2023 brokerage revenue: $3.5B
Percent increase: 14.7%
Lockton Cos. LLC saw nearly 15% revenue growth in 2023, mainly from existing operations.
The brokerage also saw a change at the top, with former CEO Peter Clune leaving the company.
Mr. Clune had been CEO of the brokerage since 2019, when he succeeded Ron Lockton in the position. When Mr. Clune left in February — “by mutual agreement,” according to the company — Mr. Lockton reassumed the title and retained his existing title of executive chairman.
Lockton reported $3.5 billion in brokerage revenue in 2023, a 14.7% increase from the prior year. It moved up one position to ninth in Business Insurance’s ranking of the world’s largest brokerages.
Of Lockton’s $476 million in growth last year, 51% came from U.S operations, 38% from international and 11% from its reinsurance brokerage, launched in 2020, Mr. Lockton said.
The international business is organized across regions, and the brokerage has plans to “continue to invest and grow across every one of those regions,” Mr. Lockton said.
The integration of Sao Paulo, Brazil-based insurance and reinsurance broker THB Group Brazil, purchased in May 2023 from Amwins Global Risks Group Ltd., is part of its plans to expand that business further.
“We are opportunistic when it comes to acquisitions and view acquisitions as a platform for future growth,” Mr. Lockton said.
Lockton is a selective acquirer of other brokerages, said Timothy J. Cunningham, managing partner at Optis Partners LLC, an investment banking and financial consulting firm in Chicago.
“They’ve been a very strategic acquirer, mostly to expand their global reach,” he said.
Lockton’s long-term growth strategy has focused more on recruitment than mergers and acquisitions, analysts said.
“Lockton has been built on talent acquisition. They’re a producer- and employee-driven company,” Mr. Cunningham said.
The headcount at Lockton increased by 750 employees last year to 11,920, the majority of whom, some 60%, are U.S.-based, according to company data.
“Lockton is highly focused on trying to attract, develop and retain competitive producers that can utilize extensive risk mitigation resources to write large and extremely complex accounts,” said John Wepler, chairman and CEO of Woodmere, Ohio-based mergers and acquisitions consultancy MarshBerry & Co. Inc.
“They would rather solicit the best talent and write target jumbo accounts than try to acquire, integrate and retrofit an acquisition into their culture,” he said.
Lockton competes successfully with larger businesses or organizations with a formal risk management practice and in specific sectors, Mr. Cunningham said.
“They’re going to be strong in construction and surety; they’re going to be strong in manufacturing, nonprofit, large institutional. You can’t be a company of that size without being strong in niches,” he said. Lockton began as a surety brokerage.
The reinsurance business, launched four years ago, grew to $311.84 million in 2023. “We looked at the marketplace and felt there was an opportunity there,” Mr. Lockton said. “Four years ago, we were looking at broker consolidation, which meant reinsurance consolidation. The marketplace was getting smaller,” he said.
Before the formation of Lockton Re, the broker’s reinsurance activities were mainly in the United Kingdom, Mr. Lockton said.
In primary commercial insurance markets, Mr. Lockton said, “The major shift we have seen in 2024 is an easing of rate increases across property coverages,” he said.
Workers compensation, directors and officers, and cyber remain competitive, he said. At the same time, liability lines still pose a challenge to clients, some of whom have “materially changed their buying philosophy and use of alternative products,” he added.
Across the broader primary insurance market, Mr. Lockton said that rate increases in some lines, such as property, are easing. Workers compensation remains profitable, but casualty and auto liability lines continue to be challenging for buyers, some of which have “adjusted their programs accordingly,” he said.
Lockton added several senior executives over the past year, including former Aon PLC executive Steven Goldenberg, who joined as executive vice president, operations, in February; former Marsh & McLennan Cos. Inc. managing director Manpreet Gill, who joined as executive vice president of the broker’s global technology risk practice group; and former Guy Carpenter & Co. LLC executive Greg Spore as U.S. financial services markets leader.
