2014 Best Practices Study

2014 Best Practices Study

Key Benchmarks

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

Profile

Revenues

Expenses

Geographic Region:

Northeast Southeast Midwest Southwest

West

Profitability

% of Agencies Located in Each Region

10.7% 12.7% 9.3% 8.8% 7.8%

Employee Overview

Net Revenue Growth (Organic)

8.3% 8.5% 11.1% 8.5% 10.2%

Producer Info

Pre-tax Profit

16.0% 16.6% 15.9% 18.5% 13.3%

Service Staff Info

Pro Forma Pre-tax Profit

18.8% 20.0% 18.5% 20.8% 19.3%

Technology

Profitability as % of Net Revenues

Operating Pre-tax Profit

8.7% 9.5% 6.0% 11.2% 7.2%

Insurance Carriers Appendix

EBITDA

20.4% 18.7% 18.7% 20.6% 16.5%

Pro Forma EBITDA

23.3% 22.1% 21.3% 23.0% 22.4%

Value Creation “Rule of 20” Score

20.5

18.6

20.0

19.7

21.4

Revenue per Employee $175,779 $174,870 $185,636 $183,611 $200,817 Compensation per Employee $107,305 $112,812 $119,522 $116,259 $131,272 Spread per Employee $68,474 $62,058 $66,114 $67,352 $69,545

Productivity

Commercial P&C

$146,672 $205,766 $213,707 $170,852 $226,633

Personal P&C

$55,833 $88,579 $76,014 $89,734 $84,181

Pay Levels for Producers

Life & Health / Financial

$146,320 $232,882 $219,707 $193,891 $217,331

Multi-Line

$101,307 $196,712 $282,598 $185,452 $273,921

Commercial P&C

25.3

31.8

43.1

25.5

40.6

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

Personal P&C

16.0

11.0

9.7

11.4

6.9

Group Life & Health

8.2

15.0

28.6

8.7

20.0

Multi-Line

11.0

*

*

*

*

Commercial P&C

22.4% 20.5% 19.9% 16.8% 19.5%

Total Service / Sales Support

Personal Lines

24.8% 22.4% 28.1% 26.1% 23.6%

Staff Payroll as % of LOB Revenue

Group Life & Health

21.1% 15.4% 15.9% 14.4% 14.1%

Multi-Line

9.3%

*

*

*

*

Personal Lines

22.6

26.1

19.6

20.6

16.3

Number of Carriers

Commercial Lines

36.6

59.3

52.7

56.8

48.5

Life & Health

34.6

47.2

57.2

39.4

65.7

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

18.5% 28.0% 33.9% 21.4% 25.4%

Service Center Use

2014 Best Practices Study

11.1% 2.1% 0.8% 1.9% 3.0%

% of Agencies Making an Acquisition in the last 12 Months

18.2% 19.2% 31.6% 16.7% 12.5%

162

*Insufficient Data