 31, 2019
Revenues Before Reimbursements:
Crawford Claims Solutions	$	77,587		$	83,319
Crawford TPA Solutions	96,935			97,794
Crawford Specialty Solutions	63,009			65,945
Total Revenues before reimbursements	$	237,531		$	247,058
Direct Expenses:
Crawford Claims Solutions	$	63,800		$	66,242
% of related revenues before reimbursements	82.2		%	79.5		%
Crawford TPA Solutions	73,694			72,331
% of related revenues before reimbursements	76.0		%	74.0		%
Crawford Specialty Solutions	44,007			43,504
% of related revenues before reimbursements	69.8		%	66.0		%
Total segment direct expenses	$	181,501		$	182,077
% of related revenues before reimbursements	76.4		%	73.7		%
Segment Gross Profit:
Crawford Claims Solutions	$	13,787		$	17,077
% of related revenues before reimbursements	17.8		%	20.5		%
Crawford TPA Solutions	23,241			25,463
% of related revenues before reimbursements	24.0		%	26.0		%
Crawford Specialty Solutions	19,002			22,441
% of related revenues before reimbursements	30.2		%	34.0		%
Total segment gross profit	$	56,030		$	64,981
% of related revenues before reimbursements	23.6		%	26.3		%
Segment Indirect Costs:
Crawford Claims Solutions	$	17,466		$	17,390
% of related revenues before reimbursements	22.5		%	20.9		%
Crawford TPA Solutions	16,956			18,730
% of related revenues before reimbursements	17.5		%	19.2		%
Crawford Specialty Solutions	12,045			10,246
% of related revenues before reimbursements	19.1		%	15.5		%
Total segment indirect costs	$	46,467		$	46,366
% of related revenues before reimbursements	19.6		%	18.8		%
Segment Operating (Loss) Earnings:
Crawford Claims Solutions	$	(3,679	)	$	(313	)
% of related revenues before reimbursements	(4.7		)%	(0.4		)%
Crawford TPA Solutions	6,285			6,733
% of related revenues before reimbursements	6.5		%	6.9		%
Crawford Specialty Solutions	6,957			12,195
% of related revenues before reimbursements	11.0		%	18.5		%

34

CRAWFORD CLAIMS SOLUTIONS SEGMENT

Our Crawford Claims Solutions segment incurred an operating loss of $(3.7) million, or (4.7)% of revenues before reimbursements, for the three months ended March 31, 2020, compared with an operating loss in 2019 of $(0.3) million, or (0.4)% of revenues before reimbursements. The trend of reduced weather related activity experienced in the 2019 fourth quarter continued to impact the first quarter of 2020. The decrease in operating earnings in the first quarter of 2020 was due to a decrease in weather related case activity, which was partially offset by a decrease in expenses.

Excluding centralized indirect support costs, gross profit decreased from $17.1 million, or 20.5% of revenues before reimbursements in 2019, to $13.8 million, or 17.8% of revenues before reimbursements, in the three months ended March 31, 2020, for the reasons referenced above.

Revenues before Reimbursements

Crawford Claims Solutions segment revenues are primarily derived from the global property and casualty insurance company markets in the U.S., U.K., Canada, Australia, Europe and Rest of World. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three months ended March 31, 2020 and 2019 were as follows:

	Three Months Ended
	Based on actual exchange rates						Based on exchange rates for three months ended March 31, 2019
(in thousands, except percentages)	March 31, 2020		March 31, 2019		Variance		March 31, 2020		Variance
U.S.	$	31,428	$	33,936	(7.4	)%	$	31,428	(7.4	)%
U.K.	15,345		16,371		(6.3	)%	15,106		(7.7	)%
Canada	10,139		12,121		(16.4	)%	10,219		(15.7	)%
Australia	9,945		10,519		(5.5	)%	10,450		(0.7	)%
Europe	6,961		6,465		7.7	%	7,232		11.9	%
Rest of World	3,769		3,907		(3.5	)%	3,776		(3.4	)%
Total Crawford Claims Solutions Revenues before Reimbursements	$	77,587	$	83,319	(6.9	)%	$	78,211	(6.1	)%

