CRD-A 10-K & 10-Q changes, risk factors and insider trading

From time to time, we derive a material portion of our revenues from a limited number of clients. No single customer accounts for 10% or more of our consolidated revenues for the years ended December 31, 2025, 2024, 2023, or 2022.2023. However, for the year ended December 31, 2025, two customers in our Platform Solutions segment represented in excess of 10% of its revenues, and for each of the years ended December 31, 2024, 2023,2024 and 2022,2023, three customers in our Platform Solutions segment each represented in excess of 10% of its revenue.revenues. For each of the yearsyear ended December 31, 2023 and 2022,2023, our International Operations segment derived in excess of 10% of its revenuerevenues from one customer.

We manage a large amount of highly sensitive and confidential consumer information including personal data, medical/health information and financial information. A security or privacy incident impacting data processed or stored in our own facilities or data maintained, processed or stored by our service providers, including cloud service providers, could compromise the confidentiality, integrity or availability of this information. Unauthorized access to or disclosure of sensitive and confidential information stored by us or our service providers may occur through break-ins, breaches of a secure network by an unauthorized party, systems and technology failures, failed internet processes, theft or misuse or other misconduct. It is also possible that unauthorized access to or disclosure of such sensitive and confidential information may be obtained through accidental or malicious failure to follow security policies or controls by us orus, our employeesemployees, or our service providers. If there were an inadvertent disclosure of confidential consumer information, or if a third party were to gain unauthorized access to the confidential information, our operations could be disrupted, our reputation could be damaged and we could be subject to claims or other liabilities, regulatory investigations, or fines. These incidents, if successful, could also materially disrupt operational systems and result in loss of intellectual property, trade secrets, other proprietary or competitively sensitive information. In addition, such perceived or actual unauthorized disclosure of the information we collectprocess or breach of our security could damage our reputation, result in the loss of customers and harm our business.

Malicious technology-related events, such as cyberattacks, computer hacking, computer viruses, ransomware, worms and other destructive or disruptive software and other attempts to gain access to confidential or personal data, denial of service attacks and other malicious activities are becoming increasingly diverse and sophisticated and the incidence of these events is on the rise worldwide and highlights the need for continual and effective cybersecurity awareness and education. Our business, which involves the collection, use, transmission and other processing of data, makes us and our clients and business partners attractive targets offor threat actors such as hackers, denial of servicedenial-of-service attacks, malicious code,code distributors, perpetrators of phishing attacks,and ransomware attacks, and other threat actors, including malicious insiders (suchincluding as employeescurrent and priorformer employees), which havemay resultedresult in security incidents. Types of cybersecurity incidents may include unauthorized access, misuse, loss, corruption, inaccessibility, or destruction of data (including personal, confidential and sensitive data), unavailability of services, or other adverse events.

In the past three years, we have faced cyberattacks, and we expect to continue to face cyberattacks in the future. Some of these attacks have been successful, althoughthough none have been material. We have made investments in our information security policies, procedures and technical controls and routinely engage a third party to assess the maturity of our information security program against the National Institute of Standards and Technology ("NIST") Cybersecurity Framework. However, we do not believe it is possible to protect our systems or third-party systems against every attempt at a malicious breach due to the increasing sophistication and frequency of such attacks. All employees receive security awareness training including communication of processes for reporting a potential security incident. We have a robust CyberCybersecurity and Privacy Incident Response PlanPolicy in place which provides a documented framework for handling high severity security and privacy incidents and facilitates coordination across multiple parts of the Company and with external expertise when necessary. Additionally, we have existing procedures to determine the potential materiality of a cybersecurity incident. These procedures include reporting protocols to and oversight from our Board of Directors. We also have disclosure controls and insider trading restrictions that would apply in the event of a material cybersecurity incident, and we routinely perform simulations and drills at both a technical and management level. Notwithstanding these measures, we cannot provide any assurance that we will always be able to prevent or mitigate a cybersecurity attack. These types of cybersecurity attacks and incidents can give rise to a variety of losses and costs, including legal exposure and regulatory fines, damages to reputation, and others.

Any perception of our practices, products or services as a violation of individual privacy rights may subject us to public criticism, class action lawsuits, reputational harm, or investigations or claims by regulators, industry groups or other third parties, all of which could disrupt our business and expose us to increased liability. Additionally, we collect, process and store information at the direction of and on behalf of our customers and if our customers fail to comply with their own contractual obligations or applicable laws, it could result in litigation or reputational harm to us.

Transferring personal information across international borders is increasingly complex and subject to a growing body of enforcement decisions. The increased focus on cross-border data transfers in various countries, in addition to new data protection and privacy laws, means our clients are also more attune to data sharing and requiring data transfer impact assessments for countries which are not deemed to provide an adequate level of protection as the data-originating country. These requirements are often complex, conflicting, unclear or ever changing, all of which can make compliance challenging and may result in an increase in the obligations required to provide our services in the U.K. and EU or in sanctions and fines for non-compliance. Several other countries, including Brazil, China, Canada and Australia, have also established specific legal requirements for cross-border transfers of personal information. These ongoing developments inaround the U.K. and EU and elsewhereworld could increase our operating costs inas thesewell jurisdictions andas impact the wayhow we operationalizefunction ouracross business models, with effects on results of operations and financial condition.borders.

Our international operations subject us to political, legal, operational, financial, exchange rate and other risks that we do not face in our domestic operations. Many of these operations are substantially smaller than our U.S. operations and as such are at risk of generating operating losses due to lack of scale. We face, among other risks, the risk of discriminatory regulation; nationalization or expropriation of assets; changes in both domestic and foreign laws regarding taxation, trade and investment abroad; pandemics such as coronavirus; potential loss of proprietary information due to piracy, misappropriation or laws that may be less protective of our intellectual property rights; or price controls and exchange controls or other restrictions that could prevent us from transferring funds from these operations out of the countries in which they were earned or converting local currencies we hold into U.S. dollars or other currencies.

