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5 Life Insurers Stocks to Buy in a Low-Interest Rate Environment
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Redesigning and repricing of products and services to maintain sales and profitability have been driving Zacks Life Insurance industry players. Increased automation is expected to drive premium growth and boost the efficiency of AIA Group (AAGIY - Free Report) . Manulife Financial Corporation (MFC - Free Report) , Lincoln National Corporation (LNC - Free Report) , Jackson Financial (JXN - Free Report) and F&G Annuities & Life (FG - Free Report) . In the recent FOMC meeting, the Federal Reserve slashed the interest rate by 25 basis points to 3.5%-3.75%, marking the third cut this year. The Fed also hinted at one cut next year. In such a scenario, life insurers will likely face challenges as they invest a large portion of their premiums to meet contractually guaranteed obligations of policyholders. Also, with accelerated digitalization, expenses are likely to increase. Prudently pricing the products and balancing customers' preferences and claim costs are a challenge.
About the Industry
The Zacks Life Insurance industry comprises companies that offer life insurance coverage and retirement benefits to individuals and groups. The products include annuities, whole and term life insurance, accidental death insurance, health insurance, Medicare supplements and long-term healthcare policies. Sales benefit from the increasing demand for protection products. The industry also includes companies providing wealth and asset management solutions. With a rise in the number of baby boomers, the demand for retirement benefits is increasing. Economic growth instills confidence. Per a Statista report, the life insurance market is expected to grow, with gross written premiums expected to be $1.34 trillion in 2025. The industry has also been witnessing the accelerated adoption of technology. However, rising mortality or loss cost trends may impact the profitability of insurers.
3 Trends Shaping the Future of the Life Insurance Industry
Interest Rate Lowered: The Federal Reserve again slashed the interest rate by 25 bps this December, taking the tally to three for 2025. The Fed also hinted at one more cut in 2026, given a soft job market and muted economic growth. Life insurers are direct beneficiaries of improved rates as they invest premiums to meet the contractually guaranteed obligations of policyholders. Thus, muted rates will likely weigh on investment return. Nonetheless, in times of persistently low interest rates, life insurers direct their funds into alternative investments like private equity, hedge funds and real estate. With an improving equity market, lower interest rates could relieve pressure on indexed universal life (UL) and whole life sales, given low unemployment as per the LIMRA report. Per the report, life insurance sales are expected to grow 2%-6% in 2025, with new annualized premium growth across indexed UL, fixed UL, variable UL, term life and whole life.
Product Redesigning: Industry players are finding new solutions and ways to improve their sales and profitability. Insurers are refraining from selling long-duration term life insurance. Also, life insurers continue to roll out investment products that provide bundled covers of guaranteed retirement income, life and healthcare to cater to customers preferring policies with “living” benefits more than those with death benefits. Increased awareness about having coverage continues to support the life insurance business. A compelling product portfolio will thus aid sales of life insurers. Also, prudently pricing products and balancing customers' preferences and claim costs will be the key to driving growth. Per a report published in ReporterLinker, global life insurance gross written premium is expected to be $2.5 trillion by 2026. Per Statista’s report, gross written premium is expected to show an annual growth rate (CAGR 2025-2029) of 3.54%. Per the Deloitte report, global life insurance premiums are projected to decline due to U.S. policy uncertainty, while annuities are likely to maintain the momentum. Growth in advanced markets is expected to remain subdued. In contrast, emerging markets should advance more robustly as insurers capitalize on low penetration rates and expanding middle-income populations across many developing regions, the report states.
Increased Adoption of Technology: Per Statista, the United States is experiencing a shift toward digital platforms and online sales in life insurance. Carriers have started selling policies online that appeal to the tech-savvy population. These insurers are offering customized coverages leveraging artificial intelligence and machine learning. At the same time, the use of real-time data makes premium calculation easier and reduces risk. Increased automation is expected to drive premium growth and boost efficiency. Moreover, accelerated digitization, as evident from the increased adoption of generative AI, cognitive intelligence and blockchain, should help life insurers curb operational costs and aid margin expansion. Insurers are investing heavily in technological advancements to ensure efficiency and smooth functioning. At the same time, players must shield themselves from falling prey to cyber threats.
Zacks Industry Rank Indicates Solid Prospects
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates strong prospects for the near term.
The Zacks Life Insurance industry, within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #74, which places it in the top 31% of the 243 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is the result of a positive earnings outlook for the constituent companies in aggregate.
