Business infrastructure needs to be fortified to ensure the highest possible service levels: Lockton Re

Reinsurance broker Lockton Re is planning to add between 80 to 90 new people to the company this year as part of its growing strategy as it focuses on growing the business’ infrastructure to deliver “the highest possible service levels.”

“We continue to hire pretty dramatically. Although there has been a little bit of a different spin on our hiring as of late as we’re going deeper, not necessarily wider,” Tim Gardner, Global Chief Executive Officer, explained during RVS 2024 in Monte Carlo.

He continued: “What I mean by that is, we’re in most of the segments now and capabilities we had always hoped to build. Generally we are about as wide as the businesses I think we would like to be, we’re just going deeper,”

Gardner noted that most of the new hires would not only be broker talent but front-end sales and backoffice to keep up with demand and to be able to deliver great service.

He stated: “A lot of that depth wouldn’t necessarily be frontline news. It is some broker talent of course and some sales down the solutions side, but it’s also things like lawyers to do contract drafting, it’s back-office to help the premium process and claims, it’s analytics folks on the cat modelling, on the actuarial side to keep up with the demand.

“It’s all of the infrastructure of our business that would grow, that we need to fortify and make sure that we can still bring the highest possible service levels. So, it’s become a pretty pronounced differentiation we believe, where some of our competitors really just haven’t invested in the nuts and bolts of their business.

“You start to see premiums that aren’t paid for six or nine months and contracts that don’t get drafted for six or nine months. It’s remarkably frustrating for clients to be in that position, so we’re certainly trying to stay ahead of that curve.”

Gardner emphasised the importance of Lockton being a private family held business, as this allows them to make decisions that benefit the business and its clients, and not focus on shareholders.

“We feel very fortunate that we are a private company and not private equity owned, a true private family held business. And what that means is we can make longer term decisions about how to position the business and what we think is the best way,” Gardner said.

Adding: “We’re not trying to show quarter over quarter earnings growth of every quarter, right. And if you have to show that which many of our public, well all of our public competitors do, you have to make decisions that are good for the shareholder and they’re not necessarily good for your business.

“So outsourcing premium and claims processing to some locale three thousand miles away to get a salary arbitrage makes sense for your shareholder but it doesn’t make a lot of sense for your customers. So, we just feel lucky that we don’t have to do that and to be able to staff appropriately.”

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