2010 Best Practices Study
Analysis of Agencies with Revenues Under $1,250,000
Profit/Loss Summary
Mgmt. Perspectives
Average
+25% Profit
+25% Growth
Profile
Revenues (as % of Gross Revenue) Commercial Lines
43.3%
44.1%
46.8%
Revenues
Bonds
0.7%
0.4%
1.4%
Expenses
Personal Lines
40.0%
40.7%
35.1%
Value Added Services Contingent/Bonus
0.8% 7.5% 5.7% 0.1% 1.6% 0.1% 0.1% 0.1%
0.0% 6.1% 7.0% 0.0% 1.8% 0.0% 0.0% 0.0%
2.2% 9.6% 3.3% 0.0% 1.3% 0.1% 0.1% 0.1%
Profitability
Employee Overview
Group Medical All Other Group
Producer Info
Individual
Bonus/Overrides Investments Miscellaneous
Staff Service Info
Technology
Total Revenues
100.0%
100.0%
100.0%
Insurance Carriers
Brokerage Commission Expense
0.0%
0.2%
0.0%
Net Revenues
100.0%
99.8%
100.0%
Appendix
Expenses (as % of Net Revenues) Compensation
55.0%
45.7%
51.9%
Selling
4.6%
4.1%
5.3%
Operating
17.2%
12.9%
18.0%
Administrative
1.7%
0.9%
1.2%
Total Expenses
78.5%
63.5%
76.5%
Profit/Loss (as % of Net Revenues)
Pre-Tax Profit
21.5% 25.1%
36.5% 43.2% 18.7% 36.9% 43.8%
23.6% 25.8% 13.7% 25.3% 27.6%
Pro Forma Pre-Tax Profit 1 Operating Pre-Tax Profit 2
9.9%
EBITDA 3
23.9% 27.5%
Pro Forma EBITDA
1 Pre-tax Profits if discretionary expenses are eliminated and all owners compensated as employees
2 Pre-tax Profits excluding contingents, bonus and investment income
3 EBITDA—Earnings Before Interest Taxes Depreciation and Amortization
Profitability
2010 Best Practices Study
Agencies with Revenues Under $1,250,000
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