Before we present a few life insurance stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry vs. Sector & S&P 500
The Life Insurance industry has underperformed the Zacks S&P 500 composite and the Finance sector year to date. The stocks in this industry have collectively gained 4.7% compared with the Finance sector’s increase of 15% and the Zacks S&P 500 composite’s increase of 18.6% in the said time frame.
Year-to-Date Price Performance
Life Insurance Industry's Current Valuation
On the basis of trailing 12-month price-to-book (P/B), which is commonly used for valuing insurance stocks, the industry is currently trading at 1.89X compared with the S&P 500’s 8.51X and the sector’s 4.22X.
Over the past five years, the industry has traded as high as 2.11X, as low as 1.04X, and at the median of 1.53X.
Jackson Financial: Headquartered in Lansing, MI, Jackson Financial provides a suite of annuities to retail investors in the United States. Retail Annuity sales are poised to grow on diversified product sales and growing distribution. Per the insurer, over the last three years, Registered Index-Linked Annuity or RILA has grown to contribute more than 30% of its total Retail Annuity sales. LIMRA estimates 2025 industry sales to remain strong, with RILA sales expected to exceed the 2024 figure. Thus, this Zacks Rank #1 insurer is poised to grow on the success of RILA, coupled with growth in fixed annuities and institutional sales. It also boasts a high-quality, diversified investment portfolio. JXN targets an 11%-27% increase in capital return to shareholders in 2025. It intends to deploy $700-$800 million through share buybacks and dividend increases.
The Zacks Consensus Estimate for Jackson Financial’s 2025 and 2026 earnings indicates a 17% and 8.5% year-over-year increase, respectively. The consensus estimate for 2025 and 2026 has moved 6.1% and 4.1% north, respectively, in the past 30 days. The company delivered a four-quarter average earnings surprise of 7.1%.
Price and Consensus: JXN
F&G Annuities & Life: Headquartered in Des Moines, IO, FG is a leading provider of insurance solutions serving retail annuity and life customers as well as institutional clients. F&G is evolving into a more fee-based, higher-margin, capital-light business, supported by its strong position as a leading seller of annuities and life insurance. This Zacks Rank #1 company expects favorable demographic trends to drive continued expansion, including substantial untapped Middle Market demand for life insurance and opportunities to shift consumers from CDs to fixed annuities. F&G is executing strategies to boost earnings, generate strong positive cash flow, and diversify into capital-light flow reinsurance and accretive owned distribution, all aimed at delivering higher returns on equity.
The Zacks Consensus Estimate for FG’s 2026 earnings indicates a 42.5% year-over-year increase.
Price and Consensus: FG
AIA: Based in Central, Hong Kong, AIA Group Limited, together with its subsidiaries, provides life insurance-based financial services in Hong Kong. This Zacks Rank #2 leading pan Asian life insurer benefits from its solid agent force, exclusive bancassurance tie-up, strong free surplus generation and a shareholder-friendly capital return program.
The Zacks Consensus Estimate for AAGIY’s 2025 and 2026 earnings indicates a year-over-year increase of 5.6% and 20.2%, respectively.
Price and Consensus: AAGIY
Manulife Financial: Headquartered in Toronto, Canada, this Zacks Rank #2 insurer is one of the three dominant life insurers within its domestic market and possesses rapidly growing operations in the United States and several Asian countries. A strong Asia business, expanding wealth and asset management business, investments to ramp up digital capabilities and solid capital position poise this life insurer well for growth. MFC estimates core EPS growth between 10% and 12% over the medium term.
The Zacks Consensus Estimate for Manulife’s 2025 and 2026 earnings indicates a year-over-year increase of 1.4% and 9.4%, respectively. It delivered a four-quarter average earnings surprise of 4.93%.
Price and Consensus: MFC
Lincoln National: Headquartered in Radnor, PA, Lincoln National is a diversified life insurance and investment management company. A fast-recovering Group Protection business, a strong fixed annuity business and positive flows in the Retirement Plan Services, coupled with pricing discipline and product introductions, should favor this Zacks Rank #2 insurer. While Lincoln’s product introductions and enhancements will help improve the top line, enhanced average life insurance in force will drive the bottom line.
The Zacks Consensus Estimate for Lincoln National's 2025 and 2026 earnings indicates a year-over-year increase of 11.2% and 2.2%, respectively. The expected long-term earnings growth rate is pegged at 12.7%. LNC delivered a four-quarter average earnings surprise of 12.03%.
