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Analysis of Agencies with Revenues Greater Than $10,000,000
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Explanations
Average Annual Pay per CSR:
Average Compensation appearing on the CSR’s W-2 forms. This does not include other employee benefits
expense. Pay per CSR is computed separately for Commercial P&C, Personal P&C, Life & Health and
Multi-Line CSR’s.
Average Annual Pay per Producer:
Average Compensation appearing on the validated producer’s W-2 that resulted from the producer’s
production responsibilities
only
. This does not include other employee benefits expense or payroll
compensation earned for management duties, profit distributions to owners, etc.
Brokerage Commission Expense:
Commissions paid to other agencies or brokers. Includes in-house producers compensated on a 1099.
Comparison Group:
The
Best Practices
firms in the same revenue category or the firms in the same affinity group against which
your agency’s results are being compared.
Comparison Group, +25% Growth:
The average results achieved by the 25% fastest growing firms in your
Best Practices
revenue category or
affinity group for that factor. (The firms comprising this group are the same for each factor or line item.)
Comparison Group, +25% Profit:
The average results achieved by the 25% most profitable firms in your
Best Practices
revenue category or
affinity group for that factor. (The firms comprising this group are the same for each factor or line item.)
Comparison Group, Top 25%:
The average results achieved by the Top 25% of the firms in the group for that particular factor or line item.
(The firms comprising this group will be different for each factor or line item.)
Compensation Per Employee:
Total compensation expense (total payroll and total benefits expense) divided by total number of “full-time
equivalent” employees.
Current Ratio:
Current assets divided by current liabilities. When the current ratio is greater than1:1, it indicates that cash
and assets with short-term maturities are greater than the firm’s short-term obligations. However, the
timing of collections from customers and payments to companies can still impact the ability of an agency to
meet obligations.
Operating Pre-Tax Profit:
Pre-tax profit minus contingents, bonus, and investment income.
Pro Forma Pre-Tax Profit:
The agency’s pre-tax profit when discretionary expenses (bonuses, compensation, and perks) made for the
benefit of the owners, based solely on ownership, are removed, i.e. removing expenses that would not be
incurred if a third-party owned the agency.
Receivable to Payable Ratio:
Accounts receivable divided by accounts payable. This factor measures the collection practices of an
agency, with a lower ratio representing more timely collections.
Revenue Per Employee: