GamePlan: Coaching Middle-Market Clients Through a Complex Environment

• July 1, 2025

By Katie Butler

Ten years ago, if an account was in the right business class, matched the carrier’s appetite, and had a decent loss history, carriers would compete aggressively to win it.

Now, “you not only have to be the right class of business and have good claims, but you’ve got to prove that you have a good risk mitigation strategy in place for underwriters to get excited about your account,” says Christian DeLozier, management, business consultant, at Mike Keith Insurance in Clinton, Missouri.

Fortunately, the competitive environment offers agents a chance to show their value. “Middle-market clients are starting to demand more than just a renewal conversation—they want strategic insight, benchmarking and a partner who understands their industry,” says Cy Young, principal of Haven Insurance Partners in Jackson, Tennessee.

DeLozier likens it to being a coach. “You’ve got to coach your client into being a best-in-class account, and put narrative behind it, so the submission gets to the top of the stack,” he says. “A client trying to get three or four quotes every year or every other year is just not the best strategy for the long term. We’re trying to coach them and tell them how we’re going to get the market to work for them.”

Today’s insurance agents have to go beyond the transaction. That means helping businesses understand why certain underwriting decisions are made, what actions they can take to improve their risk profile, and how to position themselves as desirable accounts in a tightening market. This mindset involves building a game plan that aligns with the client’s long-term goals and risk tolerance.

The definition of “middle” market is morphing. Traditionally, the middle market was defined by premium volume alone. But with the evolving nature of risk, premium volume doesn’t accurately reflect the level of risk anymore.

Young defines middle market as business accounts generating between $50,000 and $300,000 in premium. “That range tends to capture companies with more complex risks and insurance needs, without having a full-time risk manager on staff,” he says.

However, that definition is evolving with carrier appetite. “From our agency’s perspective, we focus less on hard metrics and more on where we can bring significant value through coverage strategy, risk management and service,” Young says.

Crucially, how a carrier defines middle-market business affects how the account is quoted and serviced, says Carla McGee, assistant vice president, Big “I” Alliance Blue, a free online market access program.

“Middle-market submissions are typically done through email, though some carriers have started creating rating platforms for certain middle-market lines of business and risks,” she says. “Servicing middle-market accounts is typically handled by the agent rather than a carrier service center. The automated agency management system (AMS) downloads are sometimes restricted for the middle market, requiring manual transaction entry.”

But carriers generally aren’t adhering to strict definitions of the middle market, either. “It used to be if it’s ‘x’ amount of premium, it goes to middle market, and if it’s under that, it goes to small business,” says Mark Kidd, vice president, commercial accounts at Westfield. “Today, it’s more complex because we’re trying to overlay things like risk complexity and the depth of underwriting and service that may be required on a given account. We’re moving to an exposure-based definition.”

The exposure-based definition could be the sum of various factors, such as total values at a given location, sales, payroll, subcontracted costs and even the number of vehicles, according to Kidd.

“We’re not going to go through that with every class of business; it’s based on what the class of business is and what really drives the risk,” he says. “It’s also where we feel internally that we need more eyes on that given risk.”

“There are going to be some six-figure accounts premium-wise that fall under small business,” he adds. “There are also going to be $35,000 accounts that under our old definition would have gone to small but now need to come to middle market.”

DeLozier has heard carriers say that they will “BOP” a business up to $10 million in revenue if they can get their arms around an exposure and can treat it like what was historically a small account. However, Mike Keith Insurance thinks of the middle market a little differently, especially when looking at accounts in the agency’s niches.

“We can slide down that scale to make an account fit into the middle market for our firm, but it’s going to be in the $10 million to $200 million in annual revenue, and when you get to that level, you’re usually talking 50-200 employees,” DeLozier says. “They may or may not have a risk manager. If they do, we can provide resources. If they don’t, we can get in and work with them on risk management.”

“The biggest trends impacting the middle-market space right now are increased competition, rising costs, and a focus on management and analytics in underwriting,” says Natalie Haertlein, commercial lines supervisor and senior account executive, Big “I” Alliance Blue.

Habitational businesses, such as apartment complexes, have become less desirable to many carriers, as well as any trade involved in mass new construction of residential dwellings—such as tract housing, condominiums or townhomes—due to the rising exposure of class-action lawsuits and increased litigation exposures.

“Property is just taking a beating in the market,” says Stephen Sedlak, vice president and partner at Schmale Insurance Agency in Belleville, Illinois. “And you’re seeing that not just on a premium level, but you’re also having carriers really tighten up what they’re looking for with an account on the property side.”

“Then, carriers are also throwing in things such as higher deductibles,” Sedlak continues. “They’re just trying to find innovative ways to put more back onto the insured than they were used to.”

The impact of elevated catastrophe risk is also playing out in the middle-market space and the ability of agents to explain to insureds what it means for their policy is crucial.

“Some carriers offer their proposals, and it has a 5% wind-hail deductible,” he says. “It’s up to us to educate clients and try to find innovative ways to help mitigate their out-of-pocket expense.”

Putting that change in risk burden into perspective is a major challenge. DeLozier says he’s seen clients with large property schedules forced to take wind-hail deductibles that seem “punitive.”

For example, a $20 million facility with a 2% wind-hail deductible is responsible for the first $400,000 of any wind-hail claim. Some wind-hail deductibles are as high as 5%—in this $20 million scenario, the first $1 million of any wind-hail claim.

“Clients need to explore alternatives to reduce their wind-hail deductible exposure if they don’t have the surplus or the line of credit to withstand a large wind-hail claim,” DeLozier says.

