US middle-market businesses are wading through 2026 with a paradoxical outlook: confident in their own performance, yet wary of the broader economic landscape. Research from Nationwide has highlighted a segment increasingly exposed to risk, and increasingly dependent on brokers to navigate it.
Sitting between small enterprises and large corporates, mid-sized firms occupy a “sweet spot” of vulnerability, according to Kristina Talkowski (pictured), SVP, commercial middle market at Nationwide. Talkowski said these firms are large enough to face complex risks, litigation, and regulatory scrutiny, but often lack the in-house risk-management infrastructure of larger organizations.
“Middle market clients rely heavily on agents and brokers to provide those services,” Talkowski told Insurance Business. “They’re looking for benchmarking, insights, and guidance on what (insurance) programs will have the biggest impact.”
According to Nationwide’s latest survey, 76% of mid-market business owners rate their company outlook as positive going into 2026, compared with just 59% who feel the same about the wider US economy. That disconnect reflects a cohort that is both self-reliant and acutely aware of macroeconomic pressures.
The divergence stems from heightened awareness of persistent risks such as inflation, tariffs, and labor shortages, said Talkowski. “They are keeping their eyes on changing conditions,” she explained. “At the same time, they have plans in place to address those pressures and protect their own financial outlook.”
For mid-market companies, that balancing act is becoming more complex as cost pressures intensify. Six in ten business owners expect both insurance and operating costs to rise in 2026, reinforcing concerns about margin erosion.
Rising claims severity driven by inflation, higher labor costs, and an increasingly litigious environment, is feeding directly into higher premiums. This is putting pressure on brokers, with nine in ten independent agents reporting increased client demands to reduce insurance costs.
In response, Talkowski said some clients are delaying policy purchases or dropping optional coverage altogether, which could leave them exposed in the long term. She argued that brokers must shift the conversation away from price alone and toward value.
This “value reframe” is gaining traction, she said, as firms recognize the return on investment from proactive risk management. Rather than viewing insurance as a fixed expense, more companies are treating it as part of a broader financial strategy.
“We are seeing that middle-market business owners are interested in that value conversation,” Talkowski said. “They’re looking to do the smart things for their businesses to be resilient and to mitigate risk overall.
“If we can shift the conversation to include not just the base cost of insurance but also how an individual business can start to take better control of reducing the cost of loss within their business through risk management services and capabilities, that is powerful.”
One upside from businesses becoming more cost-sensitive about insurance is the growing adoption of alternative risk financing tools. Mid-market firms are increasingly exploring higher deductibles, captives, and parametric insurance solutions to gain greater control over costs.
While rising premiums are a key driver, Talkowski noted that the trend also reflects a deeper understanding of risk.
“Businesses want to take more control, both from a safety perspective and from a cost perspective. They want to get the direct benefit of reduced (insurance) cost by reconsidering their deductibles or through an alternative financing method like parametric insurance,” she said.
“There’s also recognition that the availability of insurance isn’t always there. So, it is better to use it on the top end of your risk profile for those unexpected, more severe scenarios, and to have the more predictable potential losses covered by the businesses themselves.”
As economic uncertainty persists, Talkowski expects the interdependence between carriers, brokers, and mid-market clients to deepen. She underscored the importance of a “specialist-to-specialist” model, where insurers and brokers collaborate to deliver tailored insights and solutions.
Regular communication, data sharing, and a clear demonstration of return on investment will be key to maintaining client trust in the future. Perhaps most importantly, she said business owners are signaling that they want more than just cost relief.
“They’re looking for guidance,” Talkowski stressed. “Not just on insurance, but on the entire risk landscape and how to navigate it.”
