2010 Best Practices Study
Analysis of Agencies with Revenues Between $10,000,000 and $25,000,000
Profit/Loss Summary
Mgmt. Perspectives
Average
+25% Profit
+25% Growth
Profile
Revenues (as % of Gross Revenue) Commercial Lines
50.3%
50.6%
43.9%
Revenues
Bonds
2.2%
2.1%
1.4%
Expenses
Personal Lines
13.9%
14.6%
19.1%
VAS - P&C
1.0% 8.7%
1.3% 9.9%
2.1% 9.1%
Profitability
Contingent/Bonus Group Life & Health Individual Life & Health
Employee Overview
14.7%
11.1%
14.2%
4.6% 1.5% 1.7% 0.6% 0.9%
4.7% 2.9% 1.0% 0.7% 1.0%
5.4% 2.3% 1.1% 0.3% 1.0%
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%
3.1%
2.4%
Net Revenues
98.4%
96.9%
97.6%
Appendix
Expenses (as % of Net Revenues) Compensation
67.3%
59.6%
64.2%
Selling
3.0%
2.8%
3.5%
Operating
13.7%
11.4%
12.1%
Administrative
3.6%
2.0%
5.7%
Total Expenses
87.7%
75.7%
85.6%
Profit/Loss (as % of Net Revenues)
Pre-Tax Profit
12.3% 15.6%
24.3% 27.7%
14.4% 17.6%
Pro Forma Pre-Tax Profit 1 Operating Pre-Tax Profit 2
0.2%
9.8%
3.6%
EBITDA 3
16.3% 19.6%
27.0% 30.4%
19.7% 22.9%
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 $10,000,000 and $25,000,000
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