Other Insurance Related Activities (NAICS 52429): An Investor's Primer

A rollup primer — for both public-market and private investors.

1. Overview

Every insurance policy generates work that the insurer itself does not always do in-house. Before a rate can be filed, someone models the catastrophe and does the actuarial math. Once a plan is running, someone administers the claims and — for drug coverage — negotiates the prices and processes the prescriptions. After a loss, someone investigates and settles the claim. NAICS 52429 — "Other Insurance Related Activities" is the U.S. federal statistical bucket for the fee-and-subscription firms that do exactly this work: adjusting, administering, and advising, all around insurance rather than bearing its risk. (NAICS, the North American Industry Classification System, is the standard code set U.S. statistical agencies use to define industries.) [1][2]

The unifying idea is simple and powerful: none of these firms underwrite risk. They take no premiums onto their own balance sheet, hold no policyholder reserves, and carry no catastrophe exposure or investment "float." Instead they earn fees, subscriptions, or spreads for a service, and they sell into the insurance system regardless of which carrier or plan ultimately wins the customer. That makes the whole level a "picks-and-shovels" play on insurance — capital-light, labor- and data-intensive, and, in its best corners, highly recurring.

But the level is deceptively lopsided. It contains three very different businesses, and one of them — pharmacy benefit management and third-party administration — is roughly thirty times the size of the other two combined by reported revenue. So the distinctive job of this primer is the contrast: how the three children differ in size, growth, ownership, concentration, and how an investor actually reaches them.

2. What's inside — the three child industries and how they differ

The level splits into three federal industries, which map neatly onto three stages of an insurance policy's life:

• 524291 — Claims Adjusting: investigating, appraising, and settling claims after a loss (the independent and public adjusters, and catastrophe field crews). [3]
• 524292 — Pharmacy Benefit Management (PBM) and Other Third-Party Administration (TPA): running the drug benefit and the claims/benefits back office for plans and self-insured employers — the PBMs (Caremark, Express Scripts, Optum Rx) plus the "other" claims and benefits administrators. [4]
• 524298 — All Other Insurance Related Activities: pricing and grading insurance — advisory/rating/statistical organizations, actuarial consulting, catastrophe modeling, and insurer financial-strength ratings. [1]

They are siblings, and firms routinely straddle the lines — Sedgwick, CorVel, Crawford, and Gallagher all appear in more than one child's investable list — but the Census Bureau assigns each establishment to its primary activity. Here is how they compare.

(Shares are of the level's receipts, paid employees, and firm count respectively; see Section 3 for the underlying figures. HHI is the Herfindahl-Hirschman Index, the standard concentration gauge — the sum of squared market shares, where U.S. antitrust agencies treat below ~1,500 as unconcentrated.)

The four contrasts that matter:

1. Revenue is wildly lopsided — but the number lies. 524292 shows 94% of the level's receipts, yet most of that is drug dollars passing through PBMs on their way to pharmacies, not fee or service revenue. Measured by jobs the dominance shrinks to 84%; by firm count it is a minority (29%). Claims Adjusting has the most firms (44%) but the least revenue (under 3%) — a swarm of small shops. Read revenue share as "money flowing through," not "economic value captured."

2. Growth points in different directions. PBM/TPA rides structural drug-spend and self-funding tailwinds (and simultaneous regulatory headwinds); advisory/data grows steadily with insurance premiums and hard-to-price risks; claims adjusting is flat-to-cyclical, swinging with catastrophes and facing an automation headwind.

3. Concentration is opposite at the top. PBM/TPA is oligopolistic where it counts (three firms, ~80% of prescriptions); the other two are genuinely fragmented, each topped by a single large specialist over a long tail.

4. Ownership mix diverges. Claims adjusting is a PE-plus-small-shop barbell with one public pure-play; PBM/TPA's profit is buried inside diversified health giants; advisory is a mix of one data franchise, member-owned nonprofits (AAIS, NCCI), and employee-owned consultancies (Milliman).

