Locked into the needs of the reinsurance market
Just two years after the leader of Lockton Inc declared the company was “going all in on reinsurance”, Lockton Re is spreading its wings.
The global reinsurance brokerage launched a Bermuda office in the spring, taking to 13 the number of Lockton Re locations worldwide, including London, Malta and 10 offices across the United States.
Bermuda market veteran Jonathan (Jonty) Davies leads the local operation as CEO of Lockton Re Bermuda.
Global CEO Tim Gardner is responsible for the build-out of the global reinsurance business of Lockton Companies, the world’s largest privately held independent insurance broker.
Mr Gardner was on-island to meet with Mr Davies and his team.
He said: “We are fully established in Bermuda in terms of our capabilities. Property, Retro ILW, casualty and specialty capabilities, are all on-island. We have the major product segments covered, and we have a number of Bermudian-based clients.”
Mr Davies added: “The market is very interested in what Lockton Re is building globally.
“It has become clear that people want more choice in the broker community. The way Lockton Re is building choice is a compelling and exciting alternative.
“Our commitment, our skill sets, and our people locally have been extremely well-received.”
Mr Gardner said the company have always identified the island as one of the most important hubs for reinsurance capacity and reinsurance capital.
He said: “If you are going to build a reinsurance broking business, you have to have a strong connectivity to Bermuda.
“Many of our really important partnerships come from the Bermuda-based reinsurance community.
“If you are going to take care of clients, you need to be able to access Bermuda in a compelling way.”
Mr Gardner added that the opening of a Lockton Re office here was a matter of timing.
“We were waiting for the right talent to become available to put an anchor down on the island.
“Jonty and an incredibly high quality team were interested, and it was the right combination – a really important market and the right leadership group to take it forward.”
Lockton has had a retail operation in Bermuda since 2007.
Mr Gardner said: “It is great to be attached to the Lockton retail business and the great relationships they have already created with so many carriers.
“We can think holistically about relationship-building.”
Lockton Re was launched in 2006, but it is since early 2019 that Lockton has actively been investing in the business, adding to its platform and expertise globally.
A global leadership team was established in May of that year with Mr Gardner at the helm, prompting the “going all in” declaration by Ron Lockton, the president and CEO of Lockton Inc.
Lockton Re recorded growth of more than 300 per cent in fiscal year 2020-21.
Mr Gardner said: “We feel really good about where we are. This business is exciting and it’s not hard to identify the keys to success.
“If you have great people, and put a culture of client service at the centre, and have powerful client-facing tools and analytics, the rest takes care of itself.
“Those are the three things that are key to building the business, and they make a compelling value proposition.”
The two leaders, local and global, said the private ownership of Lockton Re is an advantage.
Mr Davies said: “Because of the privately-held nature of the firm, we can be long-term focused in our planning. We can make long-term commitments both globally and within Bermuda.”
Mr Gardner added: “Our competitors are either under public ownership, which means they are beholden to results in the next quarter, or they are private-equity-owned, which means they have an ‘event’ or exit date. Both groups, by definition, have to think short-term.
“But Lockton Re is privately-owned so we don’t have to think short-term. We can build the business today for five, seven, ten years from now. That allows us to build the business in a differentiated and compelling way in terms of our capabilities, our team, and our service model to clients, that is long-term in nature.”
Mr Gardner said Lockton Re can also differentiate in another manner.
“Many of the other ‘challenger’ brokers, sequence the build-up of their capabilities. They start with one niche segment, Florida residential as an example, and then add another segment capability later. It’s an incremental build.
“But Lockton Re has had the opportunity to build a full suite of global capabilities basically from the beginning. As a result, we are able to meet clients where they might need us most; any product line, any segment and almost any geography.
“That is one of the reasons why we have been well-received by everybody in the market broadly and in Bermuda. Our skill set allows us to talk to clients across all disciplines including property, casualty, professional lines, healthcare, and all the London-based specialties such as cyber, marine & energy, aviation, credit, etc.
“The trading opportunity in Bermuda is exciting for the market because people see us connecting global experience and leadership with the expertise in the local team.”
He added: “We are more and more excited about the future. We are not just competing on an equal footing with other brokers, we are competing and winning.
“We couldn’t be more pleased about where we are positioned and where we are headed.”