Investment Option Review
For the Record, a BISM Online contribution from MarshBerry

Patrick T. Linnert is an Executive Vice President of Marsh, Berry & Co., Inc., a Willoughby, Ohio based management consulting and investment banking firm for public and private insurance distributors.






Website: www.MarshBerry.com

Since 2001, MarshBerry has tracked various investment returns available to individuals within the insurance brokerage realm. We have tracked a public broker composite, a composite of ESOP agencies that we value on an annual basis, the Dow Jones Industrial Average (DJI), and the Standard & Poor's 500 Index (SPX). The public brokers selected for comparison are representative of those who were trading at 12/31/01 and who remained active as of 12/31/07. They include Hilb Rogal & Hamilton (HRH), Arthur J. Gallagher (AJG), Brown & Brown (BRO) and Willis Group Holdings (WSH).

While various indices have realized fluctuations over the past six years, ESOP agencies have seen steady value increases over the illustrated time period. Proper long-term agency management can ensure continued strong returns. Agency owners can realize the value of their agency investment in two ways: maximizing organizational stock value or maximizing annual cash dividends/distributions to the owners. While a difficult balancing act, the best organizations have a defined plan and time horizon for managing both. Investing in a well-managed insurance agency remains a sound investment opportunity.