2014 Best Practices Study

2014 Best Practices Study

Key Benchmarks

Regional Analysis Agencies with Revenues UNDER $5,000,000

Profile

Revenues

Expenses

Geographic Region:

Northeast Southeast Midwest Southwest

West

Profitability

% of Agencies Located in Each Region

8.3% 13.6% 14.6% 9.3% 5.4%

Employee Overview

Net Revenue Growth (Organic)

9.1% 10.0% 4.7% 6.4% 9.8%

Producer Info

Pre-tax Profit

19.7% 16.2% 25.2% 25.1% 24.0%

Service Staff Info

Pro Forma Pre-tax Profit

26.0% 21.2% 27.9% 30.0% 27.7%

Technology

Profitability as % of Net Revenues

Operating Pre-tax Profit

10.5% 9.4% 18.1% 15.3% 19.2%

Insurance Carriers Appendix

EBITDA

23.3% 18.9% 28.0% 27.6% 25.8%

Pro Forma EBITDA

29.6% 23.9% 30.7% 32.5% 29.4%

Value Creation “Rule of 20” Score

22.3

19.5

19.2

21.8

25.1

Revenue per Employee $136,203 $140,259 $150,707 $177,117 $136,658 Compensation per Employee $75,647 $86,354 $77,884 $92,731 $75,294 Spread per Employee $60,556 $53,905 $72,823 $84,386 $61,364

Productivity

Commercial P&C

$109,593 $160,399 $104,398 $125,083 $113,055

Personal P&C

$54,824 $48,183 $54,190 $57,500 $48,750

Pay Levels for Producers

Life & Health / Financial

*

$108,878 $65,316

*

$106,000

Multi-Line

$100,390 $137,802 $105,279 $146,264

*

Commercial P&C

3.8

5.5

4.4

6.5

4.5

Total Number of Service / Sales Support Staff per Line of Business

Personal P&C

5.3

2.9

4.3

3.6

1.9

Group Life & Health

0.8

1.4

1.3

0.9

0.9

Multi-Line

*

*

3.0

*

*

Commercial P&C

28.5% 22.8% 16.7% 18.3% 19.2%

Total Service / Sales Support

Personal Lines

23.4% 24.6% 21.9% 27.1% 27.9%

Staff Payroll as % of LOB Revenue

Group Life & Health

47.1% 26.0% 12.6% 27.4% 12.1%

Multi-Line

*

*

20.6%

*

*

Personal Lines

10.6

14.8

10.6

12.9

9.9

Number of Carriers

Commercial Lines

10.3

23.2

15.1

24.3

16.5

Life & Health

7.8

11.4

9.9

11.0

14.9

Total PL Comms Placed (as % of PL Revenues) Total CL Comms Placed (as % of CL Revenues)

*

29.1%

*

*

*

Service Center Use

2014 Best Practices Study

12.9% 3.6%

*

*

37.4%

% of Agencies Making an Acquisition in the last 12 Months

17.6% 7.1% 6.7% 15.8% 18.2%

161

*Insufficient Data