Life Insurers Post Record Q1 2026 Earnings as Annuity Sales Hit $107.4 Billion

Large North American life insurers posted resilient first-quarter results in 2026, with average adjusted earnings increasing 10% quarter over quarter, according to a new analysis by Morningstar DBRS. The findings cover ten of the largest non-mutual life insurers in the US and Canada, including Aflac, Athene Holding, Brookfield Wealth Solutions, Corebridge Financial, Global Atlantic, Great-West Lifeco, Manulife Financial, MetLife, Prudential Financial, and Sun Life Financial.

However, the headline numbers mask a more complicated picture shaped by geopolitical disruption, mark-to-market losses, and intensifying scrutiny of the private credit assets that have become central to the sector’s investment strategy. Reported net income remained below adjusted earnings across the group, reflecting unfavorable mark-to-market movements on invested assets and derivative hedges — a divergence most pronounced among US annuity writers with significant exposure to interest-sensitive fixed-income portfolios.

Record Annuity Sales Sustain the Growth Engine

The earnings resilience is underpinned by a structural tailwind that shows little sign of fading. Total US annuity sales reached $464.1 billion in 2025, up 7% from 2024, marking the fourth consecutive year of record sales according to LIMRA’s US Individual Annuity Sales Survey. In Q1 2026, total US annuity sales reached $107.4 billion, the tenth consecutive quarter above the $100 billion mark.

LIMRA projects 2026 sales will remain above $450 billion, supported by strong demographic demand driven by “Peak 65” — the period in which more than four million Americans are turning 65 each year — along with maturing contracts and continued product development. The scale of those inflows raises a question that regulators are increasingly focused on: what is the capital being invested in once it arrives.

Q1 2026 Annuity Product Breakdown: Where Growth Is — and Isn’t

The first-quarter product breakdown tells a story about where consumers are gravitating in an uncertain rate environment. The following table summarizes the Q1 2026 annuity sales by product category:

Registered index-linked annuities rose 20% year over year to $21.1 billion, and traditional variable annuities climbed 17% to $17.2 billion — both benefiting from demand for products that offer market participation with some downside protection. Single premium immediate annuities gained 22% to $3.7 billion and deferred income annuities rose 5% to $950 million.

The rate-sensitive fixed products told a different story. Fixed-rate deferred annuities fell 12% to $35.6 billion and fixed indexed annuities slipped 4% to $26.8 billion, reflecting consumers shifting away from products whose relative attractiveness diminishes as rate expectations become less certain.

What Drove the Life Insurance Earnings Results

Higher investment yields, improved underwriting results, and continued strength in retirement, wealth, and asset management businesses all supported earnings, with increased scale contributing to higher fee and spread-based income. Rising operating expenses partially offset those gains.

Morningstar DBRS noted that Q1 2026 was characterized by heightened market fluctuations driven largely by the conflict in the Middle East and its effect on investor sentiment. Despite having very little direct insurance or asset management exposure to the region, North American life insurers felt the effects through broader global capital markets, with disruptions to oil and gas exports contributing to upward pressure on inflation and interest rates.

Equity and credit markets largely recovered following an initial decline, which Morningstar DBRS noted may provide support to Q2 results. AUM inflows were a notable positive, particularly among rapidly growing asset manager-backed annuity providers, and capital levels across the sector remained strong even where some insurers recorded net GAAP losses.

The Private Credit Question: Regulators Take Notice

Beneath the solid operating performance, regulators and investors are pressing more urgently on the risk embedded in the private credit assets that have come to define life insurer balance sheets. Life insurer investments in private credit reached $849 billion, or 14% of the sector’s balance sheet, in 2024 — more than double the figure recorded a decade earlier — with private equity-owned life insurers identified as the primary driver of that growth, according to research from the Federal Reserve Bank of Chicago.

Private and illiquid bond holdings grew from $685 billion at year-end 2024 to $807 billion at year-end 2025, an increase of $122 billion in a single year, according to Moody’s. The rating agency identified concentration risk, a widening credit quality gap, rising structural complexity through asset-backed securities, and growing payment-in-kind exposure as dynamics warranting close monitoring.

Morningstar DBRS noted that private credit results in Q1 2026 remained benign, with no indication of performance issues despite widespread concerns about software sector exposure. The default trajectory is nonetheless shifting. Proskauer’s Private Credit Default Index reported a default rate of 2.73% in Q1 2026, up from 1.84% two quarters earlier.

The US Treasury convened domestic and international insurance regulators earlier this year for talks on risks in the private credit sector, with NAIC president Scott White flagging transparency in life insurance portfolios as a top regulatory priority for 2026. Regulators in both the US and Bermuda are tightening disclosure and capital rules to ensure capital levels keep pace with embedded risk, particularly in private credit and offshore reinsurance structures.

