The middle market for property-casualty insurers is a dynamic market, contributing significant premium to the industry. This foray into the middle market includes a market sizing analysis and the results of in-depth interviews with a wide array of middle market insurers. The study provides an analysis and insight into the unique characteristics of the market, how insurers are changing to better serve distributors and insureds, and insurer perspectives on their competitors.
Sizing of the Middle Market
Customers in the Middle
Distribution Rapidly Evolving
What Will It Take to Succeed?
This report analyzes the current state and evolving dynamics of the middle market, including market sizing, customer and distribution trends, and the state of competitiveness in the market. Insights were gleaned through a two-fold approach. First, we took an analytical-driven review of insurer financials and publicly available data including revenue and employee counts from BLS (Bureau of Labor Statistics), which allowed us to estimate the size of the middle market and economic trends of businesses within. Second, in-depth interviews with national, regional, and specialty insurers serving the middle market allowed us to gain context and insight from executives.
This study summarizes the insights found and takes a look ahead. Chapter 3 defines the middle market and estimates premium volume and examines the firmographic breakdown of medium-sized businesses. It should be noted that there is no consistent, uniform definition of middle market among insurers, but using the above two-fold approach, we were able to put together a Conning definition of the middle market. Chapter 4 examines the unique insurance characteristics of a middle market account. The focus is on how insurers define this market and approaches taken to succeed. Chapters 5 and 6 focus on customers—first insurers and then distributors. We analyze what insurers offer to customers in this space. Due to the near-unanimous usage of independent agents in middle market, we also focus on distributor as a customer that insurers are serving, including trends in consolidation and efficiency that insurers need to navigate to succeed. Finally, in Chapter 7, we examine how insurers view their competitors in the market and how the market is, overall, relatively stable with higher barriers for new entrants, with no singular event pushing competitors out. Overall, the middle market is a key market offering for commercial insurers. The line is slowly evolving, perhaps following in the footsteps of the small commercial from 10 to 20 years ago.