The U.S. life and annuity insurance industry experienced remarkable growth from 2022 to 2024, with record sales, increasing margins and strong capital inflows. However, as we approached 2025, signs of a slowdown began to emerge. While it may be tempting to assume that 2026 will see a return to the favorable conditions of 2024, I believe this assumption could be risky. As we enter 2026, I believe there are several strategic areas that life and retirement executives should consider. Here are some thoughts:
How insurers increase their sales by using AI in a targeted manner
Five measures transform ambition into growth
1. The real challenge: product architecture
In 2025, interest rate cuts from the Federal Reserve led to a decline in yields across the industry, making it more difficult for products to deliver competitive lending rates. I believe the challenge goes beyond pricing; it’s about product architecture. The lenient interest rate environment from 2022 to 2024 allowed simple products to thrive, but that era appears to be over. In my opinion, the focus should shift to comprehensive retirement income solutions that offer stability, flexibility and confidence. For example, Goldman Sachs Asset Management’s annual fixed income industry survey highlights that nearly 80% of respondents prioritize solutions that meet these needs in a yield-constrained environment.
2. Building product ecosystems
Rather than viewing products as isolated silos, I believe network operators should think about creating integrated ecosystems that address lifecycle needs. For example, the combination of a registered index-linked annuity (RILA) for growth, a deferred income annuity (DIA) for guaranteed income, and a fixed product for liquidity could meet different client needs. However, this approach requires product integration, unified customer experiences, and tools that enable advisors to build solutions rather than just sell products.
3. AI: From experiment to necessity
I think AI has become a game-changer for the industry. Research from Accenture shows that 93% of life insurers have increased their AI investments by at least 5% in the last three years and 43% plan to increase investments by over 25% in the next three years. Generative AI is already transforming operations, from underwriting to claims processing, while Agentic AI is poised to take autonomous decisions and actions. I believe that the economic impact of AI, such as reducing operational costs and enabling scalable solutions, will be transformative. However, success requires process redesign, unified data infrastructure, decentralized governance and workforce training.
4. Beyond investment alpha
While private equity has driven the sophistication of asset management, I believe sustainable advantage now requires combining investment expertise with actuarial innovation, sales strength and operational excellence. AI can play a key role in realigning cost curves and increasing efficiency.
5. Regulation as a partnership
I believe the next wave of regulation will be more consequential, driven by private equity investments and recent failures. Companies that proactively invest in risk infrastructure such as stress testing and AI-powered compliance monitoring could make regulation an advantage rather than a hindrance.
6. Focused Sales Excellence
Sales are becoming increasingly segmented, and I believe carriers should focus on excelling in specific areas rather than trying to serve all segments equally. For example, dominant RIAs might include AI tools that analyze advisors’ client books and generate tailored suggestions as they engage Carrier agents may require completely different strategies.
7. Orchestration features
I believe competitive advantage comes from orchestrating world-class capabilities rather than building everything in-house. Strategic partnerships can accelerate transformation and innovation, especially as AI continues to evolve.
8. The opportunity for the mass market
Two-thirds of boomers are not financially prepared for retirement, and I think this represents an opportunity for product design innovation. AI-powered tools could make sophisticated financial advice widely accessible and enable careers to profitably serve clients of modest wealth.
Final thoughts
If you’re planning for 2026, I think it’s worth asking: How can we gain market share if interest rates are stagnant for three years? Investments in better products, better distribution, AI-powered operations and customer experience transformation will likely be critical. The demographic wave and pension crisis are permanent and the AI revolution is accelerating. Preparing for these realities will be critical to long-term success.
Many thanks to Ed Sullivan for his valuable contributions to this perspective. Please contact us on LinkedIn at either address Shay Alon or Ed Sullivan to talk about the future of insurance.
