2004 Best Practices Study

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

C. Revenues Derived from Acquisitions Made in the Last 12 Months

EXECUTIVE PERSPECTIVES

% of Agencies Acquiring Avg. Total Commissions Acquired

% of Net Revenues

9.7%

$441,029

5.5%

PROFILE

What the Typical Transaction Looked Like:

Multiples of Revenue Paid Average 1.36x High 1.95x Low 1.00x

Revenues Acquired per Transaction Average $250,446 High $813,033 Low $30,739

REVENUES/ EXPENSES

FINANCIAL STABILITY

Group Life & Health Revenue Revenues from this line of business continue to increase in importance for most Best Practices agencies. 100% of the firms in this group have GLH revenues. Also see the Insurance Carriers section for the average number of GLH carriers represented. The percentage of agencies in this study group that acquired revenues is down from last year's 25%. However, M&A activity remains high in the indus- try as financial institutions continue their advance into the insurance business and national brokers continue to acquire agencies to expand their market areas.

EMPLOYEE OVERVIEW

D.

PRODUCER INFO

SERVICE STAFF INFO

+25% Profit 73.0% 11.2%

+25% Growth 78.2% 12.1%

Average

Health

69.3% 13.0%

Life

Disability

5.8% 4.6% 1.4% 1.7% 4.2%

5.7% 6.3% 1.6% 1.7% 0.5%

3.8% 2.3% 0.9% 2.4% 0.4%

TECHNOLOGY

Dental

Retirement Products

Employee Benefits (TPA)

INSURANCE CARRIERS

All Other

APPENDIX

109