2001 Best Practices Study

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

CSR Summary

Average Book Serviced/CSR (Commissions)

Average Pay as % of Book Serviced

20%

$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000

10%

0%

Commercial P&C

Group L&H Personal P&C Multi-Line

Commercial P&C Group L&H Personal P&C

Multi-Line

Average Top 25%

FINANCIAL STABILITY

A. Current Ratio

A current ratio greater than 1:1 indicates that cash and assets with short-term maturities are sufficient to meet a firm's short-term obligations.

Average

Top 25%

Liquidity/Current Ratio

1.32:1

1.93:1

B. Tangible Net Worth

The tangible net worth is an important measure as it represents the net value of the corporation if it were liquidated. A low or negative tangible net worth impacts a firm's ability to invest in new opportunities, develop new products, hire new employees, make other capital expenditures and handle stockholder redemption obligations.

Average

Top 25%

Tangible Net Worth (as % of Net Rev)

6.6%

34.0%

C. Receivables

1. Receivables/Payables Ratio

This factor measures the collection practices of an agency, with a lower ratio representing more timely collections. (Calculated by dividing total receivables by total payables at a given point in time.)

Average

Top 25%

Receivables/Payables Ratio

51.7%

-4.6%

2. Aged Receivables

Average

Top 25%

Over 60 Over 90

10.7%

5.9% 3.2%

2.9%

76