Although we do not have direct exposure from the ongoing and potential global conflicts including Russia and the Ukraine, the Middle East, and growing tensions in Russia/Ukrainethe andAsia Israel,Pacific region, we are aware of their potential negative impact to adjacent economies which could lower claim activity across our network of offices and increase our exposure to cyberattacks.

Natural or manmademan-made disasters or other acts of violence may affect the markets in which we operate, our clients and our service delivery.

Our business may be negatively affected by instability, disruption or destruction in the many geographic regions where we operate. Natural or manmademan-made disasters, including storm, flood, fire, earthquake, pandemics and other regional or global health crises, as well as war, terrorism, riot, civil insurrection or social unrest, may cause damage to our facilities or disrupt our services. This includes our shared services centers which exist in international geographies. Specifically, we continue to increase employees and processes performed by our Global Business Service Centers located in the Philippines. Our crisis management procedures, business continuity plans and disaster recovery capabilities may not be effective at preventing or mitigating the effects of such disasters, particularly in the case of a catastrophic event. These events may pose significant security risks to our employees, the facilities where they work, our operations, electricity and other utilities, communications, travel and network services and the disruption of any or all of them could materially adversely affect our financial results.

At the end of the most recent measurement period for our U.S. Qualified Plan, the projected benefit obligation was underfunded by $19.0$15.4 million. We did not make any voluntary contributions to this plan in 2022,2023, 2023,2024, or 2024,2025. andIn do2026, notwe expect to make any discretionary contributions of $3.0 million to theminimize U.S.future Qualifiedrequired Plan in the next fiscal year.contributions. Volatility in the capital markets, mortality changes and future legislation may have a negative impact on our pension plan, which may further increase the underfunded portion and our attendant funding obligations. Any future contributions to our underfunded defined benefit pension plan could reduce our liquidity, restrict available cash for our operating, financing, and investing needs and may materially adversely affect our financial condition and our ability to deploy capital to other opportunities. Any decision to terminate the plan and settle the defined-benefit pension obligation would result in a non-cash charge within the Consolidated Statements of Operations related to unrecognized actuarial losses in accumulated other comprehensive income, which totals $178.9$167.2 million as of December 31, 2024.2025.

We are party to a credit facility, effective as of NovemberDecember 5,2, 2021,2025, with Bank of America, N.A., Wells Fargo Bank, N.A., Truist Bank, and the other lenders a party thereto, (the "Credit Facility"). The Credit Facility consists of a $450$500 million revolving credit facility, with a letter of credit sub-commitment of $125 million. The available borrowing capacity under the Credit Facility totaled $219.4$290.7 million on December 31, 2024.2025. The Credit Facility contains various representations, warranties and covenants, including covenants limiting liens, indebtedness, guarantees, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, restrictions on dividends and distributions, and other fundamental changes in our business. Additionally, the Credit Facility contains covenants requiring us to remain in compliance with a maximum leverage ratio and a minimum interest coverage ratio.

In recentprior periods we have incurred impairment charges that reduced the carrying value of our intangible assets and goodwill; in the future we may be required to incur additional impairment charges on a portion of or all of the carrying value of our intangible assets and goodwill, which may adversely affect our financial condition and results of operations.

Broadspire, which provides third party administration for workers' compensation, auto and liability, disability absence management, medical management, and A&Haccident and health to corporations, brokers and insurers in the U.S.

As discussed in more detail in subsequent sections of this MD&A, our four reportable 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. The Company’s CEO is considered the CODM as he is responsible for strategic decisions including the allocation of resources to each reporting segment and the assessment of their performance.

Consolidated revenues before reimbursements were $1.266 billion in 2025, a decrease of 2.1% compared with $1.293 billion in 2024, an increase of 2.0% compared with $1.267 billion in 2023.2024. Net income attributable to the Company wasdecreased to $19.6 million in 2025, from $26.6 million in 2024, comparedprimarily withdue to restructuring and other costs, net income of $30.6$14.0 million in 2023.the current year.

Consolidated revenues before reimbursements increaseddecreased $25.4$26.8 million, or 2.0%,2.1%, in 2024,2025, compared with 2023.2024. This increasedecrease was due to new client growthdeclines in weather-related activity within the Platforms Solutions and North America Loss Adjusting, International Operations, and Broadspire and pricing increases in all of ourAdjusting segments. This was partially offset by a weather-related reductiongrowth in our PlatformsInternational SolutionsOperations segment.and Broadspire segments. Changes in foreign exchange rates decreasedincreased our consolidated revenues before reimbursements by $0.8$2.0 million, or 0.1%, for 20242025 as compared with the prior year.

Excluding foreign currency impacts, consolidated revenues before reimbursements increaseddecreased $26.2$28.7 million, or 2.1%,(2.2)%, for 2024.2025. Revenues from the North America Loss Adjusting segment increaseddecreased in 20242025 primarily due to ana increasedecrease in U.S. GlobalField Technical Services.Operations. Revenues from the International Operations segment increased due to increases in the U.K., Europe, AsiaEurope and Latin America.Asia. Revenues from the Broadspire segment increased due to increases in Claims and Medical Management. Revenues from the Platform Solutions segment decreased primarily due to a reduction in our Networks and Contractor Connection service lines.line, which experienced a reduction in catastrophe related claims.

