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COMMENTARY: Brokers deviate on definition of 'middle market'


How do you define “middle market”? Since the August 2011 launch of Business Insurance's Mid-Market Executive page and channel, we've struggled with the definition.

And based on the disparate responses I received to that question when I interviewed the local and regional broker leaders this past week, what constitutes “middle market” depends on whom you ask.

A large, national broker located in the Northeast may have one definition, while a regional broker located in the less-populated U.S. Southwest will have another. And nearly every broker defines middle-market property/casualty clients differently than they do middle-market benefits clients. Some brokers went so far as to say that they didn't have a hard-and-fast definition for middle-market. Instead, they use what they call an “I'll-know-it-when-I-see-it” measurement approach.

In years past, whenever I'd interview brokers about what market they were targeting, invariably they'd say “middle market,” or that “middle market is our bread-and-butter business.”

But what does that mean?

The middle market is a vast, nebulous group of American businesses that represent nearly every industry sector, and range in size from 50 to 5,000 employees with company revenues between $10 million and $1 billion.

There is only one thing that most middle-market organizations have in common: In most firms, there is no professional risk manager. Or if there is, he or she usually wears many hats.

For example, last week while attending the Risk & Insurance Management Society Inc.'s Western Regional Conference in Colorado Springs, Colo., I met a risk manager who also holds responsibility for employee travel. Yet another handles employee benefits. Other middle-market “risk managers” I have met also serve as treasurers, human resource managers and chief financial officers.

Because they often have limited in-house resources, middle-market insurance buyers rely heavily on their brokers, often using them for more than just insurance placement. They also seek risk management advisory services, claims advocacy, benefits planning and administration.

In this week's Spotlight report ranking the nation's local and regional broker leaders, we've attempted to identify not only who these producers are and where they are located, but also how they define middle market, and what proportion of their revenues are derived from this business sector. Hopefully, this information will help to guide middle-market insurance buyers in selecting a broker in their home state or region that best suits their needs.

We've also provided some tips on how middle-market companies can get the most out of their broker partners in addressing their unique insurance, risk management and employee benefits needs.