2001 Best Practices Study

Analysis of Agencies with Revenues Between $2,500,000 and $5,000,000

AGENCY CHARACTERISTICS

A. Average Total Revenues

$3,650,977

B. Corporate Structure

+25% Profit

Average

+25% Growth

C S

60.0% 33.3%

55.3% 36.8%

54.3% 39.1%

Partnership

3.3% 3.3% 0.0%

5.3% 2.6% 0.0%

4.3% 2.2% 0.0%

LLC

Sole Proprietorship

Average

+25% Profit

+25% Growth

C. Shareholders

Number of Shareholders

3.7 8.0 1.0

3.3

4.1

High Low

D. Ownership %

52.9% 100.0% Average

+25% Profit

+25% Growth

% Owned by Largest Shareholder

55.0%

52.1%

High Low

7.5%

E. Shareholder Age

Average

+25% Profit

+25% Growth

Current Age of Largest Shareholder

53.9

54.3

52.1

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

16.7% 20.0% 40.0% 23.3%

15.8% 21.1% 39.5% 23.7%

15.2% 17.4% 41.3% 26.1%

REVENUE ANALYSIS

A. % of Revenue by Source

Average

+25% Profit

+25% Growth

Commercial P&C

57.8% 15.9%

66.6% 11.1%

54.4% 11.5%

Personal P&C

P&C Service Fees

0.8% 7.3%

0.4% 7.8% 9.9% 0.9% 1.9% 1.4%

0.6% 7.8%

Contingent Group L&H

12.5%

18.4%

Individual L&H Investments Miscellaneous

2.7% 1.9% 1.3%

3.9% 1.4% 2.0%

Total Revenues

100.0%

100.0%

100.0%

Brokerage Commission Expense

2.7%

4.8%

1.7%

Net Revenues

97.3%

95.2%

98.3%

86