2010 Best Practices Study
Analysis of Agencies with Revenues Between $5,000,000 and $10,000,000
Profit/Loss Summary
Mgmt. Perspectives
Average
+25% Profit
+25% Growth
Profile
Revenues (as % of Gross Revenue) Commercial Lines
48.4%
49.7%
38.6%
Revenues
Bonds
1.1%
0.8%
0.4%
Expenses
Personal Lines
21.6%
26.0%
26.7%
VAS - P&C
0.5% 8.5%
0.8%
0.4% 8.9%
Profitability
Contingent/Bonus Group Life & Health Individual Life & Health
10.0%
Employee Overview
12.4%
8.0% 1.7% 1.0% 0.4% 0.7% 0.6%
14.8%
2.2% 3.1% 0.6% 0.7% 0.8%
2.8% 5.5% 0.8% 0.2% 0.4%
Producer Info
VAS - L&H
Bonus/Overrides Investments Miscellaneous
Staff Service Info
Technology
Total Revenues
100.0%
100.0%
100.0%
Insurance Carriers
Brokerage Commission Expense
1.6%
0.4%
2.3%
Net Revenues
98.4%
99.6%
97.7%
Appendix
Expenses (as % of Net Revenues) Compensation
66.6%
58.1%
64.0%
Selling
3.1%
2.5%
3.6%
Operating
13.6%
12.4%
14.2%
Administrative
3.2%
1.9%
2.3%
Total Expenses
86.5%
75.0%
84.1%
Profit/Loss (as % of Net Revenues)
Pre-Tax Profit
13.5% 19.6%
25.0% 31.6% 13.4% 27.1% 33.7%
15.9% 21.4%
Pro Forma Pre-Tax Profit 1 Operating Pre-Tax Profit 2
3.4%
5.3%
EBITDA 3
16.8% 22.9%
18.3% 23.9%
Pro Forma EBITDA
1 Pre-tax Profits if discretionary expenses are eliminated and all owners compensated as employees
2 Pre-tax Profits excluding contingents, bonus and investment income
3 EBITDA—Earnings Before Interest Taxes Depreciation and Amortization
Profitability
2010 Best Practices Study
Agencies with Revenues Between $5,000,000 and $10,000,000
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