2008 Best Practices Study

2008 Best Practices Study | Agencies with Revenues Between $1,250,000 and $2,500,000 | Revenues/Expenses

Agencies with Revenues Between $1,250,000 and $2,500,000

Appendix

Insurance

Carriers

Technology

Service

Staff Info

Producer

Info

Employee

Overview

Financial

Stability

Revenues/

Expenses

Profile

Revenue/Expense/Profit Summary

Expenses (as % of Net Revenue)

Average

+25% Profit

+25% Growth

Revenues (% by Source)

Commercial Lines

47.8%

47.4%

56.1%

Bonds

1.7%

4.0%

4.7%

Personal Lines

28.0%

27.7%

22.0%

VAS - P&C

0.2%

0.0%

Contingent/Bonus

10.6%

12.0%

10.7%

Group Life & Health

6.3%

4.5%

2.7%

Individual Life & Health

2.8%

1.2%

1.0%

VAS - L&H

0.5%

1.4%

0.0%

Bonus/Overrides

0.4%

0.0%

Investments

1.3%

1.6%

1.8%

Miscellaneous

0.4%

0.1%

0.9%

Total Revenues

100.0%

Less Brokerage Commission Expense

1.2%

0.0%

1.1%

Net Revenues

98.8%

100.0%

98.9%

Expenses (as % of Net Revenues)

Compensation

57.9%

45.9%

53.1%

Selling

3.9%

3.8%

3.7%

Operating

15.6%

13.2%

12.2%

Administrative

1.7%

1.0%

2.2%

Total Expenses

79.1%

63.9%

71.2%

Pre-Tax Profit

20.9%

36.1%

28.8%

Pro Forma Pre-Tax Profit

24.8%

45.6%

27.3%

Operating Pre-Tax Profit

6.4%

17.4%

12.8%

EBITDA

23.5%

38.1%

32.1%

Pro Forma EBITDA

26.7%

46.9%

26.8%

Pre-tax Profits if

discretionary expenses

are eliminated (e.g.

certain owner’s

perks/benefits), and one-

time or extraordinary

revenues are excluded

Pre-tax Profits excluding

income from

contingents, bonus and

investment income

EBITDA—Earnings

Before Interest Taxes

Depreciation and

Amortization

EBITDA if discretionary

expenses are eliminated

(e.g. certain owner’s

perks/benefits), and one-

time or extraordinary

revenues are excluded