Revenues before reimbursements from our Crawford Claims Solutions segment totaled $77.6 million in the three months ended March 31, 2020, compared with $83.3 million in the comparable 2019 period. This decrease was primarily due to a decrease in case volumes in the U.S. and Canada due to a reduction in weather related activity. Changes in foreign exchange rates resulted in a decrease of our Crawford Claims Solutions segment revenues by approximately 0.8%, or $0.6 million, for the three months ended March 31, 2020 as compared with the 2019 period. Absent foreign exchange rate fluctuations, Crawford Claims Solutions segment revenues would have been $78.2 million for the three months ended March 31, 2020. There was a decrease in segment unit volume, measured principally by cases received, of 6.5% for the three months ended March 31, 2020, compared with the 2019 period. Changes in product mix and in the rates charged for those services accounted for a 0.4% revenue increase for the three months ended March 31, 2020 compared with the same period in 2019 due primarily to a reduction in high-frequency, low-complexity cases.

The decrease in revenues in the U.S. for the three months ended March 31, 2020 was primarily due to a decrease in weather related case volumes. Based on constant foreign exchange rates, there was a decrease in revenues in the U.K. for 2020 compared with 2019 due to a decrease in weather related activity and liability case volumes. Revenues in Canada decreased in the first quarter of 2020 due to a reduction in weather related case activity. There was a decrease in revenue in Australia, although there was an increase in cases received from catastrophic activity late in the first quarter for which revenues should follow as work is completed in future periods. There was an increase in revenues in Europe in the first quarter due to a change in the mix of services provided. The decrease in revenues in Rest of World for the current three month period compared with the 2019 period was primarily due to a reduction in case volumes in Asia.

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our Crawford Claims Solutions segment, which are included in total Company revenues, were $4.3 million and $4.6 million for the three months ended March 31, 2020 and 2019, respectively. The decrease in reimbursed expenses was due to the lower revenues in the 2020 period compared to 2019.

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Case Volume Analysis

Crawford Claims Solutions segment unit volumes by geographic region, measured by cases received, for the three months ended March 31, 2020 and 2019 were as follows:

	Three Months Ended
(whole numbers, except percentages)	March 31, 2020	March 31, 2019	Variance
U.S.	69,476	72,195	(3.8	)%
U.K.	12,964	13,791	(6.0	)%
Canada	5,913	11,015	(46.3	)%
Australia	10,898	10,120	7.7	%
Europe	8,246	7,871	4.8	%
Rest of World	3,910	4,190	(6.7	)%
Total Crawford Claims Solutions Cases Received	111,407	119,182	(6.5	)%

Overall, there was a decrease in cases received of 6.5% for the three months ended March 31, 2020 compared to the 2019 period. The decrease in U.S. case volumes in the first quarter was due to a reduction in weather related activity in 2020 and a change in the mix of services provided. The U.K. case volumes were lower in the first quarter due to a decrease in weather related activity. The decrease in Canada was due to a reduction in weather related cases and a change in the mix of services provided. There was an increase in cases in Australia due to an increase in weather related activity late in the first quarter that should be reflected as revenues in future periods. There was an increase in cases received in Europe in 2020 due to an increase in weather related claims. There was a decrease in cases received in Rest of World in the first quarter due to a decline in high-frequency, low-complexity property cases in Asia.

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

Direct Compensation, Fringe Benefits & Non-Employee Labor

The most significant expense in our Crawford Claims Solutions segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. As a percentage of revenues before reimbursements, direct compensation, fringe benefits, and non-employee labor expenses were 68.8% for the three months ended March 31, 2020 compared to 67.1% for the 2019 period. The total dollar amount of these expenses decreased to $53.4 million for the three months ended March 31, 2020 from $55.9 million for the comparable 2019 period. The decrease in costs was due to the reduction in employees, and the increase in expenses as a percent of revenues before reimbursements is because the reduction in expenses did not offset the reduction in revenues. There was an average of 2,748 full-time equivalent employees in this segment in the three months ended March 31, 2020 compared with an average of 2,908 in the 2019 period.

