Inflation and supply chain concerns loom over middle market
firms' post-COVID 19 recoveries
WHITEHOUSE STATION, N.J., Aug. 9, 2022
/PRNewswire/ -- New data released from Chubb and the National
Center for the Middle Market (NCMM), housed at The Ohio State University Max M. Fisher College of Business, reveals that middle
market firms are continuing to report 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 vs. 75% in the fourth quarter of 2021), nearly four out of
five (79%) middle market firms are reporting revenue growth from a
year ago, and more than half (58%) continuing to add to their
workforce – even in a tight labor market.
"Middle market companies are experiencing sustained recovery,
posting record revenue increases and hiring more workers to meet
unprecedented consumer demand," said Ben
Rockwell, Division President, Chubb
Middle Market. "As economic factors impact the cost of risk,
the collaboration between middle market firms and their insurance
agents and brokers is more important than ever in developing robust
risk mitigation strategies and identifying potential coverage gaps
to help minimize exposures which could inhibit future growth."
According to mid-year survey results, inflation has emerged as a
major concern for middle market companies. Of the 39% of firms
reporting that inflation has negatively impacted their company, 62%
say they have raised their prices or rates in response.
Additionally, middle market firms are keenly aware of how the cost
of risk has increased, with three out of four (75%) firms
recognizing that the replacement cost of covered assets has
increased – highlighting the importance of accurate valuations and
strong business continuity plans.
Supply chain challenges continue to be a significant hurdle,
with 55% of middle market companies reporting that they have been
directly impacted by supply chain disruptions, up from 47% in the
fourth quarter of 2021. Of the middle market firms that have been
impacted by supply chain delays, 86% report a negative impact on
current revenue, and 85% report a negative impact on revenue
projections for the remainder of 2022.
Nine in ten (90%) middle market leaders are working closely with
their insurance agents and brokers to identify best practices for
reducing exposure to a range of risks amidst uncertain economic
conditions. As business needs and exposures evolve, middle market
companies should regularly review their strategies and coverages
and make necessary adjustments, with special attention to insurance
programs, where they should ensure appropriate coverages and limits
are in place.
Chubb's Executive Summary with detailed survey findings can be
found here. Industry-specific insights among middle market
technology, manufacturing, financial services, and life sciences
companies, are forthcoming.
About the Middle Market Indicator
The MMI, which was created in 2012, surveys 1,000 executives (CEOs,
CFOs and other financial decision makers) from the middle market to
examine topics related to business capabilities, performance,
growth drivers and economic outlook among other topics. The 2022
Mid-Year MMI was fielded in June
2022. It is weighted to accurately reflect the size,
industry-wide and geographic distribution of this sector, which
includes companies ranging from $10
million to $1 billion in
annual revenue. 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 The Ohio State
University Max M. 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 the world's largest
publicly traded property and casualty insurance company. 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 34,000 people
worldwide. Additional information can be found at:
www.chubb.com.
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SOURCE Chubb