Crawford & Co., the global claims management firm, might not be the flashiest name on Wall Street. But hidden within their recent earnings calls lies a tantalizing trend that savvy investors should be watching closely: the rise of the 'alternative market' and Crawford's strategic positioning to dominate this burgeoning sector. For years, Crawford has diligently built a reputation as a reliable partner to traditional insurance carriers, quietly managing billions of dollars in claims annually. But a seismic shift is underway in the insurance landscape. The rise of MGAs (Managing General Agents), MGUs (Managing General Underwriters), and captives – entities seeking greater control and flexibility in their insurance programs – is disrupting the traditional insurance model. This 'alternative market' is hungry for specialized claims management solutions, and Crawford, with its diverse portfolio of services, is uniquely positioned to capitalize on this growing appetite. In their Q1 2023 earnings call, Crawford highlighted their focus on capturing share in these alternative markets, specifically mentioning their success in attracting captives and MGAs to their Broadspire TPA (Third Party Administrator) unit. This strategic move is already bearing fruit. Broadspire reported an 11% year-over-year increase in medical management revenues, fueled in part by new business from these non-traditional clients. But the real story lies in the future potential. The alternative market is expanding rapidly, driven by hardening P&C markets and the increasing desire for tailored insurance solutions. Industry experts predict double-digit growth for MGAs in the coming years, and Crawford is strategically positioning themselves at the forefront of this trend.

Crawford's Market Share Growth Potential

Consider this: Crawford estimates their current market share to be in the low single digits. Even a modest increase in penetration within the alternative market could translate to explosive growth for the company. Imagine a scenario where just 5% of the projected MGA market turns to Crawford for their claims management needs. Given the size and growth trajectory of this sector, such a shift would be transformative for Crawford's bottom line.

Crawford's Competitive Advantages

But Crawford's advantage runs deeper than just being in the right place at the right time. They possess a unique combination of assets that make them the ideal partner for the alternative market:

Technological Prowess: Crawford has invested heavily in cutting-edge technology, including data analytics and predictive modeling, capabilities highly sought after by MGAs and other tech-forward players in the alternative space. Breadth of Services: From field adjusting and large loss expertise to TPA services and contractor networks, Crawford offers a comprehensive suite of solutions that caters to the diverse needs of alternative market clients. Financial Strength and Stability: In a turbulent market, Crawford's solid financial footing provides reassurance to clients seeking a long-term partner.

Financial Highlights - Q1 & Q2 2023

While the broader market may still be sleeping on Crawford & Co., savvy investors would be wise to recognize the signs. The company is quietly assembling a powerful engine for growth, fueled by the accelerating shift towards alternative insurance models. As the 'quiet giant' of claims management strategically positions itself to become the go-to solution for this rapidly expanding market, don't be surprised to see Crawford & Co. shed its understated image and emerge as a Wall Street darling.

"Fun Fact: Crawford & Co. has a higher Net Promoter Score (NPS) of 47 than Apple's NPS, which usually hovers around 40. This indicates a strong level of customer satisfaction and loyalty towards Crawford, further strengthening their position in the market. (Source: Various NPS Benchmarking Reports)"