2013 Best Practices Study

Analysis of Agencies with Revenues Between $1,250,000 and $2,500,000

Revenue Growth by Source (continued)

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

Average

+25% Profit

+25% Growth

Group Medical L&H Renewals 1

92.8%

94.9%

107.6%

7.4% 2.7% 0.1% 2.9%

7.9% 0.0% 2.7% 2.7%

6.5% 0.0%

New Business 2

Acquired Revenues 3

14.1% 14.1%

Organic Growth 4

Total Growth 5

All Other Group L&H Renewals 1

52.4% 47.5% 0.0% -0.1% -0.1%

* * * * *

* * * * *

New Business 2

Acquired Revenues 3

Organic Growth 4

Total Growth 5

Individual L&H

Renewals 1

55.1% 45.1%

36.3% 61.2% 0.0% -2.5% -2.5%

60.4% 31.2% 0.0% -8.4% -8.4%

New Business 2

0.0% 0.2% 0.2%

Acquired Revenues 3

Organic Growth 4

Total Growth 5

Total Commissions & Fees Renewals 1

92.9% 15.6%

92.9% 17.6%

98.2% 19.1%

New Business 2

0.4% 8.5% 8.9%

0.0%

0.6%

Acquired Revenues 3

10.5% 10.5%

17.3% 17.9%

Organic Growth 4

Total Growth 5

Brokerage Commission Expense Growth Net Commissions & Fees Growth (Organic) 6 Net Commissions & Fees Growth (Total) 7

-17.2%

*

*

9.1% 9.6%

10.5% 10.5%

19.2% 20.1%

*Insufficient Data Other Income P&C Contingent Income Growth L&H Bonus Income Growth Investment Income Growth Gross Revenue Growth Net Revenue Growth (Organic) 8 Net Revenue Growth (Total) 9 1 Renewal Revenues as a % of prior year’s total revenues for this line of business. This figure is impacted by attrition (loss or retention of accounts) and by changes in premium and commission levels. The higher the %, the more favorable the results. 2 New Revenues as a % of prior year’s total revenues for this line of business. The higher the %, the more favorable the results. 3 Acquired Revenues as a % of prior year’s total revenues for this line of business. The % indicates the significance of acquired business.

3.7% -5.4% 6.6%

-0.2%

46.0%

* *

* *

2013 Best Practices Study

8.8%

10.4% 10.4% 10.4%

22.4% 23.8% 24.6%

9.1% 9.5%

Agencies with Revenues Between $1,250,000 and $2,500,000

4 Growth in Revenues from prior year excluding acquired revenues. 5 Growth in Revenues from prior year including acquired revenues. 6 Growth in Total Commissions & Fees less Brokerage Commission Expense from prior year excluding acquired revenues. 7 Growth in Total Commissions & Fees less Brokerage Commission Expense from prior year including acquired revenues.

8 Growth in Net Revenues ( Gross Revenue less Brokerage Commission Expense ) from prior year excluding acquired revenues. 9 Growth in Net Revenues ( Gross Revenue less Brokerage Commission Expense ) from prior year including acquired revenues.

45