Bob Lockhart, the man responsible for integrating Hobbs into Hilb, Rogal & Hobbs, and who was then fired from the firm over alleged improper payments to a client, says he's breaking new ground in his creation of the insurance brokerage holdings company Kinloch Holdings Inc.
His goal is to merge the concepts of accountability and specialization and offer that to the middle market.
"What I want to do from the ground floor here is to have that message clearly articulated to people, so that is the reason they want to come join the company and they understand what the basic values and culture and operating strategy is going to be," Lockhart said.
No one knows the importance of communicating a message better than Lockhart, who served as president and chief operating officer of HRH from 2003 to 2005. When the Hobbs acquisition concluded in July 2002, there was no integration plan in place, he said.
He had to create a single message for HRH, traditionally a middle-market player, and Hobbs, a company more deeply involved in large accounts. He blended the two companies, each with its different business focus, style and culture.
Lockhart's strategy with Kinloch is to acquire a base of operations and build a regional platform around it, by buying companies that complement that original base. The company has already started with the September purchase of New York broker Genatt Associates.
Genatt had offers from eight of the top 10 brokers and many major banks. But according to Lockhart, it was the opportunity to be Kinloch's base platform in the New York area that attracted Genatt.
"The principals at Genatt are two fathers and three sons, and they all have a vote at the table about what to do with the company," Lockhart said.
Kinloch will target brokers with specialized experience, either in industry sectors or line-of-insurance disciplines. The initial focus will be to finish what was started in New York, acquiring regional brokers that can enhance Genatt's areas of expertise--real estate, health care and construction.
Once New York is established, Lockhart sees other Northeast and Mid-Atlantic cities on his list of regions to tackle.
Lockhart said he realizes that growing his company on a regional scale may limit its profits, but believes the focus will allow Kinloch to develop its specialization and open up access to all brokers and customers in that regional territory. No doubt, other brokers will follow Genatt's lead.
"People are looking for new options," he said. Long-established, larger brokers are publicly traded and continue to swell, which can deter smaller firms like Genatt that don't wish to entirely lose their identity. "They are very entrepreneurial, and when you start to take that from them, it detracts from what made them great to begin with."
And when Kinloch starts to negotiate future acquisitions, Lockhart said he will be sure to be as discriminating as the prospective partner.
"Like any marriage, you want to make sure you're making the right choice for the right reasons," he said. "It's not about putting flags on the map, and it's not all about acquiring revenue. In the end, our goal is to make the total greater than the sum of the parts."
Prior to joining HRH in 1999, where he built core competencies in executive risk, aviation and health care, Lockhart spent nearly his entire early career--21 years to be exact--climbing the ladder at Marsh & McLennan.
He started as a marine broker in 1975, served as CEO of Marsh's Singapore office from 1985 to 1988, and spent his later Marsh years developing markets in Oklahoma and Connecticut.
Lockhart was fired from HRH in 2005 after Connecticut Attorney General Richard Blumenthal accused HRH of accepting undisclosed commissions on professional-liability placements for a Connecticut health-care network and offering rebates to a third party administering the policy on behalf of the network, according to news reports.
Earlier this year, however, Lockhart sued HRH for defamation. Lockart said he had nothing to do with the firm's contingent-commission arrangements, which were in place before he joined HRH as part of an acquisition, according to the news reports.
Lockhart declined comment.
December 1, 2006
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