Securing growth through talent is key for Lockton Inc

Singapore

THE rise of Lockton Inc in the last 48 years to become the world's largest privately-owned insurance broker is no mystery, says president and chief executive officer John Lumelleau. He attributes the glowing success to his people.

Headquartered in Kansas City in the US, the company recognises the importance of attracting the right people in a time of talent war.

And Mr Lumelleau pointed out that it is this Lockton motto that has helped it grow aggressively and achieve an almost exclusively organic growth in the US alone.

When he joined Lockton in 1997 as an operations executive, Mr Lumelleau had just left Alexander & Alexander, which was at the time the world's second largest broker.

In tandem with the company's growth, he rose up the ranks and became president in 2001 and CEO in 2002. In a span of 17 years, Lockton grew from six US offices and 700 associates to its existing 64 global offices and 5,300 associates.

When Mr Lumelleau joined, there was no plan to break into the international markets. But Lockton's clients themselves had expansive plans and operations around the world, and the group found it limiting to be just a US-based broker.

So in 2006, Lockton bought the international insurance and risk management arm of Alexander Forbes, creating the world's largest private insurance broker.

The move also positioned Lockton such that it was not only able to address the needs of its clients in the US but also build its business indigenously in other parts of the world.

"Here in Singapore - part of our Asia, Australia region - we have every intention of continuing to build our indigenous business, while we continue to expand our capabilities to handle business from other parts of the world that have locations here in Singapore," Mr Lumelleau said.

In its 2014 fiscal year, Lockton posted a record revenue of US$1.13 billion.

By the end of this fiscal year, Mr Lumelleau said he expects close to US$1 billion to come from its US business and roughly US$250 million from the other countries, of which "there is a growing percentage here in Asia, Australia, Latin America and South America".

Describing Lockton as "opportunistic" when it comes to acquisition possibilities, Mr Lumelleau said at any point in time, even now, it is "engaged in conversations in different parts of the world" around expanding its business.

Noting that the business today is so different dynamically from 10 years ago, he said brokers used to deal mostly with corporations but have now expanded to include business-to-consumer (B2C) and individual business components that never existed before.

So it comes as no surprise that Lockton is developing its e-commerce business, Lockton Marketplace, which is specifically focused on attracting individuals leaving for retirement or other opportunities. "We're incubating the business right now that will position Lockton as the leader in the digital commerce area."

While it may have been started a year ago, Mr Lumelleau calls it a "work-in-progress" and said the aim is for the marketplace to be cross-borders. Already, he said, the marketplace has applications far broader than just the US.

Of course, different growth strategies aside, Lockton will not stray from the core belief that the company's success is built on its talent.

So over the next 24-36 months, Lockton will continue to add talent throughout the company and specifically here in Asia. After all, it has to walk the talk if the company is looking to boost its cyberspace and executive risk financial services capabilities, claims and risk management consultancy, and particularly its employee benefits business.