Library: Chubb – An overview of the middle market and its dynamics
Executive summary:
Two years beyond the COVID-19 shock, middle market firms have sustained their economic recovery:
- More than two-thirds say they’re doing better than before the pandemic and have improved their performance
- Mean revenue growth and employment growth remain strong at all-time highs for the survey
But the outlook is mixed:
- In the next year, more than half of middle market companies see opportunities to:
– Introduce a new product or service or
– Expand into new domestic markets
- Meanwhile, confidence in the economy at all levels has taken a hit
– And confidence in the national economy has declined sharply, falling 19 points from a year ago
– As a result, fewer companies expect gross revenue to grow in the next year.
Concerns about inflation
While supply chain disruption has been a major issue throughout the pandemic, inflation has emerged as the top concern for middle market companies:
- Nearly two in five companies have experienced a negative impact – mainly from fuel, raw materials and wages
- To offset these increases, companies most commonly have resorted to raising their prices or rates, paying workers more and delaying capital investments
- Inflation drives up replacement costs of assets covered by insurance. And most middle market companies recognise it
- The majority of these firms say inflation has impacted their ability to replace covered assets with their existing coverage.
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