Crawford & Co (CRD.A) 2020 Q3 法說會逐字稿

Good morning. My name is James, and I will be your conference facilitator today. At this time, I'd like to welcome everyone to the Crawford & Company Third Quarter 2020 Earnings Release Conference Call.

In conjunction with this call, a supplementary financial presentation is available at our website, www.crawco.com under the Investor Relations section. (Operator Instructions) As a reminder, ladies and gentlemen, this conference is being recorded today, Tuesday, November 3, 2020.

Some of the matters to be discussed in this conference call and in the supplementary financial presentation may include forward-looking statements that involve risks and uncertainties. These statements may relate to, among other things, the impact of COVID-19, our expected future operating results and financial condition, our ability to grow our revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plan, collectability of our billed and unbilled accounts receivable, financial results from our recently completed acquisitions or continued compliance with the financial and other covenants contained in our financial agreements, our long-term capital resource and liquidity requirements and our ability to pay dividends in the future.

The company's actual results achieved in future quarters could differ materially from results that may be implied by such forward-looking statements. The company undertakes no obligation to publicly release revisions to any forward-looking statements made in this conference call to reflect events or circumstances occurring after the date of the call or to reflect the occurrences of unanticipated events.

In addition, you are reminded that operating results for any historical period are not necessarily indicative of results to be expected for any future period. For a complete discussion regarding factors which could affect the company's financial performance, please refer to the company's Form 10-Q for the quarter ended September 30, 2020, filed with the Securities and Exchange Commission, particularly the information under the heading Risk Factors and management's discussions and analysis of financial condition and results of operation as well as the subsequent company filings with the SEC.

This presentation also includes certain non-GAAP financial measures defined under SEC rules. As required, a reconciliation is provided for those measures to the most directly compared GAAP measures.

I'd now like to introduce Mr. Rohit Verma, Chief Executive Officer of Crawford & Company. Rohit, you may begin your conference.

Thank you so much, James. Good morning, everyone. Joining me today is Bruce Swain, our Chief Financial Officer; Joseph Blanco, our President; and Tami Stevenson, our General Counsel. After our prepared remarks, we will open the call for your questions.

Our threefold focus over the last 9 months has been to protect the health and safety of our global workforce, navigate the financial turmoil created by the pandemic and deliver on our client commitments. And that is proving successful.

We are proud of the commitment and client-centric focus our teams continue to demonstrate in the face of the pandemic. Further, our continued focus on execution aided by the surge in weather-related activity in the U.S. resulted in strong third quarter performance. We exceeded our expectations and achieved sequential improvement over the second quarter. Today, our financial position remains very healthy. As we move into the fourth quarter, we remain well positioned to continue taking advantage of our global scale and competitive position in the market.

Turning to our results for the quarter. We delivered solid year-over-year growth, supported by our core business and further propelled by weather-related activity in the U.S. We reported GAAP revenues before reimbursement of $253.1 million and net income attributable to shareholders of $24.4 million or $0.46 per share. In addition, we generated $57.3 million in operating cash flow through September 30, 2020. On a non-GAAP basis, we reported revenues before reimbursement of $255.2 million and operating earnings were $28.2 million in the third quarter.

Our third quarter revenues reflected growth over last year, and operating earnings were 19% over the 2019 quarter. Adjusted EBITDA was $35.2 million in the third quarter, up from $32.2 million in the 2019 third quarter, representing a gain of 9.4%. Adjusted EBITDA margin was 13.8% in the 2020 third quarter, up 120 basis points over the prior year quarter.

Heightened weather-related activity was a key driver of enhanced revenues during the quarter. As a reminder, weather-related activity does create some seasonality within our business. As such, we tend to see higher claims volume in the second and third quarters as summer in the Northern Hemisphere is prime storm season.

In contrast, there may be less storm activity in the first and fourth quarters. While weather will remain a key driver of our results, we continue to push growth of non-weather-related business in our portfolio. And I'm pleased to say we have made great strides in this endeavor.

According to the Aon Global Cat Recap, we saw a spike in U.S. cat events during the third quarter, resulting in about $40 billion in economic losses with an estimated $30 billion in insured losses. This was the highest quarterly estimated cat losses of 2020, largely driven by the events in the month of August. As such, cat events bolstered our third quarter results, particularly in our CTS segment. Claims volume was largely led by the tropical storm Isaias in the U.S., followed by Hurricanes Laura and Sally. The U.K. also saw an increased number of storms, flooding and heat waves, while other parts of the world were generally benign.

