Top insurance brokers, No. 8: Lockton Cos. LLC – Business Insurance
2020 brokerage revenue: $2.15B
Percent increase (decrease): 14.9%
Lockton Cos. LLC has continued to thrive despite the coronavirus, its senior executives say.
The Kansas City, Missouri-based brokerage reported $2.15 billion in brokerage revenue for its 2020 fiscal year, which ended April 30. That was a 14.9% increase from the prior fiscal year.
Lockton, which added 220 employees to its brokerage business last year, remained in the No. 8 position in Business Insurance’s 2021 ranking of the world’s largest insurance brokers.
It is still the only privately held brokerage among BI’s top 10 not wholly owned by a private equity firm or hybrid of private equity and private ownership.
“Our performance even at the financial level was the best it’s ever been,” and “actually far exceeded my expectations,” said Peter Clune, Lockton’s president and CEO.
“Now that we’re on the other side of it, it’s easy to breathe a sigh of relief,” said Ron Lockton, the broker’s chairman. “There was a lot of uncertainty and a lot of fear, and I’ve just never been so proud to see Lockton associates taking care of clients and each other.”
Mr. Clune said one highlight over the past year was the development of the broker’s transactional liability team. In January, Lockton announced that Matt Heinz, formerly of Aon PLC, would co-lead the practice with fellow partners Joseph Halpern, Eric Ziff and Gaurav Sud, all of whom joined Lockton in 2020. There are now 25 people on this team.
Another bright spot for the company is its reinsurance unit, which “continues to attract industry-leading talent,” Mr. Clune said.
Lockton formed Lockton Re in 2019 and hired three former Guy Carpenter & Co. LLC executives to run the unit.
Lockton Re opened a Bermuda office in June and named Jonathan Davies, formerly a senior Aon PLC reinsurance executive, to run it.
Lockton Re now has just over 200 associates and has experienced “phenomenal growth,” Mr. Clune said.
The brokerage has adapted well to the pandemic’s exigencies, its executives say. About 25% of its employees have returned to the office.
“We’re really empowering our leaders to find a flexible work force that works best for our people, their families and their clients,” Mr. Clune said.
While the brokerage sector has seen significant mergers and acquisitions activity over the past several years, Lockton is committed to remaining private, Mr. Lockton said.
“We’re not just private; we’re perpetually private and independent” and “focused on staying that way,” he said.
“What we’re really finding is that private ownership brings a level of stability and focus” and has “proven to be a winning formula for us.”
Over the past year, Lockton has entered markets in Ohio and Washington state and added 66 new producers.
Other high-profile hires include former Arthur J. Gallagher & Co. area president Patrick J. Haraden as president of its Boston operations.
It also appointed a new chief financial officer, Troy Cook, who was executive vice president and chief financial officer of Pittsburg, Kansas-based NPC International Inc., a restaurant franchisor and operator. He replaced Henry Bond, who left the company in July 2020 after nearly eight years as CFO.
Mr. Cook previously served on Lockton’s board. “He brings an amazing perspective as a client, board member, and someone with a private equity strategic background,” Mr. Clune said.
Lockton saw strong new business last year, Mr. Clune said. “The fact is that there’s some pain in the market,” he said. “Where clients are receiving increases, they’re more open to talking to our people, and I think our ability to get in and help clients solve issues is the reason why we’ve had record new business.”
Lockton remains “a very impressive company,” said Timothy J. Cunningham, managing director at Optis Partners LLC, a Chicago-based investment banking and financial consulting firm.
“They continue to grow significantly over the years,” including to some extent outside the United States, but “they do it without making acquisitions, which is a bit unusual in this day and age,” he said.
“They keep a relatively low profile” and “they’re not really splashy,” Mr. Cunningham said. “They go out and they deliver to their clients.”
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