138 / 186
Revenue/Expense/Profit Summary
Profitability
AGENCIES WITH REVENUES BETWEEN $10,000,000 AND $25,000,000
EXECUTIVE
PERSPECTIVES
PROFILE
REVENUES/
EXPENSES
FINANCIAL
STABILITY
EMPLOYEE
OVERVIEW
PRODUCER
INFO
SERVICE
STAFF
INFO
TECHNOLOGY
INSURANCE
CARRIERS
APPENDIX
137
Average
+25%
Profit
+25%
Growth
Revenues (% by Source)
Commercial Lines
62.1%
66.9%
60.7%
Personal Line
7.5%
8.2%
10.7%
P&C Service Fees
2.8%
1.9%
2.0%
Contingent/Bonus
8.2%
8.5%
8.7%
Group Life & Health
16.1%
10.3%
13.7%
Individual Life & Health
1.6%
2.5%
2.1%
Investments
1.1%
1.2%
0.9%
Miscellaneous
0.7%
0.4%
1.2%
Total Revenues
100.0% 100.0% 100.0%
Brokerage Commission Expense
4.1%
8.7%
1.5%
Net Revenues
95.9%
91.3%
98.5%
Expenses (as % of Net Revenues)
Compensation
66.5%
59.6%
68.0%
Selling
3.1%
3.0%
3.0%
Operating
13.0%
11.4%
11.5%
Administrative
3.7%
2.9%
5.8%
Total Expenses
86.3%
76.9%
88.4%
Pre-Tax Profit
13.7%
23.1%
11.6%
Pro Forma Profit
1
21.7%
36.5%
18.9%
Operating Pre-Tax Profit
2
4.0%
12.5%
1.8%
Pro Forma EBITDA
3
25.4%
39.4%
24.7%
% Total Net Revenue
Average
+25% Profit
+25% Growth
40%
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