2003 Best Practices Study

SPECIAL REGIONAL ANALYSIS Agencies with Revenues Greater Than $2,500,000

AGENCY CHARACTERISTICS

in conjunction with results by revenue group to gain the most complete understanding of the The regional analysis provides another perspective for understanding the Best Practices data in their proper context. However, characteristics regarded as unique to agencies in a certain part of the country or any regional factors influencing agency operations are best considered

operating characteristics of the Best Practice agencies.

SE

MW SW

W

NE

Growth Net Revenue Growth

15.3% 19.1% 16.5% 21.7% 18.5%

Profitability as % of Net Revenues Pre-tax

12.3% 9.9% 14.5% 16.8% 10.3% 19.4% 17.9% 19.8% 20.3% 18.3% 5.2% 3.1% 6.7% 10.0% 1.5%

Pro Forma Pre-tax Operating Pre-tax

Productivity Revenue per Employee

$134,644 $140,889 $137,173 $130,340 $142,276 $81,178 $96,096 $90,461 $83,109 $96,151 $53,465 $44,793 $46,713 $47,231 $46,125

Compensation per Employee Spread per Employee (1)

Pay Levels for Producers Commercial P&C Producers Personal P&C Producers

$133,602 $181,445 $165,452 $159,657 $174,489 $67,524 $64,731 $52,665 $80,292 $57,261 $181,909 $192,869 $128,666 $130,222 $152,628

Life & Health Producers

$109,681 $117,951 $174,302

*

$118,655

Multiline Producers

Pay Levels for CSRs Commercial P&C CSRs

$42,458 $41,974 $36,808 $41,411 $47,576 $34,504 $33,739 $32,174 $32,315 $39,905 $42,964 $40,789 $37,919 $38,755 $46,270

Personal P&C CSRs Life & Health CSRs

*

*

*

*

$31,830

Multiline CSRs

Number of Carriers PL - National

8.7 6.0

6.2 3.1

5.1 3.9

8.3 2.5

7.3 2.9

PL - Regional CL - National CL - Regional

20.4 16.3

17.6 15.7

25.4 13.2

15.8

23.5 29.5

4.5

Service Center Use Total Pers'l Lines Commission placed in Carrier Service Center Total Comm'l Lines Commission placed in Carrier Service Center

27.5% 2.4% 0.6% 17.4% 10.8%

6.5% 1.2% 0.7% 1.5% 2.3%

% of Agencies Making Acquisition in Last 12 Months

27.8% 23.1% 17.6% 25.0% 33.3%

* - Insufficient Data

(1) Total revenue per employee minus compensation per employee. While revenue per employee has been a standard productivity measure, the "spread" measures the dollars per employee available to pay all other agency expenses and generate a profit for the agency.

Page 8 2003 Best Practices Study