2009 Best Practices Study

2009 Best Practices Study

Profile

Revenues/ Expenses

Financial Stability

Employee Overview

Producer Info

Service Staff Info

Technology

Insurance Carriers

Appendix

In addition to the average results for each study group, the study provides insights on how the “best of the best” are operating. This table will help you understand the terms used to report this information.

HEADING

REFERS TO

Average

the average results achieved by all the firms in the study group for a particular factor. (Extreme high and low results distorting the average have been excluded.)

High

the highest results achieved in the peer group for a particular factor

Low

the lowest results achieved in the peer group for a particular factor

Top 25%

the average results achieved by the Top 25% of the firms in the group for that particular factor or line item. (The firms comprising this group will be different for each factor or line item.) the average results achieved by the 25% of firms having the greatest pro forma profitability as a percent of net revenues. (The firms comprising this group are the same for each factor or line item.)

+25% Profit

+25% Growth

the average results achieved by the 25% of firms experiencing the greatest growth in net revenues. (The firms comprising this group are the same for each factor or line item.)

Glossary

REVENUES (as reported for most recently completed fiscal year-end and stated as a percentage of gross revenues)

Property & Casualty: 1. Commercial Commissions & Fees — Commissions (both direct & agency billed) and fees written in lieu of commissions

2. Bonds — Commissions from all bonds (surety, fidelity, etc.) 3. Personal P&C — Commissions (both direct & agency billed)

4. Value Added Services — Revenues from a Worker’s Comp TPA, loss control , engineering, risk management, consulting services, self-insurance programs, underwriting and claims services, additional carrier compensation or reimbursements for services provided on their behalf 5. Contingent / Bonus — Profit sharing, bonus, and incentive income received from insurance carriers 6. Total P&C — The sum of items 1 - 5 Life & Health / Financial 7. Group Commissions & Fees — Commissions & fees from the sale of employee benefits including group life & health, disability, pension, 401(k)s, PEOs, and investment products 8. Individual Commissions & Fees — Commissions from the sale of individual life, health, disability & investment products 9. Value Added Services — Revenues from a Benefits TPA, HR/Wellness/other consulting services, actuarial services, risk management, cost containment, and other services related to Employee Benefits/ L&H / financial services 10. Bonus / Overrides — Bonus or incentive payments paid to agency for L&H production, usually for volume, persistency, growth, etc. 11. Total L&H / Financial — The sum of items 7 - 10 12. Investments — Income from interest, dividends, premium finance, late charges, gains/losses on sales of marketable securities (investment type securities) 13. Miscellaneous — Income from countersignatures fees, gains/losses on fixed or intangible assets, life insurance proceeds

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2009 Best Practices Study | Appendix