New Chubb and National Center of Middle Market Survey reveals
inflation remains the number one risk, and rising concerns over
cybersecurity, natural catastrophes and insurance coverage
gaps
WHITEHOUSE STATION, N.J., Feb. 22,
2024 /PRNewswire/ -- Chubb and the National Center for
the Middle Market (NCMM) released today new data that reveals
middle market companies demonstrated continued robust growth
against the backdrop of inflationary pressures, cybersecurity
threats, natural catastrophes and insurance coverage gaps. These
findings are the centerpiece of the 2023 Year-End Middle Market
Indicator (MMI).
Middle market companies reported strong revenue growth compared
to one year ago. On average, revenue was up 12.4%. More than
half (55%) generated revenue growth of 10% or more. And more
than eight in 10 (83%) said revenues were up year over year. These
results are the highest since the MMI began surveying companies in
2012.
"Middle market companies are a bellwether for the overall health
of the U.S. economy, and our survey shows they are posting record
growth," said Ben Rockwell, Division
President, Chubb Middle Market. "The
findings of the MMI provide relevant direction and insights for
agents and brokers to best counsel middle market companies in
navigating and mitigating the risk management pressures with this
critical business segment."
Increasing preparedness for emerging risks continues to be top
of mind for the middle market. According to the MMI, firms believed
they were completely or very prepared to respond to the following
disruptions:
- Inflation (45%)
- Catastrophic incidents (53%)
- Cybersecurity threats (58%)
However, compared to results from the MMI report in the second
quarter of 2023, businesses indicated a pullback on expansion
plans. In the latest report, three out of five companies
(61%) said they plan to introduce a new product or service in the
year ahead, versus 68% in the mid-2023 survey. There were
similar declines for expansion into new domestic markets (55% vs.
62%) and adding a new plant/facility (42% vs. 48%).
Inflation Number One Risk
The MMI found inflation continued to be the number one risk for
companies, and likely to persist due to rising labor costs and
geographic conflicts impacting trade routes.
Nearly 60% say they find managing inflation extremely or very
challenging, with higher wages as a major factor fueling cost
pressures. To combat inflation and lingering recession worries,
companies say they plan on raising prices and increasing their use
of AI to improve efficiencies and data analytics.
Damage from Weather Events Increase in Severity
The U.S. was impacted by a record 28 separate billion-dollar
climate disaster events in 2023, according to the National Oceanic
and Atmospheric Administration, and respondents view this as a
significant risk to their firms heading into 2024. Nearly half
(48%) say it's a top three factor in their insurance purchasing
decisions. Over half of firms (53%) indicated they are completely
or very prepared for disruption from catastrophic incidents. The
MMI confirmed the importance of developing business continuity
plans, as 44% of firms say they only recovered partially or not at
all from an operational disruption.
"Middle market companies can benefit from the expertise and
knowledge their agent or broker possess in preparing for short- and
long-term catastrophe events," Michelle
McLaughlin, Executive Vice President and Chief Underwriting
Officer, Chubb Middle Market, added.
"This advice can translate into securing adequate coverage
protection, risk mitigation strategies, business continuity
planning and physical risk assessments for middle market companies
achieving a more protected future."
Cybersecurity Concerns Rising
The threat landscape for managing cybersecurity looms large for
middle market companies, with 33% identifying insufficient
cybersecurity protection. Other notable findings include:
- More than three in five (62%) survey respondents indicated
cyber security as one of their top concerns factoring into their
insurance purchasing decisions.
- Nearly half of companies (47%) believed they had adequate cyber
insurance in place.
- A majority (52%) acknowledged that they needed or were
considering the coverage.
"As the predictability of cyber threats becomes more difficult,
the MMI survey shows the urgent need for companies to address cyber
risks to prevent catastrophic disruptions," said Mike Kessler, Division President, Chubb Global
Cyber Risk. "We work with companies and their broker or agent to
provide insight into the causes of cyber incidents and cyber
security solutions to help prevent attacks, as well as assess
protection gaps and tailor coverage to help clients recover from a
cyber incident."