3. How big it is (the rollup, and why the number is slippery)

Our ground-truth federal figures for NAICS 52429 blend the 2022 Economic Census with 2023 County Business Patterns (CBP) — different vintages, not one year's financial statement:

(CR4 is the share of receipts held by the four largest firms. The federal file reports no industry-wide profit, margin, covered-lives, claims-volume, or pricing data for this code, so none is stated here.) Average pay works out to roughly $83,000 per employee (payroll ÷ employment) — a blend that runs from claims field crews up to credentialed actuaries. [11]

The children add up cleanly. Summed across 524291/524292/524298, the child establishment counts (4,934 + 6,151 + 3,089) total exactly 14,174, and paid employees (45,406 + 411,459 + 35,078) total exactly 491,943 — matching the level line-for-line. Receipts reconcile too ($8.88B + $283.6B + $8.68B ≈ $301.1B). So the three children genuinely partition the level. [3][4][9][11]

But the headline receipts figure is doubly distorted — a rare case where the number is both too high and too low.

• Too high: ~94% of it comes from 524292, whose receipts include pass-through drug costs — money the PBM never keeps. The $301 billion is therefore not a measure of fee/service revenue, and not a measure of profit. [4]
• Too low: the biggest, most investable players are classified out of the code. The dominant PBMs are reported inside their parents' insurance-carrier codes (their PBM/health-services segments alone topped $500 billion in 2024 [4]); Verisk — the leading insurance-data franchise, ~$3.07 billion revenue — is classified into the Information sector, not 524298 [9]; and the federal labor count shows about 356,100 claims-adjuster-type workers economy-wide versus just 45,406 captured inside standalone claims-adjusting firms [8][3]. CBP also excludes nonemployers and most government work, so the small-firm tail is undercounted too. [3][4]

Undercount caveat. Because small independent adjusters, solo actuarial practices, and in-house/government operations are individually or privately held and often sit outside the employer-business surveys — and because the marquee players are misclassified into other sectors — treat $301.1 billion as a distorted proxy, not a true measure of the insurance-services economy. The clean, reliable signals here are the structural facts (three businesses, their relative headcounts, their concentration shapes), not the dollar total.

4. The investable universe (where value concentrates across the children)

The recurring theme across all three children is the same: clean public pure-plays are scarce, and much of the quality is private. Value concentrates differently in each.

• 524292 (PBM/TPA) holds the most revenue and profit — but there is no pure-play public PBM. The economics live inside diversified health giants: UnitedHealth Group (Optum Rx), The Cigna Group (Express Scripts/Evernorth), and CVS Health (Caremark), with Elevance (CarelonRx) and Humana more peripheral. The disruptive "transparent"/pass-through challengers (Capital Rx/Judi Health, SmithRx, Navitus) and the Blue-owned Prime Therapeutics and independent MedImpact are all private. On the TPA side, the largest claims administrator — Sedgwick — is PE-owned. [4][6]
• 524298 (advisory/data) holds the cleanest economics — subscription, data-moated, near-zero marginal cost. The nearest listed pure-play is Verisk Analytics, alongside insurance-data/software names (CCC, Guidewire) and the actuarial arms buried inside brokers (Marsh McLennan's Oliver Wyman, Aon, WTW). Milliman (employee-owned), AM Best (private rating agency), and the member-governed AAIS and NCCI are not publicly investable. [9]
• 524291 (adjusting) holds the most firms but the least revenue. The one sizable listed pure-play is Crawford & Company; CorVel is a workers'-comp claims specialist and Arthur J. Gallagher a broker with a large claims-TPA arm (Gallagher Bassett). Everything else of scale — Sedgwick, Davies, Alacrity, McLarens — is private. [3][5]

Cross-cutting names to know. A handful of firms recur because they span the children — Sedgwick (adjusting + TPA + services), CorVel and Crawford and Gallagher (claims + administration + adjacent advisory), Davies (adjusting + services). And two forces own the private tier across all three: private-equity roll-ups (Carlyle-controlled Sedgwick; PE has been the majority buyer in insurance-services M&A) and, uniquely in PBM, vertical integration into insurers. There is no dedicated exchange-traded fund (ETF) or index for any of the three children, let alone the level as a whole. Tickers, yields, and valuations are reserved for Section 10.

