2001 Best Practices Study

Analysis of Agencies with Revenues Less Than $500,000

AGENCY CHARACTERISTICS

A. Average Total Revenues

$351,221

B. Corporate Structure

+25% Profit

Average

+25% Growth

C S

44.0% 44.0%

37.5% 50.0%

35.9% 48.7%

Partnership

4.0% 0.0% 8.0%

3.1% 0.0% 9.4%

5.1% 0.0%

LLC

Sole Proprietorship

10.3%

Average

+25% Profit

+25% Growth

C. Shareholders

Number of Shareholders

2.3 9.0 1.0

2.3

1.7

High Low

74.6% 100.0% 20.0% Average

+25% Profit

D. Ownership %

+25% Growth

% Owned by Largest Shareholder

69.5%

73.7%

High Low

E. Shareholder Age

Average

+25% Profit

+25% Growth

Current Age of Largest Shareholder

51.8

52.6

52.0

F. Population Density of Metropolitan Area Where Home Office Is Located

Average

+25% Profit

+25% Growth

Less than 50,000 50,000 - 250,000 250,000 - 1,000,000 More than 1,000,000

76.0% 12.0% 12.0%

75.0% 15.6%

74.4% 15.4% 10.3%

9.4% 0.0%

0.0%

0.0%

REVENUE ANALYSIS

A. % of Revenue by Source

Average

+25% Profit

+25% Growth

Commercial P&C

35.9% 46.5%

40.5% 46.0%

34.4% 41.4%

Personal P&C

P&C Service Fees

2.4% 4.9% 4.5% 2.9% 1.2% 1.7%

0.0% 5.1% 3.7% 2.1% 2.5% 0.1%

4.3% 4.5% 5.6% 2.1% 2.7% 4.8%

Contingent Group L&H

Individual L&H Investments Miscellaneous

Total Revenues

100.0%

100.0%

100.0%

Brokerage Commission Expense

2.8%

3.4%

5.5%

Net Revenues

97.2%

96.6%

94.5%

20