When the world’s biggest privately owned global insurance brokerage launched its Kiwi operations in September 2021, those familiar with the brand were quick to think that the New Zealand branch would have it easy in terms of market entry, given the major name backing it. It turns out, the expansion wasn’t a breeze.
In an interview with Insurance Business, Lockton NZ chief executive Peter Lowe (pictured) revealed the two-year-old unit’s journey so far and the plans for it moving forward.
Lockton New Zealand, contrary to assumptions, still had a need to introduce itself to the market.
Lowe told Insurance Business: “If you put yourself in the shoes of a New Zealand insurer and a New Zealand client – even if it’s an NZX-listed company – they’ve never heard of Lockton.”
He indicated that, while a fellow insurance leader might know who Lockton is, insurer portfolio managers might not have heard of the US-headquartered group. Lowe didn’t find this surprising.
“It was something I expected, because they’ve been used to the Marsh/Aons of this world and then that’s it,” the CEO declared. “Most of the insurer portfolio managers didn’t know anyone else. So, we had to actually put a lot of effort into the brand and encourage everyone that we talked to, to think, ‘If you trust the people I’ve hired, then trust the brand they’ve selected’.
“Once you shift their point of view, you encourage them to do a deep dive into who Lockton is, and you go, ‘Here is some information for you’... They then come back and go, ‘I get what you’re doing; tell me why you’re in New Zealand’. You tell them it’s part of the global expansion and to bring the unique Lockton advice-driven, client-first model to New Zealand.
“And then the relationship builds really quickly and they reach a level of comfort, but we still have to continue our work on brand development and brand recognition in New Zealand.”
As for what Lockton NZ believes it brings to the local market, Lowe put an emphasis on advice.
“We want to be the best advice broker in New Zealand,” he told Insurance Business. “I didn’t want to be the best procurement broker. I’m not saying procurement’s wrong, but we don’t believe that it will give you the best outcome. Some brokers believe it will; we don’t.”
In Lowe’s view, good procurement is a scarcity and the more common average procurement involves driving insurance into a price structure. He said outcomes are limited when it’s only the cost one is worried about.
Starting out with 10 people during a nationwide lockdown two years ago, Lockton New Zealand is currently manned by 27 colleagues across offices in Auckland, Christchurch, and Hamilton.
It was noted that the broker’s client portfolio has significantly expanded – with clients ranging from mid-sized businesses to NZX50 companies, not only in all principal regions of the country but also in Pacific territories such as the Cook Islands, Samoa, and the Solomon Islands.
Essentially the question for Lowe is ‘where to next’, as the business works on its existing growth plan.
“The idea now is to look at what we’ve done for the first two years and then go, ‘How do we double that in the next five years?’” Lowe told Insurance Business, adding that the goal is to grow smartly and to continue investing in the New Zealand market.
“Logically, our next office is in Napier, then maybe Wellington, and quite possibly an office in the Cook Islands, because we do a lot of Pacific Islands business as well.”
What’s certain, according to Lowe, is that another office will be opened in 2024.
He said: “[The plan] is to continue on with what we’ve done, refine it so that it better reflects New Zealand and what New Zealand needs, and also refine it to better reflect the New Zealand market. The New Zealand market today is very different from what it was three years ago… There are pricing problems; there are capacity problems, and that changes the way people think as well.
“When clients are under stress on what they can buy, you’ve got to be able to come up with the best solutions for them. Maybe what worked two years ago is not going to work today, so what kind of advice would you give today?”
Lockton NZ’s specialisms span primary industries, property management, investment firms, power and energy sectors, hotels and hospitality, infrastructure, fuel supply, technology, and manufacturing.
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