Overall, there was a decrease in cases received of (2.76.9)% in 20242025 compared with 2023.2024. Within our North America Loss Adjusting segment, thecases reductionincreased in 2025 as a result of an increase in low value inspection services cases receivedtransferred forfrom 2024our wasPlatforms primarilySolutions group with minimal revenues. Excluding the impact of this transfer, cases decreased (6.1)% due to thedecreased loss of a customerbusiness in the ContractorU.S. Connectionfrom serviceexisting lineclients and the absence of significant weather-related activity in Canada.2025. Cases within our International Operations segment increased,declined in 2025, primarily due primarily to increasesdecreases in Latin America related to high-frequency, low-severity cases,cases in the U.K., Europe, and Australia,Latin whichAmerica, hadand an increasedecreases in Australia due to higher weather-related casesactivity compared toin the prior year. There was a slightan increase in cases within our Broadspire segment primarily due to an increase in Medical Management referrals, partially offset by an increase in the prior year of 24,700 takeover claims fornew disability clients within Claims Management. Within our Platform Solutions segment, therethe wasdecrease is primarily related to the transfer of low value inspection services to North America Loss Adjusting, as well as a decrease in Contractor Connection and Subrogation cases related to the Networks and the Contractorabsence Connectionof servicesignificant lines.weather-related activity in 2025.

Segment operating earnings (a measure of segment operating performance used by our management that is defined and discussed in more detail below) increased in our North America Loss Adjusting, International OperationsOperations, and Broadspire operating segments, partially offset by a decrease in our North America Loss Adjusting and Platform Solutions segments.segment.

In the North America Loss Adjusting segment, operating earnings decreasedincreased from $23.2 million, or 7.6% of revenues before reimbursements in 2023, to $18.2 million, or 5.8% of revenues before reimbursements in 2024, to $21.0 million, or 6.9% of revenues before reimbursements in 2025, primarily due to lowerimproved staff utilization in U.S. FieldGlobal OperationsTechnical Services and Canada,Canada comparedLoss toAdjusting, 2023.a decrease in allowance for estimated credit losses, and a reduction in centralized indirect support costs. Excluding indirect expenses, gross profit decreasedincreased slightly from $62.2 million, or 20.5% of revenues before reimbursements in 2023, to $56.8 million, or 18.2% of revenues before reimbursements in 2024.2024, to $57.0 million, or 18.7% of revenues before reimbursements in 2025.

In the International Operations segment, operating earnings increased from $11.2 million, or 2.9% of revenues before reimbursements in 2023, to $21.0 million, or 5.0% of revenues before reimbursements in 2024, to $25.1 million, or 5.7% of revenues before reimbursements in 2025, primarily due to a $36.2$19.6 million increase in revenues and improved staffoperating utilization.efficiencies in the U.K., Australia, and Asia, partially offset by an increase in centralized indirect support costs. Excluding indirect expenses, gross profit increased from $60.4$77.5 million or 15.8% of revenues before reimbursements in 2023, to $77.5 million, or 18.5% of revenues before reimbursements in 2024.2024, to $86.6 million, or 19.8% of revenues before reimbursements in 2025.

In the Platform Solutions segment, operating earnings decreased from $28.5 million, or 12.7% of revenues before reimbursements in 2023, to $11.2 million, or 6.4% of revenues before reimbursements in 2024, to $7.6 million, or 6.3% of revenues before reimbursements in 2025, primarily due to a ($48.0)$52.9 million decrease in revenues from staffa argumentationreduction withinin theweather-related claims in our Networks service line. Excluding indirect expenses, gross profit decreased from $51.6 million, or 22.9% of revenues before reimbursements in 2023, to $34.9 million, or 20.1% of revenues before reimbursements in 2024.2024, as a result of reduced catastrophe related claims volume, to $27.0 million, or 22.3% of revenues before reimbursements in 2025.

Cost of services provided, before reimbursements, increaseddecreased $16.9$26.3 million, or 1.9%2.8% for 20242025 compared with 2023.2024. This increasedecrease was primarily due to ana increasedecrease in compensation expense,expense within our North America Loss Adjusting, International OperationsAdjusting and BroadspirePlatform Solutions segments, as a result of reduced weather-related claims volumes, partially offset by decreasesincreases in compensation expense in our PlatformsInternational SolutionsOperations segment.and Broadspire segments. This increasedecrease was consistent with the increasedecrease in revenues of $25.4$26.8 million, or 2.0%.2.1%.

Selling, general, and administrative ("SG&A") expenses increaseddecreased $13.2$5.5 million, or 4.6%,1.8%, in 2024,2025, as compared with 2023.2024. This increasedecrease was primarily due to increasesreduction in professional fees and IT costs,fees, partially offset by thea benefitone-time fromindirect contingenttax earnoutexpense adjustments.of $3.1 million.

Contingent earnout adjustments represent the fair value adjustment of earnout liabilities arising from recent acquisitions. This benefitexpense totaled $1.1$0.5 million for 2024,2025, compared to ana expensebenefit of $4.0$(1.1) million for 2023.2024. The fair value adjustment is based on changes to projections of acquired entities over the respective earnout periods, which span multiple years.periods.

Non-service pension costs totaled $9.4 million for 2025, compared to $9.8 million for 2024, compared to $8.6 million for 2023, primarily due to higherlower amortizationinterest ofcosts netin losses.2025 for the U.K. plans. Non-service pension costs represents the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan is frozen and the U.K. plans are closed to new participants. The service cost component of the U.K. plans remains in compensation expense.

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, non-service pension costscosts, restructuring and credits,other costs, net, contingent earnout adjustments, income taxes, reserves on certain income tax assets, and net income or loss attributable to noncontrolling interests.

