Finance & Insurance Sector

Finance & Insurance Sector

Brief Excerpt from Industry Overview Chapter:

Companies in this industry engage in financial transactions and create, liquidate, purchase, and sell financial assets such as securities, bonds, and insurance. Major finance and insurance companies include AIG, Bank of America, Citigroup, Fidelity, Goldman Sachs, JPMorgan Chase, MetLife, and Wells Fargo (all based in the US), as well as Allianz (Germany) AXA and BNP Paribas (both based in France), and Industrial and Commercial Bank of China (China).

COMPETITIVE LANDSCAPE

Demand is driven by business activity, returns on investments, and consumer income. The profitability of individual companies depends on marketing, efficient operations, and investment expertise. Large companies often have advantages in access to cheaper capital, participation in large-scale transactions, and name recognition. Small companies can compete effectively through customer service, knowledge of the local market, innovation, and specialization. The sector in the US is fragmented: the largest 50 companies account for nearly 50% of sales.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major financial and insurance products and services include loans, financial services, investment advice, insurance products, transactions processing, trading financial instruments, and asset management. Financial and insurance firms create, liquidate, or change ownership of financial assets such as stocks, bonds, options, and insurance. Insurance accounts for about 55% of sector revenue, lending for about 30%, and securities services for about 15%.