Finance & Insurance: A Tale of Two Industries
by: David Bullard

The Finance and Insurance industries accounted for 6,135 jobs in 1996. While this is slightly less than three percent of Unemployment Insurance (UI) covered employment, these industries play an important role in Wyoming’s economy. The Steering Committee Report1 noted that businesses need access to capital in order to grow, and that the health of depository institutions in the state affects the ability of Wyoming businesses to generate the capital they need. Unlike many other industries in the state, employment in Finance and Insurance is relatively stable month to month, showing almost no seasonality. However, both the Depository Institutions industry and the Insurance industry have seen dramatic changes in employment levels since 1989. Employment in Depository Institutions has fallen while Insurance employment has increased. The decreasing employment in Depository Institutions appears to be associated with changes in the regulatory environment and increasing use of technology rather than a decrease in the volume of business. The increasing employment in Insurance is partially due to new firms moving into Wyoming.

Table 1 compares the 1987 Standard Industrial Classification (SIC) Division H “Finance, Insurance, & Real Estate2” (FIRE) with the North American Industrial Classification System (NAICS) Finance and Insurance industry (NAICS code 52). This article will examine the industries included in NAICS code 52.

Table 1: 1987 SIC Division H Versus NAICS Code 52
Title SIC* 1996 Employment NAICS** 1996 Employment
Depository Institutions (SIC 60) 3,007 3,007
Nondepository Credit Institutions (SIC 61) 318 318
Security and Commodity Brokers (SIC 62) 357 357
Insurance Carriers (SIC 63) 1,159 1,159
Insurance Agents, Brokers and Service (SIC 64) 1,046 1,046
Real Estate (SIC 65) 1,766
Holding and Other Investment Offices (SIC 67) 248 248
Total 7,901 6,135

* 1987 Standard Industrial Classification (SIC) Division H: Finance, Insurance, & Real Estate (FIRE)
** North American Industrial Classification System (NAICS) Code 52: Finance & Insurance

Figure 1 shows the employment distribution between these 2-digit SIC’s in 1996. Depository Institutions (SIC 60) make up almost half of all employment in the Finance and Insurance industries. It is followed by Insurance Carriers (SIC 63) with 1,159 employees and Insurance Agents, Brokers and Service (SIC 64) with 1,046 employees. Together, these three SIC’s make up 85 percent of employment in the industry and will be the focus of this article.

Figure 1: Wyoming 
Employment for Finance & Insurance

Figure 2 shows the average weekly wages for Finance & Insurance. Each industry pays more than $440, the statewide average weekly wage in 1996. Holding and Other Investment Offices (SIC 67) and Security and Commodity Brokers (SIC 62), two of the smaller industries (in terms of employment) pay the highest wages, while the larger industries (SIC 60 and 64) pay the lowest wages in the group. Perhaps the high wages in Finance can be partially attributed to high productivity from computer use. A 1993 survey done by the Census Bureau showed that more employees in Finance use a computer at work than in any other industry3.

Figure 2: Average 
Weekly Wage for Finance and Insurance

Depository Institutions

Depository Institutions (SIC 60) includes commercial banks, thrifts or savings & loans, and credit unions. Employment in this category lost 639 people from 1989 to 1996, falling from 3,646 to 3,007 (-17.5%). At the same time, deposits in banks grew by over four billion dollars (see Figure 3). In 1989, banks in Wyoming held $3.8 billion in deposits, but by 1996 they held $7.0 billion. What can explain the decreasing employment? At the end of 1989, Wyoming had 80 commercial banks and savings institutions, but this fell to 58 in 1994. It appears that many workers lost their jobs as depository institutions failed and consolidated. The number of depository institutions reached a peak in 1984 and then fell dramatically. Employment in SIC 60 shows a positive correlation with the number of depository institutions.

Figure 3: Employment 
in SIC 60 & Deposits in Commercial Banks

Figure 4 shows employment in Depository Institutions (SIC 60) and the number of FDIC insured commercial banks and savings institutions in Wyoming. Both the number of depository institutions and employees fell from 1989 to 1994 and then increased slightly from 1995 to 1996. Employment in this industry is expected to continue to grow slowly (see “Projections” below). Trends in depository institutions at the national level show a similar pattern to Wyoming. During the period 1989-1996, the United States lost 254,800 jobs in depository institutions. While still a significant decrease in percentage terms (11.2%), it is a smaller loss than the depository institutions industry experienced in Wyoming.

Figure 4: Employment 
in SIC 60 and Number of Commercial Banks & Savings Institutions

There appear to be three main reasons for declining employment in depository institutions: failures, mergers and automation. While an in-depth discussion of these issues is beyond the scope of this article, a brief outline will help the reader better understand some of the changes taking place in this industry.

Between 1980 and 1994, 20 banks and seven FDIC insured savings and loans failed in Wyoming. Table 2 lists them in chronological order of failure. Glancing over Table 2 reveals that depository institutions failed in all of Wyoming’s major cities and several of its small towns. The banks had $375 million in assets4. While no single factor can explain why 17 percent of Wyoming’s banks failed, the recession caused by the decrease in energy prices appears to be partially responsible. However, as noted in the FDIC Banking Review, it wasn’t just the severe recession, it was the rapid growth leading up to it that caused banks to overextend themselves. Thus, banks failed in Wyoming because of boom and bust cycles.

