Characteristics of High Quality Agencies

Characteristics of High Quality Agencies

June 18, 2015 Molly M. Connell molly.connell@marshberry.com 440.392.6584

Agenda

•

MarshBerry Overview

•

Introduction

•

Characteristics of High Quality Agencies* 1.

•

Sales Infrastructure a)

Small Business Unit

b)

Service Structure

c)

Accountability

2.

Producer Reinvestment

3.

Differentiation

Questions

“High Quality”-Those kinds of agencies would generally be characterized by younger, vibrant leadership, a strong track record of producing new business, a focus in niches that enable scalable growth, compensation structures in line with the market and a base of operations in an attractive area, with significant population density. This is not necessarily the average agency.

Source: MarshBerry Opinion and Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

2

Who We Are 1. A national firm with over 900 clients in 50 states.

2. Founded in 1981, MarshBerry provides consulting services (financial, operational, sales management, and M&A advisory) in the financial services industry to independent insurance agents/brokers and carriers.

3. At our core, MarshBerry has one primary objective: Helping insurance distributors maximize value.

Offices 1. Ohio (Corporate Headquarters) 2. California 3. Michigan 4. New York 5. Pennsylvania 6. Texas Clientele 1. Insurance Agencies 2. Credit Unions & Banks 3. Insurance Companies 4. Wholesalers 5. Program Managers and Managing General Agencies Firm 1. Founded in 1981 2. Privately-held 3. 17 shareholders 4. Perpetuated ownership 5. Acquired Gill & Roeser, Inc. in July 2014

©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

3

What We Do Merger & Acquisition Advisory STRATEGY 1. Acquisition Planning 2. Deal Return Modeling 3. Strategic Options Analysis 4. Alternative Buyer Comparison

ANALYTICS 1. Agency Fair Market Valuation 2. Market Comparables/Benchmarking 3. After-Tax Return Optimization1 4. Return on Investment

PREPARATION 1. Sale Preparation Management 2. Offering Memorandum Development 3. Strategic Pitch Book Design 4. Candidate Profile Creation

EXECUTION 1. Diagnostic Due Diligence 2. Confirmatory Due Diligence 3. Intangible Asset Allocation for GAAP 4. Fairness Opinion

REPRESENTATION 1. Buy and Sell Side Representation 2. Buy Side Search and Screen 3. Letter of Intent/Negotiation 4. Deal Structure and Alternatives

POST DEAL MANAGEMENT 1. Post Closing Integration 2. Goodwill Impairment Testing 3. Peer-to-Peer CEO Exchange 4. Earn-out Maximization Consultation

Peer Exchange Networks EXECUTIVE PEER NETWORKS 1. Agency Peak Performance Exchange 2. Bank Agency Network 3. Total Agency Sales Culture 4. GPS (Growth, Profit, Survival)

PARTNER BENEFITS 1. Benchmarking Services 2. Networking & Online Exchange 3. MarshBerry Publications 4. Industry Publications

Financial Consulting VALUATION 1. Detailed Conclusion of Value 2. Summary Conclusion of Value 3. Calculation of Value

BUSINESS PLANNING 1. Strategic Business Planning 2. Execution/Action Plan Management 3. Strategic Options Analysis

FINANCIAL CONSULTING 1. Internal Financial Controls 2. Value Enhancement Planning 3. Executive Compensation Design

PERPETUATION PLANS 1. Perpetuation Plan Design 2. Plan Execution Management 3. Transfer Strategies

1Marsh,

Berry & Co., Inc. and MarshBerry Capital, Inc. do not provide tax or legal advice. These professionals should be consulted separately before implementing changes to your tax or legal matters. *Not all services are available to all specialty services organizations.