Income taxes, net corporate interest expense, stock option expense, contingent earnout adjustments, amortization of customer-relationship intangible assets, andcontingent earnout adjustments, non-service pension costscosts, and creditsrestructuring and other costs, net, 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,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. Contingent earnout adjustments represent fair value adjustments of earnout liabilities arising from recent acquisitions. Amortization expense is a non-cash expense for finite-lived customer-relationship and trade name intangible assets acquired in business combinations. Contingent earnout adjustments relate to changes in the fair value of earnouts associated with our past acquisitions. Non-service pension costs and credits represent the U.S. and U.K. non-service defined benefit pension costs and credits,costs, which are non-operating in nature as the U.S. plan iswas frozen in 2002 and the U.K. plans are closed to new participants. TheRestructuring serviceand costother componentcosts, ofnet, theare U.K.costs plansassociated remainswith in compensation expense. The exclusion of this measurement isinitiatives intended to excludeimprove marketoperating volatilityperformance, related to an expense that is non-operating in natureprofitability, and notefficiency related toof business performance.processes. Restructuring and other costs, net, include asset impairments, lease termination costs, severance and termination costs, and loss on sale of a business. 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.

Additional discussion and analysis of our income taxes, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, contingent earnout adjustments, goodwill impairment, non-service pension costscosts, restructuring and credits,other reservescosts, on certain income tax assets,net, and unallocated corporate and shared costs follows the discussion and analysis of the results of operations of our four segments.

Operating results for our segments reconciled to income before income taxes and net income (loss) attributable to shareholders of the Company are as shown in the following table.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with (i) our unaudited condensed consolidated financial statements and accompanying notes thereto for the three and six months ended MarchJune 31,30, 2026 and 2025, and as of MarchJune 31,30, 2026, and December 31, 2025, contained in Item 1 of this Quarterly Report on Form 10-Q, and (ii) our Annual Report on Form 10-K for the year ended December 31, 2025. As described in Note 1, "Basis of Presentation," the financial results of our operations outside of the U.S., Canada, the Caribbean, and certain subsidiaries in the Philippines are included in our consolidated financial statements on a two-month delayed basis (fiscal year-end of October 31) as permitted by U.S. generally accepted accounting principles ("GAAP") in order to provide sufficient time for accumulation of their results.

Consolidated revenues before reimbursements decreased $2.5$1.6 million, or (0.80.5)%, for the three months ended MarchJune 31,30, 2026, compared with the same period of 2025. This decrease was primarily driven by lower volumes in our U.S. Property & Casualty reportable segment, as well as revenue reductions due to the disposal of the Crawford Legal Services businesses in our International Operations reportable segment. Changes in foreign exchange rates increased our consolidated revenues before reimbursements by $7.8$7.7 million, or 2.4%, for the three months ended June 30, 2026 and increased revenues by $15.5 million, or 2.5%, for the threesix months ended MarchJune 31,30, 2026, as compared with the prior year period.periods. To illustrate this impact, segment revenues are presented below, using a constant exchange rate, for the three and six months ended MarchJune 31,30, 2026.

Excluding foreign currency impacts, consolidated revenues before reimbursements decreased $10.3$9.3 million, or (3.32.9)%, for the three months ended MarchJune 31,30, 2026 and decreased $19.6 million, or (3.1)%, for the six months ended June 30, 2026 compared with the same periodperiods of 2025. Revenues from the U.S. Property & Casualty segment decreased in the 2026 firstsecond quarter and year to date period primarily due to revenuea reductionscontinued decrease in staff augmentation and weather-driven services within our Catastrophe Services, Claims SolutionsServices and Contractor Connection.Connection businesses. Revenues from the Broadspire segment increased for each of the quarter2026 periods due to an increase in Claims and Medical Management revenues, partially offset by a reduction in Subrogation revenues. Excluding foreign currency impacts, revenues from the International Operations segment decreased in the 2026 firstsecond quarter compared with the same period in 2025 due to reductions in the U.K., EuropeU.K. and Latin America, partially offset by revenue increases in Australia, Canada, and Asia. Excluding foreign currency impacts, revenues from the International Operations segment decreased in the six months ended June 30, 2026 as compared to the same period in 2025 due to reductions in the U.K., Europe, and Latin America, partially offset by revenue increases in Australia, Canada, and Asia.

Overall, there waswere anslight increaseincreases in cases received of 0.8%0.1% and 0.4% for the three and six months ended MarchJune 31,30, 2026.2026, respectively. Within our U.S. Property & Casualty segment, cases decreased for the three and six months ended June 30, 2026 first quarter as a result of a weather-related reduction in all service lines other than Contractor Connection.lines. There was ana increaseslight decrease in cases within our Broadspire segment for the firstthree quartermonths primarilyended June 30, 2026 as compared to the prior year period due to ana increasedecline in Subrogation cases. For the six months ended June 30, 2026, Broadspire cases increased due primarily to increases in new disability clients within our Claims Management.Management service line, partially offset by a decline in Subrogation cases and decreased casualty claims within our Claims Management service line. Cases within our International Operations segment increased for the firstthree quarter,and six months ended June 30, 2026, as compared to the prior year period, primarily due to an increase in high-frequency, low-severity cases in Spain and weather-related activity in Australia, partially offset by reductions in low-severity cases in Brazil.Spain.

Cases received are presented below by segment for the three and six months ended MarchJune 31,30, 2026 and 2025:

To illustrate exposure to the impact of changes in foreign currencies, revenues before reimbursements are presented below by denominated currency for the three and six months ended MarchJune 31,30, 2026:

Costs of services provided, before reimbursements, decreasedincreased $0.5$1.7 million, or (0.2)%,0.8%, for the three months ended MarchJune 31,30, 2026 and increased $1.2 million, or 0.3%, for the six months ended June 30, 2026, as compared to the 2025 period.periods. As a percentage of revenues before reimbursements, costs of services decreased consistent with the decrease in revenues.

