Selling to the Financials Sector
In the financial world, trust and speed are everything. Even a tiny delay or a single security glitch can wipe out billions in value. To win these deals, your team must make transactions smoother and the entire system more secure.
Banks Highlights
- Due to the nature of banking, common metrics for other industries don’t always apply or aren’t the best basis for assessing performance. Instead, banks track the following:
– Cash—Common equity tier 1 (CET1) capital ratio: a bank’s core capital as a percentage of risk-weighted assets. It’s a measure of financial strength, so it could be an asset measure, but banks carry so much cash that they don’t track it all on its own. The CET1 capital ratio reflects a bank’s ability to absorb shocks, such as loan defaults, the same way cash measures do. It’s required by regulatory agencies. Higher is better—to a point—because it indicates that the bank has more secure, stable, quality capital.
– Profit—Net interest income: the amount of income earned from interest charged on loans minus the interest paid on deposits to customers. Net interest margin is net interest income as a percentage of the bank’s interest-earning assets.
– Profit—Expense or efficiency ratio: administrative costs as a percentage of the bank’s total revenue (net interest income plus non-interest income). Lower is better.
– Assets—Non-performing loans ratio: the ratio of non-performing loans to total loans. Lower is better.
– Assets—Loan-to-deposit ratio: this ratio varies depending on size and strategy. Larger banks tend to have lower ratios because they have a high volume of deposits.
- Banks make money in two basic ways:
– Lending money at a higher rate than the interest they pay on customers’ deposits.
– Charging fees for other services they provide to banking customers, commercial, and consumer—payment and money transfers, specialty accounts, wealth management, and more. These services are attractive because they’re often high-value, low-cost, and less volatile than lending. - Cost management is extremely important for banks because they can carry high costs for IT and cybersecurity, human resources, and operating physical branches.
Compare your client's results to industry and S&P 500 results.
|
Banking |
S&P 500 |
|
|
CASH |
||
|
CET1 Capital Ratio % |
Larger Banks: 11% |
NA |
|
|
||
|
Net Interest Margin % |
3.0% |
NA |
|
Efficiency Ratio % |
Larger banks: 52% |
NA |
|
|
||
|
Return on Assets (ROA) % |
7.5% |
NA |
|
Loan-to-Deposit Ratio % |
65-90%, depending on size and strategy
|
NA |
|
Return on Assets (ROA) % |
1.3% |
8.4% |
|
Equity Ratio |
11.1% |
33.7% |
|
|
||
|
Revenue Growth Rate % |
6.0% |
6.3% |
|
Net Income Growth Rate % |
5.0% |
8.1% |
|
|
||
|
Revenue per Employee |
$610,800 |
$1.6M |
Notes:
-
S&P 500 averages are calculated based on 3 years of annual reports as of July 2024, rounded. However, because certain financial industries, like asset management companies and diversified banks, hold large amounts of cash, they have been removed from the cash calculations.
-
Industry averages are primarily based on research and data from other sources, although some are based on S&P 500 companies in the regional banks industry.
What are Health Insurance CEOs telling Wall Street right now? We analyzed the latest annual reports from five top players to identify the mission-critical priorities shaping their 2026 spending.
1. Profitability and LTV Over Raw Growth:
The era of growth at all costs is over. Insurers are intentionally shedding unprofitable members and exiting certain geographies to protect their bottom lines. Humana has explicitly shifted its strategy away from "loss leader plans," focusing instead on maximizing customer lifetime value (LTV) and retaining high-quality membership. Commercial growth is similarly measured, with companies like Elevance and UnitedHealth prioritizing margin integrity over raw volume.
2. Massive AI and Automation Initiatives:
Artificial intelligence is being aggressively deployed to counter rising administrative and medical costs. UnitedHealth Group anticipates nearly $1 billion in AI-enabled operating cost reductions in 2026 alone, using it to handle over 80% of member calls and streamline advocacy. Elevance is also making targeted investments to embed AI-enabled capabilities that simplify the member experience and speed up prior authorizations.
3. Hyper-Focus on Specific High-Cost Trends:
Rather than fighting general medical inflation, insurers are targeting specific spikes in utilization. Centene noted that behavioral health is driving roughly 50% of their excess medical trend, with home health and high-cost specialty drugs acting as secondary pressure points. Solutions that can effectively manage complex populations or utilize advanced algorithms to detect fraud, waste, and abuse in these areas are highly attractive.
