92 / 168
2015 Best
Practices Study
Agencies
with Revenues
Between
$5,000,000 and
$10,000,000
92
Analysis of Agencies with Revenues Between $5,000,000 and $10,000,000
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
49.2%
41.9%
57.5%
Bonds
1.5%
0.7%
1.2%
Personal Lines
23.9%
28.4%
14.1%
VAS - P&C
1.8%
6.5%
0.7%
Contingent/Bonus
9.1%
7.0%
10.7%
Group Medical
9.0%
8.8%
9.6%
All Other Group
2.7%
3.8%
4.0%
Individual Life & Health
1.2%
1.4%
1.4%
Bonus/Overrides
0.6%
1.0%
0.6%
Investments
0.3%
0.2%
0.2%
Miscellaneous
0.8%
0.4%
0.0%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
0.8%
0.0%
0.3%
NET REVENUES
99.2%
100.0%
99.7%
Expenses (as % of Net Revenues)
Compensation
62.1%
57.9%
59.7%
Selling
3.3%
3.0%
3.0%
Operating
14.3%
13.6%
13.0%
Administrative
2.0%
2.3%
1.3%
TOTAL EXPENSES
81.7%
76.8%
77.0%
Average
Top 25% Profit Top 25% Growth
Pre-Tax Profit
18.3%
23.2%
23.0%
Pro Forma Pre-Tax Profit
1
22.7%
35.6%
25.3%
Operating Pre-Tax Profit
2
9.3%
16.6%
13.1%
EBITDA
3
20.8%
25.6%
24.2%
Pro Forma EBITDA
4
25.2%
37.9%
26.5%
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)