2004 Best Practices Study
AGENCIES WITH REVENUES BETWEEN $1,250,000 AND $2,500,000
Revenue/Expense/Profit Summary
EXECUTIVE PERSPECTIVES
+25% Profit
+25% Growth
Average
Revenues (% by Source) Commercial Lines
51.5% 24.7% 0.6% 8.9% 8.2% 3.4% 0.8% 1.9% 3.1% 96.9% 57.5% 4.0% 15.6% 4.5% 81.6% 18.4% 25.6% 8.3%
50.8% 24.6% 0.5% 8.8% 9.8% 3.9% 1.1% 0.6% 7.2% 92.8% 44.1% 3.8% 12.8% 6.6% 67.3% 32.7% 43.6% 22.0%
58.3% 19.0% 0.1% 9.2% 5.4% 5.2% 1.2% 1.6% 1.7% 98.3% 56.6% 4.1% 14.4% 5.3% 80.4% 19.6% 22.9% 9.0%
Personal Line
P&C Service Fees Contingent/Bonus Group Life & Health Individual Life & Health
PROFILE
Investments Miscellaneous
REVENUES/ EXPENSES
Total Revenues
100.0% 100.0% 100.0%
Brokerage Commission Expense
Net Revenues
Expenses (as % of Net Revenues) Compensation
FINANCIAL STABILITY
Selling
Operating
Administrative
Total Expenses
EMPLOYEE OVERVIEW
Pre-Tax Profit Pro Forma Profit 1
Operating Pre-Tax Profit 2
Pro Forma EBITDA 3
30.1%
50.2%
28.2%
PRODUCER INFO
1 Pre-tax profit when discretionary expenses (bonuses, compensation, and perks) made for the benefit of the owners, based solely on ownership, are removed (i.e., removing expenses that would not be incurred if a third party owned the agency). 2 Pre-tax profit minus contingents, bonus and investment income. 3 EBITDA = Earnings before Interest, Taxes, Depreciation and Amortization
SERVICE STAFF INFO
Profitability
50%
Average
40%
+25% Profit
TECHNOLOGY
+25% Growth
30%
20%
INSURANCE CARRIERS
% Total Net Revenue
10%
Pre-Tax Profit
Operating Pre-Tax Profit
Pro Forma Pre-Tax Profit
APPENDIX
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