4. Pharmacy Benefit Transformation: The pharmacy benefit manager (PBM) space is undergoing a massive structural shift. Cigna and UnitedHealth are heavily promoting new, transparent, "rebate-free" pricing models that pass savings directly to clients and consumers. Furthermore, insurers are heavily leaning into the adoption of lower-cost biosimilars to generate billions in savings over the next few years.
The Scenario:
A SaaS vendor selling an AI-driven claims tool was struggling to overcome the "we already have a large internal team for this" objection from a C-suite executive at a mid-sized health insurer.
The Strategy:
Instead of focusing on software features, the rep used the Revenue per Employee metric ($8.9M industry average). They proved that while the insurer’s revenue was growing, their headcount was growing faster—dropping their specific ratio to $7.2M (underperforming the industry).
The Pivot:
"Your business model requires high leverage; every employee needs to support nearly $9M in revenue just to protect your 3.3% net margin. Currently, your claims team spends 40% of their time on manual entry. We aren't here to replace your team; we are here to get your Revenue per Employee back above the $8.9M benchmark by automating 'low-value' touches."
The Result:
The executive shifted from seeing a "software cost" to a "margin protector." The deal closed because the vendor aligned with the executive’s hyper-focus on operational efficiency and headcount leverage.
The Scenario:
A workplace consultant was pitching a space-utilization audit to a COO facing a "return to office" dilemma. The COO was considering a generic mandate to bring everyone back just to justify lease costs, despite the risk to retention.
The Strategy:
The consultant ignored aesthetics and focused on the 3.3% Net Profit Margin. They analyzed the insurer's footprint and found three regional centers were only 40% occupied, creating a massive "administrative leakage" that was eroding the bottom line.
The Pivot:
"Your real estate overhead is a significant drag on your 3.3% margin. By rightsizing your footprint through activity-based zones, we can exit 30,000 sq. ft. of space, saving $1.2M in annual OpEx. To generate that same $1.2M in profit via new business, your sales team would have to close $36M in new premiums. We can give you that result today without a single new sale."
The Result:
The COO realized the audit wasn't a design project—it was a capital allocation strategy. They greenlit the study because the cost was negligible compared to the $36M in "equivalent premium growth" it uncovered.
- Profitability and LTV Over Raw Growth: The era of growth at all costs is over. Insurers are intentionally shedding unprofitable members and exiting certain geographies to protect their bottom lines. Humana has explicitly shifted its strategy away from "loss leader plans," focusing instead on maximizing customer lifetime value (LTV) and retaining high-quality membership. Commercial growth is similarly measured, with companies like Elevance and UnitedHealth prioritizing margin integrity over raw volume.
- Massive AI and Automation Initiatives: Artificial intelligence is being aggressively deployed to counter rising administrative and medical costs. UnitedHealth Group anticipates nearly $1 billion in AI-enabled operating cost reductions in 2026 alone, using it to handle over 80% of member calls and streamline advocacy. Elevance is also making targeted investments to embed AI-enabled capabilities that simplify the member experience and speed up prior authorizations.
- Hyper-Focus on Specific High-Cost Trends: Rather than fighting general medical inflation, insurers are targeting specific spikes in utilization. Centene noted that behavioral health is driving roughly 50% of their excess medical trend, with home health and high-cost specialty drugs acting as secondary pressure points. Solutions that can effectively manage complex populations or utilize advanced algorithms to detect fraud, waste, and abuse in these areas are highly attractive.
- Pharmacy Benefit Transformation: The pharmacy benefit manager (PBM) space is undergoing a massive structural shift. Cigna and UnitedHealth are heavily promoting new, transparent, "rebate-free" pricing models that pass savings directly to clients and consumers. Furthermore, insurers are heavily leaning into the adoption of lower-cost biosimilars to generate billions in savings over the next few years.
Insurance, Property, Casualty and Life Highlights
- Insurance companies depend on complex actuarial models to calculate their expected losses (claims) and the timing of those losses. They regularly update these estimates to account for changing risks and economic conditions and to ensure they can meet future claims, which they can do primarily because they collect premiums in the present and invest the cash. Often, the money made off the investments is a sizeable portion of their earnings.
- Insurance companies measure profitability through three key ratios: The loss ratio is the total claims and loss adjustment expenses paid over a specific period divided by the premiums col-lected over that period, and shows whether the company is earn-ing a profit from underwriting, The expense ratio is the expense of acquiring, underwriting, and servicing policies divided by the premiums collected on those policies, and measures operational efficiency. The combined ratio (the combination of the two) indi-cates overall profitability. Combined ratios nearing and over 100 put pressure on a company’s earnings.
