While life premium growth is expected to slow, annuities continue to gain momentum. Sales in the United States grew by 12% in 2024, reaching US$432.4 billion, with quarterly totals holding above US$100 billion for seven straight quarters through 2Q2025.28 As monetary policy loosens, fixed-rate annuity sales are expected to slow, and the focus will likely shift to indexed annuities.29 In Europe, unit-linked sales are surging, particularly in Italy and France, and are expected to broaden to other advanced markets like the United States.30
Carriers’ convergence with private equity continues to alter the L&A landscape
Carriers’ investments in private credit are expanding worldwide despite increasing concerns about a lack of liquidity and minimal regulatory oversight.31 Insurers’ managed assets expanded by 25% to US$4.5 trillion in 2024, with private placements now accounting for 21.1% of total insurance assets under management, up from 20% at the end of 2023.32
A Goldman Sachs survey in March 2025 indicated that 61% of chief financial officers and chief investment officers surveyed globally expect private credit to provide the highest total return over the next year.33 This expectation means 64% of respondents in the Americas and 69% in the Asia-Pacific region plan to increase their allocations to private credit over the next 12 months.34
As carriers allocate a growing share of their portfolios to alternative asset classes, they may increasingly converge with alternative asset managers to leverage private equity (PE) investment expertise. Industry convergence is showing up in various arrangements, from outright PE acquisitions of life and annuity entities to collaborative partnerships and minority stake investments.
Several large investment firms like Apollo35 and Brookfield36 continue to be drawn to life insurers for new sources of capital they can invest.
In June 2025, Lincoln Financial and Bain Capital formed a partnership to help the insurer accelerate its portfolio transformation and capital allocation priorities while leveraging the asset managers’ platform across asset classes.37 Also in pursuit of more advanced investment expertise, on April 8, 2025, Guardian Life and Janus Henderson announced a strategic partnership under which Janus Henderson will become Guardian’s investment-grade public fixed-income asset manager.38
To further boost capital efficiency, several life insurers are turning to reinsurance sidecars to move blocks of business to offshore locations that have fewer demands for capital reserves to offload policy liabilities.39 These vehicles allow outside investors to share in profits and risks, freeing up capital for insurers to underwrite new business.
Reserves ceded to sidecars nearly tripled between 2021 and 2023 (latest available data), reaching nearly US$55 billion.40 Three additional sidecars were announced and launched in 2024. One of the most notable was Allianz SE backed by Voya Financial and Antares Capital.41
These alternative investments are typically less liquid and transparent than public corporate bonds and loans, which can lead to insurance regulators working actively to address this opacity.
The National Association of Insurance Commissioners, for example, is developing guiding principles to update risk-based capital formulas to help enhance the precision and transparency of risk-based capital calculations related to asset risk.42
Increased scrutiny is also arising in other jurisdictions.43 For example, the Bermuda Monetary Authority issued a paper in December 2023 regarding the supervision and regulation of PE insurers, and the International Monetary Fund issued a white paper on PE investments in the life insurance industry.44 As the regulatory scrutiny of PE investments in insurance companies grows, investors should not only focus on the current regulatory landscape but also anticipate how it may evolve going forward.
Another outcome of the convergence between private equity and the insurance industry is that the private equity companies are beginning to model life insurance as a tax-efficient wealth management tool.45
Alliances and partnerships may also broaden opportunities to fuel revenue
Carriers could form networks of partners to provide fee-based services that can complement or expand their traditional product and service portfolios. For example, they can develop partnerships with home care and other wellness providers. In 2024, Genworth diversified its revenue stream through a partnership with a homecare startup to build a network of services to redefine and simplify the way older adults can navigate housing, services, and care.46
Moreover, third-party administrators, traditionally used by life insurers for cost reduction, are evolving into strategic partners that can help support broader business agility and growth initiatives. Third-party administrators are often capable of introducing new products and channels and leveraging advanced technologies to support insurers in reaching broader markets. This new model positions third-party administrators as an integral extension of a carrier, capable of providing support for strategic product launches and ongoing administration.
In developing countries, where the protection gaps are often widest, building alliances could help increase life insurance sales, making it more accessible, affordable, and relevant. For example, in underserved regions with high mobile phone penetration, such as sub-Saharan Africa and South Asia, mobile technology can potentially support life insurance companies to partner with telecommunication operators to offer micro life insurance products.47
Distribution consolidation pushes strategy change
Over the past few years, much of the growth in independent distribution, which accounts for more than half of retail life insurance sales and a substantial amount of annuity business, has been through mergers and acquisitions.48 This consolidation is now complicating traditional distribution strategies for insurers.49
For one, it could increase intermediary bargaining power in contract negotiations, potentially affecting premiums and commissions. It also blurs the lines between what were once distinct market sectors—such as brokerage general agents, marketing organizations, producer groups, and financial planning firms—and is changing the way carriers work with each of them.50
As the distribution transformation continues, carriers will likely try to stand out through differentiated strategies such as offering proprietary products exclusive to firms within each group, addressing bottlenecks in sales and services, and more effectively utilizing customer data to personalize products to clients’ needs.51
link