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

The U.S. life and annuity industry reported a significant net income increase of 13.8% during the first nine months of 2025 compared to the same period in 2024, according to a recent AM Best report. This growth was supported by an 8.1% rise in net investment income and a 17.2% increase in total income, which amounted to a $130.4 billion boost mainly from other income sources. Key contributors to this increase included reserve adjustments on reinsurance ceded at major companies such as American General Life Insurance Company and Athene Annuity and Life Company, totaling $84.5 billion. The industry's pretax net operating gain reached $33.6 billion, reflecting a 15.9% increase year-over-year. Despite a 17.2% decrease in taxes and an uptick in realized capital losses, net income still rose to $23.7 billion. Capital and surplus levels grew by 3.6% from the end of 2024, reaching $525.3 billion, bolstered by a combination of net income, unrealized gains, contributed capital, and other surplus changes, partially offset by asset valuation reserve changes and stockholder dividends. Investment strategies within the life/annuity sector showed a continued shift with mortgage loan allocations expanding to constitute 13.8% of total invested assets. This growing investment class reflects evolving portfolio management approaches aimed at optimizing returns in the current economic environment. These findings, derived from companies' nine-month 2025 interim statutory statements, cover approximately 96% of total U.S. life and annuity industry premiums and annuity considerations. The report provides valuable insights into the financial health and operational performance within this sector, highlighting trends that impact insurers, regulators, and investors alike. AM Best's comprehensive analysis serves as a critical resource for stakeholders monitoring industry profitability, capital adequacy, and investment allocation dynamics. Given the magnitude of financial movements and strategic shifts reported, this data is relevant for decision-making in underwriting, risk management, compliance, and capital planning across the U.S. life and annuity markets.