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

Crawford Claims Solutions expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $27.9 million for the three months ended March 31, 2020 compared with $27.7 million for the 2019 period. As a percentage of revenues before reimbursements, expenses other than direct compensation, fringe benefits, and non-employee labor expenses were 35.9% for the three months ended March 31, 2020 compared with 33.3% for the 2019 period. The increase in expense as a percent of revenues was due to the reduction in revenues although expense levels remained constant.

CRAWFORD TPA SOLUTIONS SEGMENT

Our Crawford TPA Solutions segment, which operates under the Broadspire brand globally, reported operating earnings of $6.3 million, or 6.5% of revenues before reimbursements, for the first quarter of 2020 as compared to $6.7 million, or 6.9% of revenues before reimbursements, for the first quarter of 2019. This decrease was due to slightly lower revenues that were partly offset with lower administrative costs.

Excluding centralized indirect support costs, first quarter gross profit decreased from $25.5 million, or 26.0% of revenues before reimbursements, in 2019 to $23.2 million, or 24.0% of revenues before reimbursements, in 2020.

36

Revenues before Reimbursements

Crawford TPA Solutions revenues are derived from the global casualty and disability insurance and self-insured markets in the U.S., U.K., Canada and Europe and Rest of World. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three months ended March 31, 2020 and 2019 were as follows:

	Three Months Ended
	Based on actual exchange rates						Based on exchange rates for three months ended March 31, 2019
(in thousands, except percentages)	March 31, 2020		March 31, 2019		Variance		March 31, 2020		Variance
U.S.	$	78,093	$	77,196	1.2	%	$	78,093	1.2	%
U.K.	2,865		2,530		13.2	%	2,821		11.5	%
Canada	7,463		9,372		(20.4	)%	7,521		(19.8	)%
Europe and Rest of World	8,514		8,696		(2.1	)%	8,843		1.7	%
Total Crawford TPA Solutions Revenues before Reimbursements	$	96,935	$	97,794	(0.9	)%	$	97,278	(0.5	)%

Revenues before reimbursements from our Crawford TPA Solutions segment totaled $96.9 million in the three months ended March 31, 2020 compared with $97.8 million in the 2019 period. Changes in foreign exchange rates resulted in a decrease of our Crawford TPA Solutions segment revenues by approximately 0.4%, or $0.3 million, as compared with the 2019 period. Revenues were positively impacted by an increase in unit volumes, measured principally by cases received, of 1.4% for the three months ended March 31, 2020 compared with the same period of 2019. Changes in product mix and in the rates charged for those services accounted for a 1.9% revenue decrease for the 2020 first quarter compared with the 2019 period.

The increase in revenues in the U.S. for the three months ended March 31, 2020 was due to an increase in new clients in the latter part of 2019 and ramp up of related case volumes. Based on constant foreign exchange rates, there was an increase in revenues in the U.K. in the first quarter, due to client case volume increases from both new and existing clients. Revenues in Canada decreased in the current year due to a change in the mix of services provided and a reduction in case volumes. Revenues increased in Europe and Rest of World in the first quarter primarily due to growth from both new and existing clients.

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our Crawford TPA Solutions segment were $2.1 million for the three months ended March 31, 2020, compared with $2.5 million in the comparable 2019 period. The changes in reimbursed expenses was consistent with the revenues between periods.

Case Volume Analysis

Crawford TPA Solutions unit volumes by geographic region, as measured by cases received, for the three months ended March 31, 2020 and 2019 were as follows:

	Three Months Ended
(whole numbers, except percentages)	March 31, 2020	March 31, 2019	Variance
U.S.	126,673	119,963	5.6	%
U.K.	11,684	8,475	37.9	%
Canada	19,220	21,641	(11.2	)%
Europe and Rest of World	47,023	51,615	(8.9	)%
Total Crawford TPA Solutions Cases Received	204,600	201,694	1.4	%

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Overall case volumes were 1.4% higher for the three months ended March 31, 2020, compared with 2019, due to increases in the U.S. and U.K. The increase in the U.S. was due to an increase in Claims Management, Medical Management, and Accident & Health cases. There was an increase in the 2020 period in the U.K. due to increased volumes from both current and new clients. The reduction in Canada was due to lower carrier volumes as more cases were handled internally. The decrease in cases received in Europe and Rest of World was due to a decline in high-frequency, low-complexity cases received in the first quarter.

