2014 Best Practices Study

Analysis of Agencies with Revenues Under $1,250,000

Key Benchmarks

Profit/Loss Summary

Profile

Revenues

Average

+25% Profit

+25% Growth

Revenues (as % of Gross Revenue) Commercial Lines

Expenses Profitability

41.2%

27.0%

29.6%

Bonds

0.4%

0.1%

0.2%

Employee Overview

Personal Lines

45.2%

60.9%

57.6%

VAS - P&C

0.4% 6.2% 3.0% 0.4% 2.6% 0.0% 0.1% 0.3%

0.0% 6.8% 1.0% 0.1% 4.1% 0.0% 0.0% 0.0%

1.0% 8.1% 1.4% 0.0% 1.6% 0.2% 0.0% 0.2%

Producer Info

Contingent/Bonus Group Medical All Other Group Bonus/Overrides Investments Miscellaneous Total Revenues Individual Life & Health

Service Staff Info

Technology

Insurance Carriers

Appendix

100.0%

100.0%

100.0%

Brokerage Commission Expense

0.3%

0.2%

0.0%

Net Revenues

99.7%

99.8%

100.0%

Expenses (as % of Net Revenues) Compensation

52.5%

38.3%

52.2%

Selling

5.1%

3.5%

5.5%

Operating

17.3%

12.4%

16.5%

Administrative Total Expenses

2.3%

0.3%

2.3%

77.3%

54.5%

76.5%

Profit/Loss (as % of Net Revenues)

Average

+25% Profit

+25% Growth

Pre-Tax Profit

22.7% 26.1% 17.3% 25.6% 29.0%

45.5% 48.3% 41.6% 45.8% 48.6%

23.5% 27.1% 16.3% 26.4% 30.1%

Pro Forma Pre-Tax Profit 1 Operating Pre-Tax Profit 2

EBITDA 3

2014 Best Practices Study

Pro Forma EBITDA 4

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

4 EBITDA if discretionary expenses are eliminated and all owners compensated as employees

Agencies with Revenues Under $1,250,000

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