2004 Best Practices Study

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

PRODUCER INFORMATION A. New Producer Hiring

EXECUTIVE PERSPECTIVES

+25% Profit

+25% Growth

"The cost is almost unaffordable for a small agency. We have suc- cessfully done this twice only to have the large bro- kers 'buy' the sales person away from us once trained." This statement reflects one of the most serious problems faced by agencies of this size, one that drives many agencies of this size to merge or sell to a third party.

Average

% of Agencies that Hired a New Producer During Last Fiscal Year

PROFILE

26.7% 37.5% 50.0%

Number of New Producers Hired

1.3

1.0

1.5

REVENUES/ EXPENSES

Average Annual Compensation Per New Producer

$30,180 $18,000 $31,655

FINANCIAL STABILITY

Where New Producers Were Found

Outside of Industry* 25.0%

EMPLOYEE OVERVIEW

“Successful” New Producers 83.2% of producers hired over the last 5 years have met their production goals.

Directly from college or graduate school 25.0%

Another insurance broker 50.0%

PRODUCER INFO

An insurance carrier 0.0%

SERVICE STAFF INFO

*Other industries mentioned most often include Financial, Stock Brokerage, Manufacturing, Medical/Pharmaceuticals, and Office Equipment/Furniture.

TECHNOLOGY

Future Hiring Plans

+25% Profit

+25% Growth

Average

% of Agencies that Plan to Hire a New Producer During Current Fiscal Year

INSURANCE CARRIERS

46.7% 50.0% 62.5%

Number of New Producers to be Hired

1.1

1.0

1.2

APPENDIX

44