- They’re required by regulation to have a high level of liquid assets, although not necessarily cash, compared to other industries, to pay current and future claims.
- The number of policies in force is a key driver of performance and growth.
- Decisions in property and casualty (P&C) companies have a much shorter term outlook, assessing premiums compared to expected claims in the next year. Life insurance companies operate on a much longer timeframe, because they’re making long-term investment decisions based on the life spans and mortality rates of their customer base.
Compare your client's results to industry and S&P 500 results.
|
Insurance Industry Average |
S&P 500 |
|
|
CASH |
||
|
Cash and Cash Equivalents as a % of Sales |
P&C: 8.6%; Life: 19.6% |
22.7% |
|
Cash Generated from Operations as a % of Sales |
21.4% |
20.9% |
|
|
||
|
Gross Profit Margin % |
31.5% |
49.6% |
|
Operating Profit Margin % |
16.2% |
23.2% |
|
Net Profit Margin % |
11.9% |
12.9% |
|
|
||
|
Return on Assets (ROA) % |
P&C: 4.1%; Life: 1.6% |
8.4% |
|
Equity Ratio |
P&C: 28.2%; Life: 16.4% |
33.7% |
|
|
||
|
Revenue Growth Rate % |
P&C: 8.8%; Life: 3% |
6.3% |
|
Net Income Growth Rate % |
P&C: 4.9%; Life: 12.9% |
8.1% |
|
|
||
|
Revenue per Employee |
$1.9M |
$1.6M |
Notes:
-
Because cash amounts can vary dramatically from company to company based on a company’s overall “size,” we’ve presented the numbers as a percentage of sales or revenue: the cash metric divided by total revenue or sales and then multiplied by 100.
-
S&P 500 averages are calculated based on 3 years of annual reports as of July 2024, rounded. However, because certain financial industries, like asset management companies and diversified banks, hold large amounts of cash, they have been removed from the cash calculations.
-
Most industry or sector averages are also calculated based on 3 years of annual reports from S&P 500 companies. However, certain companies or subsectors in the S&P sometimes skew the data far from what is typical for an industry, so we have occasionally removed some companies or subsectors or changed periods in our calculations to provide a more accurate set of comparison data.
- Profitability and LTV Over Raw Growth: The era of growth at all costs is over. Insurers are intentionally shedding unprofitable members and exiting certain geographies to protect their bottom lines. Humana has explicitly shifted its strategy away from "loss leader plans," focusing instead on maximizing customer lifetime value (LTV) and retaining high-quality membership. Commercial growth is similarly measured, with companies like Elevance and UnitedHealth prioritizing margin integrity over raw volume.
- Massive AI and Automation Initiatives: Artificial intelligence is being aggressively deployed to counter rising administrative and medical costs. UnitedHealth Group anticipates nearly $1 billion in AI-enabled operating cost reductions in 2026 alone, using it to handle over 80% of member calls and streamline advocacy. Elevance is also making targeted investments to embed AI-enabled capabilities that simplify the member experience and speed up prior authorizations.
- Hyper-Focus on Specific High-Cost Trends: Rather than fighting general medical inflation, insurers are targeting specific spikes in utilization. Centene noted that behavioral health is driving roughly 50% of their excess medical trend, with home health and high-cost specialty drugs acting as secondary pressure points. Solutions that can effectively manage complex populations or utilize advanced algorithms to detect fraud, waste, and abuse in these areas are highly attractive.
- Pharmacy Benefit Transformation: The pharmacy benefit manager (PBM) space is undergoing a massive structural shift. Cigna and UnitedHealth are heavily promoting new, transparent, "rebate-free" pricing models that pass savings directly to clients and consumers. Furthermore, insurers are heavily leaning into the adoption of lower-cost biosimilars to generate billions in savings over the next few years.
Real Estate Development Highlights
- Major developers in the industry also tend to be real estate investment trusts (REITs). Because they require large amounts of capital and REITs are required to distribute 90% of taxable income as dividends to shareholders, they need access to debt and equity markets, public and/or private. To generate profit and dividends, they focus on revenue optimization, cost management, and maintaining a healthy balance sheet. REITs regularly bring new properties online and sell existing properties, which can create a lot of volatility in earnings in any quarter or year. Traditional metrics aren’t always helpful in assessing performance. Instead, they assess profit using net operating income, cash using adjusted funds from operations, and assets using net asset value, among other measures.
