2012 Best Practices Study

Analysis of Agencies with Revenues Between $1,250,000 and $2,500,000

Profit/Loss Summary

Key Benchmarks Profile

Average

+25% Profit

+25% Growth

Revenues (as % of Gross Revenue) Commercial Lines

Revenues Expenses Profitability Employee Overview Producer Info Staff Service Info Technology Insurance Carriers Appendix

42.7%

54.9%

42.7%

Bonds

1.8%

4.6%

0.4%

Personal Lines

36.7%

19.9%

41.5%

Value Added Services Contingent/Bonus

0.1% 8.2% 5.8% 0.8% 2.3% 0.3% 0.6% 0.7%

0.0%

0.0% 9.2% 4.1% 0.0% 0.5% 0.0% 1.2% 0.5%

12.3%

Group Medical All Other Group Individual L&H Bonus/Overrides Investments Miscellaneous

6.7% 0.0% 1.2% 0.0% 0.4% 0.0%

Total Revenues

100.0%

100.0%

100.0%

Brokerage Commission Expense

1.7%

0.0%

3.9%

Net Revenues

98.3%

100.0%

96.1%

Expenses (as % of Net Revenues) Compensation

58.2%

41.1%

52.2%

Selling

3.5%

4.1%

2.8%

Operating

15.4%

15.1%

13.2%

Administrative

2.1%

0.6%

2.1%

Total Expenses

79.1%

61.0%

70.3%

Profit/Loss (as % of Net Revenues)

Pre-Tax Profit

20.9% 25.0% 12.2% 23.3% 27.4%

39.0% 41.8% 26.8% 39.9% 42.6%

29.7% 30.4% 20.1% 30.7% 31.4%

Pro Forma Pre-Tax Profit 1 Operating Pre-Tax Profit 2

EBITDA 3

Pro Forma EBITDA

1 Pre-tax Profits if discretionary expenses are eliminated and all owners compensated as employees

2 Pre-tax Profits excluding contingents, bonus and investment income

3 EBITDA—Earnings Before Interest Taxes Depreciation and Amortization

Profitability

2012 Best Practices Study

Agencies with Revenues Between $1,250,000 and $2,500,000

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