2010 Best
Practices Study
Agencies
with Revenues
Between
$5,000,000 and
$10,000,000
106
Analysis of Agencies with Revenues Between $5,000,000 and $10,000,000
Mgmt. Perspectives
Profile
Revenues
Expenses
Profitability
Employee Overview
Producer Info
Staff Service Info
Technology
Insurance Carriers
Appendix
Average
+25% Profit
+25% Growth
Revenues (as % of Gross Revenue)
Commercial Lines
48.4%
49.7%
38.6%
Bonds
1.1%
0.8%
0.4%
Personal Lines
21.6%
26.0%
26.7%
VAS - P&C
0.5%
0.8%
0.4%
Contingent/Bonus
8.5%
10.0%
8.9%
Group Life & Health
12.4%
8.0%
14.8%
Individual Life & Health
2.2%
1.7%
2.8%
VAS - L&H
3.1%
1.0%
5.5%
Bonus/Overrides
0.6%
0.4%
0.8%
Investments
0.7%
0.7%
0.2%
Miscellaneous
0.8%
0.6%
0.4%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
1.6%
0.4%
2.3%
Net Revenues
98.4%
99.6%
97.7%
Expenses (as % of Net Revenues)
Compensation
66.6%
58.1%
64.0%
Selling
3.1%
2.5%
3.6%
Operating
13.6%
12.4%
14.2%
Administrative
3.2%
1.9%
2.3%
Total Expenses
86.5%
75.0%
84.1%
Pre-Tax Profit
13.5%
25.0%
15.9%
Pro Forma Pre-Tax Profit
1
19.6%
31.6%
21.4%
Operating Pre-Tax Profit
2
3.4%
13.4%
5.3%
EBITDA
3
16.8%
27.1%
18.3%
Pro Forma EBITDA
22.9%
33.7%
23.9%
1 Pre-tax Profits if discretionary expenses are
eliminated and all owners compensated as
employees
2 Pre-tax Profits excluding contingents, bonus
and investment income
3 EBITDA—Earnings Before Interest Taxes
Depreciation and Amortization
Profit/Loss Summary
Profit/Loss
(as % of Net Revenues)
Profitability