14 / 168
2014 Best
Practices Study
Agencies
with
Revenues
Under
$1,250,000
14
Analysis of Agencies with Revenues Under $1,250,000
Key Benchmarks
Profile
Revenues
Expenses
Profitability
Employee Overview
Producer Info
Service Staff Info
Technology
Insurance Carriers
Appendix
Average
+25% Profit
+25% Growth
Revenues (as % of Gross Revenue)
Commercial Lines
41.2%
27.0%
29.6%
Bonds
0.4%
0.1%
0.2%
Personal Lines
45.2%
60.9%
57.6%
VAS - P&C
0.4%
0.0%
1.0%
Contingent/Bonus
6.2%
6.8%
8.1%
Group Medical
3.0%
1.0%
1.4%
All Other Group
0.4%
0.1%
0.0%
Individual Life & Health
2.6%
4.1%
1.6%
Bonus/Overrides
0.0%
0.0%
0.2%
Investments
0.1%
0.0%
0.0%
Miscellaneous
0.3%
0.0%
0.2%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
0.3%
0.2%
0.0%
Net Revenues
99.7%
99.8%
100.0%
Expenses (as % of Net Revenues)
Compensation
52.5%
38.3%
52.2%
Selling
5.1%
3.5%
5.5%
Operating
17.3%
12.4%
16.5%
Administrative
2.3%
0.3%
2.3%
Total Expenses
77.3%
54.5%
76.5%
Average
+25% Profit
+25% Growth
Pre-Tax Profit
22.7%
45.5%
23.5%
Pro Forma Pre-Tax Profit
1
26.1%
48.3%
27.1%
Operating Pre-Tax Profit
2
17.3%
41.6%
16.3%
EBITDA
3
25.6%
45.8%
26.4%
Pro Forma EBITDA
4
29.0%
48.6%
30.1%
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
4 EBITDA if discretionary expenses
are eliminated and all owners
compensated as employees
Profit/Loss Summary
Profit/Loss
(as % of Net Revenues)