Insurance Gaps Recognized
Middle market companies acknowledge that their overall needs for
particular coverages were greater than what they had envisioned in
their initial planning efforts. In terms of only adequacy and
needs, respondents shared the following:
- Multinational – 36% said they were adequately covered, but 47%
indicated they need or are considering additional protection.
- Environmental (pollution liability) – 40% said they were
adequately covered, but more than half (51%) said they need or are
considering additional protection.
- Cyber insurance – 47% said they were adequately covered, but
52% indicated said they need or are considering additional
protection.
Chubb's Executive Summary with detailed findings are available
here. Additional industry insights will be forthcoming across
manufacturing, technology, financial services, and life
sciences.
Upcoming 2024 Middle Market Webinar
Join the National Center of Middle Markets' Doug Farren and Chubb executives on Thursday, March 21 from 2
PM – 3 PM EST for a dynamic
webcast panel discussion around the Year-End Middle Market
Indicator findings. The webinar will focus on cyber insurance and
other specialty areas, along with our perspective on other trending
topics cited in the MMI. Check out the NCMM/Chubb Insights page for
webcast registration here.
About the Middle Market Indicator (MMI)
Chubb partners with the National Center for the Middle Market in
supporting the Middle Market Indicator (MMI), part of a bi-annual
flagship research report started in 2012. The MMI surveys 1,000
executives (CEOs, CFOs and other financial decision-makers) from
middle market companies and was fielded in Dec. of 2023
to explore middle market company executive thoughts regarding
business capabilities, performance, growth drivers and economic
outlook, among other topics. The survey is weighted to accurately
reflect the size, industry-wide, and geographic distribution of
this sector. These are companies with $10 million to $1
billion in annual revenue, which represent one-third of
private sector GDP, employing approximately 48 million people. The
survey is conducted by RTi Research on behalf of the National
Center for the Middle Market, which is housed at the Ohio State University Max M. Fisher College of Business. The margin of error is
3.1%, which declines to 2.7% at the 75% level.
About the National Center for the Middle Market
(NCMM)
The National Center for the Middle Market is a collaboration
between The Ohio State University
Fisher College of Business, Chubb and
Visa. It exists for a single purpose: to ensure that the vitality
and robustness of middle market companies are fully realized as
fundamental to our nation's economic outlook and prosperity. The
center is the leading source of knowledge, leadership and
innovative research on the middle market economy, providing
critical data analysis and insights for companies, policymakers and
other key stakeholders. NCMM is fully committed to funding and
distributing the most credible open-sourced research, dynamically
creating new knowledge, providing programs that drive value for
middle market companies and offering a well-informed outlook on the
health and future of the middle market via the Middle Market
Indicator.
About Chubb
Chubb is a world leader in insurance. With operations in 54
countries and territories, Chubb provides commercial and personal
property and casualty insurance, personal accident and supplemental
health insurance, reinsurance and life insurance to a diverse group
of clients. As an underwriting company, we assess, assume and
manage risk with insight and discipline. We service and pay our
claims fairly and promptly. The company is also defined by its
extensive product and service offerings, broad distribution
capabilities, exceptional financial strength and local operations
globally. Parent company Chubb Limited is listed on the New York
Stock Exchange (NYSE: CB) and is a component of the S&P 500
index. Chubb maintains executive offices in Zurich, New
York, London, Paris and other locations, and employs
approximately 40,000 people worldwide. Additional information can
be found at: www.chubb.com.
Chubb is the marketing name used to refer to subsidiaries of
Chubb Limited providing insurance and related services. For a list
of these subsidiaries, please visit our website at
www.chubb.com. Insurance provided by ACE American Insurance
Company and its U.S.- based Chubb underwriting company
affiliates. All products may not be available in all states.
This communication contains product summaries only. Coverage
is subject to the language of the policies as actually
issued. Surplus lines insurance sold only through licensed
surplus lines producers. Chubb, 202 Hall's Mill Road,
Whitehouse Station, NJ
08889-1600.
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SOURCE Chubb INA Holdings