- Real estate or property developers build or redevelop properties, requiring significant investment in assets with high risk, which can influence their asset measures as they use debt to fund projects.
- They need employees with zoning expertise and strategic inventory management experience to help maintain profitability.
- The big pressures they can face, depending on economic and market conditions, are access to capital to fund land purchases and build out structures, supply chain hurdles, and cost inflation. Efficient sourcing of materials is critical to profit.
Compare your client's results to industry and S&P 500 results.
|
Real Estate |
S&P 500 |
|
|
CASH |
||
|
Cash and Cash Equivalents as a % of Sales |
16.1% |
22.7% |
|
Cash Generated from Operations as a % of Sales |
13.5% |
20.9% |
|
|
||
|
Gross Profit Margin % |
25.1% |
49.6% |
|
Operating Profit Margin % |
18.7% |
23.2% |
|
Net Profit Margin % |
14.8% |
12.9% |
|
|
||
|
Return on Assets (ROA) % |
17.5% |
8.4% |
|
Equity Ratio |
58.5% |
33.7% |
|
|
||
|
Revenue Growth Rate % |
5.9% |
6.3% |
|
Net Income Growth Rate % |
4.9% |
8.1% |
|
|
||
|
Revenue per Employee |
$0.8M |
$1.6M |
Notes:
-
Because cash amounts can vary dramatically from company to company based on a company’s overall “size,” we’ve presented the numbers as a percentage of sales or revenue: the cash metric divided by total revenue or sales and then multiplied by 100.
-
S&P 500 averages are calculated based on 3 years of annual reports as of July 2024, rounded. However, because certain financial industries, like asset management companies and diversified banks, hold large amounts of cash, they have been removed from the cash calculations.
-
Most industry or sector averages are also calculated based on 3 years of annual reports from S&P 500 companies. However, certain companies or subsectors in the S&P sometimes skew the data far from what is typical for an industry, so we have occasionally removed some companies or subsectors or changed periods in our calculations to provide a more accurate set of comparison data.
- Profitability and LTV Over Raw Growth: The era of growth at all costs is over. Insurers are intentionally shedding unprofitable members and exiting certain geographies to protect their bottom lines. Humana has explicitly shifted its strategy away from "loss leader plans," focusing instead on maximizing customer lifetime value (LTV) and retaining high-quality membership. Commercial growth is similarly measured, with companies like Elevance and UnitedHealth prioritizing margin integrity over raw volume.
- Massive AI and Automation Initiatives: Artificial intelligence is being aggressively deployed to counter rising administrative and medical costs. UnitedHealth Group anticipates nearly $1 billion in AI-enabled operating cost reductions in 2026 alone, using it to handle over 80% of member calls and streamline advocacy. Elevance is also making targeted investments to embed AI-enabled capabilities that simplify the member experience and speed up prior authorizations.
- Hyper-Focus on Specific High-Cost Trends: Rather than fighting general medical inflation, insurers are targeting specific spikes in utilization. Centene noted that behavioral health is driving roughly 50% of their excess medical trend, with home health and high-cost specialty drugs acting as secondary pressure points. Solutions that can effectively manage complex populations or utilize advanced algorithms to detect fraud, waste, and abuse in these areas are highly attractive.
- Pharmacy Benefit Transformation: The pharmacy benefit manager (PBM) space is undergoing a massive structural shift. Cigna and UnitedHealth are heavily promoting new, transparent, "rebate-free" pricing models that pass savings directly to clients and consumers. Furthermore, insurers are heavily leaning into the adoption of lower-cost biosimilars to generate billions in savings over the next few years.
What are the leaders in global banking and payment networks telling Wall Street right now? We analyzed the 2026 strategic outlooks for the top-tier institutions to identify the mission-critical priorities shaping their capital allocation.
1. Modernizing the Core for Instant Liquidity:
The industry is moving away from old-school "batch processing" toward real-time everything. Major institutions are overhauling their backend systems to support instant cross-border settlements. The goal is to eliminate the two-day waiting period that ties up billions in capital, allowing the firm to put that money to work in high-yield markets immediately instead of leaving it dormant in clearing accounts.
2. Deepening Ecosystems Over Raw Acquisition:
The focus has shifted from winning new accounts to capturing more "share of wallet." Large banks and payment networks are integrating diverse services—like wealth management, travel booking, and everyday banking—into single platforms. By making their app the primary destination for every financial need, they increase the lifetime value of each client and make it much harder for them to switch to a competitor.
