US Finance and Insurance Sector

The 244,535 establishments in the finance and insurance sector engage in the creation, liquidation, and transfer of financial assets and/or support financial transactions. The sector connects savers and investors with borrowers and includes financial intermediaries, which use the funds of savers to make loans or investments. Firms may also act as agents and invest on behalf of others. The infrastructure of financial markets includes systems that provide information, payment, clearing, and settlement services that support and facilitate transactions.

Balancing Risk and Reward

Risk is an integral part of financial markets, and investments can lose some to even all of their value under certain types of conditions.

Government Regulation

Industries in the finance and insurance sector are subject to extensive government regulation at varying levels.

Aug 24, 2026 - Rising Medical Costs Drive Health Insurance Premiums Higher

• Employers and workers are bracing for another painful jump in health insurance costs, with little relief in sight. US employers expect healthcare costs to rise 11.1% in 2027, according to benefits consultant WTW, which would be the largest increase in more than two decades and the fifth straight year of accelerating growth. Workers are already feeling the squeeze: Aon estimates employees with workplace coverage will spend an average of $5,297 on premiums and out-of-pocket costs in 2026, up $388 from last year. Higher hospital prices, greater use of medical services and expensive treatments are driving insurers’ costs higher, with cancer therapies and GLP-1 weight-loss drugs adding particular pressure. As premiums climb, employers are passing some of the increase to workers through larger payroll deductions and cost sharing, while some smaller businesses are finding that health insurance expenses are eating deeply into already thin margins.
• US housing activity weakened further in July as higher mortgage rates strained affordability and kept sales subdued. Existing-home sales fell 1.7% from June to an annualized pace of 4.06 million, according to the National Association of Realtors (NAR), though sales were up 0.7% from a year earlier. Freddie Mac said the average 30-year mortgage rate rose to 6.69% in early August from 6.43% at the start of July. Higher rates are discouraging buyers while giving homeowners with cheaper mortgages an incentive to stay put, limiting the supply of homes for sale. Tight supply continues to prop up prices despite sluggish sales, with the median home price rising 2% from a year earlier to $434,100. The divide between weak sales and high prices shows how elevated borrowing costs are slowing the housing market without making homes substantially cheaper.
• A growing divide in household finances is creating a "K-shaped" consumer economy that isn't apparent in the headline economic data. According to HB Wealth, higher-income households continue to benefit from rising home values, stock prices, and strong balance sheets, while lower-income borrowers are relying more heavily on credit cards and other debt to cover everyday expenses. Delinquencies on credit cards, auto loans, and other consumer debt are rising fastest among lower-income households even as overall lending metrics remain relatively healthy, masking growing financial stress beneath the surface. HB Wealth argues this split helps explain why consumer spending has remained resilient despite mounting signs of strain. Affluent households driving much of the economy while financially stretched consumers become increasingly vulnerable to higher borrowing costs and a slowing labor market.
• Affordable Care Act (ACA) insurers are seeking another round of double-digit premium increases for 2027, driven largely by the expiration of enhanced federal premium subsidies and continued growth in healthcare costs. According to KFF, the median requested rate increase across 77 publicly available ACA filings is 14%, following a median 20% increase in 2026. With reduced subsidies making coverage significantly more expensive, ACA enrollment has fallen to 19.2 million from 22.1 million a year earlier, and actuaries expect healthier consumers to continue dropping coverage, leaving insurers with a smaller and costlier risk pool. Insurers also cite rising hospital and pharmaceutical costs, greater use of medical services, and higher provider reimbursements as reasons for the requested increases. The proposed rates are still subject to regulatory review before being finalized later this year.

Industry size & Structure

The finance and insurance sector is comprised of 244,535 establishments that employ 6.8 million workers and generate $5.7 trillion in annual revenue, according to government sources.

• The finance and insurance sector represents 8.9% of the nation's Gross Domestic Product (GDP) and employs 4% of the country's workers.
• The sector is somewhat concentrated at the top with the 20 largest firms representing 29% of revenue, but it is fragmented at the bottom.
• In addition to employer establishments, the finance and insurance sector has 805,000 owner-operated establishments with no employees. The owners of nonemployer establishments typically perform the work and may outsource support functions like marketing and accounting.
• The finance and insurance sector is forecast to grow its employment base by 4.4% overall by 2031, which is lower than the national average of 5.3% for all jobs, according to the Bureau of Labor Statistics.