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AGENCIES WITH REVENUES BETWEEN $1,250,000 AND $2,500,000

2005

PROFILE

REVENUES/

EXPENSES

FINANCIAL

STABILITY

EMPLOYEE

OVERVIEW

PRODUCER

INFO

SERVICE

STAFF

INFO

TECHNOLOGY

INSURANCE

CARRIERS

39

Revenue/Expense/Profit Summary

Average

+25%

Profit

+25%

Growth

Revenues (% by Source)

Commercial Lines

53.2%

58.8%

59.0%

Personal Line

24.9%

20.8%

18.6%

P&C Service Fees

0.6%

0.3%

0.3%

Contingent/Bonus

9.2%

8.4%

11.1%

Group Life & Health

7.2%

9.6%

8.1%

Individual Life & Health

2.8%

1.0%

1.9%

Investments

0.6%

0.3%

0.2%

Miscellaneous

1.5%

0.9%

0.8%

Total Revenues

100.0% 100.0% 100.0%

Brokerage Commission Expense

1.6%

3.5%

1.1%

Net Revenues

98.4%

96.5%

98.9%

Expenses (as % of Net Revenues)

Compensation

58.0%

43.5%

54.2%

Selling

4.0%

4.1%

3.7%

Operating

15.6%

14.9%

14.3%

Administrative

5.5%

8.5%

4.4%

Total Expenses

83.2%

71.0%

76.8%

Pre-Tax Profit

16.8%

29.0%

23.2%

Pro Forma Profit

1

23.1%

38.1%

27.2%

Operating Pre-Tax Profit

2

6.9%

20.2%

11.8%

Pro Forma EBITDA

3

28.6%

46.6%

31.6%

% 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%