Financial and insurance sector statistics - NACE Rev. 1.1
From Statistics Explained
- Data from January 2009. Most recent data: Further Eurostat information, Main tables and Database
This article introduces a set of statistical articles which analyse the structure, development and characteristics of the economic activities in the financial and insurance sector in the European Union (EU). According to the statistical classification of economic activities in the EU (NACE Rev 1.1), this sector covers NACE Divisions 65 to 67, and its activities are treated in more depth in four further articles:
- Financial intermediation (NACE Division 65), which includes financial and insurance services encompass financial intermediation as offered by credit institutions, financial leasing and other credit granting enterprises, and financial intermediaries such as securities and derivatives dealers;
- Funds and similar financial entities;
- Insurance and pension funding services (NACE Division 66);
- Activities providing financial auxiliary services (NACE Division 67), such as the administration of financial markets, security brokering, fund management and the various activities of brokers and agents for financial products.
Main statistical findings
Note that within the other structural business statistics sectors, the benchmark used for comparison is the non-financial business economy, which by definition excludes the activities that are covered in this article. To show the relative importance of financial and insurance services within the business economy as a whole, sources other than structural business statistics are used here, namely national accounts and the Labour force survey.
According to national accounts, the contribution of financial and insurance services (NACE Section J) to employment within the business economy (NACE Sections C to K) was around 4.3 % in the EU  in 2006, and the level of employment was around 6.0 million persons. According to results from the Labour force survey for 2007 just over three fifths (63.1 %) of the persons employed in financial and insurance services were employed in financial intermediation activities other than insurance and pension funding (NACE Division 65), with the remainder split almost equally between insurance and pension funding activities (NACE Division 66) and activities auxiliary to financial intermediation (NACE Division 67).
The EU-27's financial and insurance services generated EUR 588.3 billion of value added in 2006 according to national accounts: with this sector's contribution to business economy value added falling from a high of 6.8 % in 1996 to a low of 6.3 % in 2001, before increasing its share in four consecutive years to 7.6 % by 2005 and dropping back to 7.5 % in 2006.
In value added terms, the largest Member State in the financial and insurance services sector was the United Kingdom, which generated one quarter (24.5 %) of the EU-27's value added in 2005, ahead of Germany (16.9 %) in 2006. The contribution of this sector to value added within the business economy in 2006 was particularly high in Luxembourg (34.5 %), and this sector also contributed more than 10 % of business economy value added in Ireland, the United Kingdom, Portugal and Cyprus. Its contribution was lowest in Romania, Lithuania, Finland, the Czech Republic and Estonia where the financial and insurance services sector accounted for less than 5 % of value added. The contribution of financial and insurance services to the business economy was greater in value added terms than in employment terms in every Member State.
Only in terms of the gender breakdown did the characteristics of the workforce in this sector differ significantly from those displayed by the business economy (NACE Sections C to K). The proportion of the financial and insurance services sector's workforce that was female was 52.0 %, well above the 35.9 % share recorded for the whole of the business economy. In all Member States the female proportion of the financial and insurance services workforce was above the non-financial business economy average. In three fifths of the Member States more than half of the financial and insurance services workforce was female; the share of women rose to its highest levels in Latvia (74.7 %) and Estonia (73.4 %), while it was at its lowest in Italy (40.5 %).
The lowest rate of female employment among the three NACE divisions within the EU-27’s financial and insurance services was recorded for activities auxiliary to financial intermediation (NACE Division 67), where 46.3 % of the workforce were women. A majority of the workforce was female in the two other activities, namely insurance and pension funding (NACE Division 66) and financial intermediation activities other than insurance and pension funding (NACE Division 65).
Unlike other sectors where female employment was high (such as retail trade or hotels and restaurants), the rate of full-time employment in the EU-27's financial and insurance services sector was also relatively high in 2007, as 86.0 % of those employed worked on a full-time basis, almost the same as the 85.7 % average for the business economy. Among the three NACE divisions covered in this sector the highest full-time employment rate was recorded for financial intermediation activities other than insurance and pension funding (87.1 %), whereas the proportion of persons working full-time was just above 84 % in the other two activities.
The age structure of the EU-27’s workforce in financial and insurance services displayed a relatively low proportion of younger workers (less than 30 years of age) compensated by a slightly larger share of workers aged between 30 and 49. In 2007 some 21.4 % of the workforce was aged less than 30, which was 2.8 percentage points lower than the business economy average; 57.0 % were aged between 30 and 49, which was 3.1 percentage points above the business economy average. In all three financial and insurance services' NACE divisions the proportion of workers aged less than 30 was below the business economy average, but it was particularly low in insurance and pension funding activities at 19.2 %.
Data sources and availability
The main part of the analysis in this article is derived from structural business statistics (SBS), including core, business statistics which are disseminated regularly, as well as information compiled on a multi-yearly basis, and the latest results from development projects.
Other data sources include the Labour force survey (LFS) and Eurostat economy and finance statistics.
Financial and intermediation services provide instruments to businesses and households in the form of products that are essentially savings or loans, or products to transfer and pool risk. Changes in financing techniques have increased the possibilities open to business to fund investment, while consumers have a wider array of choices for credit, savings and payment methods. At the time of writing this sector is the focus of worldwide attention due to the financial crisis widely experienced across the globe and the impact that this has had on other parts of the economy. This crisis has led to national governments taking over some financial institutions, and providing massive amounts of financial support to others. The crisis has provoked widespread calls for reforms to regulatory bodies and new ways for overseeing the operations and practices of this sector.
There has been considerable EU legislative activity in the sphere of financial and insurance services centred upon the creation of an internal market for financial and insurance services. This work has been conducted through the Financial services action plan (FSAP), which was published by the European Commission in 1999 and the legislative phase completed in 2006.
The absence of cross-border consolidation within the financial and insurance services sector has drawn attention and in September 2007 a Directive of the European Parliament and of the Council was adopted (COM(2007) 44) that would tighten the procedures that Member States' supervisory authorities have to follow when assessing proposed mergers and acquisitions in banking, insurance and securities activities. The directive aims to clarify the criteria against which supervisors should assess possible mergers and acquisitions in order to improve clarity and transparency in supervisory assessment and help to ensure a consistent handling of mergers and acquisitions requests across the EU.
Further Eurostat information
- European Business: Facts and figures - 2009 edition
- Directive 2007/44 of 5 September 2007 on procedural rules and evaluation criteria for the prudential assessment of acquisitions and increase of holdings in the financial sector
- ↑ EU average, 2006; excluding Malta and Romania; 2005 data for the United Kingdom.