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2021 brokerage revenue: $2.7B
Percent increase: 26%
Lockton Cos. LLC continues to pursue its focus on organic growth, while making a few small acquisitions to extend its international reach.
The Kansas City, Missouri-based brokerage reported $2.7 billion in brokerage revenue for its 2021 fiscal year, ended April 30, which was a 26% increase from the prior fiscal year.
Despite the growth, Lockton dropped one spot to No. 9 in Business Insurance’s 2022 ranking of the world’s largest insurance brokerage as its acquisitive rival Acrisure LLC grew even more rapidly.
Lockton remains the only privately held brokerage among the top 10 without private equity investors.
“We are fully and firmly committed to our private ownership” and independence as a business philosophy, said chairman Ron Lockton. It is “a strategy we will be sticking to perpetually,” he said.
Lockton reported a 27% increase in organic growth last year, said Peter Clune, the broker’s president and CEO.
Lockton clients are coping with the hard market, its executives say.
With the exception of workers comp, “the market’s been firming since 2018, and clients are questioning the need for additional rate increases after multiple years” of the hard market and “looking for innovative solutions,” Mr. Clune said.
No major acquisitions are planned for Lockton, say its executives.
“We’re not opposed to acquisitions, but we view acquisitions, really, as a starting point to future organic growth, and so we will be very selective in the way we look at acquisitions,” Mr. Lockton said.
He added that what is typically most attractive to Lockton in its acquisitions are the talent and the client solutions. “If we find those things, we may pursue them,” he said.
“We’re never going to generate headlines about M&A deals “with eye-popping multiples. That’s not who we are,” Mr. Lockton said.
The broker has completed two smaller acquisitions in the past year. In October it agreed to buy Bergen, Norway-based marine insurance broker Edge Group Holdings.
It completed its acquisition of Istanbul-based Omni Insurance and Reinsurance Brokerage Inc. in May. Lockton had acquired a 50% stake in the company in December 2008.
These acquisitions, along with Lockton’s 2016 purchase of Genoa, Italy-based marine broker P.L. Ferrari & Co., “are an example of using small acquisitions to round out global offerings to our clients,” Mr. Clune said.
Lockton has been “very strategic about their acquisitions,” said Timothy J. Cunningham, managing director at Optis Partners LLC, a Chicago-based investment banking and financial consulting firm. The brokerage has “certainly done a good job of expanding domestically and internationally.”
A particular bright spot for the company has been its reinsurance business, which saw a 65.9% increase in revenue to $143.2 million last year.
Lockton announced several hires in its reinsurance business over the past year. Most recently, Lockton Re said Kathy McCann had joined from Guy Carpenter LLC.
In March, Lockton announced the launch of Lockton Advisory in Australia. The division offers capital management services to insurers and reinsurers, among other things.
Other hires at Lockton over the past year include Machua Millett, formerly with Marsh LLC, as chief information officer and alternative investment practice leader in its financial services group.
In October, Lockton announced it had recruited Julie Marcello, formerly a market leader for Marsh, as chief operating officer for its Denver-based Mountain West region, which includes Denver, Phoenix, Las Vegas, Salt Lake City and Seattle.
Lockton expanded its transaction liability group in February by naming as two New York-based senior vice presidents Annie Heiss, formerly a senior corporate associate for Willkie Farr & Gallagher LLP, and Alex Connelly, who served as mergers and acquisitions and international partnerships counsel at A+E Networks.
In March, Lockton named Michelle Faylo, formerly North America head of cyber, financial lines, at American International Group Inc., as head of cyber financial lines, replacing Anthony Dagostino, who left the company last year.
E.J. Hentennar, Lockton’s head of global financial risks, was named CEO, Europe effective May 1, as part of a new international leadership structure, and Neil Nimmo, formerly CEO of Lockton International, became its chairman, reporting to Mr. Clune.
2021 brokerage revenue: $19.86B
Percent increase: 15%