Industry Statistics Sampler
NAICS 52
Finance and insurance

Definition: NAICS 52   Finance and insurance

The Finance and Insurance sector comprises establishments primarily engaged in financial transactions (transactions involving the creation, liquidation, or change in ownership of financial assets) and/or in facilitating financial transactions. Three principal types of activities are identified:

1. Raising funds by taking deposits and/or issuing securities and, in the process, incurring liabilities. Establishments engaged in this activity use raised funds to acquire financial assets by making loans and/or purchasing securities. Putting themselves at risk, they channel funds from lenders to borrowers and transform or repackage the funds with respect to maturity, scale, and risk. This activity is known as financial intermediation.

2. Pooling of risk by underwriting insurance and annuities. Establishments engaged in this activity collect fees, insurance premiums, or annuity considerations; build up reserves; invest those reserves; and make contractual payments. Fees are based on the expected incidence of the insured risk and the expected return on investment.

3. Providing specialized services facilitating or supporting financial intermediation, insurance, and employee benefit programs.

In addition, monetary authorities charged with monetary control are included in this sector.

The subsectors, industry groups, and industries within the NAICS Finance and Insurance sector are defined on the basis of their unique production processes. As with all industries, the production processes are distinguished by their use of specialized human resources and specialized physical capital. In addition, the way in which these establishments acquire and allocate financial capital, their source of funds, and the use of those funds provides a third basis for distinguishing characteristics of the production process. For instance, the production process in raising funds through deposit-taking is different from the process of raising funds in bond or money markets. The process of making loans to individuals also requires different production processes than does the creation of investment pools or the underwriting of securities.

Most of the Finance and Insurance subsectors contain one or more industry groups of (1) intermediaries with similar patterns of raising and using funds and (2) establishments engaged in activities that facilitate, or are otherwise related to, that type of financial or insurance intermediation. Industries within this sector are defined in terms of activities for which a production process can be specified, and many of these activities are not exclusive to a particular type of financial institution. To deal with the varied activities taking place within existing financial institutions, the approach is to split these institutions into components performing specialized services. This requires defining the units engaged in providing those services and developing procedures that allow for their delineation. These units are the equivalents for finance and insurance of the establishments defined for other industries.

The output of many financial services, as well as the inputs and the processes by which they are combined, cannot be observed at a single location and can only be defined at a higher level of the organizational structure of the enterprise. Additionally, a number of independent activities that represent separate and distinct production processes may take place at a single location belonging to a multilocation financial firm. Activities are more likely to be homogeneous with respect to production characteristics than are locations, at least in financial services. The classification defines activities broadly enough that it can be used both by those classifying by location and by those employing a more top-down approach to the delineation of the establishment.

Establishments engaged in activities that facilitate, or are otherwise related to, the various types of intermediation have been included in individual subsectors, rather than in a separate subsector dedicated to services alone because these services are performed by intermediaries, as well as by specialist establishments, the extent to which the activity of the intermediaries can be separately identified is not clear.

The Finance and Insurance sector has been defined to encompass establishments primarily engaged in financial transactions; that is, transactions involving the creation, liquidation, change in ownership of financial assets; or in facilitating financial transactions. Financial industries are extensive users of electronic means for facilitating the verification of financial balances, authorizing transactions, transferring funds to and from transactors' accounts, notifying banks (or credit card issuers) of the individual transactions, and providing daily summaries. Since these transaction processing activities are integral to the production of finance and insurance services, establishments that principally provide a financial transaction processing service are classified to this sector, rather than to the data processing industry in the Information sector.

Historical comparability

Products Lines for Finance and insurance

Product code	Product description	Sales of this line ($000)	Percent of industry sales (%)	Graph
50000	Industry total	2,803,854,	100.00
50120	Accident, health, & medical insurance premiums earned - net	356,674,79	12.72
55050	Loan income from consumers - secured	351,649,41	12.54
50130	Property & casualty direct insurance premiums earned - net	321,137,20	11.45
50190	Annuity revenue, including considerations & annuity fund deposit	206,838,56	7.38
	-Other	1,567,554,	55.91

For more product detail, see the AFF links below for Product Lines

Products, Size, and Other Data from the Economic Census -- Finance and insurance

Link to pdf	Series number	Title	Link to AFF or Drill-down tables	Contents	Geography
	EC02-00C-BDG	Bridge Between NAICS 2002 and NAICS 1997		Relationships between NAICS 1997 and NAICS 2002 for those industries redefined	US
	EC02-00C-COMP	Comparative Statistics		2002 and 1997 data side by side on a comparable NAICS 1997 basis	US, states
	EC02-52SL-LS	Product Lines		Product Lines by Kind of Business	US
	EC02-52SS-SZ	Establishment and Firm Size		Revenue Size of Establishments	US
	Employment Size of Establishments	US
	Single Unit & Multiunit Firms	US
	Revenue Size of Firms	US
	Employment Size of Firms	US
	Concentration by Largest Firms	US
	Legal Form of Organization	US
	EC02-52A	Geographic Area Series		Summary Statistics	US, states, metros
	SB02-00A	Survey of Business Owners		Business Ownership by Gender, Hispanic or Latino Origin, and Race	US

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