Crawford TPA Solutions unit volumes, particularly in the U.S., are sensitive to overall employment levels and workplace reported injuries. As a result of the increased level of unemployment in the U.S. due to the economic contraction from the COVID-19 pandemic, as well as economic contraction globally which could impact other geographic regions, future case referrals could be materially below those reported in the 2020 first quarter unless offset by new client programs.

Direct Compensation, Fringe Benefits & Non-Employee Labor

The most significant expense in our Crawford TPA Solutions segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. For the three months ended March 31, 2020, direct compensation, fringe benefits, and non-employee labor, as a percent of the related revenues before reimbursements, increased from 59.7% in 2019 to 60.8% in 2020. The amount of these expenses also increased from $58.4 million for the three months ended March 31, 2019 to $58.9 million for the 2020 comparable period, due to an increase in average full-time equivalent employees.

Average full-time equivalent employees in this segment totaled 3,230 in the first three months of 2020, up from 3,158 in the comparable 2019 period. This increase was due to an increase in employees to support clients in most regions that was partly offset by a decrease in Canada.

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

Crawford TPA Solutions segment expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor as a percent of revenues before reimbursements were 32.7% for the three months ended March 31, 2020, respectively, compared with 33.4% in the comparable 2019 period. The decrease in expenses as a percent of revenues in the first quarter was due to expense controls implemented in 2020. The amount of these expenses decreased from $32.7 million for the three months ended March 31, 2019 to $31.7 million in 2020, due to the lower revenues and lower administrative support expenses.

CRAWFORD SPECIALTY SOLUTIONS SEGMENT

Our Crawford Specialty Solutions segment reported operating earnings of $7.0 million for the March 31, 2020, as compared with operating earnings of $12.2 million in the comparable 2019 period. The related segment operating margin decreased from 18.5% for the quarter ended March 31, 2019, to 11.0% in the comparable 2020 period. This decrease was primarily due to a reduction in revenues in our Contractor Connection service line resulting from a decline in weather related case activity, and an increase in compensation expense.

Excluding indirect support costs, gross profit in the first quarter decreased from $22.4 million, or 34.0% of revenues before reimbursements in 2019 to $19.0 million, or 30.2% of revenues before reimbursements, in 2020, for the reasons referenced above.

Revenues before Reimbursements

Crawford Specialty Solutions segment revenues are primarily derived from the global property and casualty insurance company markets in the U.S., U.K., Canada, Australia, Europe and Rest of World. Revenues before reimbursements by major region, based on actual exchange rates, using a constant exchange rate for the three months ended March 31, 2020 and 2019 were as follows:

38

	Three Months Ended
	Based on actual exchange rates						Based on exchange rates for three months ended March 31, 2019
(in thousands, except percentages)	March 31, 2020		March 31, 2019		Variance		March 31, 2020		Variance
U.S.	$	24,927	$	28,458	(12.4	)%	$	24,927	(12.4	)%
U.K.	14,172		12,688		11.7	%	13,954		10.0	%
Canada	7,618		8,391		(9.2	)%	7,681		(8.5	)%
Australia	4,978		5,317		(6.4	)%	5,233		(1.6	)%
Europe	5,159		4,759		8.4	%	5,304		11.5	%
Rest of World	6,155		6,332		(2.8	)%	6,211		(1.9	)%
Total Crawford Specialty Solutions Revenues before Reimbursements	$	63,009	$	65,945	(4.5	)%	$	63,310	(4.0	)%

Revenues before reimbursements from our Crawford Specialty Solutions segment totaled $63.0 million in the three months ended March 31, 2020, compared with $65.9 million in the 2019 period. Changes in foreign exchange rates resulted in a decrease of our Crawford Specialty Solutions segment revenues by approximately 0.5%, or $0.3 million, for the three months ended March 31, 2020, as compared with 2019. Absent foreign exchange rate fluctuations, Crawford Specialty Solutions segment revenues would have been $63.3 million for the three months ended March 31, 2020.