5. How the money works

The single throughline is fees for a service, not underwriting. Absent everywhere in this level: premiums, the combined ratio, reserves, and investment float — those belong to insurers. Present everywhere: labor, data, technology, and client-retention economics. But the fee mechanism differs sharply by child:

• Claims adjusting (524291) earns fee-per-claim or daily-rate revenue — the top line is claim throughput times the labor margin on it. Public adjusters work on contingency (a cut of the recovery). Roughly half of every revenue dollar goes to payroll: a labor-intensive, cyclical, catastrophe-sensitive model. [3]
• PBM/TPA (524292) is the most complex. TPAs earn recurring per-member-per-month (PMPM) administrative fees on self-funded plans (asset-light, sticky, software-like). PBMs layer on manufacturer rebates, spread pricing (charging the plan more than they reimburse the pharmacy), and owned-pharmacy dispensing margin — thin per-script margins on colossal volume. Crucially, reported revenue mixes pass-through drug cost with true service revenue; only the latter is profit. [4]
• Advisory/data (524298) runs on recurring subscriptions and data licensing (the Verisk model — a data network effect plus near-zero marginal cost), fee-for-service actuarial work (billable utilization of scarce credentialed actuaries), and issuer-pays ratings (the AM Best model). The highest-quality economics in the whole level sit here. [9]

Across all three, the investor's discipline is the same: separate the true service/fee revenue from the money merely flowing through — claim payments an adjuster disburses, drug costs a PBM passes on, or premiums an advisory firm's clients write. Then watch client retention, recurring-revenue share, revenue per professional, and contract concentration.

6. Demand drivers

The level's demand rests on the size and complexity of insurance and health-benefit spending — but each child has its own swing factor:

• The size of the underlying insurance and drug economy. Fees scale with the premiums, exposures, and drug spend flowing through the system. U.S. prescription-drug spending reached $467 billion in 2024 (up 7.9%) and is projected to keep growing mid-single-digits — the tailwind under 524292. [12]
• Specialty and GLP-1 (glucagon-like peptide-1) obesity drugs — the single biggest PBM tailwind, raising the value of formulary and utilization management. [4]
• Employer self-funding — as more employers self-insure (enabled by ERISA preemption), demand for both TPAs and PBMs rises. [4]
• Catastrophe activity — hurricanes, wildfires, hail, and floods drive sudden surges in independent/catastrophe adjusting (524291), the level's most volatile demand line. Federal data record 403 U.S. billion-dollar weather disasters from 1980–2024, and insured 2025 natural-catastrophe losses were estimated near $103 billion. [13][14]
• New, hard-to-price risks — climate, cyber, and litigation ("social inflation") all raise demand for modeling, reserving, and rate-adequacy work (524298). [9]
• Non-discretionary regulatory reporting — statutory filings and rate approvals create a baseline of advisory/data demand across the cycle.
• Outsourcing cycles — carriers and employers flex fixed cost into variable, surge-friendly cost by outsourcing to adjusters, TPAs, and analytics vendors.
• Artificial intelligence (AI) — a demand driver and a dampener. AI lifts demand for data/analytics vendors (524298) but trims the labor hours per routine claim (the federal labor forecast projects claims-adjuster employment −5% from 2024 to 2034, citing AI photo-estimation). [8]

7. Regulation

Insurance is regulated primarily at the state level; the McCarran-Ferguson Act of 1945 preserves that primacy and coordinates loosely through the National Association of Insurance Commissioners (NAIC), which publishes model laws states may adopt. There is no single federal regulator for the level — the rulebook is activity-specific: [15]

