Survey: Middle-market firms need risk management help
There are fresh opportunities for agents and brokers to help these companies better understand their exposures and mitigate threats.
Risk management is more important than ever for middle-market companies after dealing with pandemic-related disruptions over the past year and a half, according to the new Middle Market Indicator report from Chubb and the National Center for the Middle Market (NCMM).
The report reveals the findings of a survey of 1,000 middle-market executives from companies with $10 million to $1 billion in annual revenue during the first two weeks of June 2021.
According to the data, 79% of middle-market firms consider risk management to be “extremely” or “very” important to their businesses this year compared with just 68% in Q4 2020. Sixty-six percent of respondents also said their companies’ performance has improved in Q2 2021 from a year ago. However, the long-term economic impacts of the pandemic remain a top concern for these enterprises, with one-third believing COVID-19 will continue to negatively impact supply chains over the next 12 months.
“As risks evolve, it’s critical for middle-market companies to continually assess how their exposures may be changing in tandem,” Ben Rockwell, division president, Chubb Middle Market, said in a statement. ”The pandemic has presented many challenges and heightened exposures for middle-market companies, from grappling with new levels of supply chain disruption to remote work policies. As part of the planning process, middle-market companies must make risk management a top priority, assess what they have in place and make adjustments where necessary to address emerging risks.”
Although risk management is becoming a greater priority for middle-market firms, only 15% of respondents indicated that they rely heavily on the guidance of an agent or broker to help manage risks, presenting opportunities to insurance professionals to serve the unique needs of these entities.
Additionally, the report reveals the risks that middle-market companies find the most challenging to manage. What follows are those risks and the percentage of respondents that indicated the risk as extremely/very challenging:
- Insufficient cybersecurity: 40% up from 27% in Q4 2020
- Supply chain risks: 40% up from 27% in Q4 2020
- Competitive risk: 39% up from 30% in Q4 2020
- Legal regulatory or compliance risk: 38% up from 28% in Q4 2020
- Non-cyber catastrophic incidents (national disaster, operational problems): 36% up from 24% in Q4 2020
- Change in leadership or control (CEO succession, M&A): 31% up from 20% in Q4 2020
“Agents and brokers are extremely knowledgeable about risk management best practices and can help middle-market companies better understand their exposures, mitigate risks, and secure the insurance coverages for their unique needs so they can focus on continued growth and success,” Chubb and NCMM said in a release.
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