Overall case volumes were 19.5% lower for the three months ended March 31, 2020, compared with the same period of 2019. Changes in product mix and in the rates charged for those services accounted for a 15.5% revenue increase for the three months ended March 31, 2020 compared with the same period in 2019.

The decrease in revenues in the U.S. for the three months ended March 31, 2020 was due to a reduction in weather related case volumes in our Contractor Connection and Global Technical Services service lines, an compared with the 2019 period. On a constant currency basis, there was a revenue increase in the U.K. in the 2020 first quarter primarily due to an increase in our Global Technical Services service line. Revenues in Canada decreased in the 2020 period compared with 2019 due to a decrease in weather related case volumes in Contractor Connection and Global Technical Services. There was a decrease in revenues in Australia due to a reduction in property cases. There was a revenue increase in Europe in the first quarter due to increased revenues in our Global Technical Services service line. The decrease in revenues in Rest of World was primarily due to a decrease in weather related activity in Asia.

Reimbursed Expenses included in Total Revenues

Reimbursements for out-of-pocket expenses incurred in our Crawford Specialty Solutions segment were $2.1 million for the three months ended March 31, 2020 compared with $2.2 million in the comparable 2019 period, consistent with the revenues between periods.

39

Case Volume Analysis

Crawford Specialty Solutions unit volumes by geographic region, as measured by cases received, for the three months ended March 31, 2020 and 2019 were as follows:

	Three Months Ended
(whole numbers, except percentages)	March 31, 2020	March 31, 2019	Variance
U.S.	43,456	54,111	(19.7	)%
U.K.	3,333	2,553	30.6	%
Canada	13,537	20,249	(33.1	)%
Australia	1,367	1,520	(10.1	)%
Europe	2,524	2,984	(15.4	)%
Rest of World	5,304	4,970	6.7	%
Total Crawford Specialty Solutions Cases Received	69,521	86,387	(19.5	)%

Overall case volumes were 19.5% lower in the three months ended March 31, 2020 compared with the same period in 2019, due to a reduction in weather related case activity. The decrease in U.S. case volumes in the three months ended March 31, 2020 was primarily due to a decrease in weather related cases in Contractor Connection, compared to the 2019 period. The U.K. case volumes were higher in the 2020 period due to an increase in high-frequency, low-complexity property cases in the Contractor Connection service line. There was a decrease in cases received in Canada in the first quarter due to a decrease in weather related activity in the current year. The decrease in Australia cases was due to a reduction in high-frequency, low-complexity property cases in the current period. The decrease in cases in Europe was primarily due to a decrease in Global Technical Services. Cases received in Rest of World was higher in the first quarter of 2020 due to an increase in weather related cases in Asia.

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

Direct Compensation, Fringe Benefits & Non-Employee Labor

Crawford Specialty Solutions direct compensation, fringe benefits, and non-employee labor expenses as a percent of revenues before reimbursements were 56.9% in the 2020 first quarter compared to 53.0% in the 2019 first quarter. The dollar amount of these expenses was $35.9 million for the 2020 first quarter and $35.0 million for the comparable 2019 period. This increase was to support client growth. The increase in the percentage of revenues before reimbursements was due to increased compensation expense in 2020. There was an average of 1,458 full-time equivalent employees in Crawford Specialty Solutions in the 2020 three month period, compared with an average of 1,496 for the comparable 2019 three month period.

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

Expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were 32.0% of Crawford Specialty Solutions revenues before reimbursements for the three months ended March 31, 2020 compared with 28.5% for the comparable period in 2019. The dollar amount of these expenses increased to $20.2 million in the 2020 first quarter as compared with $18.8 million in the comparable 2019 period. The increase in both the expense and the expense as a percent of revenues before reimbursements in 2020 is due to an increase in administrative costs.

