2003 Best Practices Study

Analysis of Agencies with Revenues Between $5,000,000 and $10,000,000

What the Typical Transaction Looked Like:

Revenues Acquired Per Transaction

Multiple of Revenues Paid

$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000

0.0x 0.5x 1.0x 1.5x 2.0x

average

high

high

low

Pricing Structure Used

42% 44% 46% 48% 50% 52% 54% 56%

variable

fixed

What was Acquired

Primary Currency Used

Stock Cash Both

Book of Business

Agency

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

99.4% 99.6% 61.6% 86.0% 57.8% 96.1%

97.4% 94.1%

107.1% 98.6% 61.6% 82.1% 81.6% 103.7%

Personal P&C

P&C Service Fees

*

Group L&H

92.3% 48.2% 93.5%

Individual L&H

Total Commissions & Fees

Page 70 2003 Best Practices Study