• Adjusters (524291) face state licensing, exams, continuing education, and post-disaster emergency permits; public adjusters (paid by policyholders) are regulated more tightly, with fee caps in some states. [3]
• TPAs and PBMs (524292) are the regulatory storm center — and, because they hold ~94% of the level's revenue, they set the tone. After decades of light oversight, the Federal Trade Commission (FTC) found the top three PBMs process ~80% of U.S. prescriptions and sued the big three over insulin rebates (reaching settlements with Express Scripts and CVS/Caremark by 2026); all 50 states have enacted PBM laws since 2017, and "delinking" (barring PBM pay from a drug's price) is spreading. Self-funded plans fall under the federal Employee Retirement Income Security Act of 1974 (ERISA), enforced by the Department of Labor. [4][6][7]
• Advisory/rating organizations (524298) are licensed by state insurance departments; their data-pooling leans on McCarran-Ferguson's limited antitrust carve-out, and insurer financial-strength rating agencies are SEC-registered NRSROs (Nationally Recognized Statistical Rating Organizations). [9]
• Data security, everywhere. Because every child holds sensitive medical, financial, and claims data, the NAIC Insurance Data Security Model Law, state breach-notification rules, HIPAA (the Health Insurance Portability and Accountability Act), and the NAIC's 2023 AI governance bulletin apply across the level. [4][9]

The net: light and fragmented for adjusting and advisory, but intense, escalating, and politically charged for PBM/TPA — which is where the regulatory risk to the level's revenue overwhelmingly sits.

8. Consolidation

One force dominates the whole level: private-equity (PE) roll-up. PE-backed and hybrid buyers have accounted for the majority of insurance-services M&A, rolling small firms into larger platforms across all three children — Carlyle-controlled Sedgwick (adjusting + TPA), BC Partners/HGGC-backed Davies, sponsor-backed Alacrity and McLarens, and the take-privates of insurance software (Sapiens, Duck Creek). [5][9]

Layered on top, two child-specific dynamics:

• Vertical integration in PBM/TPA. The big three PBMs are each fused into an insurer that also owns pharmacies and rebate (group-purchasing) entities — capturing margin at the plan, the PBM, and the pharmacy at once. This is the level's most concentrated and most scrutinized structure. [4]
• Technology and data as the new moat. AI damage-estimation and drone inspection (adjusting), transparent-PBM software insurgents (PBM), and proprietary data franchises (advisory) are shifting competition from headcount toward software and data — which scaled players can amortize across millions of transactions and small firms cannot. [3][9]

The common outcome: a barbell across all three — a few scaled, technology-forward platforms plus a fragmenting tail of small specialists that are prime roll-up targets.

9. Risks

• Regulatory/legislative model risk (the dominant one). Because ~94% of the level's revenue sits in PBM/TPA, PBM reform — delinking, mandated rebate pass-through, spread-pricing bans, FTC enforcement — is the single biggest threat to the level's economics. [4][7]
• Automation disruption. AI cuts both ways: margin lift for data owners, commoditization and headcount cuts for adjusters and labor-heavy actuarial/inspection work. [8]
• Client concentration and repricing. TPAs, PBMs, and large adjusters live on big multi-year accounts; losing or repricing one dents revenue sharply. [4]
• Thin service margins and labor scarcity. With roughly half of adjusting revenue and a large share of advisory revenue going to payroll, wage inflation and a shortage of experienced adjusters and credentialed actuaries squeeze profitability. [3][9]
• Catastrophe volatility. Adjusting revenue spikes after disasters and sags in benign years — lumpy, hard-to-staff earnings. [13]
• Cyber and data risk. Custody of sensitive medical, financial, and claims data makes a breach a material-to-existential exposure across all three children. [4][9]
• Accounting opacity. Gross drug receipts (PBM) and claim payments (adjusting) obscure the much smaller true service margin — the reported revenue is not what the firm keeps. [4]
• Private-market leverage. The PE-owned giants across all three carry acquisition debt sensitive to interest rates and integration risk. [5]
• Measurement/classification risk. As Section 3 shows, the federal statistics for this level are genuinely unreliable for sizing — analysts who anchor on the $301 billion headline will mis-scale the industry in both directions.