Organic Growth Consulting RECRUITING 1. Find, Attract & Hire Producers 2. Compensation Modeling 3. Monitoring and Training 4. Position Profile, Search, Screen Hire 5. Technical and Sales Training

SALES MANAGEMENT 1. Growth Planning for Executives 2. Producer & Sales Manager Training 3. Infrastructure Modeling Build Out 4. Differentiation Design and Execution 5. Budget Validation Modeling

Intellectual Capital BENCHMARKING SERVICES 1. Perspectives for High Performance 2. Confidential Employee Survey 3. Industry Research and Reporting 4. Producer Performance Benchmarking

RESOURCEHUB.COM 1. Online Agency Resource 2. Position Descriptions 3. Research Studies 4. Published Articles

MarshBerry Authored Content 1. Monthly Magazine 2. 3rd Party Industry Trade Publications

Insurance Services Division* Capital Raising 1. Capital Management 2. Debt & Equity Capital Raising 3. Reinsurance Brokerage 4. Debt Solutions 5. Side Cars 6. Private Placements Analytical & Consulting Services 1. Corporate Development 2. Financial Strategies 3. Financial and Capital Analysis 4. Run-off and Commutation 5. Rating Agency Services 6. Expert Witness 7. Arbitration 8. Public Speaking 9. Structural and Capital Management Strategies for Mutual Insurers 10. Management Consulting 11. Educational Training

Reinsurance Brokerage 1. Analysis of Program Structure 2. Negotiations 3. Accounting 4. Premium Processing 5. Loss Collection 6. Proportional and Non-Proportional, Including Catastrophe Covers 7. Access to Reinsurance Markets, Including Domestic U.S., London and Bermuda 8. Export Credit & Political Risk Insurance 9. New Product Development 10. Major Medical Reinsurance 11. Integrated reinsurance brokerage and capital needs analysis Alternative Markets & Risk Pooling Merger & Acquisition Advisory Program Business Consulting

©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

4

MarshBerry Consulting Market Presence

+ 225

+ 12,000 AGGREGATE HOURS OF STRUCTURED EXCHANGE2

365

+ 10

+ 2,800

COMMERCIAL & BENEFITS PRODUCER HIRES SINCE 2007

VALUATIONS COMPLETED1

MORE THAN

>$1.9B 135 + OVER 1,000

16,000 HOURS PER YEAR SPENT MEETING WITH CLIENTS

PEER EXCHANGE AGENCY NETWORK PARTNERS

FIRMS PROVIDING DATA FOR BENCHMARKING SERVICES4

NUMBER OF METRICS IN PHP3

CERTIFIED VALUATION ANALYSTS ON STAFF

IN AGGREGATE REVENUE IN PEER EXCHANGE AGENCY NETWORK PARTNERS

70

ARTICLES WRITTEN PER YEAR5

1. By MarshBerry Valuation Teams Since It’s Inception 2. Based on number of hours in 2014 facilitators and relationship managers spent in pre-meeting preparation, during Peer Exchange Network meetings, and post-meeting follow-up and consulting engagements.

3. According to 2014 MarshBerry data; PHP: Perspectives for High Performance 4. There may be some duplication in the number of firms counted as certain firms subscribe to and/or provide data for multiple benchmarking services.

5. Includes 3rd party and proprietary publications, as tracked by MarshBerry. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc. 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230

5

Introduction

The Insurance Industry Culture 1.

Few insurance agencies have a plan to become a true sales organization.

• Eventually pressure from partners or parents will likely turn to divestiture.

2.

Organic growth too dependent on rate due to: • Limited new business production • Low new business goals • Non-performing producers • Lack of organizational commitment to embrace producers distinct from Account Executive’s • Have not branded/managed Account Executive as a position of equal importance to production

3.

Reinvestment occurs too slowly and without a plan.

4.

Attracting/retaining talent is tough given industry reputation.

