Three-quarters of middle market companies say they are considering an increase in their coverage amounts to ensure adequate protection against potential losses due to inflation, according to the Mid-Year 2023 Middle Market Indicator from Chubb and the National Center for the Middle Market (NCMM).
Inflation was the biggest concern among the 1,000 middle-market company executives who participated in the Chubb and NCMM survey. Just over a quarter of respondents ranked inflation as their top concern, followed by workforce challenges (22%) and a possible recession (15%), though recession fears have receded since year-end 2022.
“The mid-year survey showcases a number of positive economic indicators that reinforces the optimism and positive direction for the middle market segment,” Ben Rockwell, division president at Chubb Middle Market, said in a statement. Nearly three-quarters of respondents expressed confidence in the U.S. economy and 65% expect to increase revenue over the next 12 months. On average, they projected revenue growth of 9.6% next year.
Organizations’ top concerns that factor into their insurance purchasing decisions were cybersecurity (60%), infrastructure (52%), and catastrophic incidents including natural disasters (47%). More than 40% of companies said they are not well prepared to manage basic disruptions such as catastrophic incidents and prolonged power outages.
“With rising severe-weather disaster damages and increasing construction costs, companies have to be prepared for rebuilding and keeping business operations running in the case of a catastrophic event or impacts from aging infrastructure,” wrote Chubb and NCMM.
Fifty-four percent of middle market companies expect to face workforce challenges next year. Top areas of concern included recruiting talent, retaining employees, and competing for a limited number of qualified workers.