CLIENT RETENTION, NEW CLIENTS DRIVE LOCKTON GROWTH
High client retention rates and strong new business growth helped Lockton post record revenues in fiscal 2012. Lockton reported total revenues of $914,748,000 and organic growth of 9.4 percent.
Business Insurance magazine ranks Lockton as the 9th largest insurance broker in the world in its latest rankings published July 16, 2012.
In its report, Business Insurance reports that organic growth, rather than acquisitions, is the key factor in Lockton's success.
"They are just shy of a billion dollars now in revenue and to get there through organic growth... speaks to the success of their business model," said John Wicher, principal at John Wicher & Associates in San Francisco. Wicher & Associates is a consulting and investment banking firm specializing in the insurance industry.
Organic growth for the brokerage industry has been "very low," averaging from flat to about 2%, said John L. Ward, CEO at Cincinnatus Partners L.L.C., a private equity firm specializing in the insurance industry in Cincinnati.
Lockton, meanwhile, is known for a customer retention rate that outperforms the industry average by a wide margin, Mr. Ward added. That, along with its leadership, has helped the company grow organically, which is less expensive than acquiring other brokers.
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