Price and Consensus: LNC
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5 Life Insurers Stocks to Buy in a Low-Interest Rate Environment
Redesigning and repricing of products and services to maintain sales and profitability have been driving Zacks Life Insurance industry players. Increased automation is expected to drive premium growth and boost the efficiency of AIA Group (AAGIY - Free Report) . Manulife Financial Corporation (MFC - Free Report) , Lincoln National Corporation (LNC - Free Report) , Jackson Financial (JXN - Free Report) and F&G Annuities & Life (FG - Free Report) . In the recent FOMC meeting, the Federal Reserve slashed the interest rate by 25 basis points to 3.5%-3.75%, marking the third cut this year. The Fed also hinted at one cut next year. In such a scenario, life insurers will likely face challenges as they invest a large portion of their premiums to meet contractually guaranteed obligations of policyholders. Also, with accelerated digitalization, expenses are likely to increase. Prudently pricing the products and balancing customers' preferences and claim costs are a challenge.
About the Industry
The Zacks Life Insurance industry comprises companies that offer life insurance coverage and retirement benefits to individuals and groups. The products include annuities, whole and term life insurance, accidental death insurance, health insurance, Medicare supplements and long-term healthcare policies. Sales benefit from the increasing demand for protection products. The industry also includes companies providing wealth and asset management solutions. With a rise in the number of baby boomers, the demand for retirement benefits is increasing. Economic growth instills confidence. Per a Statista report, the life insurance market is expected to grow, with gross written premiums expected to be $1.34 trillion in 2025. The industry has also been witnessing the accelerated adoption of technology. However, rising mortality or loss cost trends may impact the profitability of insurers.
3 Trends Shaping the Future of the Life Insurance Industry
Interest Rate Lowered: The Federal Reserve again slashed the interest rate by 25 bps this December, taking the tally to three for 2025. The Fed also hinted at one more cut in 2026, given a soft job market and muted economic growth. Life insurers are direct beneficiaries of improved rates as they invest premiums to meet the contractually guaranteed obligations of policyholders. Thus, muted rates will likely weigh on investment return. Nonetheless, in times of persistently low interest rates, life insurers direct their funds into alternative investments like private equity, hedge funds and real estate. With an improving equity market, lower interest rates could relieve pressure on indexed universal life (UL) and whole life sales, given low unemployment as per the LIMRA report. Per the report, life insurance sales are expected to grow 2%-6% in 2025, with new annualized premium growth across indexed UL, fixed UL, variable UL, term life and whole life.
Product Redesigning: Industry players are finding new solutions and ways to improve their sales and profitability. Insurers are refraining from selling long-duration term life insurance. Also, life insurers continue to roll out investment products that provide bundled covers of guaranteed retirement income, life and healthcare to cater to customers preferring policies with “living” benefits more than those with death benefits. Increased awareness about having coverage continues to support the life insurance business. A compelling product portfolio will thus aid sales of life insurers. Also, prudently pricing products and balancing customers' preferences and claim costs will be the key to driving growth. Per a report published in ReporterLinker, global life insurance gross written premium is expected to be $2.5 trillion by 2026. Per Statista’s report, gross written premium is expected to show an annual growth rate (CAGR 2025-2029) of 3.54%. Per the Deloitte report, global life insurance premiums are projected to decline due to U.S. policy uncertainty, while annuities are likely to maintain the momentum. Growth in advanced markets is expected to remain subdued. In contrast, emerging markets should advance more robustly as insurers capitalize on low penetration rates and expanding middle-income populations across many developing regions, the report states.
Increased Adoption of Technology: Per Statista, the United States is experiencing a shift toward digital platforms and online sales in life insurance. Carriers have started selling policies online that appeal to the tech-savvy population. These insurers are offering customized coverages leveraging artificial intelligence and machine learning. At the same time, the use of real-time data makes premium calculation easier and reduces risk. Increased automation is expected to drive premium growth and boost efficiency. Moreover, accelerated digitization, as evident from the increased adoption of generative AI, cognitive intelligence and blockchain, should help life insurers curb operational costs and aid margin expansion. Insurers are investing heavily in technological advancements to ensure efficiency and smooth functioning. At the same time, players must shield themselves from falling prey to cyber threats.
Zacks Industry Rank Indicates Solid Prospects
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates strong prospects for the near term.
The Zacks Life Insurance industry, within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #74, which places it in the top 31% of the 243 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is the result of a positive earnings outlook for the constituent companies in aggregate.
Before we present a few life insurance stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry vs. Sector & S&P 500
The Life Insurance industry has underperformed the Zacks S&P 500 composite and the Finance sector year to date. The stocks in this industry have collectively gained 4.7% compared with the Finance sector’s increase of 15% and the Zacks S&P 500 composite’s increase of 18.6% in the said time frame.