As a result, in the 2020 third quarter, we handled over 10,000 claims and contractor assignments across our GSLs. Our teams also handled claims for 16 of the top 20 U.S. carriers during the severe storms. The consequential spike in claims activity from recent large carrier wins contributed to the third quarter revenues.

Globally, third quarter business activity increased from the prior quarters, but has not yet recovered to pre-COVID levels. COVID-19 continues to impact our Crawford TPA Solutions business causing a slowdown to both claims and medical management services. However, we did benefit from an increased volume of business interruption claims in the U.K., supplemented by event cancellation claims in U.K. and Europe.

Although U.S. unemployment levels have broadly decreased, and second quarter highs, the unemployment rate at 7.9% in the third quarter remained significantly higher than levels seen prior to COVID-19. While overall claims volume is increasing, the lack of medical management claims does provide headwinds to our margins.

Turning to our Global Service Lines. In Crawford Claims Solutions, we saw momentum from new client wins and the benefits of our investment in these client solutions. CCS garnered a significant amount of new client wins during the quarter, adding about $9 million in annualized revenues. Activity from large-scale clients also lifted revenues during the quarter.

We are continuing to add to the Dallas site, which is online and functional to better support one of our large carrier clients. Through the end of October, we had the highest number of adjusters within the past 2 years deployed in 5 storms in the U.S. We expect a subset of them to continue working through the fourth quarter. WeGoLook saw its highest volumes ever as this product continues to be successful in winning remote claims handling business.

During the quarter, we launched the Digital Assist solution. The portal provides an [à la carte] access to the full suite of Crawford inspection, adjusting and fulfillment offerings. The digital tools range from Crawford's YouGoLook self-service app to traditional field services and Contractor Connection. Additionally, the innovative solutions provides client with single-touch ordering, instant service and intelligent severity-based triage.

In Contractor Connection, we continue to see a return on investment we have made in this business. During the quarter, our revenue growth was supported by strong claims volume in the U.S. Our average daily assignment levels were strong in August and September, which may also provide tailwinds in the fourth quarter. Heavy weather activity in the U.S. during the second and third quarter of 2020 also led to an increase in assignment volume.

Weather aside, 8 of our top 10 U.S. clients have seen a year-over-year increase in third quarter non-surge volume. Our digitally led solutions, combined with our expertise offered by the virtual and desk-adjusting solutions have created tremendous momentum in the marketplace. We won a Top Personal Lines Carrier in Canada at the end of the third quarter, and Contractor Connection is gaining traction in Germany and Australia as we experienced a number of recent wins.

Additionally, we were selected by another large client in the U.K., specifically for decontamination services as part of their back-to-work plan. To remain connected to our contractors, we hosted virtual town halls, conducted engagement surveys and launched Contractor Connection Academy, a learning management system. GTS' business interruption, cyber and event cancellation claims also have seen significant traction. Our GTS business in the U.S. continues to thrive under new leadership brought on in the third quarter, attaining its highest quarterly revenue in recent years.

From a geographic standpoint, Australia and Europe were flat while Latin America and Middle East outperformed in the third quarter of 2019. We won one of our largest claims worth $500 million due to the delay of a significant global event in Asia. In Canada, we beat our competition to win 5 new medical clients. Currently, our pipeline consists of multiple business interruption opportunities related to COVID-19 in the U.K.

To support the growth of GTS, we made a number of strategic hires in the U.S., and we continue to seek out international opportunities to further enhance our GTS business.

Despite the adverse effects of the economic slowdown, we saw new client wins bring in $7 million in annualized revenue during the third quarter, and renewed 96% of annualized business year-to-date. In addition, we onboarded a significant number of client users to our new ecosystem. We expect the advanced technology solution to support our growth within the business.

The decreased economic activity continues to be a challenge for several of our clients, and has continued to impact our Crawford TPA Solutions business. As nonessential medical services were delayed, hospital build volumes were lower than pre-COVID levels. We also saw fewer claims in our medical management services unit.

Encouragingly, total miles driven slowly began to pick up in the U.S. during the quarter and auto claims volume in Canada returned to pre-COVID weekly levels. Our Crawford TPA Solutions business remains a meaningful contributor to our weather diversification strategy. Our relentless pursuit for service excellence stems from our legacy, purpose and values. Despite social distance orders, we remain very active with our clients having met virtually with over 3,100 global clients and prospects during the third quarter. Conducting virtual meetings allows us to stay connected and maintain a superior level of service, driving continued momentum in pursuing new business growth.

