2004 Best Practices Study

AGENCIES WITH REVENUES BETWEEN $500,000 AND $1,250,000

F.

Parent Corporation

Average

EXECUTIVE PERSPECTIVES

% of Participating Agencies

For more detail on bank-owned agency performance, see Observations of Bank-Owned Agencies on page 175 of this Study.

Owned by Another Corporation

3.3%

Description of Parent Corporation Financial Institution

PROFILE

100.0%

National Broker

0.0% 0.0%

Other

REVENUES/ EXPENSES

G.

Plans for Future Ownership of Agency

Average

Sell to Employees/Family

40.0%

FINANCIAL STABILITY

Sell to Third Party in 1 to 5 years

6.6%

Sell to Third Party in 6 to 10 years

13.3%

Sell to Third Party in 11+ years

6.7%

EMPLOYEE OVERVIEW

Merge with Privately-held Agency

16.7%

Uncertain at this point

16.7%

PRODUCER INFO

Although a significant number of these agencies want to perpetuate internally, they recognize the challenges that come with their smaller size, e.g., meeting carrier volume requirements, attracting talented employees, raising capital for necessary investments in systems and people, and being both a manager and producer. As such many are merging together with agencies of similar size. If no ideal merger partner can be found, they will opt to sell to a third party.

SERVICE STAFF INFO

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

TECHNOLOGY

+25% Profit

+25% Growth

Average

Less than 50,000

53.3%

57.9%

56.5%

INSURANCE CARRIERS

50,000 - 250,000

16.7%

15.8%

17.4%

250,000 - 1,000,000

23.3%

21.1%

19.6%

More than 1,000,000

6.7%

5.3%

6.5%

APPENDIX

34