Year-to-Date Price Performance
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Life Insurance Industry's Current Valuation
On the basis of trailing 12-month price-to-book (P/B), which is commonly used for valuing insurance stocks, the industry is currently trading at 1.89X compared with the S&P 500’s 8.51X and the sector’s 4.22X.
Over the past five years, the industry has traded as high as 2.11X, as low as 1.04X, and at the median of 1.53X.
Price-to-Book (P/B) Ratio (TTM)
Price-to-Book (P/B) Ratio (TTM)
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5 Life Insurance Stocks to Buy
Here, we present two Zacks Rank #1 (Strong Buy) and three Zacks Rank #2 (Buy) stocks from the industry. You can see the complete list of today’s Zacks #1 Rank stocks here.
Jackson Financial: Headquartered in Lansing, MI, Jackson Financial provides a suite of annuities to retail investors in the United States. Retail Annuity sales are poised to grow on diversified product sales and growing distribution. Per the insurer, over the last three years, Registered Index-Linked Annuity or RILA has grown to contribute more than 30% of its total Retail Annuity sales. LIMRA estimates 2025 industry sales to remain strong, with RILA sales expected to exceed the 2024 figure. Thus, this Zacks Rank #1 insurer is poised to grow on the success of RILA, coupled with growth in fixed annuities and institutional sales. It also boasts a high-quality, diversified investment portfolio.
JXN targets an 11%-27% increase in capital return to shareholders in 2025. It intends to deploy $700-$800 million through share buybacks and dividend increases.
The Zacks Consensus Estimate for Jackson Financial’s 2025 and 2026 earnings indicates a 17% and 8.5% year-over-year increase, respectively. The consensus estimate for 2025 and 2026 has moved 6.1% and 4.1% north, respectively, in the past 30 days. The company delivered a four-quarter average earnings surprise of 7.1%.
Price and Consensus: JXN
F&G Annuities & Life: Headquartered in Des Moines, IO, FG is a leading provider of insurance solutions serving retail annuity and life customers as well as institutional clients. F&G is evolving into a more fee-based, higher-margin, capital-light business, supported by its strong position as a leading seller of annuities and life insurance. This Zacks Rank #1 company expects favorable demographic trends to drive continued expansion, including substantial untapped Middle Market demand for life insurance and opportunities to shift consumers from CDs to fixed annuities. F&G is executing strategies to boost earnings, generate strong positive cash flow, and diversify into capital-light flow reinsurance and accretive owned distribution, all aimed at delivering higher returns on equity.
The Zacks Consensus Estimate for FG’s 2026 earnings indicates a 42.5% year-over-year increase.
Price and Consensus: FG
AIA: Based in Central, Hong Kong, AIA Group Limited, together with its subsidiaries, provides life insurance-based financial services in Hong Kong. This Zacks Rank #2 leading pan Asian life insurer benefits from its solid agent force, exclusive bancassurance tie-up, strong free surplus generation and a shareholder-friendly capital return program.
The Zacks Consensus Estimate for AAGIY’s 2025 and 2026 earnings indicates a year-over-year increase of 5.6% and 20.2%, respectively.
Price and Consensus: AAGIY
Manulife Financial: Headquartered in Toronto, Canada, this Zacks Rank #2 insurer is one of the three dominant life insurers within its domestic market and possesses rapidly growing operations in the United States and several Asian countries. A strong Asia business, expanding wealth and asset management business, investments to ramp up digital capabilities and solid capital position poise this life insurer well for growth. MFC estimates core EPS growth between 10% and 12% over the medium term.
The Zacks Consensus Estimate for Manulife’s 2025 and 2026 earnings indicates a year-over-year increase of 1.4% and 9.4%, respectively. It delivered a four-quarter average earnings surprise of 4.93%.
Price and Consensus: MFC
Lincoln National: Headquartered in Radnor, PA, Lincoln National is a diversified life insurance and investment management company. A fast-recovering Group Protection business, a strong fixed annuity business and positive flows in the Retirement Plan Services, coupled with pricing discipline and product introductions, should favor this Zacks Rank #2 insurer. While Lincoln’s product introductions and enhancements will help improve the top line, enhanced average life insurance in force will drive the bottom line.
The Zacks Consensus Estimate for Lincoln National's 2025 and 2026 earnings indicates a year-over-year increase of 11.2% and 2.2%, respectively. The expected long-term earnings growth rate is pegged at 12.7%. LNC delivered a four-quarter average earnings surprise of 12.03%.
Price and Consensus: LNC
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