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FINANCIAL STABILITY
1. Current Assets - Assets that can be converted to cash or a cash equivalent within twelve months.
Includes cash, marketable securities, accounts receivable, notes receivable maturing within twelve months, and
prepaid expenses.
2. Current Liabilities - Liabilities that require a cash outlay during the next twelve months. Includes accounts
payable, the current portion of long-term debt (the portion due during the next twelve months), payroll and
income taxes payable, and payroll that has been earned but not paid.
3. Current Ratio - Current assets divided by current liabilities.
4. Intangible Assets - Includes expirations (purchased customer lists), restrictive covenants, and goodwill.
5. Tangible Net Worth - Total assets minus intangible assets equals total tangible assets. Total tangible assets
minus total liabilities equals tangible net worth.
6. Accounts Receivable - Amounts due from insureds.
7. Accounts Payable - Amounts due to insurance companies.
8. Receivables/Payables Ratio - Accounts receivable divided by accounts payable.
9. Aged Receivables - Measures the length of time that receibvables are past due (over 60 days, over 90 days).
EMPLOYEE OVERVIEW
1. Revenue per Employee - Net revenues divided by the total number of full-time equivalent employees.
2. Compensation per Employee - Total compensation divided by total number of full-time equivalent
employees.
3. Spread per Employee - Total revenue per emloyee minus compensation per employee. While revenue per
empoloyee is a standard for measuring productivity, the “spread” measures the dollars per employee available
to pay all other agency expenses adn generate a profit for the agency.
PRODUCER INFORMATION
1. Validated Producer - Producers whose book of business is sufficient to cover his/her wages under agency’s
commission formula.
2. Annual Pay per Producer - Includes compensation that shows up on the producer’s W-2 and resulted from
the producer’s production responsibilities.
S ERVICE STAFF INFORMATION
1. Service-Related Personnel - Non-commissioned personnel who have responsibility, either directly or
indirectly, to provide or support service delivery to the agency’s clients.
2. CSR - Customer Service Representative - Positions with the main responsibility of client service or to
provide support in providing client services. Includes Account Executives, Senior CSRs, CSRs, Account
Managers, Assistant CSRs.
3. Customer Service & Processing - Includes activities such as processing new and renewal accounts, issuing
endorsements/ID’s/certificates of insurance, file maintenance, speaking with customers on the phone, company
correspondence, invoicing, etc.
4. Administration - Includes any time spent on non-customer service functions such as training,
education, receptionist duties, internal meetings, agency matters, general clerical duties, etc.
2005 BEST PRACTICES STUDY - APPENDIX
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