2001 Best Practices Study

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

AGENCY CHARACTERISTICS

A. Average Total Revenues

$893,572

Average

+25% Growth

B. Corporate Structure

+25% Profit

C S

47.1% 50.0%

48.8% 46.5%

47.1% 47.1%

Partnership

2.9% 0.0% 0.0%

4.7% 0.0% 0.0%

5.9% 0.0% 0.0%

LLC

Sole Proprietorship

C. Shareholders

Average

+25% Profit

+25% Growth

Number of Shareholders

2.4 6.0 1.0

2.8

2.3

High Low

D. Ownership %

67.5% 100.0% 30.0% Average

+25% Profit

+25% Growth

% Owned by Largest Shareholder

55.7%

62.9%

High Low

E. Shareholder Age

Average

+25% Profit

+25% Growth

Current Age of Largest Shareholder

51.4

49.6

52.5

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

60.0% 17.1%

59.1% 15.9%

58.5% 15.1%

5.7%

4.5%

7.5%

17.1%

20.5%

18.9%

REVENUE ANALYSIS

A. % of Revenue by Source

Average

+25% Profit

+25% Growth

Commercial P&C

44.2% 34.4%

44.9% 30.2%

54.7% 23.7%

Personal P&C

P&C Service Fees

0.5% 8.4% 5.6% 3.4% 1.6% 1.9%

0.6% 7.2% 5.1% 5.8% 3.0% 3.0%

0.2% 9.5% 4.7% 2.5% 1.1% 3.5%

Contingent Group L&H

Individual L&H Investments Miscellaneous

Total Revenues

100.0%

100.0%

100.0%

Brokerage Commission Expense

2.3%

1.2%

1.6%

Net Revenues

97.7%

98.8%

98.4%

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