2005 Best Practices Study

AGENCIES WITH REVENUES BETWEEN $1,250,000 AND $2,500,000

EXPENSE ANALYSIS

A.

Expenses Analysis (as a % of Net Revenues)

2005

+25% Profit

+25% Growth

Average

Compensation Expense Total Payroll

49.7%

36.7%

48.1%

Benefits

8.2%

6.9%

6.1%

PROFILE

Total Compensation

58.0%

43.5%

54.2%

Selling Expenses

T&E/Conventions

1.3% 1.1% 1.6% 4.0% 3.9% 1.2% 0.7% 1.4% 0.9% 0.8% 1.8% 1.1% 0.6% 0.2% 0.8% 1.3% 0.4% 0.5% 1.0% 1.7% 0.2% 0.7% 2.0% 5.5%

1.9% 1.3% 0.9% 4.1% 3.9% 1.2% 0.7% 1.3% 0.7% 0.8% 1.8% 1.6% 0.8% 0.2% 0.3% 1.1% 0.2% 0.3% 0.2% 1.5% 0.4% 0.0% 6.3% 8.5%

1.3% 1.2% 1.3% 3.7% 3.3% 0.9% 0.7% 1.1% 0.9% 0.4% 1.8% 1.6% 0.9% 0.3% 0.5% 1.6% 0.3% 0.2% 1.1% 0.9% 0.1% 0.3% 2.0% 4.4%

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

15.6%

14.9%

14.3%

PRODUCER INFO

Administrative Expenses Amortization

Depreciation Officer-Life

Interest

SERVICE STAFF INFO

Other

Total Administrative

Total Expenses Pre-Tax Profit

83.2% 16.8%

71.0% 29.0%

76.8% 23.2%

TECHNOLOGY

60%

Average

50%

+25% Profit

40%

+25% Growth

INSURANCE CARRIERS

30%

20%

% Net Revenue

10%

0%

Compensation Expense

Operating Expense

Administrative Expense

Selling Expense

38