Mid-market companies' risk mitigation strategies are beginning to equal — and in a few cases, outclass — strategies used by their larger counterparts, according to an analysis by The Travelers Cos. Inc.
For the five most common risk mitigation measures taken by 1,100 companies polled in Travelers' 2014 U.S. Business Risk Index, the average gap between midsize and large companies in their likelihood of taking those measures was less than four percentage points, compared with an average gap of nearly 18 percentage points between midsize and small firms.
Some gaps still persist
While there was greater alignment of mid-market and large companies' efforts to minimize exposures and mitigate losses, it was far from uniform. Large firms continue to outpace their midsize counterparts in implementing regular site safety inspections and disaster recovery plans, as well as relying on insurers, brokers and particularly third-party consultants for risk mitigation and prevention advice.
Business continuity planning also was a significant point of divergence for midsize and large companies, with mid-market firms saying they were 20% less likely to have established a formal continuity plan than large firms, according to the analysis.
Overall risk concerns
Travelers' report also revealed that the most pervasive risk management concerns among all companies polled were rooted in costs to keep their employees healthy.
Sixty-five percent of companies said they worry about medical cost inflation, followed by 62% that indicated some degree of concern about increasing employee benefit costs.
Rounding out the top five most frequently cited risk concerns were legal liability, 58%; broad economic uncertainty, 57%; and cyber security, 53%.
Those five risks also were among the top 10 exposures companies said they were least prepared to manage, along with regulatory compliance, global economics, geopolitical unrest, natural disasters and financial instability.