Financial Services Spotlight
The Financial Services Industry in the United States
Overview
Financial markets in the United States are the largest and most liquid in the world. In 2015, finance and insurance represented 7.2 percent (or $1.293 trillion) of U.S. gross domestic product. Leadership in this large, high-growth sector translates into substantial economic activity and direct and indirect job creation in the United States.
Financial services and products help facilitate and finance the export of U.S. manufactured goods and agricultural products. In 2015, the United States exported $119.6 billion in financial services and insurance and had a $46.67 billion surplus in financial services and insurance trade (excluding re-insurance, the financial services and insurance sectors had a surplus of $88.4 billion). The financial services and insurance sectors employed 6.08 million people in 2015. The securities subsector of the industry shows great potential for employment growth, with a 12 percent increase expected by 2018. According to the U.S. Department of Labor, 920,700 people were employed in the securities and investment sector at the end of 2015.
Investment in the U.S. financial services industry offers significant advantage for financial firms. In 2015, at least 128 of Fortune's Global 500 companies have chosen to locate their headquarters in the United States to take advantage of its creative, competitive, and comprehensive financial services sector. The industry offers the greatest array of financial instruments and products to allow consumer to manage risk, create wealth, and meet financial needs.
Industry Subsectors
Asset Management: The U.S. asset management subsector is unrivaled in its depth and diversity. U.S. asset managers are currently meeting the pension management needs of over 60 percent of the global retirement market. Total U.S. pension assets were $24.5 trillion at the end of 2015. Moreover, if insurance assets and mutual funds are included, U.S. asset managers held more than $51.1 trillion of long-term conventional assets under management in 2015, or 47.2 percent of the global total for these funds. Conventional funds were equivalent to 294 percent of U.S. GDP.
Insurance: In 2015, the insurance industry’s net premiums written totaled approximately $1.2 billion. According to NAIC data, premiums recorded by life and health insurers accounted for 45 percent, and premiums by property and casualty insurers accounted for 55 percent. Additionally, about one-third of all reinsurance sold worldwide is bought by U.S. firms. International insurance companies are actively seeking business partnerships and collaborations with U.S. insurance companies.
Venture Capital: The venture capital industry was created in the United States and our venture capital ecosystem continues to support many of our most innovative companies. In 2015 new commitments to venture capital funds in the United States totaled $28.2 billion, and total investment for the year reached $59.1 billion, marking the highest amount deployed since 2000 and the second highest on record. Venture capital-backed companies employ 38 percent of the U.S. workforce within public U.S. companies and account for 82 percent of private sector research and development since 1979. Annually, VC-backed companies have historically generated revenue equal to 21 percent of U.S. GDP. (Source: Stanford University and NVCA)
Private Equity: U.S. private equity firms invested more than $625.89 billion in U.S.-based companies in 2015 (most recent data available). The private equity industry in the United States comprises nearly 3,847 investment firms, operating U.S.-based businesses in all 50 states. Companies backed by U.S. private equity firms employ 11.3 million people in the United States and 19.6 million people worldwide. In 2015, business services and consumer-related businesses attracted the majority of U.S. private equity investment. (Source: PEGCC)
Financial Services Industry Associations
Alliance of American Insurers
American Bankers Association
American Benefits Council
American Council of Life Insurers
American Countertrade Association
American Insurance Association
Emerging Markets Private Equity Association
Equipment Leasing and Finance Association
Finance, Credit & International Business
Investment Company Institute
Latin American Venture Capital Association
Mortgage Bankers Association
National Association of Insurance Commissioners
National Venture Capital Association
Property Casualty Insurers Association of America
Reinsurance Association of America
Securities Industry and Financial Markets Association
Small Business Investor Alliance
Industry Publications:
American Banker
Bloomberg BusinessWeek
Global Finance
Institutional Investor
Mortgage Banking
Pensions & Investments
The Wall Street Journal