2007 Best Practices Study

Agencies with Revenues Between $2,500,000 and $5,000,000

Executive Perspectives

Profile

Revenues/ Expenses

Financial Stability

Employee Overview

Producer Info

Service Staff Info

Technology

Insurance Carriers

Appendix

Services/Other Products Provided (as % of Agencies Providing) Average

+25% Profit

+25% Growth

Loss Control/Engineering

27.3%

20.0%

28.6%

Worker’s Comp Claims Adjusting/Admin (TPA) Group Health Insurance Claims Adjusting/Admin (TPA)

4.5% 4.5%

0.0% 0.0% 0.0%

0.0% 0.0% 0.0%

Self Insurance Programs

22.7% 50.0% 45.5% 40.9% 13.6% 18.2% 22.7% 9.1%

Risk Management Consulting

40.0% 40.0% 40.0%

42.9% 14.3% 28.6% 28.6% 14.3% 28.6% 0.0%

Premium Financing (in-house vs. 3rd party)

Pension/Profit Sharing/401K Human Resource Consulting

0.0% 0.0%

Employee Leasing Products & Services (PEOs) Investment Products (Securities, Stocks)

20.0%

Other*

0.0%

*Includes P&C loss adjusting, HR website, pool administration, paralegal and legal, MyWave, background checks, wellness, and management consulting

Acquired Revenues

Average Commissions Acquired

% of Agencies Acquiring

Percentage of Net Revenues

Acquisitions Made in Last 12 Months

3.3%

$462,070

10.8%

What the Typical Transactions Looked Like Revenues Acquired per Transaction

Multiples of Revenue Paid

Average

$250,000 $400,000 $100,000

Average

1.70x 2.00x 1.40x

High

High

Low

Low

67 2007 Best Practices Study | Agencies with Revenues Between $2,500,000 and $5,000,000 | Revenues/Expenses