Selling, general, and administrative ("SG&A") expenses increaseddecreased $1.6$8.7 million, or 2.1%,(11.1)%, in the three months ended MarchJune 31,30, 2026 and $7.1 million, or (4.7)%, for the six months ended June 30, 2026 as compared with the 2025 period.periods. The increasedecrease was primarily due to ana increase$3.1 million one-time indirect tax expense in self-insurancethe expense,2025 second quarter and lower compensation costs, partially offset by a reduction$2.3 inmillion contingentsoftware earnoutimpairment expenses.charge.

We believe operating earnings is a measure that is useful for others to evaluate segment operating performance using the same criteria used by our senior management and CODM. Segment operating earnings represents segment earnings, including the direct and indirect costs of certain administrative functions required to operate our business, but excludes unallocated corporate and shared costs and credits, net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, income taxes, loss on disposal of businesses, net, software impairment, and net (income) loss attributable to noncontrolling interests.

Operating earnings in our U.S. Property & Casualty segment totaled $7.6$7.2 million, or 10.4%9.7% of revenues before reimbursements, for the three months ended MarchJune 31,30, 2026, compared with 2025 operating earnings of $9.8$7.5 million, or 11.9%9.0% of revenues before reimbursements. For the six months ended June 30, 2026, our U.S. Property & Casualty segment reported operating earnings of $14.8 million, or 10.1% of revenues before reimbursements, compared with 2025 operating earnings of $17.2 million, or 10.5% of revenues before reimbursements. The decrease in operating earnings in the three and six months ended June 30, 2026 firstas quartercompared to the prior year periods was driven by a decline in revenues within the Catastrophe Services, Claims Solutions,Services and Contractor Connection service lines, offsetting benefits from improvedreduced operatingcentralized efficiencyindirect withinsupport Global Technical Services.costs.

Excluding centralized indirect support costs, gross profit decreased from $23.1$21.3 million, or 28.1%25.8% of revenues before reimbursements in 2025, to $20.6$19.2 million, or 28.3%25.9% of revenues before reimbursements, in the three months ended MarchJune 31,30, 2026. For the six months ended June 30, 2026, gross profit decreased from $44.4 million or 26.9% of revenues before reimbursements in 2025 to $39.8 million, or 27.1% of revenues before reimbursements, primarily due to revenue declines within the ClaimsCatastrophe SolutionsServices and Contractor Connection service line, partially offset by improvements in operational efficiencies within Global Technical Services.lines.

Operating results for our U.S. Property & Casualty segment, including gross profit, for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

U.S. Property & Casualty segment revenues are primarily derived from the property and casualty insurance company markets within the U.S. Revenues before reimbursements by service line for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

Revenues before reimbursements from our U.S. Property & Casualty segment totaled $72.9$74.1 million in the three months ended MarchJune 31,30, 2026, compared with $82.2$82.5 million in the 2025 period. This decrease was primarily driven by a continued decrease in weather-driven services within our ClaimsCatastrophe SolutionsServices and CatastropheContractor ServicesConnection businesses. There was a decrease in segment unit volume, measured principally by cases received, of (16.916.5)% for the three months ended MarchJune 31,30, 2026, compared with the 2025 period. This includes a decrease in low value inspection services cases, of 10,8004,150 or (11.14.5)%. The decrease in revenues from weather-driven activity in our Catastrophe Services business resulted in a decrease in revenues of $4.0$(5.4) million, or (4.96.6)%, for which there are minimal casescases, related.is primarily due to a continued decrease in staff augmentation and weather-driven services. During the second quarter of 2025, there was an increase in complex claims of 2,250, or 2.4%, within Global Technical Services for which revenue is expected to be recognized in future periods. Changes in product mix and in the rates charged for those services accounted for a (0.6)%6.0% revenue decreaseincrease for the three months ended MarchJune 31,30, 2026 compared with the same period in 2025.

Revenue variance components for our U.S. Property & Casualty segment, for the three and six months ended MarchJune 31,30, 2026 are summarized as follows:

Reimbursements for out-of-pocket expenses incurred in our U.S. Property & Casualty segment, which are included in total Company revenues, were $1.6 million and $1.8 million for each of the three months ended MarchJune 31,30, 2026 and 2025.2025, respectively. Reimbursements were $3.4 million and $3.6 million for the six months ended June 30, 2026 and 2025, respectively.

U.S. Property & Casualty segment unit volumes by service line, measured by cases received, for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

Overall, there was a decrease in cases of (16.916.5)% in the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. Global Technical Services declined primarily due to 2,250 cases received in the prior year for a specific complex event and a decrease in claim referrals from specialized programs. The decrease in Claims Solutions volumes in the 2026 firstsecond quarter was primarily due to the decrease in low value inspection services of 10,8004,150 cases. There waswere a decreasedecreases in Contractor Connection and Catastrophe Services in the 2026 firstsecond quarter primarily due to less weather-driven activity, as compared with the 2025 period.

The most significant expense in our U.S. Property & Casualty segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. As a percentage of revenues before reimbursements, these expenses were 62.6%61.2% for the three months ended MarchJune 31,30, 2026 compared with 61.8% for the 2025 period. For the six months ended June 30, 2026, these expenses were 61.9% compared with 61.8% for the 2025 period. The total dollar amount of these expenses decreased to $45.6$45.3 million for the three months ended MarchJune 31,30, 2026 from $50.8$51.0 million for the comparable 2025 period.period, and were $91.0 million for the six months ended June 30, 2026, decreasing from $101.8 million in 2025. The firstdecreases quarter decrease waswere primarily in line with the reduction of revenues, driven by the reduction of costs affiliatedassociated with Catastrophe Services, as well as a reduction of claims within Claims Solution and Global Technical Services.Services for each of the periods presented. There was an average of 1,6371,631 full-time equivalent employees in this segment in the threesix months ended MarchJune 31,30, 2026 compared with an average of 1,8111,817 in the 2025 period.

