For 60% of Mid-Sized Businesses, Crisis Management Is Key Unmet Need

September 7, 2020

Nearly 60% of mid-sized businesses said crisis management remains a top unmet need in terms of reducing risk exposure. At the same time, a little over a third said they’re concerned about rising insurance rates, according to a new QBE North America report.

“We need to look to the future and understand what risks middle market companies worry about most to design effective solutions to address those evolving risks, whether it’s a new type of insurance coverage or loss prevention or recovery service,” Tom Fitzgerald, president of QBE North America’s Specialty & Commercial business, said in prepared remarks.

The QBE North America 2020 Mid-Sized Company Risk Report, produced with the Association for Corporate Growth (ACG), focused on the top concerns among executives at companies with $200 million to $3 billion in revenues.

The report also captures worries tied to the current environment, including pandemic risks, social unrest and climate-related concerns.

At the same time, it is not all about the pandemic for mid-sized businesses. QBE North America noted that many companies also remain worried about general business risks, citing concerns around financial risks, digital assets, litigation and talent and culture. Businesses had risk reduction shortfalls in all of those areas.

Just 37% of mid-sized businesses said they have a pandemic risk mitigation strategy. Only a third (30%) said they have a macroeconomic risk mitigation strategy to combat recession. About 40% reported having a natural disaster risk mitigation strategy, and 25% said they maintain a climate change risk mitigation strategy.

Among the additional findings:

  • Along with crisis management, nearly 60% of mid-size businesses say they are also lacking in customized advice in terms of reducing risk exposure.
  • Concerning pandemic-related risks, 32% said that ensuring employee safety is a concern. About 22% said it is a top risk. 33% said the pandemic’s impact on cash flow was a top worry, and 17% called it a top risk.
  • 33% said they were concerned about rising insurance rates; 9% rated this as a top worry.
  • 21% rated operations performance and fraud/theft as a top financial risk.
  • Social unrest ranked as the sixth most concerning business interruption risk.

Among digital risks, cyberattacks (37%), data integrity (35%), and disruptive technology (32%) rate among the biggest concerns for mid-sized businesses.

Concerning risks related to litigation, 23% of respondents said they are most concerned about customer lawsuits, underscoring the pressure social inflation is adding to businesses.

The survey was conducted by the independent market research firm HawkPartners from June 24 to July 8, 2020 and included more than 300 decision makers at U.S. companies.

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Insurance Journal West September 7, 2020
September 7, 2020
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