EXPENSES AND CREDITS EXCLUDED FROM SEGMENT OPERATING EARNINGS

Income Taxes

Our consolidated effective income tax rate may change periodically due to changes in enacted tax rates, fluctuations in the mix of income earned from our various domestic and international operations, which are subject to income taxes at different rates, our ability to utilize net operating loss and tax credit carryforwards, and amounts related to uncertain income tax positions. After considering goodwill and intangible asset impairments and the impact of expected operating losses in certain international operations, we estimate that our effective income tax rate for 2020 will be approximately 49% to 51% after considering known discrete items as of March 31, 2020.

40

The provision for income taxes on consolidated income before income tax totaled a benefit of $(8.5) million and a provision of $2.9 million for the three months ended March 31, 2020 and 2019, respectively. The overall effective tax rate increased to 39.2% for the three months ended March 31, 2020 compared with 33.7% for the 2019 period primarily due to the impact of goodwill impairment.

Net Corporate Interest Expense

Net corporate interest expense consists of interest expense that we incur on our short- and long-term borrowings, partially offset by any interest income we earn on available cash balances and short-term investments. These amounts vary based on interest rates, borrowings outstanding and the amounts of invested cash. Corporate interest expense totaled $2.3 million and $3.1 million for the three months ended March 31, 2020 and 2019, respectively. There was $0.1 million interest income during the three months ended March 31, 2020, compared to $0.4 million for the three months ended March 31, 2019.

Stock Option Expense

Stock option expense, a component of stock-based compensation, is comprised of non-cash expenses related to stock options granted under our various stock option and employee stock purchase plans. Stock option expense is not allocated to our operating segments. Stock option expense totaled $0.3 million and $0.5 million for the three months ended March 31, 2020 and 2019, respectively.

Amortization of Customer-Relationship Intangible Assets

Amortization of customer-relationship intangible assets represents the non-cash amortization expense for finite-lived customer-relationship and trade name intangible assets. Amortization expense associated with these intangible assets totaled $2.8 million for each of the three months ended March 31, 2020 and 2019. This amortization expense is included in "Selling, general, and administrative expenses" in our unaudited Condensed Consolidated Statements of Operations.

Unallocated Corporate and Shared Costs, Net

Certain unallocated corporate and shared costs are excluded from the determination of segment operating earnings. For the three months ended March 31, 2020 and 2019, unallocated corporate and shared costs and credits represented costs of our frozen U.S. defined benefit pension plan, expenses for our chief executive officer and our Board of Directors, certain adjustments to our self-insured liabilities, certain unallocated legal costs and professional fees, and certain adjustments and recoveries to our allowances for doubtful accounts receivable.

Unallocated corporate and shared costs were $2.6 million and $3.9 million for the three months ended March 31, 2020 and 2019, respectively. The decrease for the three months ended March 31, 2020 was due to a decrease in defined benefit pension expense and other administrative costs.

Goodwill Impairment

The Company recognized a pretax non-cash goodwill impairment in 2020 totaling $17.7 million related to its Crawford

Claims Solutions reporting unit. This expense was partially offset by a $1.7 million credit in noncontrolling interest expense. There was no goodwill impairment in the 2019 first quarter. See Note 9, "Fair Value Measurements" of our accompanying consolidated financial statements for further discussion about goodwill impairment.

Restructuring Costs

The Company recognized pretax restructuring costs totaling $5.7 million in the 2020 first quarter, related primarily to severance and other termination costs in an effort to consolidate and streamline various functions of our workforce. The restructuring cost was comprised of $5.1 million severance expense and related payroll taxes, and $0.6 million asset impairment. See Note12, "Restructuring Costs" of our accompanying consolidated financial statements for further discussion about restructuring costs.

LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL CONDITION

At March 31, 2020, our working capital balance (current assets less current liabilities) was approximately $111.6 million, an increase of $32.7 million from the working capital balance at December 31, 2019. Our cash and cash equivalents were $83.1 million at March 31, 2020, compared with $51.8 million at December 31, 2019.

