Commercial lines insurers have redoubled efforts to win the chunkier and more stable premiums offered by mid-corps in the past two years.

The total size of the mid-corp cake is hard to measure, because definitions vary: lines blur with the ‘M’ of SME at the smaller premium end, and at the higher end with speciality lines.

However most agree that there is currently more capacity than business in the sector. Many insurers have refocused on mid-corps as SMEs were hit by the recession and policies became more commoditised.

“The recession will have taken out risks from the market and particularly at the SME end that will have ripples,” says Tony Sault, a director at Ernst & Young.

“If you’ve not got e-trading right for SMEs then a move to mid-corporate makes sense because it plays to the insurers’ strengths of broker relationships and underwriting skill.”

Sault estimates that the mid-corporate sector has risen as a percentage of total commercial business from 22% in 2009 to XX% today owing to the level of SME failures.

Zurich defines mid-corporate loosely as £5m to £300m revenue businesses; and it targets lines where it’s confident to beat the competition, and add value to brokers.

Steve Green, Zurich head of corporate: “We don’t want to be an anonymous risk and capacity provider. We add value. We want to have a clear service, state what we want to underwrite, and win customers in this area. I want to insure the fastest-growing and most profitable companies.” Sectors of focus include professional business services, food and drink, leisure, and sport.

ACE targets FTSE 250-size companies, and is eyeing those with £500m turnover or less. ACE director of corporate risks Pat Drinan, says: “Companies with £500m turnover or below often face the same exposures and challenges with risk management, and on a global basis, as major companies. It’s right to offer all the benefits available to the major customer segment but tailored to their size and broker.”

“Mid-corporate is becoming more crowded. Many believe that risk solutions suitable for smaller customers will be suitable for larger customers with more complex exposures, but a different mind-set is required. It takes time for this realisation to unfold but eventually it will.”


TheBuy 2a

Risk managers

There are an estimated 800 risk managers in the FTSE top 200 companies. The number of risk manager positions increased by 27% during May, June and July 2011, compared to February, March and April, said recruiter Hays. Corporates are finding that regulation and compliance issues are too much to handle, and need someone in this role. Some brokers provide risk managers to sit on-site with clients.