6 Risk Questions Every Middle Market CFO Should Ask

6 Risk Questions Every Middle Market CFO Should Ask
October 9, 2025 7 mins

6 Risk Questions Every Middle Market CFO Should Ask

6 Risk Questions Every Middle Market CFO Should Ask

A CFO’s guide to smarter risk: assess retention, close emerging risk gaps, benchmark peers, and model financial impacts with six essential questions.

For middle market organizations, a smart risk strategy is more than just insurance: it’s a crucial component of protecting your balance sheet and enabling sustainable growth. As a CFO, you are tasked with steering the company's financial future while navigating challenges like rising operational costs, talent retention, supply chain disruptions, extreme weather events and emerging cyber threats. This requires asking tough questions to ensure your risk management program is not only providing adequate protection but also operating as efficiently as possible.

To help you align your risk strategy with your financial goals, here are six key questions every middle market CFO should ask.

1. Are we overpaying for volatility we can afford to retain?

Many growing companies default to low deductibles to minimize immediate risk exposure. While it seems safe, this approach often leads to higher premiums and ties up capital that could be better used to fuel growth. A more strategic approach involves evaluating how much financial volatility your company can comfortably absorb and adjusting your risk retention strategy accordingly.

Actionable Insight:

Calculate your company's true risk-bearing capacity. For a middle market firm, this isn't just a number, it’s about understanding the trade-offs between cash flow, capital reserves and growth investments. Identify areas where higher deductibles , alternative risk financing or self-insurance could lower premiums without putting the balance sheet in jeopardy. This analysis frees up capital for strategic priorities.

Consider This:

If your company pays for low deductibles "just in case," you are likely overspending. A partner with deep benchmarking data can help you determine an optimal retention level that aligns with your specific financial profile and risk appetite, turning your insurance program into a tool for capital efficiency.

Learn more: Global Insurance Market Insights

2. Are we underinsured against risks that could disrupt our growth?

The risk landscape has expanded far beyond property damage and general liability. For middle market companies, risks like cybersecurity breaches, supply chain disruptions and reputational damage can be particularly devastating, stalling momentum and eroding enterprise value. Risks are more interconnected than ever and can impact an organization directly and indirectly.

Actionable Insight:

Conduct a comprehensive risk assessment focused on the emerging threats that are most relevant to your industry and growth stage. Are you adequately covered for a cyber-attack that halts operations or a key supplier failure that cascades through your production line? Gaps in coverage for these modern risks represent significant vulnerabilities.

Consider This:

Ignoring emerging risks creates dangerous blind spots. A single uninsured event can derail your strategic plan. Proactively work with a risk advisor to identify and close these gaps, for example with risk tolerance consulting and vulnerability assessments, to ensure your coverage evolves alongside your business and the changing market.

Learn more: Client Trends 2025

3. How do our coverage, limits, and costs compare to our peers?

Benchmarking is essential - without it, you can’t confidently assess whether your insurance spend is delivering the value it should. Are you overpaying for standard coverage? Are your limits in line with what similar companies in your sector carry?

Actionable Insight:

Leverage industry data to benchmark your risk management program against peer companies. This comparison should go beyond premiums to include coverage terms, limits and deductibles. This objective analysis provides a clear picture of whether your program is competitive and cost-effective.

Consider This:

You may be missing significant cost savings or exposing your company to unnecessary risk without realizing it. An informed partner can provide access to robust benchmarking tools and insights, helping you negotiate from a position of strength and ensure your program aligns with best practices, including specific risks and coverages for your industry.

Learn more: Risk Analytics

4. Is your broker delivering value beyond traditional insurance placement?

In today’s complex risk landscape, a broker should do more than renew policies. For middle market organizations, a broker can act as a strategic partner by introducing innovative solutions like captives, parametric coverage and data-driven analytics. These tools help better manage volatility, optimize capital and align insurance strategies with broader business goals.

Actionable Insight:

Evaluate whether your broker is proactively bringing forward advanced risk financing options such as group captives, single parent captives or parametric products tied to measurable events like weather or supply chain disruptions. These approaches can offer greater control over cost, improved claims responsiveness and coverage tailored to your organization’s unique exposures.

Consider This:

If your broker is focused only on traditional coverage, your organization may be missing opportunities for greater efficiency, insight and protection. A knowledgeable broker can provide guidance that supports smarter risk decisions and long-term value.

Learn more: Parametric: A Complement to Traditional Property Coverage

5. Does our program reflect our financial strength and today’s market?

As your middle market company grows, your balance sheet, risk appetite and market environment all evolve – many insurance programs don't. They're renewed year after year with minimal strategic review, missing opportunities to optimize costs and coverage.

Insurance markets are cyclical. A "soft" market, characterized by increased competition among insurers and may present a valuable opportunity for some buyers. If your program has been on autopilot, you may be missing a chance to improve terms and reduce costs.

Actionable Insight:

Revaluate your risk portfolio in the context of both your current financial strength and the broader insurance landscape. Are you carrying coverage that no longer fits your risk appetite, or missing a chance to negotiate better terms due to favorable market conditions? Your financial strategy should inform your insurance strategy, not the other way around.

Consider This:

A static risk management program is likely misaligned in one of two ways: you're either overpaying for protection you no longer need, or you're under protected against today's most pressing risks. A proactive review, especially during soft market conditions, can unlock savings, broaden coverage, and ensure your insurance supports both capital efficiency and resilience.

Learn more: Optimizing Your Property Program: How to Use a Soft Market to Build Resilience

6. Do I fully understand the financial impact if our top risks materialize?

Knowing your top risks is one thing; quantifying their potential financial impact is another. Many organizations underestimate the true cost of a major disruption, which includes not just immediate expenses but also business interruption, reputational harm and lost growth opportunities.

Actionable Insight:

Use financial modeling and scenario analysis to quantify the potential bottom-line impact of your company’s most significant risks. For example, what would a three-week shutdown of your primary production facility cost in lost revenue and extra expenses? This analysis provides the clarity needed to make informed decisions about risk transfer and mitigation.

Consider This:

Without a clear understanding of the potential financial fallout, you may be critically underinsured. By modeling worst-case scenarios, you can build a business case for strategic investments in insurance and risk mitigation, ensuring the company's resilience.

Learn More: The CFO Roadmap: Better Decisions for Multidimensional Growth

Strengthen Your Strategy, Protect Your Future

For CFOs leading middle market organizations across North America, managing risk is a strategic cornerstone for safeguarding growth, empowering your people and protecting your financial foundation. Asking these questions is pivotal as you navigate rapid expansion, evolving market demands and increasing complexity.

Quote icon

Middle market organizations face a unique set of challenges balancing rapid growth with operational resilience and workforce performance. A strategic risk management program isn’t just about protection; it’s about enabling better decisions that drive sustainable growth and secure the future.

Denise Pearlman
Chief Executive Officer, Middle Market, North America

A forward-looking approach demands collaboration and practical insight: ensuring your risk retention, coverage strategy and balance sheet alignment support operational. By addressing these critical areas, you are better positioned to optimize capital, respond to uncertainty and seize new opportunities.

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This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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