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Business risks facing the Mid-market

By David Jones
Director of Underwriting (Property & Packaged Business)

There are around 350,000 medium-sized firms in the UK employing between 50 and 250 employees. Collectively they account for around 13% of private sector employment and 15% of turnover. Uncertainty around Brexit, global trade wars, an ageing population, climate change and new technology are all contributing to unpredictability for businesses in this sector.

Companies have been saying for a number of years that the business environment is becoming more unpredictable. QBE’s recent Unpredictability Index appears to back this up, showing that almost all the ‘least predictable years’ have occurred in the past 20 years, with the majority during the past 10 years.

UK businesses, in particular, feel the most insecure, unsurprising given political and economic uncertainty from Brexit.  The smaller the company, the more pronounced this is, according to a survey of business leaders in seven countries that accompanies the QBE Index.  Only 51% of UK mid-sized companies say the next 12 will be predictable, compared with 78% and 70% respectively of all companies surveyed in research.

More agile, less resilient?

Mid-sized companies are potentially more agile and better positioned to adapt to rapid change. However, they are also likely to be hit harder by unpredictable events and often lack the resources and influence of large multi-national companies.

In line with the results for all businesses, mid-sized companies say the biggest impact from unpredictable events is on revenues (26%), although unexpected costs had a much larger impact on mid-sized firms (30%) than for large companies (26%). Mid-sized companies are also more likely to experience reduced demand and a more impactful recovery time.

As businesses explore new markets and new opportunities, the risks they face can become more complex and diverse. As such, it’s increasingly important for businesses to build up their resilience.

A combined approach

Mid-sized companies increasingly trade beyond national borders and are far more likely to be part of complex global supply chains, with all the liabilities and risks that presents. Risks like cyber attacks or product recall may seem remote to a mid-sized company but it doesn’t mean they shouldn’t be reflected in insurance. If anything, the less well-understood a risk is, the more valued the insurance expertise.

Increasingly, complex risks will need to be reflected in the mid-market insurance proposition. Combined or packaged covers are a convenient and effective way for companies to purchase comprehensive insurance cover, but this does not mean mid-sized companies shouldn’t be able to access specialist or sector-specific covers purchased by corporates.

Each sector is also exposed to a unique set of risks and mid-sized companies would benefit from specialist expertise that insurers like QBE can provide on what they should be considering in their insurance. For example, in the retail sector, as well as insuring the buildings, liabilities and vehicles, customers may gain extra peace of mind from QBE Trade Credit insurance, which protects against debtors not being able to pay their bills. Meanwhile, concerns for media and technology companies may include software/products liability, cyber liability, technology errors and omissions, intellectual property rights infringement and business interruption.

Broker and customer support

QBE’s expert underwriters around the UK are empowered to think quickly and creatively to work with brokers to provide customers with the right kind of insurance cover. In addition, as one of the world's top insurers and reinsurers, our global footprint can provide multi‑class, multi-national insurance for businesses that operate in multiple locations around the world.

Proactive risk management advice and support helps customers understand and manage their risks more effectively around areas such as slip safety and manual handling, health and wellbeing, disaster recovery planning, cyber awareness, driver safety, data protection and legal compliance.

QBE offers mid-market solutions to a range of sectors, including:

  • Technology, media and telecoms
  • Arts, entertainment and recreation
  • Charities and caring professions
  • Wholesale and retail
  • Education
  • Manufacturing

Find out more about how QBE is supporting the mid-market by downloading our mid-market solutions brochure at: https://qbeeurope.com/document-library/products/mid-market-solutions/

Your contact

Your contact

David Jones

David Jones

Director of Underwriting, Property & Packaged

Tel: +44 20 7105 5643

david.jones@uk.qbe.com