2005 Best Practices Study

AGENCIES WITH REVENUES OVER $25,000,000

EXPENSE ANALYSIS

A.

Expenses Analysis (as a % of Net Revenues)

2005

+25% Profit

+25% Growth

Average

Compensation Expense Total Payroll

54.3%

52.1%

54.3%

Benefits

9.5%

9.5%

9.2%

PROFILE

Total Compensation

63.9%

61.6%

63.5%

Selling Expenses

T&E/Conventions

2.3% 0.9% 0.9% 4.0% 3.5% 0.8% 0.5% 1.3% 0.9% 0.3% 2.3% 1.2% 0.5% 0.1% 0.6% 1.1% 0.3% 0.6% 0.9% 1.6% 0.1% 0.4% 0.1% 2.7%

1.3% 1.0% 1.0% 3.2%

2.5% 0.8% 0.7% 3.9% 4.0% 0.7% 0.7% 1.3% 0.8% 0.2% 2.0% 1.2% 0.5% 0.2% 0.6% 1.7% 0.4% 0.4%

Automobile

Advertising/Promotions

Total Selling

REVENUES/ EXPENSES

Operating Expenses Occupancy

3.6% 0.6% 0.4% 1.8% 0.8% 0.2% 2.3% 1.2% 0.6% -0.2% 0.5% 0.6% 0.1% 0.1% 12.7%

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

14.0%

14.7%

PRODUCER INFO

Administrative Expenses Amortization

0.7% 1.2% 0.1% 0.5% 0.0% 2.5%

1.2% 1.3% -0.1% 0.3% 0.0% 1.5% 83.6% 16.4%

Depreciation Officer-Life

Interest

SERVICE STAFF INFO

Other

Total Administrative

Total Expenses Pre-Tax Profit

84.5% 15.5%

80.0% 20.0%

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

102