We have a robust pipeline of over $265 million with over 270 new or enhanced client programs. We won over $22.5 million of new and enhanced business in the quarter, which shows the strength of our brand and differentiation in the market. We are pleased to say our total Net Promoter Score, NPS, is 42. For context, any score above 30 is considered strong for our industry.

We surveyed almost 70% of our top clients across all geographies this year, an increase from last year. To better serve our clients, we devised a structured process to understand shortcomings viewed by our lower-scoring clients over the years. After introducing NPS 2 years ago, it has now become part of our standard operations to continue to improve client service.

Our balance sheet and liquidity positions are the strongest they have been in several years. As of September 30, our net funded debt-to-adjusted EBITDA was 1.11x, and operating cash flow increased 35% year-over-year to $57.3 million. We're proud of the excellent results, particularly amid the current economic environment. Our disciplined capital allocation strategy remains top of mind as we build on our cash generation capability while delivering value to shareholders.

As a result, we will balance investing in the business and returning cash to shareholders. The Board will continue to reevaluate the dividend and our share repurchase program regularly. And we will continue to make investments to attract, acquire and more seamlessly serve clients.

As part of our capital allocation strategy, we have reinvigorated our M&A pipeline as seen through our acquisition of Crawford Carvallo in October, recognized as the market leader in loss adjusting, claims management solution and legal services in Chile. Our partnership with Crawford Carvallo to date has been highly successful. Our team has already identified synergies and regional business development opportunities, which will further enhance our client offering and increase our technical expertise in the region.

The move formalizes our long-standing relationship and magnifies our ability to restore and enhance lives, businesses and communities as we become the largest loss-adjusting company in Latin America.

In November, we acquired the HBA Group in Australia. HBA Legal is a legal services provider, which will complement the Crawford TPA Solutions segment in Australia and the larger Asia region. In addition to expanding our global footprint, we anticipate this acquisition will serve as a legal services growth platform for us.

On that note, I would like to turn the call over to Joseph.

Thank you, Rohit. As evident in our third quarter financial performance, the resiliency of our global workforce has allowed us to provide the highest level of service to our clients, despite the uncertainty created by COVID-19. As our greatest asset, we remain committed to protecting the safety and well-being of our employees through flexible remote work arrangements, PPE, expert training and previsit screenings to ensure the safety of our teams. The feedback we have received from employees remains overwhelmingly positive, further demonstrating our commitment to preserving the morale of our global workforce. We are also investing in the development of our employees through state-of-the-art training programs aligned with our purpose, values and agile culture.

With oversight from members of our executive leadership team, our new employee resource groups provide support to key employee segments, women and people of color. Additionally, our Women Leadership Exploration and Development, LEAD program, a high-impact e-learning and networking experience empowers women leaders to achieve their career goals. These internal programs and initiatives further promote an environment where employees are empowered to grow and bold into act and inspire to innovate.

With that, let me turn the call over to Bruce to review the financial results of the third quarter in more detail.

Thank you, Joseph. Company-wide revenues before reimbursements in the 2020 third quarter were $253.1 million compared with $254.7 million in the prior year's third quarter. On a non-GAAP basis, the company saw revenues of $255.2 million.

Our net income attributable to shareholders of Crawford & Company totaled $24.4 million in the 2020 third quarter compared to net income of $11 million in the 2019 period. Third quarter 2020 diluted earnings per share was $0.46 for both CRD-A and CRD-B compared with diluted EPS of $0.21 for CRD-A and $0.19 for CRD-B in the 2019 period.

On a non-GAAP basis, net income attributable to shareholders was $15.2 million, resulting in third quarter 2020 diluted EPS of $0.29 for both CRD-A and CRD-B as compared to 2019 diluted EPS of $0.23 for CRD-A and $0.21 for CRD-B. The company's non-GAAP operating earnings totaled $28.2 million in the 2020 third quarter or 11.1% of revenues compared with $23.7 million or 9.3% of revenues in the prior year period.

Consolidated adjusted EBITDA was $35.2 million in the 2020 third quarter or 13.8% of revenues compared to $32.2 million or 12.6% of revenues in the 2019 quarter.

I will now review the third quarter performance of each of our segments. Crawford Claims Solutions' revenues totaled $98.4 million, increasing from $86.3 million reported in last year's quarter. Absent foreign exchange rate fluctuations of approximately $900,000, third quarter 2020 revenues would have been $99.2 million. The segment reported operating earnings of $7.2 million in the 2020 third quarter were 7.3% of revenues, increasing over operating earnings of $2.7 million or 3.1% of revenues in the prior year quarter.

