7 / 123
AGENCIES WITH REVENUES UNDER $500,000
2005
PROFILE
REVENUES/
EXPENSES
FINANCIAL
STABILITY
EMPLOYEE
OVERVIEW
PRODUCER
INFO
SERVICE
STAFF
INFO
TECHNOLOGY
INSURANCE
CARRIERS
7
Revenue/Expense/Profit Summary
Average
+25%
Profit
+25%
Growth
Revenues (% by Source)
Commercial Lines
38.5%
39.9%
28.7%
Personal Line
51.4%
48.9%
61.1%
P&C Service Fees
0.2%
0.0%
0.0%
Contingent/Bonus
4.6%
2.6%
3.1%
Group Life & Health
2.0%
4.6%
3.8%
Individual Life & Health
2.0%
2.6%
1.3%
Investments
0.3%
0.2%
0.0%
Miscellaneous
0.9%
1.2%
1.9%
Total Revenues
100.0% 100.0% 100.0%
Brokerage Commission Expense
1.8%
0.0%
0.6%
Net Revenues
98.2% 100.0%
99.4%
Expenses (as % of Net Revenues)
Compensation
49.5%
33.0%
43.0%
Selling
6.9%
5.8%
5.8%
Operating
20.3%
14.3%
15.6%
Administrative
3.1%
2.6%
1.6%
Total Expenses
79.8%
55.7%
66.0%
Pre-Tax Profit
20.2%
44.3%
34.0%
Pro Forma Profit
1
26.2%
51.0%
39.0%
Operating Pre-Tax Profit
2
15.2%
41.5%
30.9%
Pro Forma EBITDA
3
29.3%
53.6%
40.6%
% 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%