New data from Chubb and the National Center for the Middle Market shows nearly 75 percent of middle-market companies report an improvement in overall performance compared to last year — a record high statistic shared in the insurer’s biannual Middle Market Indicator (MMI).

Chubb reports that this finding is supported by top-line growth over the past 12 months, overall employment growth, and continued expansion into new domestic markets with new products and services. The numbers indicate that confidence has improved from a year ago, when inflation surged.

In the MMI, middle-market companies as defined as firms earning between $10 million and $1 billion. The middle market represents one-third of private sector GDP and employs approximately 48 million people. One thousand middle-market executives were surveyed in June to compile the latest report.

“The middle-market sector, they’re not small enough to where…they have trouble reacting to some of these macroeconomic shocks,” explained Ben Rockwell, division president of Chubb Middle Market. “But they’re not so big that they’re publicly traded. Their thinking is a bit more quarter-to-quarter, versus maybe a little bit longer timeframe.”

Chubb leaders believe this enables consistent performance from middle-market clients. Still, 60 percent of middle-market firms surveyed in June reported inflation risk as extremely or very difficult to manage, and 40 percent of respondents reported a negative impact from inflation in the last 6 months, according to the MMI.

Anil Makhija is dean of the Fischer College of Business at Ohio State University, which houses the NCMM. He told attendees at a recent Chubb webinar that, given this economic backdrop, middle-market companies may be interested in securing more insurance coverage.

“And the reason, of course, is with inflation, what happens is that your asset prices also get inflated,” Makhija shared.

When it comes to inflation, ensuring buildings and property are properly valued is key. Rockwell said it’s “been a big topic of conversation with clients, agents and brokers,” as 72 percent of companies surveyed have seen changes in the replacement value of covered assets due to inflation.

“That impacts their coverage,” Rockwell said. “Those values tend to be reviewed once a year. Our suggestion is when you’re in an environment like this, it tends to make sense to do it a bit more frequently as you’re dealing with these challenges.”

Rockwell also said climate-related and catastrophic losses continue to be the main concerns of the survey takers. He also shared that the respondents pointed to technology, particularly artificial intelligence, as an area of opportunity. Fifty-two percent of Chubb’s middle-market clients feel that AI is important to their organizations.

“What we’ve seen when you have a fairly healthy macroenvironment like we’re seeing with middle-market companies (is that) they’re investing in technology,” Rockwell said, later adding that regarding water damage prevention measures that rely on sensors and other technologies, “we’re seeing more take-up in the middle market than ever before.”

“And I think that’s a testament to the strength of the market,” he continued. “Clients are able to invest in it.”