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A Future-Forward Look at Life Insurance and Annuities

Author

David Levenson, DBA, FSA, CFA
President and Chief Executive Officer
LIMRA and LOMA

May 2025

As we approach the midyear point, it seems fair to say that 2025 already has seen a good deal of intensity and uncertainty. Economic, environmental, technological, regulatory, geopolitical, and other concerns are pervasive. In addition to having widespread social effects, their impact extends well into our industry, contributing to ongoing shifts and dynamics that must be managed. This is certainly the case within the evolving life and annuity landscape.

Last month, I had the privilege of addressing many industry leaders at the Life Insurance and Annuity Conference, sponsored by LIMRA and LOMA, ACLI and SOA. As always, I was struck by the energy there, fueled by a strong sense of connection and shared commitment among our organizations, presenters and participants. It is incredibly powerful when we get together to have meaningful dialogue about navigating the challenges and transformative opportunities that lie ahead.

I centered my remarks on the following key trends we are watching in this space, with an eye on sustainable growth, as the rest of the year unfolds. Many reflect underlying complexities or contradictions, where a positive result is tempered by an opposing or challenging reality.

  1. Overall annuity sales are reaching record levels, but variable annuity results are declining. Last year, we saw record-high annuity results, but there are variations by annuity type. Total 2024 annuity sales were $434.1 billion — representing a 13 percent year-over-year increase. Within this strong performance, however, there are different trends by product. Looking at variable annuities, while they reached a sales peak of $184.0 billion in 2007, this decreased to $60.8 billion in 2024. On the other hand, registered index-linked annuities (RILAs) have seen strong growth since their launch in late 2010 — from $1.4 billion in 2011 to $65.6 billion in 2024 — surpassing variable annuities last year.

  2. Life insurance premiums are higher than ever, but policy counts have been decreasing. Last year, total annualized life premiums grew 3 percent to $15.9 billion — marking the fourth year in a row of record-setting results. However, policy count data tells a somewhat different story. At 9.4 million new policies in 2024, it essentially remained unchanged from 2023, but this is noticeably down from a recent peak of 10.1 million in 2021. What does this tell us about what life sales might look like and new approaches the industry might need to take in the future?

  3. While demand for life coverage is high, the industry’s ability to supply it may be limited. The LIMRA and Life Happens 2025 Insurance Barometer Study shows record demand for life insurance — with 40 percent of Americans (equating to 100 million people) saying they are uninsured or underinsured. However, the overall number of financial professionals available to serve potential clients has not grown.

    Also concerning are the increasing average ages of today’s affiliated agents (46 years old) and independent agents (62 years old). Among independent agents, approximately one-third are aged 65 or older. This situation creates a current challenge and a future opportunity to strengthen the pool of financial professionals by focusing on bringing younger individuals into the industry. Moving forward, insurers should take an intentional approach to recruiting recent college graduates and emphasize the many positive aspects of the career that align with their values.

  4. Industry revenue is up — but so are expenses. 2024 represented record revenue for the industry, but expenses are also increasing significantly. While we do expect revenues to continue to grow, now is a good time for companies to get more focused on expenses and profitability metrics.

  5. There has been increased consolidation in the independent channel over the last five years, creating a sort of “oligopoly” in the industry. That dynamic has implications for carriers — good and bad — and it will become increasingly important for carriers to understand these new dynamics and respond accordingly.

  6. Capital in the industry is at record levels. New capital from reinsurers, private equity firms and foreign carriers has been a huge boost to the industry, resulting in new investments and new products, both of which have led to healthy industry growth. While we don’t see any immediate slowdown in the availability of capital, we are starting to see greater discipline on expected returns from these new capital providers.

Ultimately, there are a lot of reasons to look ahead with optimism. I am confident there will be a world of opportunities available to those who keep an eye toward the future, pivot in response to where these trends are heading, and harness the forces at work to continue to thrive and meet consumer needs.

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