144 / 168
2014 Best
Practices Study
Agencies
with
Revenues
Over
$25,000,000
144
Analysis of Agencies with Revenues Over $25,000,000
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
52.8%
59.1%
40.5%
Bonds
3.5%
4.2%
2.7%
Personal Lines
6.7%
4.0%
11.1%
VAS - P&C
1.9%
1.2%
2.3%
Contingent/Bonus
5.6%
6.0%
6.4%
Group Medical
19.4%
17.7%
21.7%
All Other Group
5.9%
4.0%
8.6%
Individual Life & Health
1.2%
1.4%
1.9%
Bonus/Overrides
1.7%
1.6%
2.7%
Investments
0.5%
0.1%
0.8%
Miscellaneous
0.8%
0.6%
1.3%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
2.4%
2.0%
3.1%
Net Revenues
97.6%
98.0%
96.9%
Expenses (as % of Net Revenues)
Compensation
64.8%
58.6%
64.4%
Selling
4.2%
3.8%
4.8%
Operating
13.3%
12.0%
13.7%
Administrative
2.9%
0.6%
3.0%
Total Expenses
85.2%
75.0%
85.9%
Average
+25% Profit
+25% Growth
Pre-Tax Profit
14.8%
25.0%
14.1%
Pro Forma Pre-Tax Profit
1
16.8%
25.6%
14.8%
Operating Pre-Tax Profit
2
7.9%
18.5%
5.2%
EBITDA
3
17.8%
26.5%
17.7%
Pro Forma EBITDA
4
19.9%
27.1%
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
4 EBITDA if discretionary expenses
are eliminated and all owners
compensated as employees
Profit/Loss Summary
Profit/Loss
(as % of Net Revenues)