2007 Best Practices Study

Agencies with Revenues Between $10,000,000 and $25,000,000

Executive Perspectives

Profile

Revenues/ Expenses

Financial Stability

Employee Overview

Producer Info

Service Staff Info

Technology

Insurance Carriers

Appendix

Services/Other Products Provided (% of Agencies Providing) Average

+25% Profit

+25% Growth

Loss Control/Engineering

66.7% 14.8%

80.0% 20.0% 20.0% 20.0% 80.0% 20.0% 40.0% 40.0% 20.0% 20.0%

50.0%

Worker’s Comp Claims Adjusting/Admin (TPA) Group Health Insurance Claims Adjusting/Admin (TPA)

0.0% 0.0%

7.4%

Self Insurance Programs

37.0% 74.1% 33.3% 55.6% 48.1% 18.5% 22.2%

16.7% 66.7% 16.7% 33.3% 50.0% 16.7% 33.3% 33.3%

Risk Management Consulting

Premium Financing (in-house vs. 3rd party)

Pension/Profit Sharing/401K Human Resource Consulting

Employee Leasing Products & Services (PEOs) Investment Products (Securities, Stocks)

Other*

7.4%

0.0%

*Includes P&C loss adjusting, HR website, pool administration, paralegal and legal, MyWave, background checks, wellness, and management consulting

Acquired Revenues

Average Commissions Acquired

% of Agencies Acquiring

Percentage of Net Revenues

Acquisitions Made in Last 12 Months

13.3%

$464,940

4.1%

What the Typical Transactions Looked Like Revenues Acquired per Transaction

Multiples of Revenue Paid

Average

$407,206 $790,000 $49,853

Average

1.32x 1.90x 1.00x

High

High

Low

Low

123 2007 Best Practices Study | Agencies with Revenues Between $10,000,000 and $25,000,000 | Revenues/Expenses