2004 Best Practices Study

AGENCIES WITH REVENUES BETWEEN $10,000,000 AND $25,000,000

C. Revenues Derived from Acquisitions Made in the Last 12 Months

EXECUTIVE PERSPECTIVES

% of Agencies Acquiring Avg. Total Commissions Acquired

% of Net Revenues

21.9%

$2,008,692

13.0%

PROFILE

What the Typical Transaction Looked Like:

Multiples of Revenue Paid Average 1.25x High 1.50x Low 1.00x

Revenues Acquired per Transaction Average $1,667,583 High $6,863,955 Low $193,000

REVENUES/ EXPENSES

FINANCIAL STABILITY

The % of agencies acquiring revenues is down from last year’s 37.0%. As one participant stated, “M&A is simply not a viable growth strategy for us any- more -- we cannot compete with the larger players.”

EMPLOYEE OVERVIEW

D.

Group Life & Health Revenue Revenues from this line of business continue to increase in importance for most Best Practices agencies. 100% of the firms in this group have GLH revenues. Also see the Insurance Carriers section for the average number of GLH carriers represented.

PRODUCER INFO

SERVICE STAFF INFO

+25% Profit 69.0% 11.5%

+25% Growth 69.8% 14.3%

Average

Health

68.2% 11.3%

Life

Disability

5.0% 5.9% 2.8% 1.5% 5.3%

4.5% 5.6% 5.7% 0.0% 3.6%

2.8% 3.6% 1.0% 4.1% 4.4%

TECHNOLOGY

Dental

Retirement Products

Employee Benefits (TPA)

INSURANCE CARRIERS

All Other

APPENDIX

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