Since interest rates started rising substantially in 2021, life insurance annuity sales have increased nearly twofold in the US from USD 220 billion in 2020 to USD 398 billion in 2024. US interest rates remain around the same level as last year, boding well for life insurance sales this year. Looking more longer-term, aging populations and intergenerational wealth transfers are also driving growth. Alternative asset managers have taken note of this too. Firms like Apollo, Brookfield and KKR have been acquiring or partnering with life insurers. This reflects rising demand for annuity-like returns in retirement alongside better yields from non-equity investments. Colleagues from Robeco’s New World Financials fund describe these and other trends more in depth here.
Source: LIMRA Secure Retirement Institute, Jefferies, Bloomberg, January 2025.