2007 Best Practices Study

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

Executive Perspectives

Profile

Revenues/ Expenses

Financial Stability

Employee Overview

Producer Info

Service Staff Info

Technology

Insurance Carriers

Appendix

“We will have a competitive advantage when we can do a better job of managing risk for our clients than our competitors do. To do so today requires that we offer a number of value-added services that we did not provide in the past. We will probably have to provide additional services in the future.”

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

+25% Profit

+25% Growth

Loss Control/Engineering

44.4% 11.2%

33.3%

37.5%

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

0.0%

0.0% 0.0%

7.4%

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

Self Insurance Programs

14.8% 66.7% 25.9% 44.4% 22.2%

25.0% 75.0% 12.5% 25.0% 12.5%

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)

7.4%

0.0%

0.0%

25.9%

50.0% 16.7%

25.0% 12.5%

Other*

3.7%

*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

10.0%

$1,035,483

15.5%

What the Typical Transactions Looked Like Revenues Acquired per Transaction

Multiples of Revenue Paid

Average

$738,010

Average

1.36x 1.69x 1.00x

High

$1,472,000

High

Low

$50,143

Low

95 2007 Best Practices Study | Agencies with Revenues Between $5,000,000 and $10,000,000 | Revenues/Expenses