76 / 191
2010 Best
Practices Study
Agencies
with Revenues
Between
$2,500,000 and
$5,000,000
76
Analysis of Agencies with Revenues Between $2,500,000 and $5,000,000
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
48.3%
43.4%
53.8%
Bonds
2.7%
6.1%
2.7%
Personal Lines
24.8%
33.3%
18.1%
Value Added Services
1.3%
0.0%
0.2%
Contingent/Bonus
8.2%
9.7%
7.0%
Group Medical
9.2%
3.4%
10.1%
All Other Group
1.7%
0.6%
2.5%
Individual L&H
2.0%
2.7%
1.6%
Bonus/Overrides
0.5%
0.0%
0.8%
Investments
0.5%
0.6%
0.9%
Miscellaneous
0.9%
0.1%
2.4%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
1.1%
0.3%
0.2%
Net Revenues
98.9%
99.7%
99.8%
Expenses (as % of Net Revenues)
Compensation
62.7%
56.3%
60.9%
Selling
4.1%
3.5%
3.4%
Operating
14.9%
13.2%
14.0%
Administrative
2.7%
0.7%
1.4%
Total Expenses
84.4%
73.8%
79.7%
Pre-Tax Profit
15.6%
26.2%
20.3%
Pro Forma Pre-Tax Profit
1
19.9%
32.7%
26.6%
Operating Pre-Tax Profit
2
6.2%
15.8%
11.6%
EBITDA
3
18.9%
27.3%
21.5%
Pro Forma EBITDA
23.2%
33.7%
27.8%
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