10. How to invest, and the outlook

Public-market routes (tickers reserved for here, per house style):

• PBM/TPA economics (524292): only through diversified health giants — UnitedHealth Group (UNH), The Cigna Group (CI), CVS Health (CVS), and more peripherally Elevance (ELV) and Humana (HUM). Treat these as integrated-managed-care bets whose PBM policy risk is now a first-order swing factor. For the benefits/claims-TPA slice, Alight (ALIT) and CorVel (CRVL) are more targeted. [4]
• Advisory/data (524298): the nearest pure-play is Verisk Analytics (VRSK) — subscription-heavy, data-moated — with CCC Intelligent Solutions (CCCS) and Guidewire (GWRE) for insurance data/software, and Marsh McLennan (MMC), Aon (AON), Willis Towers Watson (WTW), plus RELX, S&P Global, and Moody's for diluted exposure. [9]
• Claims adjusting (524291): essentially one pure-play, Crawford & Company (CRD-A/CRD-B) — a small-cap, thin-margin, family-controlled value/turnaround profile — plus workers'-comp specialist CorVel (CRVL) and broker Arthur J. Gallagher (AJG). Carlyle (CG) and Onex (ONEX) offer indirect ownership of private Sedgwick. [3][5]
• There is no dedicated ETF or index for the level or any child; broad insurance/financials/health funds hold these names only in small weights.

Private-market routes. Much of the level's quality is unlisted: PE platforms in adjusting and services (Sedgwick, Davies, Alacrity, McLarens); the transparent-PBM challengers (Capital Rx/Judi Health, SmithRx, Navitus) and independents (Prime Therapeutics, MedImpact) in PBM; and employee-owned Milliman, private AM Best, and member-governed AAIS/NCCI in advisory. The dominant institutional path is PE platform-and-add-on roll-up of firms below the SBA small-business thresholds. Diligence in every channel: recurring-contract share, renewal/retention rates, true service revenue versus pass-through, customer concentration, data security, licensing, technology ownership, and — for sponsor deals — acquisition accounting and debt. [4][5][9]

Near-term outlook (forward-looking judgments, not settled facts):

• PBM regulation is the central binary for the level — because it governs ~94% of the revenue. Delinking and rebate reform would reshape incumbent economics; the pace of employer defection to transparent models is the other half of that story. [4][7]
• AI is the level-wide swing variable — a genuine tailwind for the data-moated advisory leaders and a productivity boon (but pricing/headcount pressure) for adjusting. [8]
• Catastrophe frequency and self-funding growth should keep feeding adjusting and TPA demand respectively. [13][4]

Bottom line: a defensive, fee-driven, capital-light corner of insurance whose reported size is dominated — and distorted — by pass-through PBM drug dollars. The cleanest recurring economics belong to the data-moated advisory franchises (a short public list led by Verisk); the largest cash flows belong to the PBM giants (reachable only through diversified health insurers, and squarely in the regulatory crosshairs); and the most fragmented, roll-up-ripe tier is claims adjusting (one public pure-play, everything else private). Across all three, the durable pattern is the same: scale, data, and technology increasingly favor a few consolidators — public where they exist, private where they don't.

