2015 Best
Practices Study
Agencies
with
Revenues
Under
$1,250,000
14
Analysis of Agencies with Revenues Under $1,250,000
Key Benchmarks
Profile
Revenues
Expenses
Profitability
Employee Overview
Producer Info
Service Staff Info
Technology
Insurance Carriers
Appendix
Note: See page 163 for an explanation of column headings
Average
Top 25% Profit Top 25% Growth
Revenues (as % of Gross Revenue)
Commercial Lines
38.7%
34.9%
45.0%
Bonds
0.5%
0.1%
0.5%
Personal Lines
47.3%
52.7%
34.2%
VAS - P&C
0.6%
0.0%
0.0%
Contingent/Bonus
5.3%
6.6%
2.9%
Group Medical
3.6%
0.8%
8.2%
All Other Group
0.2%
0.1%
0.1%
Individual Life & Health
3.2%
4.8%
7.7%
Bonus/Overrides
0.1%
0.0%
0.3%
Investments
0.1%
0.1%
0.2%
Miscellaneous
0.3%
0.0%
0.8%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
0.3%
0.0%
0.0%
NET REVENUES
99.7%
100.0%
100.0%
Expenses (as % of Net Revenues)
Compensation
51.1%
34.1%
50.9%
Selling
4.5%
4.5%
3.8%
Operating
15.7%
9.4%
19.0%
Administrative
2.0%
0.1%
0.9%
TOTAL EXPENSES
73.3%
48.2%
74.6%
Average
Top 25% Profit Top 25% Growth
Pre-Tax Profit
26.7%
51.8%
25.4%
Pro Forma Pre-Tax Profit
1
30.7%
54.9%
28.8%
Operating Pre-Tax Profit
2
22.2%
48.3%
22.9%
EBITDA
3
28.8%
51.8%
26.3%
Pro Forma EBITDA
4
32.8%
54.9%
29.7%
Profit/Loss Summary
Profit/Loss
(as % of Net Revenues)
1 Pre-tax Profit if discretionary
expenses are eliminated and
all owners compensated as
employees
2 Pre-tax Profit excluding
contingents, bonus and
investment income
3 EBITDA—Earnings Before
Interest, Taxes, Depreciation and
Amortization
4 EBITDA if discretionary expenses
are eliminated and all owners
compensated as employees