- 80% of middle-market companies indicated that they are concerned about the future of their business
- 77% of middle-market business owners indicated that they have or will be reassessing their insurance needs due to economic uncertainty
- 68% of middle-market businesses struggle to determine the appropriate levels of coverage for their company’s needs
These days, running a successful business of any size is no small accomplishment. It takes time, effort and dedication. Each year, businesses have new and ongoing challenges to tackle. Whether it’s preparing for the latest cyberthreat, addressing labor trends, dealing with industry disruption, sizing up changes in consumer behavior or complying with new regulatory requirements, businesses have a lot to consider.
Of course, the events of 2020 have drastically changed the landscape for most businesses. The fallout from the COVID-19 pandemic and corresponding economic uncertainty have uprooted life as we know it. Against this backdrop, it’s no surprise that middle-market businesses are increasingly turning to their insurance agents for assistance. The best-equipped insurance agents are those prepared to deliver tailored guidance and value-added services that help their clients effectively manage their business through these uncertain times.
This sentiment was underscored in Nationwide’s latest Agent Authority research, which involved surveying over 600 middle-market businesses and 400 independent insurance agents from across the country. In this article, we will examine key findings from that research and how independent agents can leverage this information to meet the needs of clients and prospects.
COVID-19 and economic uncertainty weigh heavily
There is no denying that the ongoing COVID-19 pandemic and the state of the economy weigh heavily on businesses across the country. This is especially true for middle-market companies.
The owners of these businesses have the highest level of concern when it comes to how their company will fare during an economic downturn. In fact, 80% of middle-market companies indicated that they are concerned about the future of their business in the current economic environment. When it comes to their outlook for the next 12 months, businesses are more divided. Nearly half of middle-market business owners believe that the economy will improve by this time next year.
So how have businesses reacted to a changing economy? According to our research, more than 93% of middle-market businesses have taken proactive measures to protect their assets. And 77% of middle-market business owners surveyed indicated that they have reassessed or will be reassessing their insurance needs due to economic uncertainty.
This sentiment is even more profound for middle-market businesses with fleets. Over 90% of these businesses feel the need to reassess their insurance in the current environment. At the same time, more than 75% of these same businesses are unsure of how the economy will impact their insurance coverage needs moving forward. This speaks to a potential opportunity for insurance agents to help their clients through these difficult times by providing sound insurance guidance that meets the realities of the current environment. For many agents, the ability to provide this level of service will require staying up to date on the latest trends in the insurance industry and developments in the industries they sell to.
Ongoing insurance challenges in the middle market
As middle-market businesses are re-examining their insurance needs, they are coming up against several challenges. When businesses grow and enter the middle market, they tend to face a wider range of exposures and insurance challenges than their smaller counterparts. Addressing these challenges can take a great deal of time and effort, as well as input from various stakeholders in the business.
A majority (71%) of middle-market businesses reported that understanding what is and what is not covered under their insurance policies is a challenge. Almost the same amount (69%) of middle-market businesses — along with 67% of middle-market businesses with fleets — indicated that it can be difficult to understand the different types of coverage available to them. Finally, determining appropriate levels of coverage and policy limits is a constant struggle in the middle market. In fact, 68% of middle-market businesses struggle to determine the appropriate levels of coverage for their company’s needs.
| Top 5 insurance challenges for middle-market businesses |
| General middle-market accounts |
Middle-market accounts with fleets (20+ vehicles) |
| Understanding what is and what is not covered in my policy |
The length of time it takes to settle claims |
| Finding the best price for my protection needs |
Finding the best price for my protection needs |
| The length of time it takes to settle claims |
Understanding what is and what is not covered in my policy |
| Understanding different types of coverage |
Understanding insurance terminology |
| Keeping up with the new technology offered by the insurance industry |
Keeping up with the new technology offered by the insurance industry |
Source: Nationwide Agent Authority research
These findings demonstrate that middle-market companies are looking for more engagement from their insurance partners. Many businesses are seeking tailored advice from their agents that enables them to understand their risk profile and make informed insurance decisions. However, for many agents, this remains a challenge. According to our research, more than half of the agents we surveyed feel they can improve when it comes to:
- Educating clients on the level of coverage they need
- Understanding the nuances between different industries
- Educating clients about different types of coverage
- Educating clients on insurance terminology
Practically speaking, those agencies that are positioned to deliver to their clients technical policy guidance in a timely manner will fare better than their counterparts by meeting the needs of their clients.
Taking a more holistic approach
For many dynamic, growth-minded organizations in the middle market, a holistic approach to risk management is key to their success. Nationwide’s Agent Authority research shows that there is a strong appetite in the middle market for guidance that extends beyond traditional insurance topics. In particular, the middle-market businesses surveyed indicated that they would welcome more information on a whole host of topics, including cybersecurity, employee benefits, safety, loss control, emerging risks, business interruption and disaster planning.
These findings speak to an opportunity for insurance agents to differentiate themselves from their competitors. Agents who are prepared to help businesses solve pressing challenges, limit exposures, become more informed and take advantage of opportunities may be able to build stronger ties with their clients.
Core qualities that middle-market businesses look for in their independent insurance agents
While businesses are always looking for cost-effective insurance solutions, the ability to provide competitive pricing isn’t the only factor that businesses use when selecting an agent. In fact, the top five characteristics that middle-market businesses use when selecting an agent focus more on quality of service, value-added offerings and industry know-how.
| What middle-market businesses look for in an insurance agent |
| General middle-market accounts |
Middle-market accounts with fleets (20+ vehicles) |
| Trustworthiness |
Trustworthiness |
| A strong reputation |
Knows and understands my needs as an insured |
| Superior customer service |
The ability to help grow my business |
| Knows and understands my needs as an insured |
Offers cost-effective insurance solutions |
| Offers cost-effective insurance solutions |
Industry expertise |
Source: Nationwide Agent Authority research
KEY TAKEAWAYS
- Nationwide’s Agent Authority study surveyed over 600 middle-market businesses and 400 independent insurance agents from across the country.
- As middle-market businesses are re-examining their insurance needs, they are coming up against several challenges, from understanding different types of coverage to keeping up with new technology offered by the insurance industry.
- The best-equipped insurance agents are those prepared to deliver tailored guidance and value-added services that help their clients effectively manage their business through these uncertain times.
Survey methodology
Nationwide commissioned Edelman Intelligence to conduct a 20-minute quantitative online survey among a sample of 2,600 U.S. independent insurance agents, small-business owners, mid-market business owners, mid-market business owners with fleet vehicles, African American business owners, Hispanic business owners and general consumers between June 9 and June 25, 2020. The goal was to understand what business owners and consumers value when buying or renewing insurance policies, explore the various challenges each audience faces concerning insurance, gauge perceptions of the economy and how each audience is managing uncertainty, and discover the actions that business owners and consumers have taken as a result of COVID-19 and the conversations they’re having with agents. As a member in good standing of the Council of American Survey Research Organizations, Edelman Intelligence conducts all research in accordance with the Code of Marketing Research Standards.
