66 / 168
2015 Best
Practices Study
Agencies
with Revenues
Between
$2,500,000 and
$5,000,000
66
Analysis of Agencies with Revenues Between $2,500,000 and $5,000,000
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
51.9%
45.9%
54.4%
Bonds
1.4%
1.1%
0.9%
Personal Lines
28.7%
34.3%
24.0%
VAS - P&C
0.1%
0.1%
0.1%
Contingent/Bonus
8.8%
11.9%
9.5%
Group Medical
5.6%
3.5%
6.7%
All Other Group
1.2%
0.7%
2.2%
Individual Life & Health
1.1%
0.9%
0.8%
Bonus/Overrides
0.2%
0.5%
0.1%
Investments
0.5%
0.6%
0.6%
Miscellaneous
0.4%
0.5%
0.6%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
2.1%
0.0%
1.6%
NET REVENUES
97.9%
100.0%
98.4%
Expenses (as % of Net Revenues)
Compensation
56.9%
47.9%
57.9%
Selling
4.0%
4.1%
4.0%
Operating
14.0%
11.4%
13.3%
Administrative
2.9%
3.6%
2.3%
TOTAL EXPENSES
77.8%
66.9%
77.4%
Average
Top 25% Profit Top 25% Growth
Pre-Tax Profit
22.2%
33.1%
22.6%
Pro Forma Pre-Tax Profit
1
26.7%
42.9%
26.6%
Operating Pre-Tax Profit
2
14.1%
23.3%
13.8%
EBITDA
3
25.2%
36.4%
24.4%
Pro Forma EBITDA
4
29.8%
46.3%
28.5%
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)