DeLozier also hears from his middle-market clients that labor continues to be a challenge. “People are exiting,” he says. “And now we have new people coming in, and [employers are] trying to get those people trained properly so they don’t have an accident at work or miss dotting an ‘i’ or crossing a ‘t’ that’s going to open a company up to potential litigation or a financial loss.”

As the insurance landscape continues to shift, middle-market businesses are being forced to re-evaluate the adequacy of their existing coverage. The days of relying on boilerplate policies or bundled endorsements are over.

The need for standalone, high-limit policies, accurate property valuations, risk-mitigating technology and nuanced underwriting strategies is more pressing than ever. In this environment, agents and brokers who are proactive can become indispensable guides for clients navigating the modern risk landscape.

Here are some of the most pressing coverage considerations facing the middle market:

Cyber liability. The “new” coverage every middle-market business should be considering is a more robust cyber insurance policy.

“With an increasing reliance on technology, every business should consider the impact cybercrime could have on their finances and reputation,” Haertlein says.

Specifically, phishing scams and social engineering are typically not covered in the small cyber coverage included in their policy. Insuring against cybercrime as a separate line of coverage offers the most robust coverage and protection for middle-market businesses.

“Pricing has skyrocketed in some segments, and underwriters are much more selective than they were just a couple of years ago,” Young says.

Sedlak doesn’t think the industry has done a good job of educating commercial clients about cyber coverage. “If people were quoted $50,000 or $100,000 limits, they originally thought that was sufficient,” he says. “And they’re, of course, finding out those limits aren’t sufficient.”

Cyber coverage “really needs to be on a standalone policy with its own separate, much higher limits,” he adds.

Property. Property coverage is another area facing pressure—especially with clients who have older buildings or are in CAT-exposed areas. Carriers are scrutinizing valuations and pushing for more accurate replacement cost data.

“Carriers are mitigating these rising costs with larger deductible requirements, greater coverage restrictions or forcing coverage into the surplus market,” Haertlein says. “Agents can provide value to their clients by educating them on what characteristics insurance companies look for [in terms of] ‘best in class’ risks.”

“Some of these characteristics include: recent updates; all mechanical systems less than 30 years old; roofing updated within 15 years; pride in ownership, such as keeping the exterior free from debris; and well-maintained parking lots, sidewalks and building exteriors,” she says.

Additionally, for lessors risks, carriers are looking for low-risk tenants who run clean, well-maintained businesses, owners that have strong practices in place for managing the property, and leases with appropriate risk-transfer language in favor of the owner and insurance company, Haertlein notes.

Commercial auto. Nuclear verdicts arising from commercial auto incidents aren’t going away, DeLozier says. These cases frequently include claims of negligence, distracted driving or inadequate safety protocols, and they’ve made insuring fleet operations increasingly difficult and expensive for carriers.

“Middle-market clients with moderate to large auto fleets must implement driver monitoring systems like dash cams or GPS to manage their fleets and provide a defense in the event of a significant claim,” he says. “Building policies around cell phone use in company vehicles is critical to preventing an employee from causing a distracted driving accident.”

Further, “due to shrinking profit margins in the commercial auto market, many carriers will only consider this line of coverage if it is packaged with more profitable lines to balance the risk,” Haertlein says.

Excess and umbrellas. Capacity is being reduced, and it’s getting harder to find excess, according to Sedlak. He says that the limits are especially difficult on the casualty side with contractors, whose requirements on contracts aren’t going down, and he’s going to the excess & surplus market more often.

“Due to nuclear verdicts and litigation funding, carriers are trying to minimize their exposure the best they can,” Kidd says. “But just because a carrier doesn’t want to provide a large umbrella anymore doesn’t mean the customer doesn’t need it.”

“It’s now more complex and can create professional liability exposure for agents,” he continues. “You not only have to find the carriers that are willing to provide the limits, but you also have concurrency issues. If one carrier is providing the first million and the second carrier is providing the next five million, you want to make sure the second umbrella isn’t broader than the first.”

How can agents position themselves to win more middle-market business and compete against the big brokers? It starts with digging in on each client’s operations and coaching them in the right direction.

“We don’t just quote policies,” Young says. “We understand their growth plans, pain points and risk tolerance.”

However, before offering value-added services, “the agency must be educated and have professional liability for risk management services to offer them,” McGee points out.

Further, two areas can set an agent apart: responsiveness and continuity. “Our clients aren’t bounced around departments like they might be at a national broker. They get a team that knows them and is accountable,” Young says. “For many middle-market clients, that personal approach, combined with strong carrier access and technical expertise, is the winning combination.”

The competitive edge that DeLozier’s agency has built in the middle market is centered on teams that are knowledgeable about the niches they serve and the agency’s continual investment in education. And agents who have built expertise around a niche can best leverage the role of being not only an agent but a business adviser, according to Kidd.

“Customers want agents and carriers who understand their business, and they want agents and carriers that can help them optimize that retention versus cost balance,” Kidd says.

Agents who are successful in the middle-market space lean into a consultative sales process, utilizing risk control and claims resources. Using their carriers’ resources as an extension of their overall program can put them on a level playing field with some of the largest brokers.

“The best way an agent can serve a middle-market client is not to wait until renewal time to have the conversation,” Young says. “Work proactively with clients to assess exposures, review contracts and build a stronger risk narrative for underwriters.”

Katie Butler is principal at Aartrijk, a consulting firm specializing in the insurance industry.