Crawford Specialty Solutions' revenues were $67.5 million in the 2020 third quarter, down from $68.9 million in the prior year quarter. Absent foreign exchange rate fluctuations of approximately $900,000, revenues would have been $68.5 million for the quarter.

Operating earnings in Crawford Specialty Solutions totaled $17.4 million or 25.7% of revenues in the 2020 third quarter, increasing over operating earnings of $13.3 million or 19.3% of revenues in the 2019 third quarter.

Revenues for Crawford TPA Solutions were $87.2 million in the 2020 third quarter, decreasing from $99.5 million in the 2019 period. Absent foreign exchange rate fluctuations of $300,000, third quarter 2020 revenues would have been $87.5 million. Crawford TPA Solutions' operating earnings were $4.4 million during the current quarter compared to last year's third quarter operating earnings of $9.3 million. The operating margin in this segment was 5.1% in the 2020 quarter and 9.4% in the 2019 quarter. Unallocated corporate costs were $1 million in the third quarter of 2020 compared to cost of $1.6 million in the same period of 2019. This decrease was driven by lower self-insurance expense and a credit from the Canada Emergency Wage Subsidy, partially offset by an increase in incentive compensation and severance costs.

Crawford recognized a noncash goodwill impairment in the 2020 first quarter. The initial income tax benefit related to the impairment is being normalized through our effective tax rate during the remainder of the year. During the 2020 third quarter, the impact of this treatment decreased the initial income tax benefit by $1.9 million or $0.04 per share. In June 2020, we sold our 51% stake in Lloyd Warwick International for initial cash proceeds of $20.3 million. Due to the 2-month reporting lag for reporting our international results, this transaction was recognized in the 2020 third quarter.

Crawford recognized an after-tax gain of $11.7 million on the disposition. And an additional loss on the disposal of Crawford Compliance, Inc. of $600,000 in the third quarter. Both disposals were in our Crawford Specialty Solutions segment and resulted in a net gain of $0.21 per share.

In July 2020, the company acquired the remaining 15% membership interest of WeGoLook for $300,000. The non-compete agreements with former minority members were terminated under the terms of the purchase agreement. As a result, the company recognized $1.1 million of accelerated amortization on the non-compete agreements in the third quarter.

Subsequent to quarter end, in October 2020, the company acquired the remaining 85% equity interest in Crawford Carvallo and its subsidiaries. The purchase price includes an initial lump-sum payment of $11.6 million and a maximum of $11.7 million payable over the next 6 years based on achieving certain EBITDA performance goals.

In November 2020, the company acquired 100% of HBA Group in Australia. The purchase price includes an initial lump-sum payment of $5 million and a maximum $3.2 million payable over the next 4 years based on achieving certain revenue and EBITDA performance goals.

We estimate that COVID-19 negatively impacted our revenues in the range of $21 million to $25 million during the third quarter of 2020 and $46 million to $54 million so far this year. We expect the ongoing global economic slowdown from COVID-19 could have a material impact to our results of operations, financial condition and cash flows in one or more future quarters, absent the occurrence of weather surge events.

The company's cash and cash equivalent position as of September 30, 2020, totaled $48.7 million compared to $51.8 million at the 2019 year-end. The company made $3.5 million in contributions to its U.S. and U.K. defined benefit pension plans for 2020 compared with $500,000 in 2019.

During the fourth quarter, the company made a discretionary contribution of $6 million to its U.S. pension plan. This takes total contributions to $9 million for the U.S. plan, which was our original intention for 2020. The company's total debt outstanding as of September 30, 2020, totaled $127.8 million compared with $177 million at the 2019 year-end. Net debt stood at $79 million as of September 30, 2020, marking the lowest level since 2013. While our leverage ratio under our credit agreement of net funded debt-to-adjusted EBITDA closed at 1.11x.

Additionally, our pension liability was down to $56.5 million at the end of the third quarter, marking a multiyear low. We are pleased with our operating cash flow so far this year. Cash provided by operations totaled $57.3 million for the 2020 period compared to $42.3 million provided by operations in the prior year period.

The increase in cash provided by operating activities was primarily due to a payroll tax deferral under the CARES Act and the benefit from the Canada Emergency Wage Subsidy.

