2015 Best Practices Study

Analysis of Agencies with Revenues Between $2,500,000 and $5,000,000

Key Benchmarks Profile Revenues Expenses Profitability Employee Overview Producer Info Service Staff Info Technology Insurance Carriers Appendix

Revenue Growth by Source (continued)

Average

Top 25% Profit

Top 25% Growth

Group Medical L&H

92.2% 10.5%

88.6% 6.0% 0.0% -5.4% -5.4%

91.0% 5.6% 0.0% -3.4% -3.4%

Renewal Revenues 1

New Business 2

0.6% 2.7% 3.3%

Acquired Revenues 3 Organic Growth 4

Total Growth 5

All Other Group L&H

78.1% 16.8% 0.0% -5.1% -5.1% 59.4% 31.0% 0.0% -9.7% -9.7%

69.4% 14.4%

73.8%

Renewal Revenues 1

2.3% 0.0%

New Business 2

0.0%

Acquired Revenues 3 Organic Growth 4

-16.2% -16.2%

-23.8% -23.8%

Total Growth 5

Individual L&H

58.5% 46.3%

85.1% 44.1%

Renewal Revenues 1

New Business 2

0.0% 4.8% 4.8%

0.0%

Acquired Revenues 3 Organic Growth 4

29.2% 29.2%

Total Growth 5

Total Commissions & Fees (P&C, L&H) Renewal Revenues 1

96.1% 13.0%

97.6% 11.9%

105.5%

15.0%

New Business 2

1.3% 9.2%

0.5% 9.5%

3.1%

Acquired Revenues 3 Organic Growth 4

20.5% 23.5% 44.9% 20.1% 23.2%

10.4% 13.6%

10.0%

Total Growth 5

Brokerage Commission Expense Growth Net Commissions & Fees Growth (Organic) 6 Net Commissions & Fees Growth (Total) 7

*

9.2%

9.5%

10.5%

10.0%

*Insufficient Data Other Income P&C Contingent Income Growth L&H Bonus Income Growth Investment Income Growth GROSS REVENUE GROWTH NET REVENUE GROWTH (ORGANIC) 8 NET REVENUE GROWTH (TOTAL) 9 1 Renewal Revenues are presented as a % of prior year’s total revenues for this 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 %, the more favorable the results. 2 New Business is presented as a % of prior year’s total revenues for this line of business. The higher the %, the more favorable the results. 3 Acquired Revenues are presented as a % of prior year’s total revenues for this line of business. The % indicates the significance of acquired business.

13.0% -9.0% -0.1% 10.3%

2.0%

26.6%

*

*

2015 Best Practices Study

-7.8%

4.6%

11.4% 10.9% 11.4%

24.9% 21.9% 24.7%

Agencies with Revenues Between $2,500,000 and $5,000,000

9.1%

10.3%

4 Organic Growth represents growth in revenues from prior year excluding acquired revenues. 5 Total Growth represents growth in revenues from prior year including acquired revenues. 6 Growth in Total Commissions & Fees ( less Brokerage Commission Expense) from prior year excluding acquired revenues. 7 Growth in Total Commissions & Fees ( less Brokerage Commission Expense) from prior year including acquired revenues.

8 Growth in Net Revenues ( Gross Revenue less Brokerage Commission Expense ) from prior year excluding acquired revenues. 9 Growth in Net Revenues ( Gross Revenue less Brokerage Commission Expense ) from prior year including acquired revenues.

62

Note: See page 163 for an explanation of column headings