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.

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 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.

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

Agents and brokers looking to grow their revenues by cross-selling to middle market clients should seek out insurance carriers that provide a depth of products and services. Key factors to look for in insurance carriers include:

• Global reach and expertise—According to the recent NCMM survey, nearly half of middle market companies plan to expand into new international markets in the next year. A strong insurance partner will offer coverage and services on a global scale.
• Value-added services—Look for an insurance carrier that offers services to help prevent risks and rapidly respond to adverse events. These services might include risk engineering, cyber services, travel assistance, translation services during the claims process, and more.
• Specialty coverages—Commercial general liability policies have limits that leave gaps in coverage. A strong insurance carrier will offer an array of coverages to help close gaps, such as premises pollution liability, fiduciary liability, and multinational foreign casualty insurance coverage.

Insurance carriers may also offer strong sales support, provide robust technology tools, and make it easy to set up multiple coverages in a single package.

Middle market companies bring many advantages to the competitive marketplace, but they often lack the in-house resources of large multinationals to manage complex risks. This is where agents and brokers can serve as important strategic partners.

Consider reaching out to your middle market clients to discuss their growth initiatives, changes to their operations, and the evolving risk landscape. Following these steps will help you provide value to your clients and support cross-selling:

• Conduct research and ask questions—Learn details about a company’s current operations and growth strategies from its website, social media, and third-party coverage. Reach out to client contacts to ask questions as well.
• Review current coverage and identify gaps—With your knowledge of a company’s operations in mind, review their current coverage to determine what risks lack sufficient coverage and identify gaps. Help your client consider what new risks might arise as they execute their growth strategies.
• Highlight cost-savings opportunities and value-added benefits—Show your clients how they can expand coverage and realize overall savings by bundling coverage. In addition, highlight special benefits provided by insurance providers, such as web-based risk management tools.

In-depth conversations can build trust and help your clients understand the value of identifying coverage gaps. With a strong risk management program in place, supported by an engaged broker or agent, middle market companies can move forward with greater confidence as they execute their growth strategies.

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