From cyber threats to transportation delays, U.S. middle market businesses are constantly battling a myriad of risks to maintain smooth operations. According to Nationwide’s latest Agency Forward survey, mid-market business owners are most concerned about economic and financial risks, regulatory changes, technological disruptions and labor shortages. Despite implementing various risk management strategies, only 54% of business owners feel highly protected against these threats.  

Nationwide’s survey of 400 middle market business owners highlights three critical themes for distribution partners and outlines steps they can take to help support their commercial clients.

Risk management is a key consideration for middle market businesses
Most businesses are prioritizing risk management and safety planning. Eight in 10 (83%) have a dedicated safety budget, averaging about 6% of their total budget. High-risk industries like Construction and Manufacturing allocate even more to safety at 19% and 13% of their annual budget, respectively.

Roughly 9 in 10 businesses have formal risk management policies in place and review or update them at least annually, if not more often. However, 21% of businesses report not having a business continuity plan, leaving them vulnerable to operational disruptions.

Over the next 12 months, business owners’ top risk management priorities include navigating a potential economic downturn, easing supply chain constraints, and staying on top of regulatory changes.

Key takeaway:
“Despite nearly 90% of businesses having formal risk management policies that are regularly reviewed, a critical vulnerability remains: one in five businesses lack a business continuity plan. This gap leaves them exposed to potential disruptions that could severely impact their operations. Agents can help identify and fill these gaps with commercial clients, partnering with them and carrier-provided risk management experts to develop and implement a comprehensive business continuity plan. These efforts can significantly enhance clients’ resilience and ensure they’re prepared to navigate unexpected challenges,” said Mark McGhiey, Nationwide’s leader of Commercial Lines Risk Management.

Evolving regulations test businesses but technology provides support
Middle market business owners overwhelmingly agree that evolving regulatory and safety standards present obstacles for their operations. Three quarters (78%) say changes have had an impact on their risk management needs and 1 in 5 (20%) feel their business is unprepared to respond to new regulations. Of the regulations their businesses deal with, most owners find data privacy and security requirements the most difficult to comply with.

Technology provides crucial support in the risk management or regulatory realm for 76% of middle market businesses, with 11% reporting its central to all their risk management activities and 65% using it in specific areas but not comprehensively. Owners report improved efficiency and compliance to regulations, enhanced data analysis and reporting, and better real-time monitoring of risks as a result of their technology use.

Key takeaway:
“Commercial carriers offer industry-specific resources and services, sometimes at no additional cost to the policyholder, to help businesses fill protection gaps and comply with standards and regulations, such as jobsite forms and incident report templates for construction or guidance on emergency action plans and PPE selection for manufacturing. Business owners also say distribution professionals can add value by communicating regularly about safety or regulatory updates and implications to their operations,” said McGhiey.

Business owners have difficulty merging risk management with business success
Despite the many safety actions businesses are taking, many owners still struggle to recognize the value and impact of their efforts: only 51% currently view their risk management initiatives as effective. Their top challenges with safety and risk management include:

Cost of safety measures (38%)Maintenance of safety equipment (31%)Resources required for conducting regular safety assessments (30%)

These concerns underscore the importance of connecting risk management with business strategy. By working with distribution professionals and industry risk management experts, business owners can develop tailored risk mitigation and safety strategies that align with their company’s priorities. Risk management professionals frequently discover easy, cost-effective strategies to help businesses improve their risk profile and safety records, helping to enable business success.

Key takeaway:
“Leverage carrier-provided resources to help enhance your safety initiatives,” McGhiey said. “Working with industry-specialized safety partners like Nationwide’s Risk Management experts can help commercial customers identify protection gaps and design customized, budget-friendly strategies that can improve safety outcomes while seamlessly integrating into their operations.”

Learn more about Nationwide’s Risk Management services and resources, offered at no additional cost to commercial policyholders.

‘;