Source: MarshBerry Opinion and Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

7

Allowing External Factors to Control Your Sustainability 20.00%

15.00%

10.00%

6.31%

5.00%

7.66%

2013

2014

2.88%

4.08% 0.39%

0.00%

7.47%

0.13%

-­‐3.78% -­‐5.00%

2007

2008

2009

2010

2011

2012

Total Commissions & Fees Organic Growth New Business as % Prior Year Total Commissions & Fees Leakage/Lift (Rate, Retention, & Exposure Base Compression/Expansion) Past performance is not necessarily indicative of future results.

Source: MarshBerry proprietary financial management system Perspectives for High Performance (“PHP”). Only includes agencies from U.S. and Canada. It excludes agencies from Puerto Rico, U.S. Virgin Islands, and Peru. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

8

Historical Organic Growth Rates 23% 20%

20.7% 17.9%

16.4%

18%

14.8%

15% 13%

10.8%

10.5%

11.4%

10% 8% 5%

6.3%

6.0% 4.1%

3%

7.5%

7.7%

2.9% 0.4%

0.1%

0% -3% -5% 2007

2008

-3.8% 2009

2010

All Agency Average

2011

2012

2013

2014

Best 25%

Past performance is not necessarily indicative of future results.

Source: MarshBerry proprietary financial management system Perspectives for High Performance (“PHP”), MarshBerry Market and Financial Outlook Survey, 2014. “Average” is the average of all agencies in the database, while “Best 25%” is the best 25% of the average performance. Only includes agencies from U.S. and Canada. It excludes agencies from Puerto Rico, U.S. Virgin Islands, and Peru. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

9

Sales Culture Best Practices How many of the following are you not addressing?

1. Integrated plan for growth and staffing 2. Sustainable/consistent producer recruitment process 3. Organizational sales process 4. Advertising and marketing 5. Perpetuation of talent and relationships 6. Tracking 7. Benchmarking / Reporting 8. Goal setting 9. Accountability 10. Compensation 11. Technical training 12. Sales training 13. Producer management 14. Rewards and recognition 15. Optimizing service / production interaction Source: MarshBerry Opinion & Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

10

10

Characteristics of High Quality Agencies

Small Business Unit Sophisticated Service Staff Accountability Producer Reinvestment Differentiation Source: MarshBerry Opinion & Experience. Š2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

11

Sales Infrastructure: Small Business Unit

Capacity Management

Past performance is not indicative of future results.

Source: MarshBerry Sales Management Best Practices and Benchmarking Report 2012-2015 Š2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

13

How to Create Capacity Break down each segment of your book by total revenue and percentage of book

Accounts

Revenue

% of Resources

Top 5% Top 20% Bottom 40%

4 – 6%

Bottom 20%

1 – 3%

Source: MarshBerry Opinion & Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc. 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230

14

Defining Terminology Minimum Account Threshold •

• •

Free up capacity for the producer to sell more and spend less time servicing Protect producers from flat lining book growth Necessary at a certain book size to trade down accounts for balancing work/life with continued increase in compensation and agency growth

Small Business Unit • • •

•

Dedicated unit to service accounts under the minimum account threshold Provides a more automated, consistent and profitable service model Target $300,000 - $500,000 in year 1 to justify 1 full time service employee Consider allowing 3-5 exceptions per producer

Source: MarshBerry Opinion & Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

15

SBU Benefits

•

Capacity

•

Retention

•

Compensation

•

Growth

•

Home for every account

Source: MarshBerry Opinion & Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

16

Determining Minimum Account Threshold

35.0% 30.0% 25.0%

X

20.0%

X

New Bus $ as a % of PY C&F

Average Target Account Ratio (Minimum Account Threshold / Average Account Size - Non House)

15.0% 10.0% 5.0% 0.0% 30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Target Account Ratio

The above example is for illustrative purposes only. Individual results may vary.

