The past two years have presented new challenges to companies. Many were forced to adjust how they operated, whether transitioning to a remote or hybrid work model, or changing their production and/or delivery of goods and services—and those adjustments continue to evolve.
According to data from Chubb and the National Center for the Middle Market (NCMM), some middle market companies reported they were starting to recover from the economic impacts of the pandemic in the second quarter of 2021. Two-thirds (sixty-six percent) of middle market firms surveyed reported that their gross revenue increased compared to one year ago, whereas less than half (forty-six percent) shared this same sentiment in Q4 2020 – the last time the survey was conducted previously. Many middle market companies anticipate bringing on new employees to keep pace, with fifty-seven percent projecting that they’ll add to their workforce in the next 12 months, compared to only thirty-four percent who shared the same sentiment at the end of last year.
Despite being on the path to economic recovery, many middle market companies recognize that they’re not completely out of the woods, especially when it comes to managing risks. Nearly half (forty-five percent) of middle market companies surveyed said they are more risk averse due to their experiences with the pandemic, and seventy-nine percent said risk management is “extremely” or “very” important to their firm, up from sixty-eight percent in Q4 2020.
Additionally, many continue to find managing the following risks “extremely” or “very” challenging—more so than they did at the end of 2020:
In addition, few middle market companies say their businesses are completely prepared to respond to certain disruptions while they are occurring. For example, when it comes to property risk, only seventeen percent of middle market companies say they are completely prepared to respond to physical damage from water or fire, and eighteen percent say they are completely prepared to respond to hazardous weather.
As middle market leaders shift their focus from stop-gap solutions to long-term pandemic recovery, risk assessment and mitigation must be part of the equation.
Insurance agents and brokers have a wealth of knowledge around emerging risks and can serve as invaluable advisors to their clients. Thus, when planning for 2022, middle market companies should work with their insurance agent or broker to better understand how their exposures may have evolved—or may be evolving, review potential challenges, and identify opportunities to better protect themselves in the year ahead.
Ben Rockwell is Division President, Chubb Middle Market.
The opinions and positions expressed are the authors’ own and not those of Chubb. The information and/ or data provided herein is for informational purposes only and is not a substitute for professional advice. Insurance coverage is subject to the language of the policies as issued.