Meeting the Unique Risks and Needs of the Middle Market
Middle market companies are often overlooked when it comes to insurance coverage.
Defined as those with up to $150 million in physical assets and up to $500 million in annual revenue, middle market businesses tend to get missed as insurance focus on solutions that cater to small businesses and large corporations.
But by neglecting this burgeoning market, insurers are missing a wide swath of potential customers. Middle market businesses face their own unique set of challenges, particularly when it comes to obtaining cover for property, general liability, and workers’ compensation.
Securing coverage is also an arduous process for middle market firms, with much having to do with the traditional back and forth between the insured, broker, and insurer to complete the underwriting process. And because many insurers still use legacy systems and overly complex operating models, it adds a further layer of inefficiency and complexity.
“That’s something we want to fundamentally change,” said Walt Sykes, Head of Middle Corporate Business, North America, at Swiss Re Corporate Solutions. “We want to be fully transparent in how we bring customers into our portfolio and underwrite their business, so that when they first purchase or renew their insurance with us they don’t get any nasty shocks or surprises. We want to make their buying process better!”
In addition, service levels provided by insurers vary greatly for middle market companies compared to their SME and corporate counterparts. And because it’s such a wide-ranging market in terms of company size, there are a host of different risks and requirements for each individual one, meaning that one size of coverage and service does not fit all.
In recent years, workers’ compensation has also become a particular challenge for middle market firms, given the rising impact of climate change on the working environment. So, customers need an insurance carrier that understands the impact of a climate change to help develop a more sophisticated risk management approach that not only addresses traditional injury exposures for their employees, but the ever-increasing concerns for employees working in changing operating environments.
Up until now, insurers have simply scaled up their SME solutions or scaled down those for their large accounts for the middle market. But often their models don’t necessarily fit the differing or changing needs for the large variety of middle market companies that exist today.
An Elevated Solution
In response to all these problems and the growing need for better coverage in the middle market, Swiss Re has developed its own solution built on three defining principles: speed, simplicity, and service. Elevate provides commercial property (proprietary form), general liability and workers’ compensation coverage for these companies that can be quickly and efficiently scaled up as they grow as a business and their risk complexities change.
To support this, Swiss Re uses in-house and third-party data and technology to make the underwriting and decision-making process as efficient as possible. It’s also backed by an experienced underwriting team with access to its parent company’s Nat CAT model and institutional knowledge, which gives it an edge over its competitors who only use a standard model.
“We wanted to do something different to what’s already out there,” said Katarina Scamborova, Head of Standard Propositions, North America, at Swiss Re Corporate Solutions (CorSo). “So, we started from scratch and developed a product specifically designed for the middle market that is supported by technology enabled operating model.”
Swiss Re initially developed a minimum viable product, providing property and general liability insurance, within twelve months and soft-launched it to a handful of brokers in 10 States last year, to solicit and incorporate their feedback. Since, then it has expanded its offering to include workers’ compensation, across close to 50 States.
At the same time, Swiss Re has increased its network of brokers and agencies across the U.S., that work closely with their clients to determine their risk exposures and to mitigate them. The highly user-friendly and reliable product is also available in the UK and Spain, in a form specific to those markets, with plans to roll it out further afield in the future.
One of the key benefits of Elevate is the technology behind it. Because it enables the insurer to gain a greater understanding and insight into the risk, the underwriter needs to ask less questions and, therefore, can make a quicker assessment and more accurately price it.
“We want to ensure that we’re providing insurance policies that are both easy to understand and purchase,” said Sykes. “But we also want to make sure that every customer interaction is meaningful and absolutely necessary because we know how valuable their time is.”
Because each industry is different, ranging from commercial real estate to manufacturing firms, Swiss Re CorSo has established purpose-built endorsements within its coverage offering to meet each individual company’s needs as a basic operating principle. The company constantly reviews and develops these special provisions to ensure they remain current and in line with that sector’s requirements, but insureds can add on further enhancements if they want.
“For example, our property form offers four additional levels of enhancement that the insured can select from and then choose to purchase or not,” said Sykes. “We provide all four optional enhancements every time we propose insurance to the customer’s broker or agent, we give them an exact price, so they know what each level would cost to expand their coverage – one way of reducing the traditional back and forth of the placement process.”
Claims are another core component of Swiss Re’s solution. Reflecting that, its claims department is highly accessible and responsive to its customer’s needs, particularly with resolving claims, which is paramount in today’s tough trading environment where every dollar counts.
“The customer is at the center of everything we do,” said Scamborova. “Whether it’s from an underwriting or claims standpoint, we’re constantly striving to provide the best possible service to our customers and to ensure they have a positive experience every time. At the end of the day, we work with people and kindness and empathy goes a long way.”
On the customer’s side, however, Swiss Re requires full commitment to risk mitigation through having a clear strategy to address critical exposures. That fits in with its overall ethos of improving resiliency, not only among clients, but on the wider global stage.
“A company’s risks will inevitably change over time, so they need to focus on evaluating their changing risk profile and adopting strategies that matches the change,” said Sykes. “But we’re here to support them every step of the way.
“We achieve that by taking a consultative approach with our risk engineering services team and through our underwriting process. Because at the end of the day, we want to become a trusted partner to our customers that acts in their best interests by helping them manage their risk and the impact that it has on their employees and customers, so that they can be even more resilient as an organization moving forward.”
To learn more about Swiss Re’s Elevate middle market solution, visit https://corporatesolutions.swissre.com/insurance-solutions/elevate/us.html.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Swiss Re Corporate Solutions. The editorial staff of Risk & Insurance had no role in its preparation.