Source: MarshBerry Opinion and Experience. Š2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

17

Reinvesting Short Term Effect on Growth

Balancing Growth and Profit

Short Term Effect on Cash

Hiring Producers

Agency Acquisition

Instituting Value Added Resource

Small Business Unit Creation

Source: MarshBerry Opinion & Experience. Š2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

18

Sales Infrastructure: Sophisticated Service Staff

Largest Challenge to Commission Growth

Non-producing Producers

36.4%

Economy

17.1%

Geographic Location

8.5%

Other

8.5%

Lack of Producers & Quality Employees

7.8%

Markets

6.2%

Minimal Capital

4.7%

Leadership

4.7% 3.8%

No Acquisition Prospects Regulations

2.3% 0%

5%

10%

15%

20%

25%

30%

35%

40%

“Other” includes leads/lack of new business generation, service capacity/ability, time, competition, and debt. Past performance is not necessarily indicative of future results.

Source: MarshBerry Market & Financial Outlook Survey 2014-2015 ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

20

Four Tier Model

Producer Account Executive Customer Service Representative Account Tech/Processer

Source: MarshBerry Opinion & Experience. Š2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

21

How Do We Define an Account Executive Role: ●

Highly technical servicers

●

Client, facing professionals

●

Insurance experts in multiple niche focuses

Not Producers: ●

Not responsible for new business production generation, but receive a bonus based on identifying and closing new business opportunities

●

Not subject to producer minimums or compensation reductions

●

Not privy to increase compensation for reaching target

Not CSRs: ●

Paid a salary at 10-15% of the book of business they manage

●

Always paid a salary, never paid a commission split

●

Opportunity to receive bonus based on growth, account retention, utilization of value added services, compliance scores on service timelines

Source: MarshBerry Opinion & Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

22

Layers of Service Help Drive Performance As % of Total Commissions & Fees

All Agency

AE Synergy Group

Variance

Total Payroll

59.0%

59.9%

0.9%

Service Staff Payroll

21.9%

23.7%

1.8%

Production Payroll

28.3%

26.4%

-1.9%

Total Commission & Fees per Production

$586,026

$689,594

$103,568

P&C Commission per P&C Production Person

$556,727

$644,654

$87,927

L&H Commission per L&H Production Person

$570,218

$740,298

$170,080

Payroll Per Production Personnel

$158,710

$183,611

$24,901

$55,089

$60,282

$5,193

Average CL Account Size

$3,199

$4,078

$879

Average EB Account Size

$7,304

$9,341

$2,037

$523

$661

$138

55.0%

56.9%

1.9%

Payroll Per Service Personnel

Average Small Commercial Lines Service Personnel as % of Total

Source: MarshBerry Letter, January 2013. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc. 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230

23

Sales Infrastructure: Accountability

Your Assembly Line: Biggest Obstacles for Most Producers

Limited Pipeline

You Have to do it!!!

Closing the Sale

You Will Learn

Product Knowledge

Value You Will Proposition

Learn

You Will Learn

Source: MarshBerry Opinion and Experience. Š2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

25

Robust Pipeline Calculation

1

Production Goal ($)

2

Closing Ratio (%)

3

Total Annual Pipeline Needed (= #2 /#1)

4

Number of Days in Sales Cycle

5

Number of Inventory Turns (= 360 / #4)

6

Robust Pipeline (=#3 / #5)

$100,000 50% $200,000 90 4

$50,000

The above is for illustration purposes only. It is not meant to represent any specific client experience.

Source: MarshBerry Opinion and Experience Š2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

26

What is the Value of a Pipeline for Producers?

•

•

Carrier and Marketing Tracking Functionality Ø

Facilitate communication between departments

Ø

Hold your carriers accountable

Easy way to track and manage leads Ø

Ability to track notes

Ø

Ability to sort through additional detail (i.e. SIC Code, Renewal Months)

•

Outlook/Follow-up consideration

•

Identify trends of winning business

•

Ø

Industry type

Ø

Prospecting techniques

Identify trends of losing business Ø

What went wrong?

