Insurance Stronghold: LOCKTON COS. BUILDS ON OMAHA OPERATIONS

The Omaha office of Lockton Cos. — a Kansas City-based property and casualty, benefits consulting and retirement plan firm — is marking its 10th year in business by embodying the maxim that crises such as the pandemic, economic downturn, hard market, civil commotion and increased natural catastrophes offer opportunities. The 17,000-square-foot Omaha office at 13710 FNB Parkway, Suite 400, now is staffed by a workforce of 60, up from 50 two years ago. Nebraska President Jack Struyk, a 42-year veteran of the industry, said the local operations of the family-owned firm that was founded in 1966, earns about 60% of its revenues from property and casualty coverage, followed by benefits consulting and the smallest amount, 10%, in retirement plans.

Growth in Nebraska

The Nebraska office has gained recognition for its work with clients in specific verticals that include private equity, food and beverage, energy, construction and property. “We are planning for continued double digit growth in all segments, but if I had to choose, I believe benefits and retirement have the largest upside,” Struyk said. “Both sides of the house are facing unprecedented challenges, which will lead to growth for the top brokers.” Whether organizations are fully insured or self-funded, cost related to health plans continues to rise and employers cannot continue to manage health plans as they have in the past, he said.

Changing the Conversation

Struyk, a native Omahan, said while the property and casualty market is as hard as it has been in decades, said the best brokers are changing the conversation and the game plan to successfully study risk management plans. The use of analytics has become more prevalent in the product-marketing process, he said. A longtime client was recently forced to make changes to their program to help control their cost of risk and Lockton ran a dynamic capital model analysis with thousands of loss simulations to model the best retentions/limits/structure of a potential insurance program to maximize return on the client’s capital. In another case, Struyk said his team partners with a Nebraska-based client that previously had been insured through a group captive for many years. “We modeled various coverage structures, including guaranteed cost programs, large deductions, and alternative captives to see how their cash flow would be impacted over the next 10 years based on their prior loss experience,” he said. “Our models incorporated estimated premiums, losses, and retentions, and helped the client determine the most efficient way to deploy their capital when it came to insurance.” Struyk said such work differentiates Lockton from many of its competitors. “Investing in dollars for [training] the people meeting with our clients has enabled us to develop a great mix of business clients in Nebraska that include contractors, large retailers, medical firms, including nursing homes and other skilled health care providers, distribution businesses and manufacturing firms,” he said.

Growing Markets

Retirement products were added in 2018. Struyk, who places more than $75,000,000 in premium annually, said it has been his goal to build “bench strength” in Omaha, which is then augmented by specialists from the Kansas City corporate offices. Such is the case with cyber liability coverage. Lockton, since 2012, has hired about 100 cyber liability specialists who work out of the Kansas City headquarters. In Nebraska, Iowa and Minnesota, Struyk is finding more clients are seeking coverage and that multiple-factor authentication factors are not always being met. Since the pandemic, more clients want policies electronically at a time when the number of personal identifiable records continues to grow — a situation that is coming back to bite them. “Tighter controls are needed,” Struyk said, noting that Lockton specialists partner with outside vendors, and various clients to assure that MFA items are implemented. The property insurance market is changing and becoming more challenging due to the complexity and severity of storms, the intensity of wildfires, hail and tornadoes. Lockton now has technology to study via mapping the probability of flooding. One railroad client sought a study of land in Sarpy County that was being considered for a data center. For employee benefit clients, Lockton continues to be “creative” in monitoring employee use of benefits with the hope of stemming some of the higher premiums clients are charged for employee medical care. InfoLock, a program developed by Lockton, enables a patient’s chronic conditions to be identified along with suggested preventive treatment that in the long run can help lower costs. Adding to a program initiated four years ago, six nurse-advocates in Omaha monitor client accounts and work with patients to carry out physician orders in situations requiring continuous monitoring and care. Diabetes is an example. “We’re working with our clients to drive the health care spending down,” Struyk said. Struyk is one of 55 Lockton employees not related to the family of founder Jack Lockton to have ownership in the business. The firm, founded in 1966, has more than 8,500 associates and 65,000 clients globally. Organic growth is 13% and the client retention rate is 97%.

Opportunity Ahead

The Nebraska office has a client retention rate of 98%, one percent above the 25 U.S. and 56 global offices. It has won numerous awards including two consecutive years as Best Place to Work in the under 250 employee category in an annual competition sponsored by Baird Holm. Since the pandemic hit many Omaha Lockton Cos. office employees have been experiencing a 60/40 office-home work arrangement. Flexibility is the key at present in transitioning employees toward spending more time in the firm’s office. “I’m continually amazed at the bench strength that we’re assembling,” Struyk said. “By being a privately-held company, when we see opportunity, we can evaluate the need and fill that niche quickly.” Struyk, 66, is nearing retirement and has started a transition process that gives three key employees more responsibilities for operations of the office. Tim Huber, vice-president of client services and a 30-year industry veteran, will take an active role in servicing the largest clients. Kirt McAlpine, vice president and producer, will continue to specialize in property and casualty products and be joined by Cody Beguin, as a vice president and producer. 402-970-6100 • 13710 FNB PARKWAY, SUITE 400, OMAHA 68154 • WWW.LOCKTON.COM SOCIAL MEDIA: LINKEDIN • FACEBOOK • TWITTER • INSTAGRAM • YOUTUBE • VIMEO