There is reason to celebrate at Lockton Cos. L.L.C.

The Kansas City, Mo.-based broker recently exceeded a significant milepost, tallying more than $1 billion in annual revenue for 2012.

The privately owned property/casualty and employee benefits broker exceeded the $1 billion mark for the first time by logging an unexpected $100 million in additional revenue for 2012, the company said.

It produced $1.01 billion in brokerage revenue during 2012, up from $904.4 million the prior year, placing it ninth in Business Insurance's 2013 broker rankings.

Lockton is known for being a well-run company that is producer focused with an entrepreneurial environment, said Timothy J. Cunningham, managing director of Chicago-based investment banking and consulting firm Optis Partners L.L.C.

That allows Lockton to attract talented producers who have large broker expertise, but don't want to be hindered by a large-broker environment, Mr. Cunningham said.

Lockton also has an advantage as a privately owned broker, Mr. Cunningham said. The company is not beholden to quarterly reports or a private equity firm. That allows Lockton greater freedom to invest in its people and infrastructure, he said.

That shows in Lockton's revenue growth.

“We are feeling very good about it,” said David Lockton, chairman of Lockton. “There is pretty much all good news at Lockton right now.”

The growth was all organic and flowed from U.S. and global operations, Lockton said.

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“Growing at 11% organically in an environment where economic turmoil continues to buffet our clients and the markets is a significant achievement,” said John Lumelleau, president and CEO of Lockton. “While we are proud of the $1 billion milestone, we are even more proud about how we have realized it, taking a consistent approach to solving (client) business problems where we do business around the world.”

Serving U.S. clients generated 74% of Lockton's 2012 brokerage revenue, with the remainder from non-U.S. clients, as the company's global reach gradually expands. For instance, Lockton last year opened offices in Australia and in the United Arab Emirates.

Lockton now has offices in 19 states and operates in other countries such as Brazil, China, Mexico and the United Kingdom.

While international expansion has helped add new business, the company's success and growth is rooted in retaining customers by listening and responding to their needs, the broker said.

“We have always believed that our growth is first driven by the retention levels we are able to achieve, with industry-leading levels in excess of 95%,” Mr. Lumelleau said. “It gives us an excellent jumping-off point (for growth) at the beginning of every year.”

While Lockton's strategy remains focused on organic expansion, it will be opportunistic should the right acquisition opportunities emerge, its leaders said.

But growth also has meant that finding employees capable of meeting Lockton's standards and selection process is now the company's biggest challenge, its leaders said.

“We developed a tremendous track record for attracting great people and, as we get larger, that becomes more difficult,” Mr. Lockton said. “It's not an easy job and we have to make sure we stay the course and that we are very rigorous in our recruiting and selection process.”

Lockton reported 4,950 brokerage employees in 2012, up from 4,450 in 2011.

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Clients, meanwhile, are demanding greater analytic sophistication from the broker, Mr. Lockton said. That trend over the past several years also has required Lockton to continually innovate.

For example, some years ago, Lockton developed a tool called InfoLock to help clients analyze and mitigate employee benefit claims costs, Mr. Lumelleau said. InfoLock's capability has now been extended to provide “deep-dive” analysis into workers compensation claims cost drivers.

“So we have transcended the employee benefits segment of our business with analytics, bringing it into our property/casualty retail business with InfoLock and workers compensation,” Mr. Lumelleau said. It's the “same approach: analyze claims, benchmark performance and adjust risk control approaches to drive down total cost of risk.”

Overall, Lockton attributes its success to such services that help clients improve their businesses, Mr. Lumelleau said.

“It's all about helping clients make better, more well-informed decisions,” Mr. Lumelleau added.