Fitch Issues Neutral Outlook for North American Life Insurance; Top Stocks Selected by Hedge Funds

Fitch Ratings has issued a neutral outlook for the North American life insurance sector for 2026, highlighting stable balance sheets as a counterbalance to slower economic growth, macroeconomic volatility, and geopolitical uncertainty. The sector faces increased investment risk due to greater exposure to private credit, but strong capitalization and prudent asset-liability management remain key strengths. Life insurers are expected to maintain steady operating profits with net investment income potentially rising due to spread widening, despite some pressure on commercial real estate exposures. Regulatory oversight, particularly from the Bermuda Monetary Authority and the National Association of Insurance Commissioners (NAIC), is anticipated to stay dynamic, focusing on capital adequacy and risk management, especially in relation to offshore reinsurance and partnerships with alternative investment managers. AM Best has also noted increased investment risk and a competitive regulatory environment shaping insurer strategies. The article further provides an analysis of the top U.S.-listed life insurance stocks favored by hedge funds based on holdings as of Q3 2025 and upside potential as of December 4, 2025. Notably, Abacus Global Management, Inc. (NASDAQ:ABL) has shown strong financial results, including robust revenue growth and a new dividend policy supported by free cash flow and cash reserves. Primerica, Inc. (NYSE:PRI) presents moderate upside potential with solid earnings growth, strong sales in its Investment and Savings Products category, and plans for a substantial share repurchase program authorized through the end of 2026. The methodology for stock selection underscores replicating hedge fund strategies to outperform market benchmarks, with a track record of significant returns since 2014. The analysis includes nuanced insights into life insurers' financial health, investment strategies, and regulatory trends that influence market performance and investment decisions.