2001 Best Practices Study

SPECIAL REGIONAL ANALYSIS Agencies with Revenues Less Than $1,250,000

AGENCY CHARACTERISTICS

in conjunction with results by revenue group to gain the most complete understanding of the The regional analysis provides another perspective for understanding the Best Practices data in their proper context. However, characteristics regarded as unique to agencies in a certain part of the country or any regional factors influencing agency operations are best considered

operating characteristics of the Best Practice agencies.

NE

SE

MW SW

W

Growth Net Revenue Growth

9.8% 7.8% 10.6% 7.8% 8.1%

Profitability as % of Net Revenues Pre-tax

16.4% 15.1% 16.6% 19.2% 24.7% 17.3% 19.3% 19.4% 24.5% 20.5% 3.3% 6.6% 4.6% 5.1% 7.6%

Pro Forma Pre-tax Operating Pre-tax

Productivity Revenue per Employee

$93,639 $98,207 $90,671 $94,144 $106,676 $51,006 $55,053 $49,179 $51,745 $48,422 $42,634 $43,155 $41,492 $42,399 $58,254

Compensation per Employee Spread per Employee (1)

Pay Levels for Producers Commercial P&C Producers Personal P&C Producers

$70,880 $59,674 $77,000

* * * *

$38,000

* *

$27,167 $41,503

* *

*

$39,286

Life & Health Producers

$61,168 $107,700 $60,659

$45,400

Multiline Producers

Pay Levels for CSRs Commercial P&C CSRs

$32,653 $35,000 $25,866 $25,513 $33,529 $28,275 $29,829 $27,943 $19,842 $24,814

Personal P&C CSRs Life & Health CSRs

$13,313

*

*

$14,129

* *

$37,017 $28,856 $25,832

*

Multiline CSRs

Number of Carriers PL - National

2.4 4.3 2.8 4.9

3.1 3.2 3.8 4.5

1.9 4.2 2.2 4.1

3.0 2.5 3.2 4.0

3.3 1.8 4.0 2.7

PL - Regional CL - National CL - Regional

Service Center Use Total Pers'l Lines Commission placed in Carrier Service Center Total Comm'l Lines Commission placed in Carrier Service Center

*

13.7%

*

*

27.2%

*

5.8%

*

*

15.3%

% of Agencies Making Acquisition in Last 12 Months

0.0% 7.7% 0.0% 16.7% 0.0%

* - Insufficient Data

(1) Total revenue per employee minus compensation per employee. While revenue per employee has been a standard productivity measure, the "spread" measures the dollars per employee available to pay all other agency expenses and generate a profit for the agency.

5