Free cash flow increased by $4.3 million compared with 2019, reflecting the higher operating cash flows, partially offset by higher software development and capital expenditures in 2020 as compared with 2019. Our free cash flow generation remains a top priority for the company.

As mentioned on prior calls, we have placed a hold on our current share repurchase plan, and did not repurchase any shares during the 2020 third quarter.

With that, I would like to turn the call back to Rohit for concluding remarks.

Thank you, Bruce. As we enter the fourth quarter, we are focused on maintaining our position as a leader within the industry through innovation and market-leading solutions. To that end, we will continue to evaluate our client solutions to [sted] industry benchmarks globally. Our global footprint and empowered teams give us the reach and agility to meet the changing needs of the industry.

Crawford's emphasis on our people and delivering service excellence to our clients will remain at the forefront of our priorities. We are confident in our financial position and our ability to deliver superior results for our shareholders over the long term. Above all, we remain committed to fulfilling our purpose of restoring and enhancing lives, businesses and communities.

Thank you for your time today. Operator, please open the call for questions.

(Operator Instructions) Our first question comes from the line of Mark Hughes with Truist.

The -- and I'm sorry, I missed the first few minutes of the call, so I apologize if you've already touched on some of this. The $500 million event. What is the revenue? Is that the revenue number? And if or if not, what's the timing for that project?

Sure. So the $500 million is the total size of the loss. It's the major event in Asia, which was canceled, and we will be handling that loss. It's not possible for us to estimate what the revenue from that will be at this time because it will be based on a time and expense charge. And we are still working through the loss.

We believe that over time, we'll build up the WIP and then realize the revenue in the coming 12 to 18 months.

I believe that will be material to the GTS?

Yes. For the region, it will be material.

Okay. And then about the weather catastrophe claims. How much follow-through do you think there will be in the fourth quarter? I think one of the dynamics recently has been that you've been able to handle some of these claims very quickly. And so you wouldn't see as much follow-through. So I'm just sort of curious how much there is, you think, that extends into 4Q and you've had some more events here in the fourth quarter. So I'm curious when you -- yes, go ahead.

Yes, great question. That is true. We have been much faster in resolving some of this claims activity. We do believe that there are some tailwinds that we're carrying into the fourth quarter. With the recent Zeta event as well, we've seen some activity pick up from that. But it is hard to say how long that will continue at this point. But just reasonable to say that we'll have tailwinds into the fourth quarter.

The -- in Contractor Connection, you're talking about a strong level of daily assignments. Was that related to the cat? Or was that more non-cat activity?

Well, as you know, we've added a couple of very large clients to our Contractor Connection client base. So we have seen some organic growth just coming to the business from these new clients. We've also seen some of our historic clients pick up their volume as we believe direct repair continues to be a preferred choice for a lot of our clients who are choosing not to send adjusters out into the marketplace given COVID concerns.

So we've seen growth from our new clients as well as just enhanced revenue from existing clients. Some of that is certainly related to the storms because the storms create pressure on the in-sourcing of claims for our carriers, but we believe that this is a secular growth story and not just related to storms.

And then did you say what the claims volume was declining in TPA, if you look at the, say, same customer, what's the average decline?

Sure. What we are seeing is that if you look at the average of September, say, compared to the average of January and February, we're seeing achieving sort of flattish levels. Our concern is that there is still sort of medical management business, which is lagging behind, which, as you know, and generally lags behind the claims volume. We've seen our workers' comp lost-time claims trend up, which generates the medical management business.

But they're still behind our true pre-COVID levels. The biggest drop that we've seen has been in our auto liability and general liability claims, which are directly related to the economic activity. As you know, as people travel more, spend time at hotels, go to restaurants more, go to movie theaters, we will see that volume pick up. But until that happens, we believe that, that volume will remain suppressed.

When you say flat levels in September, are you talking relative to just the most recent month?

January, February. I would take the average of the January, February and say that we're starting to get to a flattish level over there. But remember, a lot of that is actually happening because of COVID claims. And those claims usually don't generate significant medical management revenue.

Okay. So the COVID claims are medical management still down?

Correct.

I got you. And then just 1 more. The Canada Wage Subsidy this quarter, what was that dollar amount?

Total amount was $4.7 million for the quarter.

(Operator Instructions) Our next question comes from the line of Greg Peters with Raymond James.

I was wondering if you could comment on the savings you might be realizing from travel and entertainment. A lot of other service providers because you're doing things virtually, you're not traveling as much. I'm just curious, as we look across the 3 segments, if you've -- we've seen some improvement in expenses in some of the areas, but I'm just wondering where the pickup is.

