40 / 168
2014 Best
Practices Study
Agencies
with Revenues
Between
$1,250,000 and
$2,500,000
40
Analysis of Agencies with Revenues Between $1,250,000 and $2,500,000
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
45.6%
47.8%
46.2%
Bonds
3.3%
6.3%
1.5%
Personal Lines
30.5%
20.4%
27.5%
VAS - P&C
0.1%
0.2%
0.2%
Contingent/Bonus
10.1%
10.8%
10.2%
Group Medical
5.8%
6.9%
11.3%
All Other Group
0.7%
0.1%
0.4%
Individual Life & Health
2.6%
6.4%
1.7%
Bonus/Overrides
0.5%
0.4%
0.3%
Investments
0.2%
0.5%
0.3%
Miscellaneous
0.5%
0.1%
0.4%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
1.5%
0.0%
4.7%
Net Revenues
98.5%
100.0%
95.3%
Expenses (as % of Net Revenues)
Compensation
55.3%
41.7%
47.8%
Selling
4.2%
4.7%
3.7%
Operating
16.1%
16.1%
17.8%
Administrative
1.4%
0.5%
3.2%
Total Expenses
77.0%
63.0%
72.5%
Average
+25% Profit
+25% Growth
Pre-Tax Profit
23.0%
37.0%
27.5%
Pro Forma Pre-Tax Profit
1
28.5%
41.9%
33.1%
Operating Pre-Tax Profit
2
13.3%
28.4%
18.0%
EBITDA
3
25.1%
37.7%
32.1%
Pro Forma EBITDA
4
30.6%
42.6%
37.7%
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)