2007 Best Practices Study

Agencies with Revenues Over $25,000,000

Executive Perspectives

Profile

Revenues/ Expenses

Financial Stability

Employee Overview

Producer Info

Service Staff Info

Technology

Insurance Carriers

Appendix

Revenues

(% by Source)

Average

+25% Profit

+25% Growth

Property & Casualty Commercial Commissions & Fees

55.7%

47.2%

60.8%

Bonds

3.4%

2.9%

5.3%

Personal P&C

10.9%

21.1%

3.9%

Value Added Services

2.2%

2.7%

1.9%

Contingent/Bonus

7.1%

7.9%

6.3%

Total P&C

79.3%

81.8%

78.1%

Life & Health/Financial Group Commissions & Fees

15.1%

13.6%

14.6%

Individual Commissions & Fees

0.7%

1.0%

0.8%

Value Added Services

0.6%

0.0%

1.3%

Bonus/Overrides

0.4%

0.3%

0.3%

Total L&H/Financial

16.9%

14.9%

17.1%

Investments

2.5%

2.1%

2.5%

Miscellaneous

1.3%

1.1%

2.3%

Gross Revenues

100.0%

100.0%

100.0%

Brokerage Commission Expense

3.5%

2.0%

3.4%

Net Revenues

96.5%

98.0%

96.6%

Future Revenue Sources % of Agencies Considering Line of Business as Very Important:

Personal Lines

44.0% 48.0% 32.0% 80.0% 68.0%

Small Commercial Lines Individual Life & Health Group Life & Health

Surety/Bonding

The fastest growing segments of these large agencies were employee benefits and bonds, which grew organically by 15.4% and 15.2%, respectively. This group had strong organic growth (10.6%) despite the soft market. This was due to strong retention of 92.9% across all lines (which is outstanding in light of soft P&C pricing) and strong new business production equal to 17.0% of their overall commissions and fees. Top agencies find a way to generate new business equal to 15%-20% of their commissions and fees each year.

151 2007 Best Practices Study | Agencies with Revenues Over $25,000,000 | Revenues/Expenses