Global broker Lockton is to set up in Australia after tearing up its agreement with Australian Reliance.

Lockton announced this month that the Australian broker was to be part of a global alliance. But this changed dramatically when the US-based firm confirmed today that it will instead open its own offices in Sydney and Perth – where Australian Reliance trades.

Lockton Executive Chairman Asia Pacific Gerry Callaghan told insuranceNEWS.com.au his company is taking 34 staff from Australian Reliance, including several principals.

“Lockton will own 100% of Lockton Australia,” he said. “This fits with our business intention to build a cohesive Asia-Pacific strategy allowing us to leverage off our current base across Asia and service the needs of multinational clients from around the globe.”

It is understood Lockton was looking at increasing its 10% stake in Australian Reliance, but changed its mind during the due diligence process.

“Lockton’s decision to own 100% of the business… rather than increase its stake in Australian Reliance is consistent with our approach across Asia,” Mr Callaghan said.

The Lockton offices will open on May 18. Andrew Rhodes, previously with Australian Reliance, will head the business.

Mr Callaghan says Lockton will focus on the corporate and multinational business, while smaller companies will remain with Australian Reliance.

“The actual split is business-confidential,” he said. “We believe the client has the right to choose which intermediary they wish to work with, but this does not preclude either organisation from dealing in these sectors.”

Mr Callaghan did not rule out Lockton opening further offices in Australia, saying client demand will dictate when this will happen.

Australian Reliance CFO Kim Hanson did not respond to questions from insuranceNEWS.com.au.