Industry Overview - The Zacks Life Insurance industry includes companies providing life insurance and retirement benefits, with products such as annuities, whole and term life insurance, and health insurance [2] - The life insurance market is projected to grow, with gross written premiums expected to reach 2.5 trillion by 2026, reflecting a CAGR of 3.54% from 2025 to 2029 [4][2] - The industry is experiencing increased demand for protection products, driven by a growing number of baby boomers seeking retirement benefits [2] Trends Impacting the Industry - Interest rates are expected to be cut three times in 2024, totaling 150 basis points, which may negatively impact investment returns for life insurers [3] - Insurers are adapting to low interest rates by investing in alternative assets like private equity and real estate [3] - Product redesigning is a key trend, with insurers focusing on bundled products that offer living benefits rather than just death benefits [4] Technological Advancements - The adoption of technology is increasing, with a shift towards digital platforms and online sales in the U.S. life insurance market [5] - Automation and the use of real-time data are expected to enhance premium growth and operational efficiency [5] - Insurers are investing in technological advancements to reduce operational costs and improve margins while also addressing cybersecurity threats [5] Performance Metrics - The Zacks Life Insurance industry ranks 58, placing it in the top 24% of 255 Zacks industries, indicating strong near-term prospects [6][7] - Over the past year, the life insurance industry has gained 13.4%, outperforming the Zacks S&P 500 composite's increase of 7.7% but underperforming the Finance sector's 15.1% increase [9] - The industry currently trades at a trailing 12-month price-to-book (P/B) ratio of 1.81X, significantly lower than the S&P 500's 7.84X and the Finance sector's 4.05X [12] Company Highlights - Abacus Global Management: Expected adjusted net income for 2025 is between 78 million, reflecting a 51% to 68% increase from 2024 [19] - Aviva: Anticipates earnings growth of 8.1% and 10.5% for 2025 and 2026, respectively, supported by a proposed acquisition of Direct Line [24][22] - Jackson Financial: Projects an 11% to 27% increase in capital return to shareholders in 2025, with a focus on diversified product sales [27][26] - NN Group: Expected earnings growth of 25.5% and 2.6% for 2025 and 2026, respectively, driven by strong sales and margin improvements in Europe [31][30]
4 Stocks to Watch From a Prospering Life Insurance Industry