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Cash and cash equivalents as of March 31, 2020 consisted of $58.1 million held in the U.S. and $25.0 million held in our foreign subsidiaries. All of the cash and cash equivalents held by our foreign subsidiaries is available for general corporate purposes. The Company generally does not provide for additional U.S. and foreign income taxes on undistributed earnings of foreign subsidiaries because they are considered to be indefinitely reinvested. The Company's current expectation is that such earnings will be reinvested by the subsidiaries or will be repatriated only when it would be tax effective or otherwise strategically beneficial to the Company such as if a very unusual event or project generated profits significantly in excess of ongoing business reinvestment needs. If such an event were to occur, we would analyze the potential tax impact and our anticipated investment needs in that region and provide for U.S. taxes for earnings that are not expected to be indefinitely reinvested. Other historical earnings and future foreign earnings necessary for business reinvestment are expected to remain indefinitely reinvested and will be used to provide working capital for these operations, fund defined benefit pension plan obligations, repay non-U.S. debt, fund capital improvements, and fund future acquisitions.

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

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

Cash Used in/Provided by Operating Activities

Cash used in operating activities was $8.0 million for the three months ended March 31, 2020, compared with $0.5 million of cash provided in the comparable period of 2019. The decrease in cash provided by operating activities was primarily due to an increase in pension contributions in 2020 and lower net income, compared with the same period of 2019. The increased use within "Accrued or prepaid income taxes" in the 2020 period is due to a $8.5 million non-cash tax benefit, primarily resulting from the non-discrete income tax treatment of the goodwill impairment.

Cash Used in Investing Activities

Cash used in investing activities, primarily for acquisitions of property and equipment and capitalized software, was $7.5 million for the three months ended March 31, 2020, compared with $3.3 million used in the first three months of 2019. Capital expenditures were higher in the 2020 period due to an increase in capitalized software to support initiatives in our operating segments.

Cash Provided by/Used in Financing Activities

Cash provided by financing activities was $47.2 million for the three months ended March 31, 2020, compared with $1.1 million used in financing activities for the 2019 period. We paid $3.3 million in dividends in each of the three months ended March 31, 2020 and 2019. During the first three months of 2020, we increased net borrowing from our revolving credit facility by $53.3 million, compared with a net increase during the first three months of 2019 of $18.8 million, to fund working capital requirements and to provide extra liquidity as a result of the economic uncertainty due to the COVID-19 pandemic. Share repurchases totaled $2.7 million in the 2020 period, compared to $16.4 million for the first three months of 2019.

Other Matters Concerning Liquidity and Capital Resources

As a component of our credit facility, we maintain a letter of credit facility to satisfy certain contractual obligations. Including $11.6 million of undrawn letters of credit issued under the letter of credit facility, the available balance under our credit facility totaled $204.9 million at March 31, 2020. Our short-term debt obligations typically peak during the first half of each year due to the annual payment of incentive compensation, contributions to retirement plans, working capital fluctuations, and certain other recurring payments, and generally decline during the balance of the year. However, certain events, such as the COVID-19 pandemic, will likely impact the level and timing of our short-term debt obligations in the future. The balance of short-term borrowings represents amounts under our credit facility that we expect, but are not required, to repay in the next twelve months. Long- and short-term borrowings outstanding, including current installments and finance leases, totaled $227.1 million as of March 31, 2020 compared with $177.0 million at December 31, 2019.

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Our liquidity is defined as cash on hand and borrowing capacity under our Credit Agreement based on our trailing twelve month EBITDA, as defined in our Credit Agreement. At March 31, 2020, we had $83.1 million of cash on hand and additional borrowing capacity, based on trailing twelve month EBITDA, of $98.6 million, resulting in total liquidity of $181.7 million at March 31, 2020. In response to the COVID-19 pandemic, we have taken a number of steps to enhance our liquidity including reducing our planned capital expenditures, stopping our discretionary U.S. defined benefit pension plan contributions for the remainder of 2020, ceasing share repurchases under our 10b5-1 repurchase plan, and adjusting our employment levels through furloughs and reductions in force. We do not intend to apply for governmental loans to support the Company’s operations but are continuing to evaluate the CARES Act and are taking advantage of certain aspects of the CARES Act such as the deferral of payroll tax deposits. In addition, there are numerous international legislative responses that we continue to evaluate, such as the Canadian Emergency Wage Subsidy program, among other enactments. 

