2010 Best Practices Study

2010 Best Practices Study

Mgmt. Perspectives

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

Profile

Revenues

Expenses

Profitability

Geographic Region:

Northeast Southeast Midwest Southwest

West

% of Agencies Located in Each Region

12.0% 11.2% 9.4% 6.9% 6.7%

Employee Overview

Net Revenue Growth (Organic)

2.9% -1.2% 1.3% 0.5% -1.2%

Producer Info

Pre-tax Profit

15.8% 12.9% 9.4% 12.1% 13.2%

Staff Service Info

Pro Forma Pre-tax Profit

20.2% 17.2% 12.4% 20.2% 16.5%

Profitability as % of Net Revenues

Technology

Operating Pre-tax Profit

3.0% 3.6% -0.5% 2.8% 3.4%

EBITDA

20.8% 17.2% 13.2% 13.8% 13.2%

Insurance Carriers

Pro Forma EBITDA

25.2% 21.5% 16.2% 21.9% 19.0%

Appendix

Value Creation “Rule of 20” Score

15.5

9.5

9.4

11.4

8.3

Revenue per Employee $172,613 $152,865 $164,037 $179,255 $191,224 Compensation per Employee $104,423 $102,191 $115,186 $124,915 $127,000 Spread per Employee $68,190 $50,674 $48,851 $54,340 $64,225

Productivity

Commercial P&C

$209,212 $209,002 $217,745 $199,631 $203,813

Personal P&C

$59,828 $77,704 $72,517 $97,120 $142,290

Pay Levels for Producers

Life & Health / Financial

$216,490 $207,399 $258,933 $233,186 $229,162

Multiline

$132,554 $237,099 $260,874 $181,689 $180,933

Commercial P&C

$52,134 $45,293 $48,307 $48,370 $57,025

Pay Levels for Service / Sales Support Staff

Personal P&C

$44,316 $40,318 $43,754 $42,426 $50,842

Life & Health / Financial

$50,486 $44,605 $47,720 $44,289 $61,145

Multiline

*

*

*

*

*

Commercial P&C

$86,700 $78,733 $86,400 $72,627 $93,843

Pay Levels for Account Execs

Life & Health / Financial

$73,195 $81,908 $82,246 $65,165 $98,667

PL - National

8.6

9.4

6.4

11.5

10.5

PL - Regional

7.4

10.7

10.8

3.8

6.5

Number of Carriers

CL - National

20.4

31.8

15.0

46.4

38.3

CL - Regional

11.4

28.3

31.8

14.6

21.9

EB - All

32.6

48.1

54.4

36.8

58.2

Total PL Comms Placed

28.0% 13.7% 24.0% 26.3% 38.7%

Service Center Use

Total CL Comms Placed

3.8% 1.9% 1.1% 4.4% 1.9%

2010 Best Practices Study

% of Agencies Making an Acquisition in the last 12 Months

11.1% 8.0% 28.6% 13.3% 26.7%

185

*Insufficient Data