Crawford to cut costs in wake of profit decline
Reprints
Crawford & Co. on Thursday said it is looking to cut costs and realign its senior management, as the claims management company saw a steep drop in profit for the first quarter of 2015.
Atlanta-based Crawford reported $306.6 million in revenue for the quarter ended March 31, up nearly 6% from the same period last year. However, net income for the recent quarter fell to $3.3 million, down 50.2% from the first quarter of 2014.
However, Crawford’s workers compensation and liability third-party administrator, Broadspire Services Inc., reported $69.7 million in revenue for the recent quarter, up 7.6% from a year ago. The company attributed Broadspire’s growth to new clients and an increase in workers comp case referrals.
Crawford President and CEO Jeffrey T. Bowman said in a statement that winter weather in the United States during the first quarter contributed to the company’s overall profit downturn. Crawford is considering management changes and other cost-reduction strategies that are expected to benefit the company in the second quarter of 2015, Mr. Bowman said.
“The challenging market environment has continued through the 2015 first quarter, driving a further mix shift from high-margin property claims, which typically results from severe weather, to high volume, low-value claims both in the U.S. and internationally,” according to the statement. “Given the persistence of this environment, we have made the strategic decision to further rationalize our cost structure to reduce expenses and enhance margins. Additionally, we have further realigned our senior management team to improve execution and capitalize on the opportunities that we see ahead of us.”
Crawford also said it has received approval from the United Kingdom’s Competition and Markets Authority to move forward with its $73.3 million acquisition of London-based claims management firm GAB Robins Holdings UK Ltd., announced in December.
Read Next
-
Broadspire a bright spot in Crawford & Co. financial results
Crawford & Co. President and CEO Jeffrey T. Bowman expects Broadspire Services Inc. to grow its revenue and profitability this year as the third-party administrator works to gain ground among competitors.
Related Stories
Most Read in Workers Comp
-
1. Zurich ordered to pay $80 million in suit over employee incentives
-
3. Marsh McLennan sees rate hikes slowing; reports revenue growth
-
4. Travelers sees rate hikes continue; Q1 profit up over 15%
-
5. DeSantis signs legislation prohibiting local workplace heat protections
-
6. AI not a ‘substitute,’ but can benefit insurance industry: Experts
