On the one hand, there is the Ayn Rand fan – veteran of half a dozen corporate broking roles at Guy Carpenter and Marsh, seasoned business traveller, at home on the golf course. So far, so executive.
But on the other, there is the family man who relishes the extra time with his wife and teenage children afforded by coronavirus-mandated home working.
If he wasn’t engaged in the rapid expansion of Lockton Re, CEO Timothy Gardner would likely be on a family vacation in Colorado where, after a morning on the slopes, he would trade in his ski boots for waders for an afternoon’s fly-fishing.
However, Gardner’s departure from Guy Carpenter, accompanied by two senior colleagues, to head up reinsurance at Lockton, also indicates a willingness to take risks with his career – not to mention a certain steeliness in riding out several months of a tempestuous court battle with his former employer.
But more of that later…
The analytics guy
Gardner takes the reins at the burgeoning reinsurance division at an interesting time for the sector. Top-tier broker consolidation has been rife in recent years, and after the dust begins to settle at the new mega-brokers, the landscape for large independent brokers will look very different.
Parent company Lockton bought out the minority stake owned by private equity firm Stone Point in mid-2012, freeing it up to build scale and diversity at a pace and in a manner of its choosing – and the development of its reinsurance segment has been emblematic of this approach.
“We’re really an analytics business at the end of the day,” says Gardner.
“When I started in ‘92 it was three weeks before Hurricane Andrew and the industry was really ill-equipped to deal with catastrophic loss at that point,” he says. “We were still calculating loss potential on premium market share – and that’s nonsense, right? There are all kinds of concentration issues that we identified. But what it meant was that I was at the early days of this ramping curve of analytics.”
Gardner says the analytical capabilities that brokers now deliver are a key component of rating agency advice and capital optimisation, bringing “a tremendous amount of value” to help clients grow their businesses and become more profitable, more capital-efficient and more compliant with regulation.
That freedom to build from first principles is a key element of what attracted Gardner to Lockton.
“When we first started thinking about this business, we definitely had an expectation and a strategy about where we wanted to be and what we thought we needed in terms of capabilities,” he explains.
The executive says his team have been in an “incredibly enviable position” as part of a privately owned company where the desire to expand has not only been encouraged but aided by the ripple of talent emanating from the Marsh-JLT merger and also the lead-in to the Aon-Willis tie-up.
Gardner says the Lockton Re leadership has thus had the leisure to think about what geographies or lines of business it would like to enter, survey the market for the best practitioners in those areas and then “reach out to them and see if they’re a fit with us”.
Taking risks
You might wonder, however, why a senior executive at the reinsurance arm of one of the big three brokers would want to go back to basics and get involved in building a global reinsurance operation. For Gardner it’s about taking the right risk at the right time.
“I’d just gotten to the point at Guy Carpenter where, on a number of large accounts, I was the number one – and at that point I decided to pick up and move to London,” he recalls.
“I remember a number of the older-school brokers at Guy Carpenter said: ‘You’re mad – you’ve finally gotten yourself in the number one seat and you’re going to give it up!’ [But] I wanted the opportunity to continue to learn and to see something different.”
However, he maintains, it’s not just personal growth that drives him, but also the desire for collaborative creativity.
“The cumulative progress that we’ve made at Lockton Re is probably the highlight of my career; whether it’s the quality of the people that have joined us, the quality of our capabilities – the analytical offering, the technology we’re utilising – some of the successes we’ve had in the market with clients and prospects, [or] recruiting.
“It’s been incredibly enjoyable and rewarding, and we’re also excited and really emboldened by what we’re building. We do feel like we’re creating something unique.”
On and off the field
As an avid New York Giants fan, it may come as little surprise that Gardner describes his leadership style as “player/coach”.
“I like being a broker. I like being with clients and being involved in deals, and so one of the things that attracted me to Lockton as a culture and to the build-out of Lockton Re, was the opportunity to go back and be a broker again.”
Gardner contrasts this with the “ivory tower” senior executives inevitably find themselves in at larger organisations.
“You spent less and less time with clients – it became an internal job. So I was really excited by the opportunity to be external again. I love the chance to sit down with the teams and think about a client pitch.”
But although he talks a good game, is Coach Gardner capable of building a truly inclusive and nurturing business?
“We are always going to be better as a collective as opposed to an individual. The culture that I have always lived by and believe in deeply, because I think it serves clients the best, is one of collaboration, communication and really bringing the best of the firm to the fore – no matter where that voice might sit,” he says.
“How that translates in terms of the way Lockton Re is built is that we are intentionally as flat an organisation as we can be. We have functional titles – you’re a broker, you’re an actuary, you’re a cat modeller – but we’re trying to get away from the ‘executive vice chairman’, very hierarchical, ‘where do I fit in the org chart’-type mentality.
When it comes to management style, Gardner says he never been comfortable with the hierarchical structure that has been a feature of much of his career to date, and thus came to Lockton Re fully prepared to implement a more horizontal approach.
“You’re going to be better as an organisation when you break down siloes and barriers,” he says. “So it was actually relatively easy to create that culture within Lockton Re.”
Ground up
However, it hasn’t all been plain sailing. Gardner admits that he is typically impatient to get on with the job in hand, adding that in his current role “there’s a speed issue that I wrestle with”.
Part of the issue has been the fact that, due to contractual obligations, he was “pretty severely restricted for a year after leaving Guy Carpenter”.
“It got relatively public with some of the legal wranglings, which was disappointing, but it is what it is – these things happen at times.”
The news that Gardner, previously CEO of North America at Guy Carpenter, was to leave for Lockton Re along with Guy Carpenter’s chief innovation and product development officer Claude Yoder and managing director Nick Durant, broke in March last year.
By the end of May, parent company Marsh & McLennan Companies (MMC) had secured a temporary restraining order against the three men, preventing them from soliciting Guy Carpenter clients, trying to persuade ex-colleagues to join them, and also from carrying out any business that mirrored the work they had performed while at Guy Carpenter.
The lawsuit was eventually settled in January this year, with MMC’s lawyers telling a Manhattan federal judge that the parties had “agreed to a mutual resolution of all claims”.
“Many of us at Lockton Re had spent our careers in front of clients – pitching new business and reinforcing and cementing relationships. To be out of the market for a year was a challenge,” recalls Gardner.
The upside, in his view, was the freedom it gave the new leadership team “to focus on building the business from the bottom foundational bricks”.
“Things like our claims and accounting capabilities – we never had aspirations to outsource those resources to some far locale like India. We want to be a higher service, higher touch enterprise,” he explains.
“Building that capability with the right systems, people, communications, protocols and processes was really helpful. And the same with the analytics and technology. We spent the better part of a year thinking about what platforms we were going to utilise.”
I wonder how this relatively new business has fared given that, for a significant portion of its existence, coronavirus has disrupted the usual ways of doing business.
“If we were new entrants to the reinsurance brokerage space, and we were picking up the phone and saying, ‘Hey listen, we’re a start-up reinsurance broker. Let me introduce myself and the team’, that would be a hard sell in this environment,” Gardner says.
“The good news is that many of us have been doing this for decades, so we have a lot of personal relationships – so you’re not having to make that first introductory call.”
“I think we’ll be happier when this is all behind us but it hasn’t really slowed us down,” he concludes.
