2007 Best Practices Study

Agencies with Revenues Over $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 (as % of Agencies Providing) Average

+25% Profit

+25% Growth

Loss Control/Engineering

95.7% 47.8% 34.8% 73.9% 87.0% 34.8% 69.6% 30.4%

80.0% 20.0% 20.0% 80.0% 80.0% 20.0% 60.0% 20.0%

100.0% 83.3% 66.7% 83.3% 83.3% 50.0% 83.3% 50.0%

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

Self Insurance Programs

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)

4.3%

0.0%

0.0%

39.1% 17.4%

60.0% 20.0%

50.0%

Other*

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

52.0%

$2,479,402

4.3%

What the Typical Transactions Looked Like Revenues Acquired per Transaction

Multiples of Revenue Paid

Average

$1,400,764 $7,000,000

Average

1.43x 2.00x 1.00x

High

High

Low

$41,105

Low

“With the acquisition appetites of public brokers, banks and now private-equity firms, it is getting harder and harder to grow by acquisitions.”

153 2007 Best Practices Study | Agencies with Revenues Over $25,000,000 | Revenues/Expenses