2005 Best Practices Study

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

EXPENSE ANALYSIS

A.

Expenses Analysis (as a % of Net Revenues)

2005

+25% Profit

+25% Growth

Average

Compensation Expense Total Payroll

47.9%

35.9%

49.9%

Benefits

9.5%

7.2%

7.5%

PROFILE

Total Compensation

57.4%

43.0%

57.4%

Selling Expenses

T&E/Conventions

0.8% 1.5% 1.5% 3.9% 3.0% 1.2% 0.7% 1.2% 0.6% 0.3% 1.9% 0.6% 0.4% 0.2% 0.8% 1.3% 0.4% 1.6% 0.7% 1.0% 0.3% 0.9% 0.3% 3.1%

0.7% 1.1% 1.1% 3.0% 2.5% 1.3% 0.7% 1.1% 0.5% 0.5% 1.4% 0.5% 0.2% 0.1% 0.2% 1.1% 0.5% 0.3% 0.1% 0.9% 0.1% 0.1% 0.0% 1.2%

0.8% 1.7% 1.4% 3.9% 2.8% 1.1% 0.8% 1.7% 0.7% 0.3% 2.2% 0.9% 0.4% 0.0% 2.1% 1.5% 0.5% 0.6% 0.4% 1.6% 0.2% 0.2% 1.0% 3.4%

Automobile

Advertising/Promotions

Total Selling

REVENUES/ EXPENSES

Operating Expenses Occupancy

Telephone

Postage

Supplies/Printing

FINANCIAL STABILITY

Dues/Subscriptions/Contributions

Taxes/Licenses

Insurance

Professional Fees

Equipment Rental/Maintenance

Bad Debts

EMPLOYEE OVERVIEW

Outside Services

Information Technology

Education/Training

Miscellaneous

Total Operating

14.2%

10.9%

15.7%

PRODUCER INFO

Administrative Expenses Amortization

Depreciation Officer-Life

Interest

SERVICE STAFF INFO

Other

Total Administrative

Total Expenses Pre-Tax Profit

78.6% 21.4%

58.1% 41.9%

80.4% 19.6%

TECHNOLOGY

60%

Average

50%

+25% Profit

40%

+25% Growth

INSURANCE CARRIERS

30%

20%

% Net Revenue

10%

0%

Compensation Expense

Operating Expense

Administrative Expense

Selling Expense

22