2011 Best Practices Study

Analysis of Agencies with Revenues Between $2,500,000 and $5,000,000

Revenue by Acquisition

Key Benchmarks Profile Revenues Expenses Profitability Employee Overview Producer Info Staff Service Info Technology Insurance Carriers Appendix

Acquired Revenues

Average Commissions Acquired

% of Agencies Acquiring

Percentage of Net Revenues

Acquisitions Made in Last 12 Months

7.9%

$73,812

2.1%

What the Typical Transactions Looked Like Revenues Acquired per Transaction

Multiples of Revenue Paid

Average

$85,747

Average

1.2x

High

$120,000

High

1.8x

Low

$49,636

Low

0.5x

Revenue by Account Concentration Average

+25% Profit

+25% Growth

% of Revenue Derived from: Largest Account

4.3%

5.4%

5.9%

High Low

20.2%

1.5%

10 Largest Accounts

16.5% 39.4%

14.3%

17.8%

High Low

3.2%

Average

+25% Profit

+25% Growth

“Other” Group Revenue* (% from source) Life

29.4% 16.6% 26.6%

10.6% 32.8% 37.0%

27.9% 13.3% 15.7%

Disability

Dental & Vision

Retirement/Pension

4.3% 7.5% 2.3% 4.2% 9.1%

6.0% 3.0% 4.2% 0.0% 6.4%

4.0% 8.7% 5.4% 0.0%

Worksite/Voluntary/Supplement

Long-Term Care

Employee Benefits TPA

2011 Best Practices Study

All Other

25.0%

*Excludes Group Medical

Agencies with Revenues Between $2,500,000 and $5,000,000

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