2001 Best Practices Study

Analysis of Agencies with Revenues Between $5,000,000 and $10,000,000

What the Typical Transaction Looked Like:

Revenues Acquired Per Transaction

Multiple of Revenues Paid

$1,500,000

0.0x 0.5x 1.0x 1.5x 2.0x 2.5x

$1,000,000

$500,000

$0

average

high

low

average

high

low

Pricing Structure Used

0% 20% 40% 60% 80%

variable

fixed

What was Acquired

Primary Currency Used

Book of Business

Agency

Stock Cash

F. Renewal Revenue as % of Prior Year's Total Revenues for Each Line of Business

This figure is impacted by attrition (loss or retention of accounts) and by changes in premium and commission levels. The higher the percentage, the more favorable the results. Average +25% Profit +25% Growth

Commercial P&C

95.5% 92.8% 69.9% 97.6% 47.9% 93.8%

91.0% 91.6% 65.3% 100.4% 27.1% 91.9%

99.2% 90.4%

Personal P&C

P&C Service Fees

*

Group L&H

108.4% 29.7% 96.7%

Individual L&H

Total Commissions & Fees

*-Insufficient Data

110