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2013 Best

Practices Study

Agencies

with Revenues

Between

$2,500,000 and

$5,000,000

77

Analysis of Agencies with Revenues Between $2,500,000 and $5,000,000

Key Benchmarks

Mgmt. Perspectives

Profile

Revenues

Expenses

Profitability

Employee Overview

Producer Info

Service Staff Info

Technology

Insurance Carriers

Appendix

Revenue Growth by Source

(continued)

*Insufficient Data

Average

+25% Profit

+25% Growth

Group Medical L&H

Renewals

1

87.4%

90.4%

86.0%

New Business

2

15.9%

12.9%

19.1%

Acquired Revenues

3

0.0%

0.0%

0.0%

Organic Growth

4

3.3%

3.3%

5.0%

Total Growth

5

3.3%

3.3%

5.0%

All Other Group L&H

Renewals

1

84.1%

*

75.9%

New Business

2

21.6%

*

19.9%

Acquired Revenues

3

0.0%

*

0.0%

Organic Growth

4

5.7%

*

-4.1%

Total Growth

5

5.7%

*

-4.1%

Individual L&H

Renewals

1

63.2%

81.2%

73.3%

New Business

2

30.8%

16.4%

24.3%

Acquired Revenues

3

0.0%

0.0%

0.0%

Organic Growth

4

-6.0%

-2.4%

-2.4%

Total Growth

5

-6.0%

-2.4%

-2.4%

Total Commissions & Fees

Renewals

1

93.7%

94.6%

98.7%

New Business

2

16.3%

15.4%

18.1%

Acquired Revenues

3

0.5%

1.1%

1.1%

Organic Growth

4

10.0%

10.0%

16.8%

Total Growth

5

10.5%

11.1%

17.9%

Brokerage Commission Expense Growth

-18.8%

-12.3%

-5.7%

Net Commissions & Fees Growth (Organic)

6

10.2%

10.1%

17.2%

Net Commissions & Fees Growth (Total)

7

10.7%

11.2%

18.3%

Other Income

P&C Contingent Income Growth

-2.6%

8.7%

7.2%

L&H Bonus Income Growth

-8.0%

*

-29.4%

Investment Income Growth

-13.5%

2.6%

-16.1%

Gross Revenue Growth

9.7%

12.3%

20.4%

Net Revenue Growth (Organic)

8

9.5%

11.7%

20.0%

Net Revenue Growth (Total)

9

9.9%

12.7%

21.0%

1

Renewal Revenues

as a % of prior year’s total

revenues for this line of business. This figure is

impacted by attrition (loss or retention of accounts)

and by changes in premium and commission levels.

The higher the %, the more favorable the results.

2

New Revenues

as a % of prior year’s total revenues

for this line of business. The higher the %, the more

favorable the results.

3

Acquired Revenues

as a % of prior year’s total

revenues for this line of business. The % indicates

the significance of acquired business.

4

Growth in Revenues

from prior year excluding

acquired revenues.

5

Growth in Revenues

from prior year including

acquired revenues.

6

Growth in Total Commissions & Fees

less Brokerage

Commission Expense

from prior year excluding

acquired revenues.

7

Growth in Total Commissions & Fees

less Brokerage

Commission Expense

from prior year including

acquired revenues.

8

Growth in Net Revenues

(

Gross Revenue less

Brokerage Commission Expense

) from prior year

excluding acquired revenues.

9

Growth in Net Revenues

(

Gross Revenue less

Brokerage Commission Expense

) from prior year

including acquired revenues.