Yes. We have seen a considerable benefit from lower travel and entertainment expense, Mark (sic) [Greg], not just across our segments, but in our administrative areas as well. I would say that our travel and entertainment cost is probably trending down 50% this year.

Yes. But Greg, by the way, I hope you're well. We have about 2% of our expense, which really is travel and entertainment. So it's not a significant chunk for us, but as Bruce mentioned, even in that, there is about a 50% trending down.

Well, let me come at it this a different way. How many of your employees are in a work-from-home position versus where we were a year ago? And I guess, ultimately, I'm wondering is there an opportunity for you to harvest some savings and a reduced office footprint type of scenario?

Yes. I would -- I'll start off and I'll let Rohit comment. The vast majority of our employees are in work from home and have been since March. So we've largely been working remote since March. And that continues today, and that will continue through the rest of this year and probably into the first quarter of '21. We are evaluating our corporate real estate in light of that. I think that this is still an evolving situation. I don't see us going fully remote as a company.

I think that we need to have places where our employees can congregate and come together and interact. We're a business that needs contact amongst our employees, our nurses with the adjusters or adjusters with their managers, et cetera. But we do think that there will be a rationalization as we go forward with the mixture of work from home and then people in the office. And ultimately, having what I would refer to as a clubhouse for the employees within a particular region to come into and be tethered to.

Yes. That makes sense. And that's how we're moving forward, Greg. 95% to 96% of our staff, just so you know is working from home now globally.

And what was it last year? Just -- was it every one working from the office? Because I mean, given your business model, there's a lot of remote work anyways.

Yes. I would say probably about -- if I take the total workforce, there was probably about 20% of it that was working remote, and that's an estimate because we had adjusters who were out and about, but they were still tethered to an office. So whether they came in once a week or once every other week, that obviously varied, but we did have brick-and-mortar.

And we do believe that having some form of brick-and-mortar is still important for the -- to demonstrate proximity to our clients, which they like because one of the reasons they pick us is because we are in places that they may not want to be or they couldn't afford to be.

Our next question comes from the line of Mark Hughes with Truist.

The -- you talked about a nice backlog. I think it's in the TPA business of $265 million. When does that potentially come to fruition? Is that kind of a Jan 1 backlog you're looking at? Or pipeline?

Are you talking about our pipeline?

Correct. Yes.

Right. I would not call that backlog because that's just pipeline of what clients are in various stages. Some of them may be an acquisition for us in acquisition mode, some of them may be in qualifying mode, some of them may be in presentation mode. That's just a demonstration that our sales is working, and we're starting to build a huge pipeline of potential client candidates.

Is there -- please go ahead.

Sorry, go ahead. No, no, please you go ahead.

Okay. I was going to ask, when you look at the number of RFPs in the -- out in the market, are those back to a normal level? Or is it still somewhat depressed?

It's definitely better than what it was, Mark, in say, the May through July time frame. But it's not back to where it used to be pre-COVID. If you look at our numbers, we've roughly written, in total new business, $60-plus million of new business this year on an annualized basis. And so we feel good about that given the current circumstances of COVID.

We've had over 3,000 client meetings, which have been remote just in this quarter. So we feel good about the activity. But the RFP activity is not back to the levels that it used to be.

And I think you mentioned one of the top personal lines carrier contract in Canada. How significant can that be for Contractor Connection?

In Canadian terms, it's extremely significant. In U.S. terms, as you know, we have some very large clients in the U.S. So -- but for Canada, it could be one of the largest client wins in Canada for us in Contractor Connection.

And there are no further questions in queue at this time. I'd like to turn the call back over to Mr. Verma for some closing remarks.

Thank you, James. I just wanted to thank our employees, our clients and all our shareholders for their confidence and commitment to Crawford and company. With our strong results in Q2, which are sequentially better -- Q3, which are sequentially better than Q2, it demonstrates the resilience of our almost 80-plus year business.

We are confident in our future of the company. We want to wish everybody well, be safe and God bless us all. Thank you so much.

Thank you for participating in today's Crawford & Company conference call. This call will be available for replay beginning at 11:30 a.m. Eastern Standard Time today through 11:59 p.m. Eastern Standard Time on December 3, 2020. The conference ID number for the replay is 7888597. The number to dial for the replay is (800) 585-8367 or (416) 621-4642. Thank you. You may now disconnect.