Chubb and the National Center for the Middle Market (NCMM), housed at The Ohio State University Fisher College of Business, announced results from its second-quarter Middle Market Indicator (MMI) report, within which there is a special segment on the impact of COVID-19. Findings reveal the realities that middle market companies are facing due to the pandemic, with decreased economic confidence, revenue and employment growth; and an increased perception of risk—particularly regarding volatility in the business environment.

Following an optimistic fourth quarter in 2019, revenue and employment growth declined sharply in the second-quarter survey. Seventy three percent of company executives polled reported revenue growth in the fourth-quarter, while only 38 percent reported revenue growth in the second-quarter. Similarly, employment growth decreased from 48 percent reporting growth in Q4 to 24 percent reporting growth in Q2, and economic confidence dropped from 83 percent to 57 percent over the same period.

Perception of risk among those surveyed for the MMI report, which is highlighted within Chubb's Market Dynamics Outlook summary, increased both for their company and within their industry from the previous survey period. Top concerns ranked as extremely or very important among executives polled included: state of the economy as it relates to growth (52 percent—up from 34 percent from the fourth-quarter), state of the economy as it relates to the cost of doing business (49 percent—up from 36 percent), general increase in business environment volatility (40 percent—up from 28 percent), and cyber security (40 percent—down from 43 percent), followed closely by catastrophic incidents (38 percent—up from 18 percent).

"The second-quarter MMI report is a clear indicator that the pandemic is impacting the middle market in terms of decreased economic confidence and increased perception of risk," said Ben Rockwell, Division President, Chubb Middle Market. "Facing subdued revenues and a prolonged business recovery from the pandemic means that middle market companies have little room to take chances in a potentially riskier business environment."

In a complementary document, COVID-19 and the Middle Market, Chubb examines some of the key exposures companies are facing, and provides tools and insights to help agents and brokers work with businesses to assess their changing risk profiles and offer opportunities to mitigate and transfer risk. Agents and brokers can leverage these tools—including suggested conversation-starters—to help their clients manage through the myriad of risks presented by this challenging pandemic.

"As part of this quarter's survey, we included questions to assess the impact COVID-19 is having on their operations and business outlook—comparing findings to both the previous quarter's survey and the COVID-19 pulse poll conducted in March," said Thomas A. Stewart, Executive Director of NCMM. "If there's a bright side to this news, it's that the middle market appears to have endured the pandemic's first punches better than other sectors."

Survey findings reveal that middle market businesses appear to be faring better than the market as a whole. According to the MMI, year-over-year growth fell to -3.7 percent while, at the same time, the S&P 500 reported a -13.9 percent revenue growth. And middle market executives project a two percent revenue growth over the next 12 months.

"While that represents the lowest growth forecast on record, it may mean these companies will, again, show the way forward once the pandemic comes under control," said Rockwell.

Issued quarterly, the MMI explores current and emerging macro trends across the middle market, measuring past and predicted revenue growth, employment growth, economic confidence levels and business investment, along with their perception of risk.