66 / 168
2014 Best
Practices Study
Agencies
with Revenues
Between
$2,500,000 and
$5,000,000
66
Analysis of Agencies with Revenues Between $2,500,000 and $5,000,000
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
53.3%
47.6%
54.7%
Bonds
1.9%
0.7%
1.2%
Personal Lines
26.5%
35.4%
27.1%
VAS - P&C
0.2%
0.1%
0.0%
Contingent/Bonus
8.5%
10.9%
8.9%
Group Medical
5.7%
2.8%
3.5%
All Other Group
1.3%
0.6%
1.6%
Individual Life & Health
1.4%
0.5%
0.9%
Bonus/Overrides
0.2%
0.3%
0.0%
Investments
0.7%
0.6%
1.6%
Miscellaneous
0.4%
0.4%
0.4%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
1.4%
2.4%
1.2%
Net Revenues
98.6%
97.6%
98.8%
Expenses (as % of Net Revenues)
Compensation
58.8%
49.4%
61.3%
Selling
3.9%
2.1%
4.0%
Operating
14.1%
11.6%
14.8%
Administrative
2.7%
1.7%
2.2%
Total Expenses
79.5%
64.8%
82.4%
Average
+25% Profit
+25% Growth
Pre-Tax Profit
20.5%
35.2%
17.6%
Pro Forma Pre-Tax Profit
1
24.8%
41.2%
19.8%
Operating Pre-Tax Profit
2
12.8%
26.3%
9.3%
EBITDA
3
23.6%
37.1%
20.2%
Pro Forma EBITDA
4
27.9%
43.1%
22.4%
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)