Conning puts the size of the total addressable middle market at more than $150 billion, and with no carrier commanding more than a 5 percent share, the segment has become more attractive to insurers.

The insurance asset manager included these insights in a report published late last month, “2025 Middle Market Study: Expanding the Middle,” which also notes that there are roughly 200,000 U.S. accounts defined by these characteristics:

• Firms employ somewhere between 50 and 999 workers, with nearly three-quarters (73 percent) having fewer than 150.
• Firms generate between $10 million and $1 billion in revenue annually.
• Premiums range from $50,000 to $1 million.

In general, premiums will fall in the $100,000 to $250,000 range, Conning said in an abbreviated summary copy of the report made available to the media.

“For many insurers, the middle market has long been an amorphous swath of business potential that could require underwriting smaller risks with ‘thread the needle’ precision or ‘elephant hunting’ larger premium policies,” according to the opening introduction of the report. Addressing the entirety of the middle market would require both approaches, the report says, but Conning’s conversations with insurers suggest that the space is “diverse enough to accommodate multiple approaches.”

Much of the information contained in the report is based on interviews with top executives of leading insurers that participate in the middle market and an executive at a nationally positioned broker that places business for its middle market clients with nearly every top 50 insurer, Conning said, without revealing the name of the broker. Conning’s calculations to size the market relied on data from S&P Global Market Intelligence and from U.S. government databases such as the Bureau of Labor Statistics and the U.S. Census Bureau.

All calculations were performed by Conning, resulting in a range of $153 billion to $168 billion in revenues for the total addressable market. Conning’s calculations and assumptions about the market size are discussed further in the first chapter of the report.

“This market is highly fragmented. Based on the estimated size of the addressable market for middle market insurance, and the relatively estimated low market share of industry leaders such as Travelers and The Hartford, there is no one truly dominant insurer in the middle market space,” the report states.

Middle market firms have become more attractive accounts for insurers because opportunities are limited among national accounts and competing for small commercial business often means competing primarily on price, the report says.

To remain competitive in the middle, insurers are offering highly customized coverage options. Another key to winning middle market business is to provide some value-added services such as risk mitigation and risk engineering because many middle market firms are not big enough to maintain these risk functions on their own, Conning advises.

A chapter titled “Engaging Middle Market Firms” also explains why relationships with agents and brokers are crucial. “Success in the middle market often depends on the quality of agents/brokers and the strength of the relationship an insurer has with its agents,” the executive summary to the report notes, adding that agents and brokers play a major role in conducting due diligence for insurers and getting to the heart of each risk.

Here, Conning also breaks down the middle market at a more granular firmographic level to help insurers focus their efforts and outlines the types of coverage that resonate among firms in this space.

The coverage detail is only available to purchasers of the study. The executive summary notes that those who buy the full report will also see a list of insurers tagged as “up-and-coming competitors” to the likes of Chubb, CNA, Hartford and Travelers, named as leaders in the segment by insurers interviewed for the report. The “up-and-coming” carriers were identified based on declarations they made earlier this year about their desire to succeed in the middle market space, the report’s executive summary says.

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