16 / 191
2010 Best
Practices Study
Agencies
with Revenues
Under $1,250,000
16
Analysis of Agencies with Revenues Under $1,250,000
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
43.3%
44.1%
46.8%
Bonds
0.7%
0.4%
1.4%
Personal Lines
40.0%
40.7%
35.1%
Value Added Services
0.8%
0.0%
2.2%
Contingent/Bonus
7.5%
6.1%
9.6%
Group Medical
5.7%
7.0%
3.3%
All Other Group
0.1%
0.0%
0.0%
Individual
1.6%
1.8%
1.3%
Bonus/Overrides
0.1%
0.0%
0.1%
Investments
0.1%
0.0%
0.1%
Miscellaneous
0.1%
0.0%
0.1%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
0.0%
0.2%
0.0%
Net Revenues
100.0%
99.8%
100.0%
Expenses (as % of Net Revenues)
Compensation
55.0%
45.7%
51.9%
Selling
4.6%
4.1%
5.3%
Operating
17.2%
12.9%
18.0%
Administrative
1.7%
0.9%
1.2%
Total Expenses
78.5%
63.5%
76.5%
Pre-Tax Profit
21.5%
36.5%
23.6%
Pro Forma Pre-Tax Profit
1
25.1%
43.2%
25.8%
Operating Pre-Tax Profit
2
9.9%
18.7%
13.7%
EBITDA
3
23.9%
36.9%
25.3%
Pro Forma EBITDA
27.5%
43.8%
27.6%
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