23 / 123
AGENCIES WITH REVENUES BETWEEN $500,000 AND $1,250,000
2005
PROFILE
REVENUES/
EXPENSES
FINANCIAL
STABILITY
EMPLOYEE
OVERVIEW
PRODUCER
INFO
SERVICE
STAFF
INFO
TECHNOLOGY
INSURANCE
CARRIERS
23
Revenue/Expense/Profit Summary
Average
+25%
Profit
+25%
Growth
Revenues (% by Source)
Commercial Lines
45.1%
44.5%
50.0%
Personal Line
35.9%
40.1%
32.9%
P&C Service Fees
0.3%
1.0%
0.1%
Contingent/Bonus
9.5%
6.6%
12.9%
Group Life & Health
6.7%
5.7%
1.9%
Individual Life & Health
1.5%
1.8%
0.9%
Investments
0.5%
0.1%
0.9%
Miscellaneous
0.6%
0.2%
0.3%
Total Revenues
100.0% 100.0% 100.0%
Brokerage Commission Expense
1.8%
1.7%
0.0%
Net Revenues
98.2%
98.3% 100.0%
Expenses (as % of Net Revenues)
Compensation
57.4%
43.0%
57.4%
Selling
3.9%
3.0%
3.9%
Operating
14.2%
10.9%
15.7%
Administrative
3.1%
1.2%
3.4%
Total Expenses
78.6%
58.1%
80.4%
Pre-Tax Profit
21.4%
41.9%
19.6%
Pro Forma Profit
1
31.5%
53.0%
29.0%
Operating Pre-Tax Profit
2
11.3%
34.9%
5.8%
Pro Forma EBITDA
3
34.6%
54.2%
32.4%
% Total Net Revenue
Average
+25% Profit
+25% Growth
60%
30%
20%
10%
Pre-Tax
Profit
Pro Forma
Pre-Tax Profit
Operating
Pre-Tax Profit
1
Pre-tax profit when discretionary expenses (bonuses, compensation, and perks) made for the benefit of
the owners, based solely on ownership, are removed (i.e., removing expenses that would not be
incurred if a third party owned the agency).
2
Pre-tax profit minus contingents, bonus and investment income.
3
EBITDA = Earnings before Interest, Taxes, Depreciation and Amortization
40%
50%