Table 2: Failed Savings Institutions and Commercial Banks in Wyoming
Year Savings Institution Location
1986 Guaranty Federal Bank Federal Savings Bank Casper
1988 Rocky Mountain Federal Savings & Loan Association Cheyenne
1988 United Savings Bank of Wyoming Cheyenne
1989 First Federal Savings Bank Diamondville
1990 Provident Savings Association Casper
1990 Sweetwater Federal Savings & Loan Association Rock Springs
1991 Westland Federal Savings & Loan Association Rawlins
Year Commercial Bank Location
1983 Western National Bank of Lovell Lovell
1984 Western National Bank of Casper Casper
1984 State Bank of Mills Mills
1985 Citizens State Bank Edgerton
1985 American National Bank of Riverton Riverton
1985 First National Bank of Glenrock Glenrock
1985 Saratoga State Bank Saratoga
1985 Yellowstone State Bank Lander
1986 American Bank of Casper Casper
1986 First National Bank of Douglas Douglas
1986 Security Bank of Glenrock Glenrock
1986 The First National Bank of Sheridan Sheridan
1986 Medicine Bow State Bank Medicine Bow
1986 American National Bank of Eastridge Casper
1986 Valley State Bank Baggs
1987 American National Bank of Evanston Evanston
1987 Stockmen's Bank & Trust Company Gillette
1987 American National Bank of Afton Afton
1987 First State Bank at Shoshoni Shoshoni
1988 Bank of Casper Casper
Source: Federal Deposit Insurance Corporation (FDIC) Historical Statistics on Banking.

Consolidation in the banking industry is closely related with the deregulation and the increase in interstate branching. Wyoming lost 26 banking organizations to mergers and breakups from 1980 to 19955. Mergers reduce employment as the combined organizations eliminate duplicated positions, often closing branches that serve the same area.

Computer automation has allowed depository institutions to save money by replacing tellers with automated teller machines (ATM’s). A Bureau of Labor Statistics economist, Teresa Morisi, noted that as employment in commercial banks has fallen, the volume of ATM transactions has increased year after year6 . Her article also identified telephone transactions, direct deposits and point-of-sale transactions as technologies that allow depository institutions to serve more customers with fewer employees.


The Insurance industry contains two groups: Insurance Carriers (SIC 63), who underwrite insurance, and Insurance Agents and Brokers (SIC 64) who sell insurance, service insurance claims and offer other insurance-related services. In sharp contrast to depository institutions, employment in Insurance (the sum of SIC 63 and 64) grew rapidly between 1989 and 1996. It added 664 jobs, giving it a growth rate of 43 percent, more than twice the rate of increase in all UI covered jobs (15.5%). The increase is split between SIC 63 and SIC 64. Some of this growth came from new firms relocating to Wyoming, while other jobs have resulted from existing firms adding employees to better serve a growing population and an expanding economy.


Figure 5 shows employment projections by quarter for 1997 and 1998 for Depository Institutions (SIC 60) and Insurance (SIC 63 and 64). Employment in Depository Institutions is expected to grow 1.9 percent or 60 jobs over the two-year period. In other words, it will continue its pattern of slow growth that began in 1995. Insurance will grow faster over the same period adding 179 jobs for an 8.1 percent growth rate.

Figure 5: 
Employment Projections for Depository Institutions (SIC 60) and 
Insurance (SIC 63 & 64)


The Finance and Insurance industries only employ a small fraction of workers in Wyoming, but they pay high wages. Despite growth in deposits, failures, mergers and automation caused the number of depository institution employees to fall dramatically in the late 1980’s and early 1990’s. During the same period, Insurance enjoyed rapid employment growth. Current projections are for slow growth in depository institutions, and more moderate growth in the Insurance industry as Wyoming moves toward the 21st century.

David Bullard is an Economist, specializing in Local Area Unemployment Statistics (LAUS) with Research & Planning.

1 Steering Committee for Business Development, Vision for a New Economic Future, November 1997.

2 The Real Estate industry (SIC 65) was the subject of a previous article: Mike Evans, " Wyoming Construction and Real Estate Industries: Where Have We Been and Where Are We Going?" Trends, July 1997.

3 US Census Bureau, Use of Computers at Home, School, and Work by Persons 18 Years and Older, October 1993.

4 “The Banking Crises of the 1980’s and Early 1990’s Summary and Implications,” FDIC Banking Review, Volume 11, Number 1 (1998).

5 Keeton, William R., “Banking Consolidation in Tenth District States,” Federal Reserve Bank of Kansas City Economic Review, Volume 81, Number 2 (Second Quarter 1996).

6 Morisi, Teresa L., “Commercial Banking Transformed by Computer Technology,” Monthly Labor Review, Volume 119, Number 8 (August 1996).

This article was published in the Wyoming Labor Force Trends August 1998 issue.

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