Inflation and supply chain concerns are linked to mid-market recovery after COVID-19
WHITEHOUSE STATION, NJ, Aug. 9, 2022 /PRNewswire/ — New data released by Chubb and the National Center for the Middle Market (NCMM), housed at Ohio State University’s Max M. Fisher College of Business, show that mid-market companies continue to experience sustained growth despite ongoing macroeconomic pressures.
According to Chubb and NCMM’s 2022 Mid-Year Middle Market Indicator, despite the 11 percentage point drop in global economic confidence compared to six months ago (64% in the second quarter of 2022 versus 75% in the fourth quarter of 2021), nearly four in five (79 %) midsize companies are reporting year-over-year revenue growth, and more than half (58%) are continuing to expand their workforce — even in a tight labor market.
“Middle businesses are enjoying an ongoing recovery, posting record sales increases and hiring more employees to meet unprecedented consumer demand,” said Ben Rockwell, division president, Chubb Middle Market. “As economic factors drive the cost of risk, collaboration between mid-market companies and their insurance agents and brokers is more important than ever to develop robust risk mitigation strategies and identify potential coverage gaps to mitigate risks that could inhibit future growth.”
According to mid-year survey results, inflation has become a top concern for mid-sized companies. Of the 39% of companies who say inflation has negatively impacted their business, 62% say they have increased prices or rates in response. Additionally, mid-market companies are well aware of how the cost of risk has increased, with three in four (75%) companies reporting that the replacement cost of covered assets has increased – underscoring the importance of accurate valuations and sound business continuity plans.
Supply chain challenges continue to be a significant hurdle. 55% of midsize companies said they were directly affected by supply chain disruptions, up from 47% in Q4 2021. Of midsize companies affected by supply chain delays, 86% report a negative impact on ongoing sales and 85% a negative impact on sales forecasts for the remainder of 2022.
Nine out of ten (90%) leading mid-market companies are working closely with their insurance agents and brokers to identify best practices to reduce exposure to a range of risks in uncertain economic conditions. As business needs and risks evolve, midsize companies should periodically review their strategies and coverages and make necessary adjustments, with a particular focus on insurance programs where they should ensure appropriate coverages and limits are in place.
Chubb’s executive summary with detailed survey results is available here. Industry-specific insights into mid-market technology, manufacturing, financial services and life sciences companies will be released soon.
About the Middle Market Indicator
Founded in 2012, MMI surveys 1,000 middle-market executives (CEOs, CFOs and other financial decision-makers) to explore topics related to business capability, performance, growth drivers and economic prospects, among others. The 2022 Mid-Year MMI was installed in June 2022. It is weighted to accurately reflect the size, industry-wide and geographic spread of this sector, which includes companies with annual sales ranging from $10 million to $1 billion. The survey is conducted by RTi Research on behalf of the National Center for the Middle Market
About the National Center for the Middle Market (NCMM) The National Center for the Middle Market is a collaboration between Ohio State University’s Max M. Fisher College of Business, Chubb, and Visa. It consists of a single purpose: to ensure that the vitality and resilience of mid-market companies, fundamental to our country’s economic prospects and prosperity, is fully realized. The Center is the leading source of knowledge, leadership and innovative research on the midmarket economy, providing business, policy makers and other key stakeholders with critical data analysis and insights. NCMM is fully committed to funding and disseminating the most credible open source research, dynamically creating new knowledge, delivering programs that drive value for midsize companies, and providing an informed outlook on health through the middle and Future of SMEs Market Indicator.
Chubb is the world’s largest publicly traded property and casualty insurance company. With offices in 54 countries and territories, Chubb provides commercial and personal property and casualty insurance, accident and supplemental health insurance, reinsurance and life insurance to a diverse customer base. As an underwriting firm, we assess, accept and manage risk with insight and discipline. We service and pay our claims fairly and promptly. The company is also distinguished by its extensive range of products and services, its broad distribution capabilities, its exceptional financial strength and its worldwide offices. 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 has offices in Zurich, New York, London, Paris and other locations and employs approximately 34,000 people worldwide. For more information, visit: www.chubb.com.