166 / 191
2010 Best
Practices Study
Agencies
with Revenues
Over $25,000,000
166
Analysis of Agencies with Revenues Over $25,000,000
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
48.8%
51.3%
46.4%
Bonds
3.2%
2.2%
4.3%
Personal Lines
10.2%
19.2%
3.1%
Value Added Services
3.4%
0.1%
0.4%
Contingent/Bonus
5.6%
3.6%
6.7%
Group Medical
20.2%
14.8%
29.8%
All Other Group
4.2%
3.0%
2.9%
Individual L&H
1.2%
1.0%
2.7%
Bonus/Overrides
1.3%
0.8%
2.3%
Investments
1.0%
1.8%
1.2%
Miscellaneous
0.9%
2.1%
0.2%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
2.7%
2.2%
2.0%
Net Revenues
97.3%
97.8%
98.0%
Expenses (as % of Net Revenues)
Compensation
65.4%
60.3%
69.0%
Selling
3.5%
3.3%
4.2%
Operating
14.3%
14.6%
14.3%
Administrative
4.1%
1.0%
2.7%
Total Expenses
87.4%
79.2%
90.3%
Pre-Tax Profit
12.6%
20.8%
9.7%
Pro Forma Pre-Tax Profit
1
15.5%
24.9%
15.4%
Operating Pre-Tax Profit
2
4.5%
14.4%
-0.7%
EBITDA
3
16.9%
23.2%
12.8%
Pro Forma EBITDA
19.8%
27.3%
18.4%
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