2005 Best Practices Study

AGENCIES WITH REVENUES BETWEEN $5,000,000 AND $10,000,000

EXPENSE ANALYSIS

A.

Expenses Analysis (as a % of Net Revenues)

2005

+25% Profit

+25% Growth

Average

Compensation Expense Total Payroll

56.1%

46.7%

57.4%

Benefits

8.1%

7.4%

7.4%

PROFILE

Total Compensation

64.1%

54.1%

64.8%

Selling Expenses

T&E/Conventions

1.2% 0.7% 1.2% 3.2% 3.6% 0.8% 0.5% 1.1% 0.7% 0.4% 1.7% 1.0% 0.5% 0.3% 0.6% 1.2% 0.3% 0.9% 0.9% 1.6% 0.4% 0.4% 1.0% 4.2%

1.5% 0.6% 1.0% 3.2% 3.1% 0.9% 0.5% 1.1% 0.7% 0.3% 1.5% 1.0% 0.5% 0.2% 0.4% 1.0% 0.3% 1.3% 0.6% 1.4% 0.2% 0.2% 0.8% 3.2%

1.0% 0.6% 1.7% 3.4% 4.1% 0.9% 0.6% 1.1% 0.6% 0.3% 1.8% 1.0% 0.4% 0.2% 0.5% 1.1% 0.4% 1.3% 0.4% 1.9% 0.4% 0.1% 1.7% 4.5%

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

13.5%

12.7%

14.3%

PRODUCER INFO

Administrative Expenses Amortization

Depreciation Officer-Life

Interest

SERVICE STAFF INFO

Other

Total Administrative

Total Expenses Pre-Tax Profit

85.0% 15.0%

73.2% 26.8%

86.9% 13.2%

TECHNOLOGY

70%

Average

60%

+25% Profit

50%

+25% Growth

INSURANCE CARRIERS

40%

30%

20%

% Net Revenue

10%

0%

Compensation Expense

Operating Expense

Administrative Expense

Selling Expense

70