Cyber Security, the Economy, and Regulatory Compliance Top Concerns for Mid-Market Leaders: Marsh McLennan Agency Report

Rhea-AI Summary

Marsh McLennan Agency's 2024 Business Insurance Trends Report reveals that US mid-market business leaders consider cyber, economic, and regulatory risks the top threats for 2024. The study, based on over 500 C-Suite respondents from firms with 10-250 employees and $10M-$49M in annual revenue, highlights that 75% worry about cybersecurity due to third-party data reliance. Economic risks, driven by inflation and high interest rates, concern 63%, while 61% fear regulatory issues like BIPA laws. The report notes that mid-market firms, making up 5% of US businesses, contribute 33% of national business revenue. Additionally, 64% reviewed their insurance in 2023, compared to 14% in 2022, indicating a proactive approach to risk management.

Positive

• 75% of mid-market leaders are proactively concerned about cybersecurity risks.
• 63% of respondents highlight economic risks as a major concern, showing awareness of inflation and high-interest rates.
• 61% are mindful of regulatory risks, including BIPA laws and worker classification rules.
• 64% of businesses reviewed their insurance coverage in 2023, a significant increase from 14% in 2022.
• Mid-market businesses account for 33% of total US business revenue, despite making up only 5% of US businesses.

Negative

• 75% of mid-market leaders are extremely concerned about cybersecurity due to reliance on third-party data management vendors.
• Economic risks driven by inflation and higher interest rates concern 63% of respondents.
• 61% of respondents are worried about regulatory risks, including strict worker classification rules and BIPA laws.
• Workforce risks, such as fall prevention and ergonomics, are concerns for 57% of respondents.
• 56% of leaders are worried about catastrophic risks from extreme weather events.

Insights

Cybersecurity Specialist

The growing concern around cybersecurity among mid-market businesses, as highlighted by the report, underscores a critical issue in the modern digital landscape. With 75% of respondents expressing high levels of concern, it is evident that cybersecurity threats are perceived as a top priority. This is likely due to the increasing reliance on third-party data management vendors, which introduces additional vulnerabilities. Companies must invest in robust cybersecurity frameworks and continuous monitoring to mitigate these risks. The rise in cyber threats could also lead to an uptick in demand for cybersecurity solutions and services, potentially benefiting firms in this industry.

Financial Analyst

The economic risks cited by 63% of respondents, driven by ongoing inflation and higher interest rates, present significant challenges for mid-market businesses. Inflation can erode purchasing power and increase operating costs, while higher interest rates can elevate borrowing costs, thereby affecting profitability and growth prospects. For investors, it's important to monitor how these businesses manage their cost structures and optimize efficiencies. Companies that can successfully navigate these economic headwinds may present attractive investment opportunities, while those that struggle could face financial instability.

Regulatory Expert

With 61% of respondents highlighting regulatory risks, such as worker classification rules and Biometric Information Privacy Act (BIPA) laws, it's clear that compliance remains a pressing issue. Regulatory changes can impose new operational constraints and financial burdens on businesses. For investors, assessing a company's compliance infrastructure and adaptability to regulatory changes is crucial. Non-compliance can result in significant fines and legal costs, negatively impacting profitability. Thus, businesses that proactively manage regulatory risks can be more resilient and less prone to unexpected financial setbacks.

WHITE PLAINS, N.Y.--(BUSINESS WIRE)-- According to a new report published today by Marsh McLennan Agency, a subsidiary of Marsh, US-based mid-market business leaders view cyber, economic, and regulatory risks as posing the biggest threats to their operations in 2024.

Marsh McLennan Agency’s 2024 Business Insurance Trends Report is based on over 500 responses from primarily C-Suite executives at businesses with under 250 employees and between $10 million to $49 million in annual revenue. The report provides insights on the top risk concerns experienced by mid-market businesses and their readiness to handle the most significant threats.

When asked what risks they are extremely or very concerned about as a threat to their business, 75% said cybersecurity and data privacy risks, in part due to growing reliance on third-party data management vendors. Economic risks, highlighted by ongoing inflation and higher interest rates, were cited second by 63% of respondents, followed closely by regulatory risks, such as strict worker classification rules and Biometric Information Privacy Act (BIPA) laws, reported by 61% of respondents.

While only making up 5% of total national businesses in the U.S., mid-market organizations account for 33% of total U.S. business revenue.

“Mid-market organizations are operating in an increasingly complex and volatile business environment requiring a more proactive approach to risk identification and mitigation,” said Denise Perlman, President and National Practice Leader of Business Insurance at Marsh McLennan Agency. “Despite the challenges, our findings show that organizations are becoming more mindful of their business’ vulnerabilities and are seeking to ensure proper insurance coverage is in place to protect their bottom lines.”

According to the report, 64% of respondents indicated that they conducted a thorough review of their insurance coverage in 2023; up from just 14% in 2022.

Rounding out the top five reported concerns are workforce risks (57%), such as an increased focus on ergonomics, fall prevention and protection introduced by the Occupational Safety and Health Administration, and catastrophic risks (56%), primarily driven by rising frequency and severity of extreme weather events.

About Marsh McLennan Agency

Marsh McLennan Agency provides business insurance, employee health & benefits, retirement & wealth, and private client insurance solutions to organizations and individuals seeking limitless possibilities. With 10,000 colleagues and 180 offices across North America, Marsh McLennan Agency combines the personalized service model of a local consultant with the global resources of the world’s leading professional services firm, Marsh McLennan (NYSE: MMC).

View source version on businesswire.com: https://www.businesswire.com/news/home/20240528353255/en/

Raphaele Schnoll

Media Relations

312-339-8662

rschnoll@stretchpr.com

Source: Marsh McLennan Agency

FAQ

What are the major concerns for mid-market business leaders in 2024 according to the Marsh McLennan Agency report?

According to the report, mid-market business leaders are most concerned about cybersecurity, economic, and regulatory risks.

What percentage of mid-market businesses are worried about cybersecurity risks?

75% of mid-market business leaders are extremely or very concerned about cybersecurity risks.

How many mid-market businesses are concerned about economic risks?

63% of mid-market businesses are concerned about economic risks, such as inflation and high-interest rates.

What regulatory risks are mid-market leaders worried about in 2024?

61% of mid-market leaders are worried about regulatory risks, including the Biometric Information Privacy Act (BIPA) laws and worker classification rules.

What is the importance of mid-market businesses in the US economy?

Mid-market businesses, while only 5% of total US businesses, contribute 33% of total US business revenue.

How many mid-market businesses reviewed their insurance coverage in 2023?

64% of mid-market businesses reviewed their insurance coverage in 2023, up from 14% in 2022.

What are the workforce risks identified by mid-market leaders?

57% of mid-market leaders are concerned about workforce risks, including ergonomics, fall prevention, and protection.

What percentage of mid-market businesses are worried about catastrophic risks?

56% of mid-market businesses are worried about catastrophic risks, primarily due to extreme weather events.