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2013 Best
Practices Study
Agencies
with Revenues
Between
$2,500,000 and
$5,000,000
81
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
Average
+25% Profit
+25% Growth
Revenues (as % of Gross Revenue)
Commercial Lines
55.1%
45.7%
56.0%
Bonds
2.4%
0.9%
3.2%
Personal Lines
24.3%
34.5%
22.1%
VAS - P&C
0.2%
0.1%
0.2%
Contingent/Bonus
8.0%
10.0%
9.8%
Group Medical
6.4%
4.1%
6.3%
All Other Group
1.1%
0.6%
0.6%
Individual Life & Health
1.5%
2.7%
0.8%
Bonus/Overrides
0.2%
0.4%
0.2%
Investments
0.4%
0.7%
0.5%
Miscellaneous
0.4%
0.3%
0.3%
Total Revenues
100.0%
100.0%
100.0%
Brokerage Commission Expense
1.6%
3.3%
3.8%
Net Revenues
98.4%
96.7%
96.2%
Expenses (as % of Net Revenues)
Compensation
59.6%
50.6%
63.4%
Selling
3.7%
2.3%
2.6%
Operating
15.1%
11.2%
12.9%
Administrative
2.7%
1.1%
1.4%
Total Expenses
81.1%
65.2%
80.3%
Average
+25% Profit
+25% Growth
Pre-Tax Profit
18.9%
34.8%
19.7%
Pro Forma Pre-Tax Profit
1
23.5%
39.4%
27.3%
Operating Pre-Tax Profit
2
10.4%
23.9%
8.9%
EBITDA
3
22.4%
36.2%
21.1%
Pro Forma EBITDA
27.1%
40.8%
28.7%
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
Profit/Loss Summary
Profit/Loss
(as % of Net Revenues)