U.S. Life/Annuity Sector Posts 13.8% Net Income Growth in Early 2025

The U.S. life/annuity insurance industry demonstrated robust financial growth during the first nine months of 2025, with net income increasing by 13.8% compared to the same period in 2024. This growth was supported notably by an 8.1% rise in net investment income, a key component of insurer profitability. Total income in the sector climbed 17.2%, propelled by a $130.4 billion surge in other income, partly driven by significant reserve adjustments related to reinsurance transactions at major companies such as American General Life Insurance Company and Athene Annuity and Life Company. The industry’s pretax net operating gain reached $33.6 billion, marking a 15.9% increase over the prior year's nine-month interval. Despite a 17.2% reduction in taxes and an uptick in realized capital losses, net income growth was sustained at $23.7 billion. This reflects both operational performance and broader market influences affecting insurers’ investment portfolios and capital strategies. Capital and surplus levels increased by 3.6% to $525.3 billion compared to the end of 2024. This growth incorporated $48 billion in net income, changes in unrealized gains, and contributed capital, partially offset by asset valuation reserve adjustments and stockholder dividends totaling $29.8 billion. Notably, the industry continues to increase its allocation to mortgage loans, which now represent 13.8% of total invested assets, indicating a strategic investment positioning. These insights are part of AM Best’s financial analysis based on interim statutory statements from U.S. life/annuity insurers covering approximately 96% of industry premiums and annuity considerations as of December 4, 2025. The data highlights ongoing trends in insurance company financial conditioning, investment strategies, and risk management practices in a dynamic market and economic context. AM Best’s reporting solidifies transparency for market participants, regulators, and stakeholders interested in the financial resilience and operational results of the life/annuity sector. The report and data provide a benchmark for risk assessment, capital adequacy, and income generation potential within the industry, informing strategic planning and regulatory compliance efforts moving into the latter part of 2025 and beyond.