Life Insurers Face Mixed Q1 Results Amid Economic and Market Shifts
The Q1 earnings season revealed mixed results for the U.S. life insurance industry, with many companies missing revenue and earnings estimates amid a complex economic backdrop. As interest rates influence life insurers’ investment returns and product offerings, the sector remains cyclical and sensitive to market and demographic shifts, including aging populations that drive retirement product demand and competition from insurtech innovators reshaping distribution models. The 15 life insurance stocks tracked collectively posted revenues below analysts' expectations by 3.1%, and share prices declined on average by 2.1% since earnings announcements.
Brighthouse Financial, spun off from MetLife to specialize in retail financial products, reported a 5.2% revenue increase to $2.16 billion but fell short of estimates by 5.3%, with notable shortfalls in net premiums earned and book value per share. Its stock declined 12.2% following the release. Corebridge Financial, a recent AIG spin-off focused on retirement markets, posted a revenue decline of 19.1% to $4.74 billion but surpassed estimates by 7.9%, resulting in a 7% stock gain. Equitable Holdings, with origins dating back to 1859, experienced a 4% revenue increase to $3.78 billion but missed EPS estimates and saw its stock decrease by 1.3%.
F&G Annuities & Life had the weakest quarter among peers, with revenues falling 40.7% to $930 million and significant misses on analysts’ net premiums and EPS estimates. Its shares dropped 13.5%. Lincoln Financial Group delivered revenues of $4.69 billion, up 2.2% year over year, matching revenue expectations but missing book value per share estimates; its stock edged up 1.6% post-earnings.
The life insurance industry's performance is further shaped by shifting economic conditions, including Federal Reserve interest rate hikes during 2022 and 2023 aimed at tempering inflation, which has since decreased toward target levels without triggering a recession. Recent rate cuts in late 2024 have supported stock market gains. However, ongoing uncertainties related to macroeconomic policies and tariffs create cautious optimism heading into 2025. Insurers continue to navigate an evolving landscape influenced by regulatory, demographic, and technological factors.