40 / 168
2015 Best
Practices Study
Agencies
with Revenues
Between
$1,250,000 and
$2,500,000
40
Analysis of Agencies with Revenues Between $1,250,000 and $2,500,000
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
46.7%
43.2%
38.3%
Bonds
3.3%
5.9%
0.4%
Personal Lines
30.4%
25.6%
38.2%
VAS - P&C
0.1%
0.1%
0.1%
Contingent/Bonus
9.7%
7.1%
10.0%
Group Medical
3.8%
9.0%
1.8%
All Other Group
0.9%
1.4%
1.6%
Individual Life & Health
4.2%
5.8%
9.0%
Bonus/Overrides
0.5%
2.0%
0.0%
Investments
0.1%
0.1%
0.2%
Miscellaneous
0.5%
0.0%
0.4%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
0.4%
1.3%
0.0%
NET REVENUES
99.6%
98.7%
100.0%
Expenses (as % of Net Revenues)
Compensation
56.8%
50.3%
59.0%
Selling
4.5%
4.2%
6.2%
Operating
16.8%
14.0%
20.2%
Administrative
2.7%
0.5%
1.3%
TOTAL EXPENSES
80.8%
69.0%
86.7%
Average
Top 25% Profit Top 25% Growth
Pre-Tax Profit
19.2%
31.0%
13.3%
Pro Forma Pre-Tax Profit
1
23.4%
37.9%
17.3%
Operating Pre-Tax Profit
2
9.7%
23.7%
3.2%
EBITDA
3
22.5%
31.7%
15.7%
Pro Forma EBITDA
4
26.9%
38.7%
19.8%
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
Profit/Loss Summary
Profit/Loss
(as % of Net Revenues)