U.S. Property & Casualty expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $19.6$21.6 million for the three months ended MarchJune 31,30, 2026 compared with $21.6$24.0 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 26.9%29.1% for the three months ended MarchJune 31,30, 2026 compared with 26.3%29.2% for the 2025 period. For the six months ended June 30, 2026, these expenses were $41.2 million, compared with $45.7 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 28.0% for the six months ended June 30, 2026 compared with 27.7% for the 2025 period. The decrease in the 2026 first quarter expenses was due to reduction infor the allowance for credit lossesthree and asix reductionmonths inended centralizedJune indirect30, support costs2026 as compared to the 2025prior period.year The increase in costs as a percentage of revenuesperiods was due to the reductionreductions in revenues.software amortization and centralized indirect support costs.

Our Broadspire segment reported operating earnings of $10.9$15.7 million, or 10.4%14.4% of revenues before reimbursements, for the three months ended MarchJune 31,30, 2026 as compared with $12.0$14.2 million, or 11.6%13.1% of revenues before reimbursements, for the firstsecond quarter of 2025. For the six months ended June 30, 2026, our Broadspire segment reported operating earnings $26.6 million, or 12.4% of revenues before reimbursements, compared with 2025 operating earnings of $26.2 million, or 12.4% of revenue before reimbursements. The decreaseincrease in the 2026 firstsecond quarter operating earnings and year-to-date periods was due to a shiftgrowth in productdisability mixclaim and anmedical increasemanagement revenues along with a decline in employeescentralized andindirect averagesupport wages.expenses.

Broadspire revenues are derived from the property, casualty and disability insurance and self-insured markets in the U.S. Revenues before reimbursements by service line for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

Revenues before reimbursements from our Broadspire segment totaled $104.8$109.4 million in the three months ended MarchJune 31,30, 2026 compared with $103.7$108.2 million in the 2025 period. This increase was primarily due to an increase in cases in the Claims Management and Medical Management service lines. There was ana increaseslight decrease in segment unit volume, measured principally by cases received, of 8.7%(0.1)% for the three months ended MarchJune 31,30, 2026 compared with the same period of 2025. ThisThere was primarily due to an increase of high-frequency, low-severity claims within our Claims Management service line of 14,900,6,300, or 10.2%,4.2%, primarily related to new disability clients. Revenues were negatively impacted by a $(1.01.1) million decrease in revenues within our Claims Management service line related to income earned which offsets the costs of managing the funds maintained to administer claims for our customers, for which no cases are received, or (0.91.0)% decrease in revenues. There was also a $0.3$1.4 million increase in revenues within our Medical Management service line for which no cases are received, or a 0.2%1.3% increase in revenues. Changes in product mix and in the rates charged for those services accounted for a 3.2%5.2% revenue increase for the 2026 firstsecond quarter compared with the 2025 period.

Revenue variance components for our Broadspire segment, for the three and six months ended MarchJune 31,30, 2026 are summarized as follows:

Reimbursements for out-of-pocket expenses incurred in our Broadspire segment were $0.7 million andfor $0.8each million forof the three months ended MarchJune 31,30, 2026 and 2025. Reimbursements were $1.4 million and $1.5 million for the six months ended June 30, 2026 and 2025, respectively.

Broadspire unit volumes by service line, as measured by cases received, for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

OverallThere casewas volumesan increasedincrease 8.7%in forcases of 4.2% in the threesix months ended MarchJune 31,30, 20262026, compared to the same period in 2025, due primarily to an increaseincreases in new disability clients within our Claims Management service line, increases in physician review services and utilization management claims within Medical Management, partially offset by a decreasedecline in Subrogation cases due to the loss of a customer.customer and decreased casualty claims within our Claims Management service line.

The most significant expense in our Broadspire segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. These expenses totaled $60.4$60.6 million for the three months ended MarchJune 31,30, 2026, compared to $58.3$60.7 million for the 2025 period. As a percent of the related revenues before reimbursements, these expenses increaseddecreased from 56.3%56.1% in the 2025 firstsecond quarter to 57.6%55.4% in the 2026 firstsecond quarter. For the six months ended June 30, 2026, these expenses totaled $120.9 million, compared to $119.0 million in 2025. For the six months ended June 30, 2026, these expenses, as a percent of the related revenues before reimbursements, increased from 56.2% for the six months ended June 30, 2025 to 56.5% for the 2026 period. The increase in cost andcosts as a percentage of revenues before reimbursements for the 2026 firstthree quarterand six month periods was primarily due to increased employees and average wages related to the increase in revenues, as well as product mix changes. Average full-time equivalent employees in this segment totaled 2,9352,931 in the threesix months ended MarchJune 31,30, 2026, compared with 2,8412,860 in the 2025 period.

Broadspire segment expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor as a percent of revenues before reimbursements decreased slightly to 32.0%30.3% for the three months ended MarchJune 31,30, 2026, from 32.2%30.8% in the 2025 period. The amount of these expenses increaseddecreased slightly from $33.4$33.3 million for the three months ended MarchJune 31,30, 2025 to $33.5$33.1 million in 2026. These expenses were $66.6 million for each of the six months ended June 30, 2026 and 2025. As a percentage of revenues before reimbursements, these expenses were 31.1% for the six months ended June 30, 2026, compared with 31.4% for the 2025 period. The slight decrease in the 2026 firstthree quarterand six months ended June 30, 2026 expenses as a percentage of revenues before reimbursements was due to improved operating leverage.leverage and lower centralized indirect support costs.

