Business Risks the Same

This issue’s special report talks to a few carrier executives about the state of the small business insurance market and the opportunity and risks this important sector faces in 2022.

But when it comes to top risks, it doesn’t matter whether the business is small, medium or large, the challenges are the same.

Small businesses are subject to most of the challenges facing any size businesses today, Charles Hamann, deputy president of small commercial at The Hanover, told Insurance Journal. (See page 18 for the small business report).

Those risks include labor shortages, supply chain disruptions, cyber and ongoing concerns over the pandemic. While most middle-market firms and many small businesses, as well, have experienced a recovery following the height of disruptions caused by COVID-19, and remain optimistic about the global economy, these business risks continue to cause concern.

According to a survey of 1,000 executives by Chubb and the National Center for the Middle Market (NCMM), 73% said business improved compared to a year ago and 75% said they are at least somewhat confident in the global economy.

However, pandemic risk appears to remain fresh on the minds of these middle market executives, who ranked it highest among “extremely or very challenging” risks, according to Chubb and NCMM’s 2021 Year-End Middle Market Indicator.

Nearly half of middle market executives surveyed put supply chain risk in this category too, followed by cybersecurity.

“With the growing complexity and global nature of many company supply chains, it is clear the middle market is in no way exempt from the issues,” said the NCMM. “Over the course of 2021, perspectives regarding supply chain disruption changed significantly. The percentage of companies saying supply chain risk was extremely challenging to manage jumped from 27% at the end of 2020 to 48% 12 months later.”

The complexity of data privacy laws, trade-policy uncertainty, and the frequency and severity of extreme weather events are top-of-mind concerns for middle-market companies looking to do business overseas.

“Business success and risk are inherently intertwined,” said Ben Rockwell, division president, Chubb Middle Market. “Middle market leaders have an opportunity to make risk management — from better understanding of their exposures to updating their risk mitigation strategies and insurance program — a priority, so they can support continued growth.”

The same is true for their smaller business counterparts.

Topics Commercial Lines Business Insurance