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Life Insurance and Annuities in 2025:
Trends and Transformations
The US life insurance and annuities sector is experiencing significant transformation driven by new administrative policies and a dynamic interplay of forces. The growing involvement of private equity firms and the rapid adoption of technologies such as artificial intelligence (AI) and blockchain are reshaping how insurers operate and connect with customers.
Traditionally known for its stability and predictability, the industry is now at the forefront of innovation, adapting to evolving consumer preferences, regulatory changes and economic conditions. Insurers are increasingly focusing on accumulation-driven products, with personalization becoming a key theme.
Learn about five trends that can help protect and grow your book of business and your clients' financial wellbeing by requesting our report, Life Insurance and Annuities in 2025: Trends and Transformations.
Here's a glimpse of some of our key findings
- Rising demand for annuities — With lower returns on traditional savings, more investors are turning to annuities with guaranteed lifetime income features to help secure retirement income.
- The potential implications of stronger economic growth — In a "higher for longer" rate environment, clients may want to consider adjusting the exposure of their fixed income portfolios.
- Evolving consumer preferences — Insurers are shifting their focus to meet wealth accumulation and retirement planning demands.
- Tech-driven transformation — AI is accelerating processes, big data is enabling personalized products, and blockchain is enhancing transaction security.
There's a shift towards accumulation-focused products. Client interest in accumulation-focused life insurance is increasing, especially among younger consumers. How will this shift affect competition and innovation in product offerings?
Tech transforms insurance. The insurance industry is rapidly adopting AI, big data and blockchain to enhance efficiency, personalize products and secure transactions. How will these technologies reshape professional roles and address data misuse concerns?
Investors shift from money markets to annuities. As the Federal Reserve cuts rates, investors are moving from money markets to annuities for guaranteed income and downside protection, while elevated interest rates and a high-yield environment create a unique opportunity for annuity investments. How will this shift affect investment strategies and the financial income planning landscape?
Private equity reshapes the insurance landscape. Private equity firms are increasingly investing in insurance companies due to their stable cash flows and large asset bases, leading to capital infusions and a focus on short-term profitability. How might this focus impact long-term sustainability and policyholder protection?
With many changes at play, it’s important to stay abreast of the key areas that may significantly influence the US life insurance and annuity space in 2025 and beyond. Read the report and connect with your Gallagher consultant to strategize.
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