2014 Best Practices Study

2014 Best Practices Study

Key Benchmarks

Population Density Agencies with Revenues OVER $5,000,000

Profile

Revenues

Expenses

Less than 50,000

50,000 to 250,000

250,000 to 1,000,000

Over 1,000,000

Population Where Home Office is Located:

Profitability

% of Agencies Located in Each Population

7.3%

9.6%

15.1% 17.0%

Employee Overview

Net Revenue Growth (Organic)

6.5%

10.3%

8.8%

10.1%

Producer Info

Pre-tax Profit

14.5% 17.9% 16.6% 15.5%

Service Staff Info

Pro Forma Pre-tax Profit

16.7% 20.4% 20.5% 19.3%

Technology

Profitability as % of Net Revenues

Operating Pre-tax Profit

5.8%

11.3%

8.8%

8.0%

Insurance Carriers Appendix

EBITDA

18.9% 21.2% 18.7% 18.3%

Pro Forma EBITDA

21.1% 23.7% 22.6% 22.1%

Value Creation “Rule of 20” Score

17.1

22.2

19.0

20.7

Revenue per Employee

$154,264

$181,040

$184,384

$194,521

Productivity

Compensation per Employee

$95,138

$111,475

$118,418

$126,501

Spread per Employee

$58,946

$69,566

$65,966

$68,020

Commercial P&C

$131,722

$168,755

$209,249

$220,329

Personal P&C

$51,650

$66,885

$101,846

$81,690

Pay Levels for Producers

Life & Health / Financial

$140,940

$200,951

$214,375

$226,808

Multi-Line

$180,497

$233,506

$210,006

$178,581

Commercial P&C

20.4

28.4

45.3

29.1

Total Number of Service / Sales Support Staff per Line of Business

Personal P&C

14.5

9.0

12.8

9.8

Group Life & Health

6.3

13.6

19.3

17.7

Multi-Line

*

*

*

*

Commercial P&C

20.5% 19.9% 19.3% 20.6%

Total Service / Sales Support

Personal Lines

26.4% 23.4% 25.1% 24.9%

Staff Payroll as % of LOB Revenue

Group Life & Health

16.3% 16.5% 14.4% 17.8%

Multi-Line

*

*

*

*

Personal Lines

23.9

16.9

23.5

22.1

Number of Carriers

Commercial Lines

46.8

37.2

67.3

44.3

Life & Health

38.3

38.8

60.0

46.4

Total PL Comms Placed (as % of PL Revenues) Total CL Comms Placed (as % of CL Revenues)

29.3% 27.6% 18.3% 23.6%

Service Center Use

2014 Best Practices Study

*

3.1%

5.1%

2.7%

% of Agencies Making an Acquisition in the last 12 Months

6.7%

20.0% 22.6% 22.9%

160

*Insufficient Data