Defined Benefit Pension Funding and Cost

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

For the three months ended March 31, 2020, the Company made contributions of $3.0 million to its U.S. defined benefit pension plan and $0.2 million to its U.K. defined benefit pension plans, respectively. During the comparable period in 2019 no contributions were made to the U.S. defined benefit pension plan and $0.2 million was contributed to the U.K. defined benefit plans. The Company does not expect to make any additional contributions to its U.S. and U.K. plans during the remainder of 2020. Anticipated funding for the other international plans is not significant.

Dividend Payments

Our Board of Directors makes dividend decisions from time to time based in part on an assessment of current and projected earnings and cash flows. During the three months ended March 31, 2020, we paid $3.3 million in dividends. Our ability to pay future dividends could be impacted by many factors including the funding requirements of our defined benefit pension plans, repayments of outstanding borrowings, levels of cash expected to be generated by our operating activities, the impact of the COVID-19 pandemic on our business, and covenants and other restrictions contained in any credit facilities or other financing agreements. The covenants in our existing credit facility limit dividend payments to shareholders.

Financial Condition

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

• Unbilled revenues increased $7.2 million excluding foreign currency exchange impacts and the adoption of Topic 326. This increase was primarily due to the Crawford Claims Solutions segment, which had increases due to weather related activity in the U.K. and Australia.

• Accrued retirement costs decreased $8.6 million excluding foreign exchange impacts. The decrease related to a contribution to our pension plan as well as timing of annual payments such as our 401K match program.

At March 31, 2020, we were not a party to any off-balance sheet arrangements which we believe could materially impact our operations, financial condition, or cash flows.

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

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

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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New Accounting Standards Adopted

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

Pending Adoption of New Accounting Standards

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

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

Changes in Internal Control over Financial Reporting

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

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PART II — OTHER INFORMATION

Item 1A. Risk Factors

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

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

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

• the duration and scope of the pandemic;

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

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

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

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

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

• the impact on our third party vendors;

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

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

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

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

The Company's share repurchase authorization, approved on May 9, 2019 by the Company's Board of Directors, provided the Company with the ability to repurchase up to 2,000,000 shares of CRD-A or CRD-B (or a combination of the two) through December 31, 2020 (the "2019 Repurchase Authorization"). Under the 2019 Repurchase Authorization, repurchases may be made for cash, in the open market or privately negotiated transactions at such times and for such prices as management deems appropriate, subject to applicable contractual and regulatory restrictions. Since December 31, 2019, the Company has purchased 316,810 shares pursuant to the 2019 Repurchase Authorization. As of March 31, 2020, the Company was authorized to repurchase 642,097 shares under the 2019 Repurchase Authorization.

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May be Purchased Under the Plans or Programs
Balance as of December 31, 2019					958,907
January 1, 2020 - January 31, 2020
CRD-A	33,412	$	9.14	33,412
CRD-B	75,000	$	9.78	75,000
Totals of January 31, 2020					850,495
February 1, 2020 - February 29, 2020
CRD-A	75,000	$	9.04	75,000
CRD-B	32,027	$	8.04	32,027
Totals of February 29, 2020					743,468
March 1, 2020 - March 31, 2020
CRD-A	46,939	$	6.93	46,939
CRD-B	54,432	$	6.77	54,432
Totals as of March 31, 2020	316,810			316,810	642,097

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Item 6. Exhibits

Exhibit
No.	Description
3.1	Restated Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 14, 2007)
3.2	Restated By-laws of the Registrant, as amended (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 22, 2008)
15	Letter of Ernst & Young LLP
31.1	Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	XBRL Documents

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SIGNATURES

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

		Crawford & Company (Registrant)
Date:	May 5, 2020	/s/ Harsha V. Agadi
		Harsha V. Agadi
		President and Chief Executive Officer (Principal Executive Officer)
Date:	May 5, 2020	/s/ W. Bruce Swain
		W. Bruce Swain
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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