Source: MarshBerry Opinion and Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

27

High Growth Agency Activity Tracking

Category

High Growth

New Business Production (as % of Prior Year C&F)

23.5%

Appointment to Close Ratio

47.7%

Retention of Top 20% Accounts

94.6%

Organic Growth

14.7%

Source: MarshBerry Sales Management Best Practices and Benchmarking Report 2012-2015 Š2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

28

High Growth Agency Activity Tracking

Does your agency use a pipeline management software in addition to agency management system?

47.0%

46.3%

45.0% 43.0%

41.7%

41.0% 39.0% 37.0%

35.0% 33.0% 31.0% 29.0% 27.0% 25.0% All Agency Average

High Growth Agencies

% Answered "Yes" High Growth Agencies consist of the top 25% of agencies surveyed based on organic growth.

Source: MarshBerry Organic Growth Survey 2015 – Executive Summary ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

29

Methods of Pipeline Management

Agency Management Systems

Excel Spreadsheets

Customer Relationship Management Technology SalesForce.com • LN Sales Portal • SLX • Goldmine • Microsoft Dynamics • ACT

In My Head

Source: MarshBerry Opinion and Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

30

Producer Reinvestment

Process Versus Event: Industry Success

Source: MarshBerry proprietary financial management system Perspectives for High Performance (“PHP”). Only includes agencies from U.S. and Canada. It excludes agencies from Puerto Rico, U.S. Virgin Islands, and Peru. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

32

Lagging Producer Reinvestment $7,000,000 $6,000,000 $5,000,000 $4,000,000

$3,000,000 $2,000,000 $1,000,000 $0 Less than $5 Million

$5 Million to $10 Million

Actual Pay of Unvalidated Producers

$10 Million to $25 Million

$25 Million to $50 Million

$50 Million to $100 Million

Recommended Pay of Unvalidated Producers

Past performance is not necessarily indicative of future results.

Source: MarshBerry Opinion and Experience. The data is from a proprietary financial management system of Marsh, Berry & Co., Inc., Perspectives for High Performance (“PHP”). Agencies subscribe to the PHP system and data from each subscriber is updated every quarter. The system calculates critical financial and productivity ratios and compares these ratios to the Average Performance in the group. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

33

Average Producer Age Dispersion

Average Producer Age Dispersion

All Agency Average

13%

High Growth Agencies

13%

0% Ages 21-30

21%

21%

23%

26%

10%

20%

Ages 31-40

24%

30%

40%

50%

Ages 41-50

22%

19%

60%

70%

Ages 51-60

18%

80%

90%

100%

Ages 60+

High Growth Agencies consist of the top 25% of agencies surveyed based on organic growth.

Source: MarshBerry Organic Growth Survey 2015 – Executive Summary ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

34

Average New Business Generated

by FTE Producer by Age Group Average New Business Generated by FTE Producer by Age Group $140 $120

$ Thousands

$100 $80 $60 $40

$20 $0 Ages 21-­‐30

Ages 31-­‐40 All Agency Average

Ages 41-­‐50

Ages 51-­‐60

Ages 60+

High Growth Agencies

High Growth Agencies consist of the top 25% of agencies surveyed based on organic growth.

Source: MarshBerry Organic Growth Survey 2015 – Executive Summary ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

35

Differentiation

What You Think Makes You Different 1. Insurance Expertise 2. Great Service 3. Local Presence 4. Community Involvement 5. Reputation

Makes You the Same Secures your spot in the client’s eyes as a vendor

6. Passionate People 7. Value Added Resources 8. Carrier Relationships Source: MarshBerry Opinion and Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc. 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230

37

The Reality

•

We see that very few agencies are truly different from their competition

•

Many invest in value added services, but few fully leverage investments

•

Even when processes are built, execution is often sporadic / inconsistent

•

Very few can dollarize the value delivered to the insured

•

Lack of differentiation creates commoditization

•

Commoditization helps to keep agencies from breaking the cycle

Source: MarshBerry Opinion and Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

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Client Perception of Your Value Business

Process

Create Demand

Executives

Create Value

High Margin

Meet Specs

Low Margin

Strategic Resource

Business Resource

Problem Solver

Vendor Product

Event

Operations

Service Demand

Source: Beyond Selling Value. Mark Shonka and Dan Kosch, 2002. Š2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

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How do you Articulate it?

