Mid-sized companies are a vital pillar of the UK economy. In 2024, there were about 37,800 medium-sized business in the United Kingdom, according to Government statistics.
By 2028, it’s predicted that medium-sized businesses will account for more than a quarter – 27% – of the country’s Gross Value Added, contributing about £745 billion to UK GVA in three years’ time and creating an additional 1.9 million jobs, according to recent research by advisory firm BDO.
At the same time, the risks and opportunities faced by companies of all sizes are complex, evolving and often interconnected. According to risk experts surveyed for the AXA Future Risks Report 2025, the biggest threats facing companies are climate change, geopolitical instability, cyber security, AI and Big Data risks and social tensions and movements.
We aim to support our mid-market clients as they seek to expand and grow against this dynamic backdrop.
We recognise that our mid-market clients – those with turnover of between $500 million and $ 2 billion – need a full suite of tailored insurance coverages to meet their complex and changing risk needs.
Our approach is to cater to the distinct requirements of individual companies in various industry verticals, including care homes, life sciences and marine. And we offer a wide range of specialist coverages like accident and health, cyber and product recall and access to risk engineering expertise and local market knowledge across the globe.
Management risks
UK mid-market companies are subject to numerous macroeconomic and microeconomic trends including geopolitical tensions, the evolving cyber threat, the overhang of the COVID-19 pandemic, post-Brexit fallout and other pressures including inflation, supply-chain challenges and high interest rates.
For mid-sized clients, these challenges can be particularly complex and put their directors and officers at risk of claims of mismanagement or poor decision-making should things go wrong. Experience has shown that claims against directors and officers tend to increase in periods of economic distress.
Without recourse to some of the resources that their larger counterparts may have, like in-house counsel, mid-sized companies and their directors may be particularly vulnerable. Tailored D&O coverage, however, can help to mitigate the risks.
Developing challenges
Although group actions are less common in the United Kingdom than in some other jurisdictions, notably the United States, increased regulatory scrutiny and shareholder activism mean that directors and officers are facing complex and evolving risks.
The UK Government is pursuing a regulatory agenda that aims to safeguard economic growth and profitability but have consumer protection at its heart. New legislation is likely to affect the risks that company directors and officers face. For example, while the full impact of the Economic Crime & Corporate Transparency Act 2023 is yet to be seen, the act introduces a new offence of ‘failure to prevent fraud’. Risk professionals will be closely watching developments.
And an increased focus from stakeholders including shareholders, customers, employees and lobbying organisations like non-governmental organisations (NGOs) on the Environmental, Social & Governance (ESG) performance of companies opens the door for group actions in instances where organisations are deemed to have fallen short of their pledges. The risk of claims for greenwashing, for example, add to an already complex picture for directors and officers of mid-sized companies.
The growing use of Artificial Intelligence (AI) by firms in most sectors may also open up exposure to new legal action. Company directors are alert to the risk of accusations of ‘AI-washing’ – over-emphasising their AI capabilities or making claims about their use of AI that are unsubstantiated.
Managing the challenge
D&O insurance protects company directors from personal liability if they are sued for alleged wrongful acts including mismanagement, regulatory violations or breach of fiduciary duty. So-called Side A coverage protects individual directors when the company is not able to do so – in the case of insolvency or financial difficulty, for example. Side B coverage, meanwhile, provides balance sheet protection for the company when it has decided to indemnify a director/officer in a claim made against them.
Mid-market companies require particular expertise in tailoring D&O coverage that suits their business sector and unique characteristics. As part of the AXA group, we are able to access expertise not just on the ground in the United Kingdom, but in other territories where our mid-market clients may have subsidiaries or operations.
D&O coverage is also particularly relevant to mid-market firms that, because of their size, may not have large legal departments or in-house counsel. Our product includes access to a helpline staffed by experts from a leading London-based law firm. In the event of a claim, these experts communicate directly with our client’s broker, assisting them through the process.
As well as giving individual directors and officers peace of mind, D&O coverage is also often a prerequisite for investment. Mid-sized companies that wish to make themselves more attractive to investors – of all sizes – are looking to secure coverage, particularly since it protects past, present and future directors and officers in the event of a claim against them.
Looking ahead
For mid-market companies, like their larger counterparts, risks are evolving quickly. We recognise that for mid-market firms, it’s important to have an insurance partner that offers a 360-degree view of potential risks and access to mitigation, management and transfer solutions to those challenges.
A tough economic environment, geopolitical shifts, supply-chain issues, the increasing use of AI, ever-changing cyber threats, an intensifying focus on the ESG performance of companies in all sectors and greater regulatory oversight – among other challenges – mean that mid-sized companies and their directors and officers face a host of potential risks, now and in the future.
We aim to support our mid-market clients as they seek to expand and grow against this dynamic backdrop. And we hope that our ability to offer them tailored, specialist coverages will both give directors peace of mind and enhance the enterprise risk management capabilities of clients boosting their attractiveness to investors and talented new management recruits.
* The information contained herein is intended for informational purposes only. Insurance coverage in any particular case will depend upon the type of policy in effect, the terms, conditions and exclusions in any such policy, and the facts of each unique situation. No representation is made that any specific insurance coverage would apply in the circumstances outlined herein. Please refer to the individual policy forms for specific coverage details. This summary does not constitute an offer, solicitation or advertisement in any jurisdiction, nor is it intended as a description of any products or services of AXA XL.
