2006 Best Practices Study

AGENCIES WITH REVENUES BETWEEN $10,000,000 AND $25,000,000

EXPENSE ANALYSIS

A.

Expenses Analysis (as a % of Net Revenues)

2006

+25% Profit

+25% Growth

Average

Compensation Expense Total Payroll

57.6%

49.2%

53.9%

Benefits

8.8%

8.3%

9.2%

PROFILE

Total Compensation

66.4%

57.5%

63.1%

Selling Expenses

T&E/Conventions

1.4% 0.8% 1.0% 3.1% 3.6% 0.6% 0.4% 0.7% 0.6% 0.3% 1.9% 1.0% 0.4% 0.1% 0.6% 1.2% 0.4% 0.6% 0.9% 1.2% 0.2% 0.4% 0.5% 3.2%

1.4% 0.7% 1.1% 3.1% 3.4% 0.6% 0.4% 0.6% 0.5% 0.3% 1.2% 1.3% 0.4% 0.1% 0.3% 1.1% 0.4% 0.8% 1.0% 1.1% 0.1% 0.2% 0.4% 2.7% 11.3% 74.7% 25.3%

1.0% 0.6% 1.3% 3.0% 3.2% 0.7% 0.4% 0.8% 0.6% 0.4% 1.1% 1.2% 0.4% 0.1% 0.7% 0.8% 0.3% 0.7% 1.5% 1.3% 0.1% 0.2% 0.1% 3.2% 11.4% 80.6% 19.4%

Automobile

Advertising/Promotions

Total Selling

REVENUES/ EXPENSES

Operating Expenses Occupancy

Telephone

Postage

Supplies/Printing

FINANCIAL STABILITY

Dues/Subscriptions/Contributions

Taxes/Licenses

Insurance

Professional Fees

Equipment Rental/Maintenance

Bad Debts

EMPLOYEE OVERVIEW

Outside Services

Information Technology

Education/Training

Miscellaneous

Total Operating

12.5%

PRODUCER INFO

Administrative Expenses Amortization

Depreciation Officer-Life

Interest

SERVICE STAFF INFO

Other

Total Administrative

Total Expenses Pre-Tax Profit

85.2% 14.8%

70%

TECHNOLOGY

Average

60%

+25% Profit

50%

+25% Growth

40%

INSURANCE CARRIERS

30%

20%

% Net Revenue

10%

0%

Compensation Expense

Operating Expense

Administrative Expense

Selling Expense

2006 Best Practices Study

86