Key themes we see emerging for insurance investors in 2025 involve duration positioning, managing credit exposure, exploring relative-value opportunities, tapping the potential of private markets, and portfolio-liquidity and cash-management considerations.
As we get ready to close the books on 2024, the US economy continues to expand, though the labor market has weakened, painting a picture of a coming deceleration in growth. With both growth and inflation likely to continue slowing, the door is wide open for the Federal Reserve to continue rate cuts, which should forestall a more negative economic outcome. Still, the path of interest rates isn’t certain and some inflation risks remain. A policy regime change from new US leadership creates uncertainty, and continued geopolitical tension bears monitoring.
North America insurance market growth remains fragmented. Life insurance in force has extended its decade-long flat trend, while annuity sales continued outpacing other life products. Growth was driven mainly by record fixed annuity sales: annual sales have nearly tripled since 2021, as higher rates have made these products more attractive to policyholders. Variable annuity sales have rebounded to 25% growth year to date, driven by record sales in registered index-linked annuities, up 39%.
You can now read the full whitepaper at the link below
