2003 Best Practices Study

Analysis of Agencies with Revenues Less Than $500,000

REVENUE ANALYSIS

A. % of Revenue by Source

Average

+25% Profit

+25% Growth

Commercial P&C

35.8% 48.7%

35.3% 55.3%

47.7% 41.6%

Personal P&C

P&C Service Fees

3.2% 3.7% 4.7% 2.6% 0.7% 0.6%

0.0% 2.1% 4.5% 2.6% 0.1% 0.1%

0.1% 3.1% 3.5% 0.8% 1.5% 1.7%

Contingent Group L&H

Individual L&H Investments Miscellaneous

Total Revenues

100.0%

100.0%

100.0%

Brokerage Commission Expense

1.0%

0.0%

0.7%

Net Revenues

99.0%

100.0%

99.3%

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

% Total Revenue

0.0%

Commercial P&C

Personal P&C

P&C Service Fees

Contingent Group L&H Individual L&H

Investments

Average +25% Profit

+25% Growth

B. % of Revenues Derived from Largest Accounts

Average

+25% Profit

+25% Growth

Largest Commission Account

4.2%

3.7%

4.1%

High Low

13.5%

1.2%

10 Largest Commission Accounts

12.8% 28.9%

8.9%

12.7%

High Low

1.9%

C. Revenues Derived from Acquisitions Made in Last 12 Months

% of Agencies Acquiring

Avg. Commissions Acquired

% of Net Revenues

5.9%

$35,076

9.8%

What the Typical Transaction Looked Like:

INSUFFICIENT DATA - CHARTS NOT APPLICABLE

D. Renewal Revenue as % of Prior Year's Total Revenues for Each Line of Business This figure is impacted by attrition (loss or retention of accounts) and by changes in premium and commission levels. The higher the percentage, the more favorable the results.

Average

+25% Profit

+25% Growth

Commercial P&C

93.3% 89.8%

97.1% 100.2%

98.7% 101.1%

Personal P&C

P&C Service Fees

*

*

*

Group L&H

83.9% 66.2% 90.7%

66.3% 60.0% 94.5%

87.9% 66.6% 97.1%

Individual L&H

Total Commissions & Fees

*-Insufficient Data

Page 12 2003 Best Practices Study