Top 10 North American Life Insurers: Q1 2026 Performance Overview

The Morningstar DBRS analysis covered ten of the largest non-mutual life insurers. Here is how they compare on key metrics:

Individual Life Insurance Sales Also Rising

While annuity sales dominate in dollar terms, individual life insurance sales are also showing growth. The US life insurers that Wink tracks generated $2.9 billion in individual life insurance sales in the first quarter of 2026, up 8.2% from a year earlier. Preliminary results from LIMRA show individual life sales increased 7% year over year to $4.5 billion. The disparity between Wink and LIMRA figures reflects different survey methodologies and definitions of “sales.”

One notable trend: one publicly traded financial services giant reported individual life sales growth of more than 30% year over year in Q1 2026, significantly outpacing the industry average. This suggests that market share is shifting among carriers, even as the overall pie grows modestly.

The Adoption Gap: Why Record Sales Coexist with Under-Adoption

Despite record annuity sales, LIMRA and LOMA’s chief marketing officer Tina Beckwith identified a persistent gap between retirement need and actual product adoption. In the organization’s June MarketFacts publication, Beckwith identified three primary behavioral barriers:

• Loss aversion: Consumers are psychologically wired to avoid perceived losses, making them hesitant to lock up funds in irrevocable annuity contracts.
• Decision paralysis: The complexity of annuity products — with their riders, surrender periods, and crediting methods — overwhelms consumers, leading to inaction rather than informed choice.
• Longevity risk underestimation: Most people underestimate how long they will live and therefore under-prioritize guaranteed lifetime income.

Beckwith made a counterintuitive observation: more consumer education can actually reinforce the perception that annuities are too complicated rather than reducing it. Her recommended alternative is to reframe lifetime income around outcomes — describing the approach as a “personal pension” — rather than leading with technical features or rate comparisons. She called on carriers and advisors to standardize plain-language messaging and normalize partial allocation to guaranteed-income products.

Key Takeaways for Consumers Shopping for Life Insurance in 2026

• Insurer financial strength remains robust: Roughly 95% of North American life insurers carry ratings of A- or higher, with 87% assigned stable outlooks by S&P Global Ratings — meaning policyholder claims are well-protected.
• Annuity product variety is expanding: With RILA sales up 20% and SPIAs up 22%, consumers have more options than ever for matching guaranteed income to their retirement timeline.
• Rate-sensitive products are repricing: Fixed-rate deferred annuities dropped 12%, suggesting that consumers should compare current offers carefully — last year’s attractive rate may no longer be available.
• Regulatory scrutiny is intensifying: The NAIC has made transparency in life insurance portfolios a top 2026 priority, which could lead to enhanced consumer protections and clearer disclosures.

Why This Matters to Policyholders

For consumers considering life insurance or annuity purchases, the Q1 2026 results carry several practical implications. First, the financial health of the industry remains strong — life insurers are profitable, well-capitalized, and continuing to grow. This means your policy benefits are secure. Second, the record annuity sales demonstrate that millions of Americans are actively choosing guaranteed-income products for retirement, validating the approach. Third, the shift toward registered index-linked annuities and away from fixed-rate products suggests that consumers are becoming more sophisticated about balancing growth potential with downside protection.

However, the growing private credit exposure on life insurer balance sheets is worth monitoring. While defaults remain low and regulators are tightening oversight, consumers should pay attention to the financial strength ratings of any carrier they’re considering. You can check AM Best ratings for any insurer through the AM Best rating search tool.

If you’re exploring life insurance options for the first time, it helps to understand the broader landscape. Our burial insurance vs term life comparison covers the fundamentals of coverage types, our whole life insurance guide explains how permanent policies build cash value, and for those approaching retirement, our life insurance for retirees guide addresses coverage decisions in the post-65 years. You can also use our return of premium calculator to evaluate whether ROP term life makes financial sense for your situation.

The Interest Rate Dynamic and Near-Term Outlook

Rising interest rates will have a negative short-term mark-to-market impact on life insurer balance sheets but will ultimately prove positive through improved investment yields and profit margins. S&P Global Ratings expects the sector’s fundamentals to remain resilient, with roughly 95% of North American life insurers carrying ratings of A- or higher and 87% assigned stable outlooks.

The picture that emerges is one of operational strength meeting structural complexity. Record annuity inflows are funding growth, yields are improving, and capital remains robust. But the private credit build-up that helped finance much of that expansion is drawing regulatory attention at a pace that is unlikely to slow through the remainder of 2026.

Related Resources

• AM Best Insurance Company Ratings — Verify the financial strength rating of any life insurer before purchasing a policy.
• NAIC Consumer Resources — State-by-state guides to policyholder rights, complaint processes, and insurance regulations.
• IRS Publication 525 — Taxable and Non-Taxable Income — Understanding how life insurance death benefits and annuity payouts are treated for tax purposes.

Frequently Asked Questions About Life Insurance Industry Performance in 2026

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