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 Industrial and Commercial Bank of China, Societe Generale and AXA (France), and Deutsche Bank (Germany).

Major global financial hubs include New York, London, Zurich, Hong Kong, and Tokyo. Demand for sophisticated financial services is expected to grow in Asia, particularly in China and Indonesia.

The US finance and insurance sector consists of about 475,000 establishments with combined annual revenues of more than $3 trillion. Moderate growth is forecast for the next two years. Key growth drivers include an increase in business activity and consumer income. However, economic slowdowns and increased regulation could dampen growth.

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, and specialization. The sector is concentrated: the largest 50 companies account for nearly 50 percent of sales.

The finance and insurance sector has undergone significant change in the past decade, and more changes are likely. The growth of international...