A Message to Our Shareholders

Crawford & Company's 2013 results mark a five-year period of growth and improved profitability for the Company. Since the recession of several years ago, Crawford's revenues before reimbursements have grown at a compound annual rate of nearly 4 percent from 2009 through the present, and consolidated operating earnings have grown by 79 percent.


We have diversified our revenue stream and put in place a significantly improved technology infrastructure that drives our business today. While results in our core business of claim processing are subject to weather and catastrophe-related events, today half our revenue derives from business process outsourcing and ­consulting services within our Legal Settlement Administration and Broadspire® segments and the Contractor Connection division. This is changing the way we operate globally, the way we continue to invest in our future, and the way we expect to provide future earnings. We are creating a stronger company.

There is no doubt that our solid results in recent years have been driven by a number of large claim events such as the 2011 flooding in Thailand, affecting our Europe, Middle East, Africa and Asia Pacific (EMEA/AP) operations, and our Legal Settlement Administration responsibilities in the Gulf Coast Claims facility and Deepwater Horizon class action settlement. These projects also contributed to our 2013 results. Over the past year, however, we have also seen a better balance to our earnings. Volumes have improved in our Broadspire third-party administration (TPA) business, with corresponding growth in profitability. Our Americas businesses demonstrated a resilient performance this year in a benign weather environment against the comparison with superstorm Sandy in 2012.

In the past five-year period, we have substantially improved Crawford's balance sheet strength by reducing our debt levels and unfunded pension obligations and increasing shareholders' equity. In 2011, Crawford restored payment of dividend, which we have subsequently increased each quarter. Importantly, we have also returned cash to shareholders by repurchasing approximately 1.2 million shares since the inception of the recent share repurchase program.

Significant progress has been made toward achieving our strategic objectives. We continue to innovate our technology and evolve our client offerings, both of which move our Company forward.

Review of 2013

We were pleased to report growth in net income and diluted earnings per share on a relatively flat revenue performance in 2013, reflecting in part a global absence of major weather events over the 12 months. Revenues before reimbursements totaled $1.163 billion, and consolidated operating earnings were $94.9 million. Net income attributable to our shareholders was $51.0 million for 2013, an increase of over 4 percent from 2012. Consolidated diluted earnings per CRDA share were $0.93 in 2013, compared with $0.91 in 2012. Diluted earnings per CRDB share were $0.90 in 2013, compared with $0.87 in 2012.

This performance reflects an increasing strength in Crawford's Americas segment, which reported a 56 percent gain in operating earnings for 2013, and much-improved performance in Broadspire, which reported 6 percent growth in revenues and significantly improved profitability.

Midway through the year, Crawford launched Specialty Markets, a global offering targeting Lloyd's of London, the International adjusting market, and other clients with the unique needs of highly technical and specialized claims handling in the areas of energy, marine, aviation, forensic accounting, and mining. Crawford also acquired a majority interest in Lloyd Warwick International Limited, a specialist loss consulting company based in London offering onshore and offshore energy expertise. This acquisition is in line with Crawford's global strategy of continuing to grow our portfolio of services and builds on Crawford's existing capabilities in the energy market.

We strategically grew our global third-party administration capabilities with further expansion of the Broadspire brand in Europe, the Asia Pacific region and Canada. Crawford is the only TPA to offer this global range of services.

In addition to our achievements in operations, we have made important gains in the strength of our balance sheet by reducing our net debt and unfunded pension obligations, while delivering nearly $78 million in operating cash flow for the year. Our total third-party debt decreased in 2013 by almost $29 million. During the 2013 fourth quarter, Crawford amended its revolving credit facility, extending the maturity to five years, as well as increasing the credit line to $400 million and reducing borrowing costs. After reflecting cash on hand, the Company's net debt was just under $62 million, which is the lowest level since 2005.

We continued to reduce our unfunded pension obligations. Our pension liabilities position at the end of 2013 was $103 million—the lowest level since 2007, and a 52 percent decline from pension liabilities at the end of 2009.

As a result, we believe Crawford enters 2014 well-prepared to invest in market leading solutions for our clients and respond to opportunities as they emerge.

