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Top insurance brokers, No. 10: Lockton Cos. LLC

Top insurance brokers, No. 10: Lockton Cos. LLC

Peter Clune, Ron Lockton

2022 brokerage revenue: $3.05B
Percent increase: 12.8%

Lockton Cos. LLC continues to focus on organic growth rather than acquisitions as it expands its business in the United States and internationally.

One notable exception in the past year was an acquisition the brokerage made in Brazil. 

The Kansas City, Missouri-based brokerage reported $3.05 billion in brokerage revenue for the 2022 fiscal year, ended April 30. That was a 12.8% increase from 2021. 

Despite the double-digit growth, Lockton slipped one position to the No. 10 spot in Business Insurance’s ranking of the world’s largest insurance brokerages. Outside of the three largest brokers, its more acquisitive rivals posted bigger brokerage revenue gains. 

A total of 95% of Lockton’s growth is organic, said Peter Clune, the broker’s president and CEO. “If you’re not out doing acquisitions, it’s the way to grow, through new business and retention,” he said.

Timothy J. Cunningham, managing director of Optis Partners LLC in Chicago, said Lockton is an “extremely impressive organization” that has quietly and deliberately built a significant international presence. 

About 23% of Lockton’s commercial retail revenue is derived from non-U.S. offices.

In May, Lockton acquired Sao Paulo, Brazil-based full-service insurance and reinsurance broker THB Group Brazil from Amwins Global Risks Group Ltd. for an undisclosed sum. 

“That was part of an overall Latin America strategy,” Mr. Clune said, noting Lockton has increased its business in Argentina, Brazil and Chile. 

Three years ago, Lockton hired Jose Otavio Sampaio, who is CEO of Lockton Brazil, and others from Willis Towers Watson PLC. Their addition “really changed the look and feel” of Lockton’s business in Brazil, where it now has more than 500 people and its business has tripled over the past three years, Mr. Clune said. 

The brokerage has seen significant growth in its overall reinsurance operations. Its reinsurance brokerage revenue increased 30.4% to $186.8 million in fiscal 2022. Industry surveys showed significant reinsurance rate hikes during Jan. 1 renewals. 

Wholesale revenue for the broker increased 20.4% to $184.8 million. 

Lockton also has a “very robust platform domestically in the U.S., both P/C and benefits,” Mr. Cunningham said. 

Mr. Clune said Lockton has a retention rate of more than 97% while also logging “record new business.” The broker surpassed the $3 billion revenue mark in its 57th year in business, with $1 billion of that being added in the past 24 months. 

The brokerage has actively recruited, with its total staff increasing about 15% in 2022. 

“When people are treated right, empowered to do their job and have a shareholder that’s willing to take a much lower margin, they can have the resources they need to do their job, that the culture’s no longer just some soft statements on the wall,”’ Mr. Clune said. 

Among key hires, in December Lockton named Sara Romine, formerly assistant vice president with AT&T Corp.’s legal department, as U.S. general counsel. She succeeded Ann Abercrombie, who retired after 18 years with Lockton.

Chairman Ron Lockton said, “We spend a lot of time each year focusing on being able to maintain Lockton’s private ownership and in paying attention to succession planning.” 

There is no designated successor at this point to the company founded by Ron Lockton’s father, Jack, in 1966. Potential candidates in the next generation range in age “from three-and-a-half to 27,” Mr. Lockton said. 

Mr. Lockton said “the Lockton family, including myself, retains active client relationships. I’ve been a producer at Lockton since 1991, and still consider myself a producer,” he said. 

Lockton works with its clients several years out “to determine the most efficient way to manage the total cost of risk,” so its clients have not been surprised by what has happened with rising rates, Mr. Lockton said. 

The brokerage is also actively involved in taking advantage of artificial intelligence. 

“We have a large amount of data at the heart of everything we do,” Mr. Clune said.

“We use AI to help us ask better questions, generate greater insights and produce better outcomes for our clients. 

This is refined by the experience and wisdom of our associates, but AI for Lockton is all focused on a greater client experience.”

“We’re excited about the future of AI,” Mr. Lockton said. “We see it as an opportunity to add capabilities and large data sets” and perform better analyses.






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