2013 Best Practices Study

Analysis of Agencies with Revenues Over $25,000,000

Revenue by Acquisition

Key Benchmarks Mgmt. Perspectives Profile Revenues Expenses Profitability Employee Overview Producer Info Service Staff Info Technology Insurance Carriers Appendix

Acquired Revenues

Average Commissions Acquired

% of Agencies Acquiring

% of Net Revenues

Acquisitions Made in Last 12 Months

53.8%

$2,063,560

4.1%

What the Typical Transactions Looked Like Revenues Acquired per Transaction

Multiples of Revenue Paid

Average

$1,629,168 $8,300,000

Average

1.2x 1.8x 0.4x

High Low

High Low

$6,644

Revenue by Account Concentration

Average

+25% Profit

+25% Growth

% of Revenue Derived from: Largest Account

2.5% 7.8% 0.6% 9.8%

2.5%

3.2%

High Low

10 Largest Accounts

11.7%

11.4%

High Low

20.0%

3.6%

Average

+25% Profit

+25% Growth

“Other” Group Life & Health* Revenue (% from source) Life 20.5%

24.5% 20.6% 36.4%

23.4% 19.8% 39.7%

Disability

18.7% 27.9%

Dental & Vision

Retirement/Pension

4.5%

0.5% 4.9% 1.1% 1.6%

0.5% 4.1% 0.4% 2.4% 9.7%

Worksite/Voluntary/Supplement

10.9%

2013 Best Practices Study

Long-Term Care

1.1% 2.6%

Employee Benefits TPA

All Other

13.9%

10.6%

Agencies with Revenues Over $25,000,000

*Excludes Group Medical

168