2005 Best Practices Study

AGENCIES WITH REVENUES BETWEEN $10,000,000 AND $25,000,000

EXPENSE ANALYSIS

A.

Expenses Analysis (as a % of Net Revenues)

2005

+25% Profit

+25% Growth

Average

Compensation Expense Total Payroll

57.5%

53.3%

56.3%

Benefits

8.9%

8.1%

8.4%

PROFILE

Total Compensation

66.4%

61.3%

64.7%

Selling Expenses

T&E/Conventions

1.5% 0.7% 1.2% 3.4% 3.8% 0.7% 0.4% 0.7% 0.7% 0.3% 1.7% 1.1% 0.4% 0.3% 0.6% 1.2% 0.5% 0.6% 0.8% 1.4% 0.2% 0.3% 0.6% 3.3%

1.3% 0.8% 0.8% 2.9% 3.2% 0.6% 0.4% 0.7% 0.6% 0.2% 1.4% 0.6% 0.4% 0.4% 0.3% 0.9% 0.4% 0.2% 0.8% 1.3% 0.1% 0.2% 0.1% 2.6%

1.5% 0.6% 1.3% 3.5% 3.2% 0.8% 0.5% 0.7% 0.6% 0.4% 1.5% 0.6% 0.3% 0.3% 0.7% 1.4% 0.4% 0.8% 0.3% 1.6% 0.2% 0.4% 1.8% 4.3%

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

12.9%

10.1%

12.3%

PRODUCER INFO

Administrative Expenses Amortization

Depreciation Officer-Life

Interest

SERVICE STAFF INFO

Other

Total Administrative

Total Expenses Pre-Tax Profit

86.0% 14.0%

76.8% 23.2%

84.7% 15.3%

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

86