Where are you on the pyramid?

• Vision - proprietary process to drive value • Comprehensive risk assessment and delivery process • Consistent client facing message • Cultural buy-in from leadership and staff • Continual training to ensure consistent delivery • Memorialize in cards, proposals and collateral material • Recite at meetings • Peer review

Source: MarshBerry Opinion and Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

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How do you ask others to share it?

• Client recognition of value creation • List top 20 prospects – referral request • Permission to share value creation • Leverage testimonials for top prospects

Source: MarshBerry Opinion & Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

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Understand True Differentiation

•

Understand the customer Identify solutions that enhance the value of the insured

•

Execute the Strategy Create Vision, Define Value, Articulate, Collaborate, Communicate, Publish, Integrate, Train, Hold Accountable, Reinforce - make it a thread of your culture

•

Dollarize the Value Identify the dollar value of the innovation to the customer

•

Share

Source: MarshBerry Opinion and Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

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Differentiation

• Define your goal: Predictable, profitable, organic growth • Define the mantra: Our value is value creation • Define the recipe: Create a structured process • Define the measure of success: Enhance value of insured by $7M* • Execute, institutionalize, refine, repeat

*For illustrative purposes only. Individual Results May Vary.

Source: MarshBerry Opinion & Experience. ©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

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Questions

Acronyms AE AM C&F CL CSR EB EBITDA FTE L&H M P&C PHP PL PY SBU SIC

Account Executive Account Manager Commission and Fees Commercial Lines Customer Service Representative Employee Benefits Earnings Before Interest, Tax, Depreciation and Amortization Full Time Equivalent Life & Health Million Property & Casualty Perspectives for High Performance Personal Lines Prior Year Small Business Unit Standard Industrial Classification

Š2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

The information contained herein is for information purposes only. It is not intended as, and does not constitute, an offer or solicitation for the purchase or sale of any financial instrument. Except where otherwise indicated, the information provided is based on matters as they exist as of the date of preparation, and may not be updated or otherwise revised to reflect information that subsequently becomes available, or changes occurring after the date hereof.

MarshBerry Capital, Inc. makes no representations or warranties with respect to the accuracy, reliability, or utility of information obtained from third-parties. Certain assumptions may have been made by these sources in compiling such information, and changes to assumptions may have material impact on the information presented in these materials. Past performance is not necessarily indicative of future results.

Certain information contained herein constitutes forward-looking statements which can be identified by the use of terms such as “may,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” (or the negatives thereof) or other variations thereof. Due to various uncertainties and actual events, including those discussed herein and in other documents, actual results or performance may differ materially from those reflected or contemplated in such forward-looking statements. As a result, individuals should not rely on such forward-looking statements in making their financial decisions. We have no duty to update or amend such forward-looking statements. An investment in any vehicle discussed herein has not been recommended or approved by any U.S. Federal or state or any non-U.S. regulatory authority. Furthermore, the foregoing authorities have not passed upon the accuracy or determined the adequacy of this presentation. Any representation to the contrary is a criminal offense.

MarshBerry Capital, Inc. does not provide tax or legal advice. These professionals should be consulted separately before implementing changes to your tax or legal matters.

Circular 230: Any tax advice or communication contained within this document was not intended or written to be used and cannot be used for the purpose of avoiding penalties that may be imposed.

Securities offered through MarshBerry Capital, Inc., Member FINRA, SIPC, and an affiliate of Marsh, Berry & Co., Inc. 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122, (440) 354-3230

©2015 Marsh, Berry & Co., Inc. – No part of this presentation may be reproduced, published, stored or transmitted by any means, electronic or mechanical, without prior written permission of Marsh, Berry & Co., Inc. Securities offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc., 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 440.354.3230.

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