How cross-selling helps cover your clients’ hidden risks

Despite economic headwinds, middle market companies are sustaining growth. They continue to add employees, introduce new products and services, and expand into new markets.

For many middle market companies, the combination of growth initiatives and changing market dynamics creates a range of new and often unseen risks. Agents and brokers can better serve their middle market clients by helping them identify, understand, and mitigate these risks through cross-selling.

The benefits of cross-selling

When you cross-sell to middle market clients you provide an essential strategic service; namely, you help enable your clients to limit exposures that could hinder future growth. Cross-selling additional lines has several other benefits as well, including:

• Client retention—Cross-selling may help strengthen your ties with clients, and additional coverages may help promote policy renewals.
• Increased revenues—You can grow your own commissions while helping clients increase their coverages.
• Professional duty—As a professional service provider, you can meet your obligations to clients by helping them recognize emerging risks through the cross-selling process.

Middle market companies face growing risks

Middle market companies are moving forward in the face of numerous economic challenges and increased risks. In a recent survey conducted by Chubb and the National Center for the Middle Market (NCMM), executives of middle market companies identified the following top concerns:
 

• Inflation – 38%
• Supply chain – 24%
• Workforce shortages – 19%
• Geopolitical instability – 10%
• Climate change – 9%
   

To sustain growth, businesses are responding to these challenges with a range of tactics, including making investments in technology, ramping up hiring, and increasing training and employee development. These operational tactics, combined with growth strategies such as opening new facilities and entering new international markets, can give rise to additional exposures such as environmental liability, foreign regulatory risks, and cybercrimes.

Changing external factors have also created new and greater risks for middle market companies. For instance, the increase in the severity and frequency of weather-related disasters, combined with rising replacement and labor costs, can lead to greater losses and longer business interruptions. Basic commercial property policies may be inadequate—and cross-selling may help close gaps and level up coverage. Agents and brokers should also consider working with middle market clients to evaluate coverage limits in light of the increased costs arising from inflation.
 

Strong opportunities for cross-selling

All middle market companies maintain multiple essential and compulsory coverages—such as workers’ compensation and commercial general liability insurance —to manage the risks that every business faces. But many middle market companies face additional exposures depending on their industry, operations, geographic reach, and other factors.

Agents and brokers can serve as valuable partners to these companies by helping them identify and mitigate risks that are unique to their business. Examples of cross-selling are illustrated in the following three scenarios:

Scenario One: Professional Services
When Miami-based digital marketing agency Optivox set up offices in Brazil, Lisbon, and Sydney, the company exposed itself to additional risks related to international travel, new service contracts, and hiring employees in new geographies. Cross-selling opportunities include:
 

• Business travel accident insurance
• Global extensions of domestic policies
• Professional liability and E&O insurance

Scenario Two: Technology
Fast-growing San Francisco-based telecom business Chatwire is adding customers and opening offices around the globe. Its success has attracted cyberattacks and led to property theft. Cross-selling opportunities include:
 

• Cyber insurance
• Crime coverage
• Multinational extension policies

Scenario Three: Manufacturing
Dallas-headquartered furniture manufacturer Quarter Craft expanded rapidly during the pandemic and continues to grow, adding new facilities in several states—and taking on new risks. Cross-selling opportunities include:
 

• Excess occupational accident insurance
• Pollution liability coverage
• Management liability insurance