2014 Best Practices Study

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

Key Benchmarks

Profitability

Profile

Historical EBITDA Margin & Operating Margin (for Average Group)

Revenues

Expenses Profitability

34.0%

35%

29.3%

30.6%

31.1%

30.1%

27.0% 27.4%

30%

Employee Overview

26.7%

27.7%

25%

Producer Info

25.1%

24.6%

23.4%

23.3%

23.0%

23.5%

Service Staff Info

20%

23.2%

Technology

15%

Insurance Carriers

10%

12.8% 13.3%

12.2%

9.2%

Appendix

8.0%

7.4%

7.8%

5%

6.4%

0%

2008

2007

2009

2010

2011

2012

2013

2014

Pro Forma EBITDA

EBITDA Margin

Operating Margin

About EBITDA Margin and Operating Margin EBITDA Margin is calculated by dividing a firm’s EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) by the firm’s net revenues.

Pro Forma EBITDA Margin is calculated by dividing a firm’s Pro Forma EBITDA by the firm’s Pro Forma net revenue.

Operating Margin is calculated as EBITDA less contingent income divided by Pro Forma net revenues less contingent income.

2014 Best Practices Study

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

41