2011 Best Practices Study

Analysis of Agencies with Revenues Between $5,000,000 and $10,000,000

Profit/Loss Summary

Key Benchmarks Profile

Average

+25% Profit

+25% Growth

Revenues (as % of Gross Revenue) Commercial Lines

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

45.4%

42.5%

43.0%

Bonds

1.0%

0.4%

0.4%

Personal Lines

23.5%

29.6%

25.4%

Value Added Services Contingent/Bonus

0.6% 7.6%

0.4% 8.1%

0.0% 7.9%

Group Medical All Other Group Individual L&H Bonus/Overrides Investments Miscellaneous

12.7%

11.9%

12.8%

3.4% 3.6% 0.8% 0.5% 0.9%

3.0% 2.0% 0.8% 0.2% 0.5%

2.1% 6.6% 1.0% 0.6% 0.1%

Total Revenues

100.0%

100.0%

100.0%

Brokerage Commission Expense

1.4%

0.6%

3.9%

Net Revenues

98.6%

99.4%

96.1%

Expenses (as % of Net Revenues) Compensation

66.5%

59.4%

66.6%

Selling

3.2%

2.6%

3.3%

Operating

13.9%

11.5%

11.8%

Administrative

3.6%

1.9%

3.5%

Total Expenses

87.1%

75.5%

85.1%

Profit/Loss (as % of Net Revenues)

Pre-Tax Profit

12.9% 17.6%

24.5% 31.0% 14.9% 26.2% 32.7%

14.9% 19.8%

Pro Forma Pre-Tax Profit 1 Operating Pre-Tax Profit 2

3.7%

5.0%

EBITDA 3

16.3% 21.0%

17.3% 22.2%

Pro Forma EBITDA

1 Pre-tax Profits if discretionary expenses are eliminated and all owners compensated as employees

2 Pre-tax Profits excluding contingents, bonus and investment income

3 EBITDA—Earnings Before Interest Taxes Depreciation and Amortization

Profitability

2011 Best Practices Study

Agencies with Revenues Between $5,000,000 and $10,000,000

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