The Lockton Cos. headquarters is on the Country Club Plaza.
Adam Vogler I KCBJ
Jack Lockton started his insurance brokerage in 1966 above a laundromat on West 43rd Street in Kansas City.
Lockton Cos. grew into a pillar of the Kansas City community, now operating from a headquarters on West 47th Street overlooking the Country Club Plaza. Beyond that, it has grown into the world’s 10th-largest insurance broker.
Revenue has grown by more than 7.4% each of the past 10 years — a feat that gets increasingly harder as the total grows. For the year ended April 30, revenue grew 27%, to $2.72 billion — the highest year-over-year revenue growth in company history.
Lockton Cos. has roughly 9,000 associates in more than 125 countries and does what it takes to keep them happy. It made Forbes magazine’s 2022 ranking of America’s Best Large Employers and has among Business Insurance magazine’s list of Best Places to Work in Insurance for 13 consecutive years.
Although the size of Lockton Cos. has changed dramatically through the years, the foundation for growth really hasn’t. Jack Lockton led the company for 38 of its 55 years, thoroughly instilling his vision for the insurance brokerage business: work hard, take care of clients in a way they’ve never experienced, have a caring company culture, hire passionate people and be proactively ingrained in the community.
Current CEO Peter Clune has no plans to stray from Jack Lockton’s playbook. Lockton died in 2004, but his vision statement hangs prominently in Clune’s office. Clune is quick to cite books, videos and other historical references relaying his favorite stories about Jack Lockton’s business philosophy.
Clune said one thing Jack Lockton really got right was the value of keeping the company privately owned. Clune was particularly struck by a recording of a speech Jack Lockton gave to employees after being diagnosed with pancreatic cancer.
“He said it’s the decision of the family to keep the company a private enterprise headquartered in Kansas City and to be a part of the Kansas City civic community,” Clune said. “He said we can’t be bought. Then he said things like I know rumors come up about so and so wanting to buy us, but there are no rumors. The only thing we would have said is sorry, you’re nice people, but we don’t want to talk to you. So if there’s a concern to anyone in the back of your minds about today, tomorrow, the future, what it’s going to be like, you should be concerned with something else. It’s not an issue.”
A longtime employee told Clune that Jack Lockton wasn’t talking to the 250 people in the room during that speech. He was talking directly to his three sons and his brother in the front row.
For years, Jack Lockton kept a copy of a letter on his office wall from Carl Harris, a colleague who encouraged Lockton to start his business. It still hangs in the Lockton Cos. boardroom.
It’s a copy of a resignation letter Harris sent to the Glen Falls Insurance Agency. Harris cited as his reason the company’s practice of vesting all authority in a central office. Too much central control, he wrote, limits the abilities of associates to be creative.
“So in 1969, Jack and Carl were already talking about empowerment before it became a cool buzzword in the 1990s,” Clune said. “Still today, we believe that innovation happens closest to the client, and then we can bring that back and scale it. Our best ideas come from our people. They don’t call the central office and ask permission.”
Staying close to the client is more than words to the Lockton family. Jack Lockton worked as a producer the entire time he led the company. So did his brother and former Chairman David Lockton. So does Ron Lockton, the company’s current chairman and Jack’s son.
Being close to clients keeps leadership focused on doing what’s best for them. Being a private company allows the company to focus on long-term investments benefiting associates and clients, instead of short-term profits to please the market.
Lockton Cos. had about $9 million in annual revenue in 1986 when David Lockton first met former JE Dunn Construction Chairman Steve Dunn.
“I still remember that day vividly,” Dunn said. “One of my responsibilities at the time was handling the insurance, and in 1986, the insurance market got really tough to get coverage. We looked into the Lockton company and found them to be a lot different than the others. They were competing against some of the larger insurance agencies, which were cutting staff and services. But Lockton was doing the opposite. They were really looking at what they could do to provide the services that their clients need.
“I found that they really were willing to get their hands dirty in the trenches, go in there and fight for you to convince the carriers why they should take a risk on you and do it at a reasonable price. It’s why we stayed with them all these years, and they’re still handling the company’s insurance today.”
David Lockton handled the JE Dunn account for the rest of his career. Dunn said Lockton became a key strategic partner for JE Dunn and played a big role in the company’s ability to grow.
JE Dunn isn’t an isolated story. Lockton provides insurance brokerage services to many of the area’s leading companies. Its client retention rate was 97% during the past fiscal year.
It can seem harder to find a cause or major event in the Kansas City area that Lockton Cos. isn’t involved with than it is to find one that it backs. The company supports the United Way, Kansas City Sports Commission and WIN for KC, the Kansas City Zoo, Nelson-Atkins Museum of Art, the Greater Kansas City Chamber of Commerce, Rockhurst University, Harvesters, Folly Theater, Kansas City Ballet, Kansas City Tech Council, Civic Council of Greater Kansas City, Starlight Theatre and countless other institutions and causes.
“If you’re not in the insurance business, typically the way you know Lockton is through the community,” Clune said. “I walked into a golf tournament at Blue Hills (Country Club) a few weeks ago that was raising money for suicide prevention and saw the presenting sponsor was Lockton. It wasn’t because Lockton thought it could get some business there. Someone at Lockton knows a kid who has gone through a tough time and said we’re going to give to this cause.”
When there was a bistate effort in 1995 to restore Kansas City’s Union Station, David Lockton convinced everyone that the best way to insure the project would be though an owner-controlled insurance program (OCIP). Lockton Cos. had never written an OCIP before, but David Lockton put some people together and got it done. It resulted in lower costs, quicker enrollment, wider contractor access and simplified claims management for the project.
The Lockton family was one of the first to jump in when John Sherman started organizing a group of prominent Kansas City-area businesspeople to buy the Kansas City Royals in 2019 and ensure that the team stayed in the community for the long term.
Tim Dunn, current chairman of JE Dunn, said he’s had a chance to get to know David Lockton’s son, Marshall, very well through the years. They often trade business and community support ideas, especially where the two organizations share common ground. Increasingly, that involves angel capital or private equity investments in area startups and small businesses.
“When we see a new company starting up, both Lockton and us relate to them, thinking that was our founders back in the day,” Dunn said. “So we try to give them a shot, whether it’s piloting their product or service or investing in them. Like us, Marshall and Ron and David Lockton have a similar open-door policy where we’re willing to listen and at least give them feedback.
“We’ve both been philanthropic players in this city for a long time. We know if you can lend a hand and give direct feedback or an investment, it just makes the entire community better.”
The Lockton Cos. headquarters is on the Country Club Plaza.