2010 Best Practices Study

2010 Best Practices Study

Mgmt. Perspectives

Regional Analysis Agencies with Revenues UNDER $5,000,000

Profile

Revenues

Expenses

Profitability

Geographic Region:

Northeast Southeast Midwest Southwest

West

% of Agencies Located in Each Region

12.9% 12.5% 13.8% 8.4% 6.2%

Employee Overview

Net Revenue Growth (Organic)

0.0% 0.1% 1.4% 1.1% -0.2%

Producer Info

Pre-tax Profit

15.4% 18.8% 21.4% 15.7% 25.7%

Staff Service Info

Pro Forma Pre-tax Profit

20.7% 22.6% 22.8% 25.5% 31.0%

Profitability as % of Net Revenues

Technology

Operating Pre-tax Profit

4.0% 8.7% 9.5% 6.0% 13.1%

EBITDA

17.8% 22.8% 24.8% 17.6% 28.1%

Insurance Carriers

Pro Forma EBITDA

23.0% 26.6% 26.2% 27.3% 33.4%

Appendix

Value Creation “Rule of 20” Score

11.6

13.3

15.2

14.8

16.5

Revenue per Employee $120,305 $134,707 $145,884 $148,073 $148,840 Compensation per Employee $73,267 $80,374 $83,072 $94,123 $76,429 Spread per Employee $47,038 $58,333 $62,812 $53,950 $72,412

Productivity

Commercial P&C

$96,237 $135,901 $110,939 $90,046 $108,290

Personal P&C

$63,729 $70,202 $50,442 $46,014 $54,704

Pay Levels for Producers

Life & Health / Financial

$218,603 $77,023 $60,052 $76,622 $69,531

Multiline

$118,267 $107,768 $102,487 $94,765 $156,847

Commercial P&C

$45,154 $41,897 $53,625 $44,587 $40,877

Pay Levels for Service / Sales Support Staff

Personal P&C

$39,363 $34,190 $35,396 $38,245 $35,079

Life & Health / Financial

$40,051 $30,176 $37,292 $35,301

*

Multiline

$41,544

*

$31,576 $47,141

*

Commercial P&C

$60,074 $59,925 $63,479 $55,788 $46,532

Pay Levels for Account Execs

Life & Health / Financial

$49,075 $38,546 $52,200 $44,000

*

PL - National

4.4

4.4

3.2

5.9

6.5

PL - Regional

5.6

3.9

4.7

2.3

3.2

Number of Carriers

CL - National

6.6

9.0

8.0

8.0

6.4

CL - Regional

5.7

6.5

7.1

3.8

6.0

EB - All

9.6

6.9

9.7

10.3

5.9

Total PL Comms Placed

*

23.3% 59.7% 59.9% *

Service Center Use

Total CL Comms Placed

5.4% 4.0% 24.0% 18.4% 4.0%

2010 Best Practices Study

% of Agencies Making an Acquisition in the last 12 Months

0.0% 3.6% 16.1% 0.0% 0.0%

184

*Insufficient Data