Operating earnings in our International Operations segment were $4.0$10.9 million, or 3.0%7.9% of revenues before reimbursements, for the three months ended MarchJune 31,30, 2026, compared with $2.2$7.3 million, or 1.8%5.5% of revenues before reimbursements, in the 2025 period. For the six months ended June 30, 2026, our International Operations segment reported operating earnings of $14.9 million, or 5.5% of revenues before reimbursements, compared with operating earnings of $9.6 million, or 3.7% of revenues before reimbursements in 2025. The increase in operating earnings in the three months ended June 30, 2026 periodas compared to 2025 was primarily due to improved operating results in Canada, Australia and Asia, partially offset by a reduction in operating earnings within the U.K. and Europe. The increase in operating earnings for the six months ended June 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia, and Asia, partially offset by a reduction in operating earnings within the U.K.U.K., Europe, and Latin America.

Excluding centralized indirect support costs, gross profit increased slightly from $22.3$27.0 million, or 17.7%20.4% of revenues before reimbursements in 2025, to $22.5$30.9 million, or 17.1%22.4% of revenues before reimbursements, in the three months ended MarchJune 31,30, 2026. For the six months ended June 30, 2026, gross profit increased from $49.3 million, or 19.1% of revenues before reimbursements in 2025, to $53.4 million, or 19.8% of revenues before reimbursements. The slight increase in gross profit in the three months ended June 30, 2026 periodas compared to 2025 was primarily due to improved operating results in Canada, Australia and Asia, partially offset by a reduction in operating earnings within the U.K. and Europe. The increase in gross profit for the six months ended June 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia, and Asia, partially offset by ana reduction in earnings within the U.K.U.K., Europe, and Latin America.

Operating results for our International Operations segment, including gross profit, for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

International Operations segment revenues are primarily derived from the global property and casualty insurance company markets in the U.K, Europe, Australia, Canada, Asia and Latin America. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

Revenues before reimbursements from our International Operations segment totaled $131.9$138.0 million in the three months ended MarchJune 31,30, 2026, compared with $126.2$132.3 million in the 2025 period. The change in exchange rates increased our International Operations segment revenues by approximately 6.2%,5.8%, or $7.8$7.7 million, for the three months ended MarchJune 31,30, 2026 as compared with the 2025 period. Absent foreign exchange rate fluctuations, International Operations segment revenues would have been $124.0$130.3 million for the three months ended MarchJune 31,30, 2026. There was an increase in segment unit volume, measured principally by cases received, of 4.9%11.6% for the three months ended MarchJune 31,30, 2026, compared with the 2025 period. There was a net increase in high-frequency, low-severity cases of 3,500,17,900, or 2.5%,13.2%, primarily in SpainSpain, Canada, and Finland,the Netherlands, partially offset by a decreasedecreases in Germany and Brazil. In addition, revenues decreased by $3.2$(4.2) million or 2.5%(3.2)% in the current year within Australia and the U.K. within our legal services business. In the Middle East, revenue was $1.5 million or 1.2% lower due to revenuesthe disposition of Crawford Legal Services businesses. In Australia, storm related to weather activitycases recorded in 2025 for cases received at the endprior ofyear 2024.second quarter with revenues recorded in future periods decreased by 6,000, or (4.4)%. Changes in product mix and in the rates charged for those services accounted for a 3.3%(1.2)% revenue increasedecrease for the three months ended MarchJune 31,30, 2026 compared with the same period in 2025.

BasedExcluding onthe constantimpact foreign exchange rates, revenues decreased by $2.1 million. Excludingof foreign currencies, revenues decreased in the U.K. for the 2026three firstand quartersix month periods due to a reduction in higher-value third-party administration claims as well as a reduction in legal services as compared to the prior year first quarter.services. There was aan decreaseincrease in revenues in Europe in the 2026 period,periods, compared with 2025, due to new clients in Spain, Norway, and the Netherlands, partially offset by a reduction in flood related revenues in the Middle East. There was an increase in Australia in the 2026three firstand quarter,six months ended June 30, 2026, compared with 2025,the prior year periods, due to increased weather-related activity, partially offset by the sale of the legal services division. Canada increased in theeach 2026period first quarter, compared with 2025, relateddue to a new client in third-party administration. There was an increase in revenues in Asia infor the 2026three firstand quarter,six month periods, compared with 2025, due to earthquakes in Thailand in 2025 that continue to generate revenues in the current year, as well as increasesimproved results in Hong Kong and Taiwan.Malaysia. The decrease in revenues in Latin America in the 2026 periodperiods was primarily driven by a reduction in weather-related cases in Chile.

Revenue variance components for our International Operations segment, for the three and six months ended MarchJune 31,30, 2026 are summarized as follows:

Reimbursements for out-of-pocket expenses incurred in our International Operations segment, which are included in total Company revenues, were $8.4$6.3 million and $8.6$9.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Reimbursements were $14.7 million and $17.8 million for the six months ended June 30, 2026 and 2025, respectively.

International Operations segment unit volumes by geographic region, measured by cases received, for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

Overall, there was an increase in cases received of 4.9%11.6% for the three months ended MarchJune 31,30, 2026, compared with the 2025 period. The increases were primarily related to high-frequency, low-severity cases within Europe, where Spain had an increase of 10,00016,000 cases and Finlandthe Netherlands increased by 1,6003,000 cases. In addition, AustraliaCanada volume improved bydue 3,100to the addition of a new client with high-frequency, low-severity cases. TheseAustralia increaseshad werea decrease in claims primarily due to 6,000 storm claims added in the prior year second quarter, offset by additions related to 2026 weather-related activity. U.K had a decline in third-party administration cases. Latin America wherealso had decreased cases due to a reduction in high-frequency, low-value cases received in Brazil decreasedof by2,000 8,100 cases from the 2025 period.cases.