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Sources

1. U.S. Census Bureau / NAICS. 2022 NAICS — 524298 All Other Insurance Related Activities; 52429 industry definition and related codes. https://www.census.gov/naics/?input=524298&year=2022&details=524298
2. NAICS Association. NAICS Code 524298 / 52429 — description and index entries. https://www.naics.com/naics-code-description/?code=524298
3. U.S. Census Bureau. County Business Patterns 2023 and 2022 Economic Census — NAICS 524291, Claims Adjusting (receipts $8.88B; 3,862 firms; 4,934 establishments; 45,406 employees; $4.10B payroll; CR4 21.3%; HHI 161.3). https://www.census.gov/data/datasets/2023/econ/cbp/2023-cbp.html
4. U.S. Census Bureau / FTC / Drug Channels. NAICS 524292 — Pharmacy Benefit Management and Other Third Party Administration (receipts $283.6B; 2,480 firms; 6,151 establishments; 411,459 employees; $33.3B payroll; CR4 77.3%; HHI 1,633.5); FTC finding that the top three PBMs process ~80% of U.S. prescriptions and the top six >90%. https://www.ftc.gov/news-events/news/press-releases/2024/07/ftc-releases-interim-staff-report-prescription-drug-middlemen
5. Sedgwick / The Carlyle Group; Davies (BC Partners / HGGC); Alacrity; McLarens (Lee Equity Partners). Private-equity ownership of the large claims/insurance-services platforms. https://www.sedgwick.com/id/press-release/sedgwick-announces-investments-from-altas-partners-carlyle-and-stone-point/
6. Fein, Adam J. The Top Pharmacy Benefit Managers of 2025: Market Share and Key Industry Developments. Drug Channels, 2026. https://www.drugchannels.net/2026/03/the-top-pharmacy-benefit-managers-of.html
7. U.S. Federal Trade Commission and MultiState. FTC PBM enforcement (insulin settlements with Express Scripts and CVS/Caremark) and state PBM legislation / "delinking." 2024–2026. https://www.ftc.gov/news-events/news/press-releases/2026/07/ftc-secures-major-settlement-caremark-resolving-antitrust-case-against-second-drug-middleman
8. U.S. Bureau of Labor Statistics. Occupational Outlook Handbook: Claims Adjusters, Appraisers, Examiners, and Investigators (~356,100 employed economy-wide; projected −5%, 2024–34, citing AI photo-estimation). https://www.bls.gov/ooh/business-and-financial/claims-adjusters-appraisers-examiners-and-investigators.htm
9. Verisk Analytics / U.S. SEC; Milliman; AM Best; AAIS; NCCI; Capstone Partners. NAICS 524298 investable universe, ~$3.07B Verisk FY2025 revenue, and >70% PE share of insurance-services M&A. https://www.globenewswire.com/news-release/2026/02/18/3240081/0/en/verisk-reports-fourth-quarter-and-full-year-2025-financial-results.html
10. U.S. Census Bureau. 2022 Economic Census — Establishment and Firm Size / Concentration, NAICS 52429 (receipts $301.1B; 8,692 firms; CR4 72.8%, CR8 79.4%, CR20 84.0%, CR50 88.8%; HHI 1,449.4). https://data.census.gov/table/ECNSIZE2022.EC2200SIZECONCEN?q=52429
11. U.S. Census Bureau. County Business Patterns 2023 — NAICS 52429 (14,174 establishments; 491,943 employees; $40.8B annual payroll; $11.8B Q1 payroll). https://www.census.gov/data/datasets/2023/econ/cbp/2023-cbp.html
12. Centers for Medicare & Medicaid Services. National Health Expenditure Fact Sheet (U.S. prescription-drug spending $467.0B in 2024, up 7.9%). 2026. https://www.cms.gov/data-research/statistics-trends-and-reports/national-health-expenditure-data/nhe-fact-sheet
13. National Oceanic and Atmospheric Administration (NOAA), NCEI. Billion-Dollar Weather and Climate Disasters — U.S. Summary (403 events, 1980–2024). https://www.ncei.noaa.gov/access/billions/
14. Insurance Information Institute (III). Facts + Statistics: U.S. Catastrophes (estimated 2025 U.S. insured natural-catastrophe losses ~$103 billion). https://www.iii.org/fact-statistic/facts-statistics-us-catastrophes
15. National Association of Insurance Commissioners (NAIC). McCarran-Ferguson Act; adjuster, TPA/PBM, and advisory-organization regulation; Insurance Data Security Model Law; AI model bulletin. https://content.naic.org/insurance-topics/mccarran-ferguson-act