3. Resilience and Defense as a Service:
Security spending is no longer just a "back-office" necessity; it is a competitive advantage. Financial giants are investing heavily in hardware-level encryption to combat sophisticated digital threats. By guaranteeing a higher level of transaction safety, they are positioning themselves as the "safe haven" for large-scale institutional money and high-net-worth individuals who prioritize security over all else.
4. Strategic Capital Management and Dividend Stability:
In an unpredictable interest-rate environment, the mandate is a "fortress" balance sheet. Executives are prioritizing high-quality, stable assets and shedding riskier, high-cost loan portfolios. This disciplined approach ensures they maintain the massive cash reserves required by regulators while still having the flexibility to return significant capital to shareholders through dividends and buybacks.
The Scenario:
A salesperson for a specialized transaction accelerator was pitching to the Head of Trading Operations at a major investment bank. The Director was hesitant, arguing that their current server speeds were already "standard" and a tiny improvement in speed wasn't worth the equipment cost.
The Strategy:
The salesperson ignored the "speed" and focused on Opportunity Cost. They demonstrated that during busy market hours, those tiny delays caused "slippage"—where the bank bought or sold at a slightly worse price than intended—costing them millions in lost profit every year.
The Pivot:
"If we look at your daily average, your current tech is fine. But let’s look at your Execution Leakage during peak hours. Right now, your system's tiny delay is causing you to miss the best price on 4% of your high-volume trades. We aren't here to just 'go faster'; we’re here to ensure you capture the exact price you intended. Over a year, that small difference is worth $15M in recovered profit that is currently vanishing. We’re here to make sure your capital actually lands where you aimed it."
The Result:
The Director realized the hardware wasn't an "IT upgrade"—it was a Profit Recovery tool. They approved the purchase because the found money from better execution paid for the equipment in less than a month.
The Scenario:
A salesperson for a premium, biometric-enabled physical card was pitching to the Head of Consumer Rewards at a massive global card issuer. The executive was leaning toward a cheaper, standard plastic card, arguing that "customers only care about the points."
The Strategy:
The salesperson ignored the "look and feel" of the card and focused on Top-of-Wallet Retention. They used data to show that when a customer has a high-security or "premium" physical card, they use it for 30% more transactions than their other cards, regardless of the rewards program.
The Pivot:
"You’re spending millions on points to get people to use your card, but if they find the checkout process clunky, they'll reach for a competitor's card. Our biometric cards make the transaction five seconds faster by removing the need for pins or signatures. That 'frictionless' experience ensures your card stays Top-of-Wallet. If we can move your card from 'secondary' to 'primary' for just 5% of your users, the increase in fees will outweigh the cost of these cards ten times over. We’re selling you a way to own the customer’s daily habit."
The Result:
The executive realized the card was a Market Share play. They moved forward with the premium card because it offered a physical advantage that competitors couldn't easily copy with a simple rewards update.
- Profitability and LTV Over Raw Growth: The era of growth at all costs is over. Insurers are intentionally shedding unprofitable members and exiting certain geographies to protect their bottom lines. Humana has explicitly shifted its strategy away from "loss leader plans," focusing instead on maximizing customer lifetime value (LTV) and retaining high-quality membership. Commercial growth is similarly measured, with companies like Elevance and UnitedHealth prioritizing margin integrity over raw volume.
- Massive AI and Automation Initiatives: Artificial intelligence is being aggressively deployed to counter rising administrative and medical costs. UnitedHealth Group anticipates nearly $1 billion in AI-enabled operating cost reductions in 2026 alone, using it to handle over 80% of member calls and streamline advocacy. Elevance is also making targeted investments to embed AI-enabled capabilities that simplify the member experience and speed up prior authorizations.
- Hyper-Focus on Specific High-Cost Trends: Rather than fighting general medical inflation, insurers are targeting specific spikes in utilization. Centene noted that behavioral health is driving roughly 50% of their excess medical trend, with home health and high-cost specialty drugs acting as secondary pressure points. Solutions that can effectively manage complex populations or utilize advanced algorithms to detect fraud, waste, and abuse in these areas are highly attractive.
- Pharmacy Benefit Transformation: The pharmacy benefit manager (PBM) space is undergoing a massive structural shift. Cigna and UnitedHealth are heavily promoting new, transparent, "rebate-free" pricing models that pass savings directly to clients and consumers. Furthermore, insurers are heavily leaning into the adoption of lower-cost biosimilars to generate billions in savings over the next few years.