Lockton New Zealand out to "crack the duopoly"

Lockton New Zealand out to "crack the duopoly" | Insurance Business New Zealand

Lockton New Zealand out to "crack the duopoly"

The largest privately held insurance brokerage in the world expanded into New Zealand in September 2021, and here Lockton NZ chief executive Peter Lowe (pictured) gives Insurance Business the lowdown on the company’s bold plans for the market.

“We’re going to shake up the industry,” asserted Lowe, who took on the top post on November 29. “We’re going to crack the duopoly, and the only people who will benefit from it will be clients. We’re going to break up the transactional mode of New Zealand broking and drive-thru advice.

“And there will be a significant number of large New Zealand businesses who are itching for people like Lockton to come along to give them good advice and not focus on the transaction, not focus on the commission amount, not focus on how much we can make overseas. It’s all about if we give you the right advice, we will all benefit. So, it’s a great time to be here.”

The CEO, who brings decades of insurance brokerage experience to Lockton Companies NZ Limited Partnership, declared: “It’s a great time for Lockton, and it will be a scary time for the incumbents.”

Read more: Lockton commences operations in New Zealand

Lockton’s entry into the market comes at a time of transformation in New Zealand, with a host of insurance reforms at different progress stages. So, how does an essentially new player navigate through all the changes?

“Probably easier than our competitors because we have no legacy,” responded Lowe. “We have no legacy problems to worry about. We have no legacy issues to fight. We don’t have backward-looking brokers who are sitting there saying, ‘In 1973 I did it this way’. We have innovative people who want to move forward.

“The challenge in the New Zealand market is good. If you go back to 2011, when the Insurance (Prudential Supervision) Bill came into play, that was the very first update of the Insurance Act since 1953 – it was good for the insurance industry as we now have a proper Act.”

The broking boss went on to tell Insurance Business: “So, what’s happening now with contracts, with catastrophic risk, with advisors, is that we’re just stepping up to where we should have been probably 20 years ago. And it’s meaning that people like my organisation have to provide the right advice, and have to be prepared to be judged by their advice.”

Read more: “Years of effort” lead to new insurance bill

Based at 1 Albert Street in Auckland, nearly seven-month-old Lockton NZ is opening its Christchurch office next week, to be followed by that of a Hamilton site within three weeks. The current staff count, according to Lowe, is 23. What’s challenging, he said, is finding the right people and attaching the Lockton brand to them.

“The biggest challenge,” noted the Marsh and WTW alumnus, “is driven by the actual Lockton name; it is unknown in New Zealand. The people we’ve recruited have fantastic reputations – be that Craig Buckle who heads up corporate, Jessica Schade who runs ART (alternative risk transfer), Niall Martin who runs EB (employee benefits), Ged McCombie who looks after the Pacific business, Mike Kayes in trade credit, and Jo McIntosh in forestry and agriculture.

“These are all people that people queue up to have them look after them. So, the biggest challenge is attaching the Lockton name to these fabulous people, and that will roll it out quicker.”

The initial plan is for a twofold growth of the workforce by year-end, but “if it takes me three years to double, I’m prepared to do that, to put the right people to fit our organisation,” added Lowe – who said the wrong type would be the ones who put themselves and the dollar first, the lazy ones, and, to a certain extent, the so-called rainmaker or “the big golden person who strolls in with a big book of business” but is not interested in anyone else.

“What I’m really excited about is the opportunity to start something brand-new with a great partner who has the same values as I do, who believes in putting clients and staff first and believes in looking after people,” stated the chief executive, who described the market’s acceptance as having been remarkable. “If someone gets sick, you take care of them. It’s not all about profit. Because if you do all that right, you’ll make money.”

Read more: Lockton receives licence to operate in Cook Islands 

Lowe stressed: “The moment you put a shareholder first, you fail as an organisation, you fail as an individual, and you fail as a leader. And Lockton has given me the freedom to focus on clients and to focus on staff. If you have a great culture that is staff-driven and client-driven, you’ll have people knocking on your door, ‘Can I come and work for you? Would you be my advisor?’

“The people that have joined, they want to be here. The clients that have joined us and the people I talk to about the story as to why we are here, they’re also excited. So, we’ve got clients who are excited, staff who are excited, and shareholders who are supportive. It’s all the good measures to create a great organisation that I’ll be able to sit back in 10 years’ time and [know] that I helped create that.”

The business leader, who said it’s about building a value-driven advice model, believes clients are “a little bit fed up with the duopoly, and they’re excited about someone new coming in place with really high-quality people” who don’t only do transactions but actually provide the right advice based on listening and focussing on risk.

“The ability to listen, the ability to shut up, the ability to think – if you have those, then you will hear what the person’s telling you and then you can figure out a way to reply,” Lowe pointed out. “And that can be applied across everything – in clients, prospects, people who want to work with you, how you want to behave in a corporate community, and what type of organisation you want to have. That all flows through to putting staff first and putting clients first.”