Technology

Crawford's global footprint allows us to expand in key areas throughout the world as we concentrate on providing excellent customer service and increasing our technical capabilities. A great example of technology investment for our clients is our mobile accessible CAT Connection that links Crawford employees into our Claims Management System, expediting claims set-up and deployment of adjusters. Our response to flooding in Canada last year consisted of handling more than 7,000 assignments for about 60 clients while deploying approximately 350 Canadian and U.S. claims adjusters. In another area, our award-winning GTS® mobile website emphasizes the Company's global reach and strategy through our Global Technical Services resources and experience.

In 2013, Crawford deployed the latest innovative site assessment technology to more effectively manage claims for insurers and the insured. The technology enables complete automation of task management for field activities, informs clients of progress within minutes of activities taking place in the field or office, and empowers a mobile work force. The technology, which will be used globally by Crawford's adjusters, is fully integrated with Crawford's systems to further improve organizational effectiveness and our level of service.

Crawford is dedicated to technological innovation that helps our clients achieve their business goals with ease and efficiency. Our technology strategy is focused on a global standardized technology platform. Our strategy is guided by our Global System Roadmap which comprises several core technologies, including: business intelligence; data privacy; cross border data transfer; business process management; and mobile technologies.

Crawford will continue to invest in technology to deliver process improvement, speed, automation and analytics. All are essential components of The Crawford Solution, designed to meet the expanding demands of our clients.

2014 Outlook

Our global management team is aggressively executing our strategies and continues to create a culture in which our employees understand the values that foster improved performance for clients and shareholders. The people of Crawford, whose efforts have improved our operations on every dimension, warrant significant recognition. Their accomplishments are receiving well-deserved attention from clients and our peers.

Our outlook remains upbeat and the balance of positive results among our segments is encouraging. Our goals of driving operating performance, further strengthening our balance sheet and enhancing total return to shareholders remain in place for 2014. Our expectations are for improved earnings performance as anticipated revenue declines in EMEA/AP and Legal Settlement Administration are expected to be offset by continued focus on cost savings, technology and ­process efficiency improvements as well as innovative product launches the we believe could lead to significant client wins.

We will remain disciplined in our approach to both our balance sheet and cash management. Crawford's pension risk management program has yielded positive results as we continue to move towards a fully funded position in our plans.

Crawford's stronger balance sheet and improved cash generation have supported both expected growth of quarterly dividends and ongoing share repurchases, enhancing our shareholders' return.

With these actions, we expect to continue to offer meaningful returns to our shareholders.

Conclusion

Our 2013 results are evidence of the benefit of having balanced operations in an unpredictable market. We will continue to promote excellence in our developing business operations. We expect to further expand market share, invest in technology to deliver operational efficiencies, and capitalize on the client opportunities that present themselves in the coming year. We are optimistic about our outlook going forward and will continue evaluating the marketplace in pursuit of global opportunities that will allow us to capitalize on our core strengths and strategies, all while enhancing our offering to clients and returns to shareholders.

I would like to thank long-time board member Jenner Wood who retired from the Crawford Board of Directors in 2013 after 16 years of service. His contributions to our Company were many and we will miss his guidance and experience. We were very fortunate to be able to welcome Roger A.S. Day to our Board of Directors. Roger's global insurance industry experience and operating acumen are great assets to the Company as we look ahead.

On behalf of the entire management team and our Board of Directors, I would like to thank our employees for their devotion, enthusiasm, and continuous efforts toward exceptional service, as well as our shareholders for their support. Our future remains vibrant with a broad array of opportunities, and our strategic plans reflect optimism, excitement and dedication to our operational and financial success in 2014.

Sincerely,

Jeffrey T. Bowman

President and Chief Executive Officer





Jeffrey T. Bowman
President and Chief Executive Officer

"While results in our core business of claims processing are subject to weather and catastrophe-related events, today half our revenue derives from business process outsourcing and ­consulting services within our Legal Settlement Administration and Broadspire segments and the Contractor Connection division."

"We strategically grew our global third-party administration capabilities with further expansion of the Broadspire brand in Europe, the Asia Pacific region and Canada. Crawford is the only TPA to offer this global range of services."

"Crawford is dedicated to technological innovation that helps our clients achieve their business goals with ease and efficiency. Our technology strategy is focused on a global standardized technology platform."