The most significant expense in our International Operations segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. As a percentage of revenues before reimbursements, these expenses were 68.5%64.5% and 66.6% for each of the three months ended MarchJune 31,30, 2026 and 2025.2025, respectively. The total dollar amount of these expenses was $90.4$89.0 million for the three months ended MarchJune 31,30, 2026, compared to $86.5$88.2 million for the 2025 period. The increasefluctuation in costexchange rates resulted in an increase to these expenses by $4.9 million. The decrease as a percentage of revenues before reimbursements was due to lower administrative compensation costs and non-employee labor within the region. For the six months ended June 30, 2026, these expenses were 66.5%, compared with 67.6% in 2025, and were $179.3 million for the six months ended June 30, 2026 compared to $174.6 million in 2025. The fluctuation in exchange rates resulted in an increase into these expenses by $10.3 million. The decrease as a percentage of revenues before reimbursements was due to lower administrative compensation expense,costs relatedand tonon-employee labor within the increase in revenues, including incentive compensation, partially offset by a decrease in non-employee labor.region. There was an average of 4,2194,195 full-time equivalent employees in this segment in the threesix months ended MarchJune 31,30, 2026, compared with an average of 4,4304,418 in the comparable 2025 period.

International Operations expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $37.5$38.1 million for each of the three months ended MarchJune 31,30, 2026 andcompared 2025.to $36.8 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 28.5%27.6% for the three months ended MarchJune 31,30, 2026 compared with 29.7%27.8% for the 2025 period. For the six months ended June 30, 2026, these expenses were $75.6 million, compared with $74.3 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 28.0% for the six months ended June 30, 2026, compared with 28.8% for the 2025 period. The increase in expenses for the three months ended June 30, 2026 as compared to the 2025 period was due to increased professional fees and increased centralized indirect support costs. The increase in expenses for the six months ended June 30, 2026 as compared to the prior period was due to the increased professional fees, an increase in self-insurance costs, partially offset by a reduction in centralized indirect support costs. There was a decrease in the expense as a percentage of revenues before reimbursements for the 2026 firstperiods quarteras wascompared to 2025 due to the increase inincreased revenues while costs remained consistent withof the 2025 period.segment.

The Company's consolidated effective income tax rate may change periodically due to changes in enacted statutory tax rates, changes in tax law or policy, changes in the composition of taxable income from the countries in which it operates, the Company's ability to utilize net operating loss and tax credit carryforwards, changes in permanent reinvestment assertions, and changes in unrecognized tax benefits. We estimate that our effective income tax rate for 2026 will be approximately 33% to 35% after considering known discrete items as of MarchJune 31,30, 2026.

The provision for income taxes on consolidated income before income tax totaled $2.4$6.2 million and $2.5$5.8 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The overall effective tax rate increaseddecreased to 32.6%31.7% for the three months ended MarchJune 31,30, 2026 compared with 26.9%42.8% for the 2025 period primarily due to changesa one-time expense of $1.3 million relating to administrative guidance issued by a foreign tax authority in the mix of income and U.S. taxation of foreign subsidiary profits in the 2026 results.2025.

Net corporate interest expense consists of interest expense that we incur on our short- and long-term borrowings, partially offset by any interest income we earn on available cash balances and short-term investments. These amounts vary based on interest rates, borrowings outstanding and the amounts of invested cash. Corporate interest expense totaled $3.4$3.6 million and $4.8$4.7 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Interest income was $0.8 million for each of the three months ended MarchJune 31,30, 2026 and 2025. Corporate interest expense totaled $7.0 million and $9.4 million for the six months ended June 30, 2026 and 2025, respectively. Interest income was $1.5 million and $1.6 million for the six months ended June 30, 2026 and 2025, respectively.

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 $0.1 million and $0.2 million for each of the three months ended MarchJune 31,30, 2026 and 2025.2025, respectively. Stock option expense totaled $0.3 million and $0.4 million for the six months ended June 30, 2026 and 2025, respectively.

Amortization of acquisition-related 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 $1.8 million for each of the three months ended MarchJune 31,30, 2026 and 2025. Amortization expense associated with these intangible assets totaled $3.6 million for each of the six months ended June 30, 2026 and 2025. This amortization expense is included in "Selling, general, and administrative expenses" in our unaudited Condensed Consolidated Statements of Operations.

Certain unallocated corporate and shared costs are excluded from the determination of segment operating earnings. For the three and six months ended MarchJune 31,30, 2026 and 2025, unallocated corporate and shared costs and credits represented 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 estimated credit losses.

Unallocated corporate and shared costs were $8.8$4.3 million and $6.1$7.0 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Unallocated corporate and shared costs were $13.1 million for both six month periods ended June 30, 2026 and 2025. The increasedecrease in the 2026 firstsecond quarter was primarily due toa anone-time increase$3.1 million indirect tax expense incurred in administrativethe compensation2025 expensesecond and self-insurance reserves.quarter.

Contingent earnout expense represents the fair value adjustment of earnout liabilities arising from recent acquisitions. ThisThere resultedwas inno adjustment for the three months ended June 30, 2026, and a benefit of $0.2 million for the threesix months ended MarchJune 31,30, 2026, compared to expenses of $0.1 million and $0.4 million for the three and six months ended MarchJune 31,30, 2025. The fair value adjustment is based on changes to projections of acquired entities over the respective earnout periods, which span multiple years.

Non-service pension costs totaled $2.0 million forand the three months ended March 31, 2026, compared to $2.3$3.4 million for the three and six months ended MarchJune 31,30, 2026, compared to $2.4 million and $4.7 million for the three and six months ended June 30, 2025. Non-service pension costs represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan is frozen and the U.K. plans are closed to new participants. The service cost component of the U.K. plans remains in compensation expense.