5 Life Insurance Stocks to Watch Despite Low-Interest Rate Environment

Redesigning and repricing of products and services to maintain sales and profitability have been driving Zacks Life Insurance industry players. Increased automation is expected to drive premium growth and boost the efficiency of Aviva plc AVVIY, Reinsurance Group of America Incorporated RGA, Primerica Inc. PRI, Voya Financial Inc. VOYA and Lincoln National Corporation LNC. The Fed has kept the interest rate unchanged till now this year but hinted at one cut this year. In such a scenario, life insurers still face challenges as they invest a large portion of their premiums to meet contractually guaranteed obligations of policyholders. Also, with accelerated digitalization, expenses are likely to increase. Prudently pricing the products and balancing customers' preferences and claim costs are a challenge.

About the Industry

The Zacks Life Insurance industry includes companies offering life insurance, annuities, and retirement products such as term and whole life policies, health coverage, Medicare supplements, long-term care, and wealth and asset management services. Per Research and Markets, the global life insurance market is expected to grow to $7.13 trillion in 2026 and reach $11 trillion in 2032, at a CAGR of 7.5%, given the increase in the aging population and increased awareness of the need for financial security. While emerging markets could see faster growth due to low insurance penetration, developed markets could witness slower growth due to market maturity, as per Deloitte. The industry has also been witnessing the accelerated adoption of technology. However, rising mortality or loss cost trends may impact the profitability of insurers.

3 Trends Shaping the Future of the Life Insurance Industry

Low Interest Rate: The Federal Reserve cut interest rates three times in 2025 and signaled one potential cut in 2026 amid labor-market softness and subdued economic growth. Life insurers generally benefit from higher rates because they invest premiums to meet policyholder obligations. Consequently, lower rates could reduce investment income, depress new-money yields and compress margins on annuities and other spread-based products. To counter prolonged low rates, insurers increased allocations to private equity, hedge funds and real estate, although these assets are less liquid and more difficult to value. Conversely, lower rates, stronger equity markets and low unemployment could support indexed universal life (IUL) and whole life sales. LIMRA noted that IUL sales began 2026 strongly before moderating in the second quarter. It nevertheless expects IUL sales to increase 8-12% in 2026, supported by product launches and broader distribution.

Product Redesigning: The industry is increasingly combining insurance, wealth management, and healthcare services (including retirement income products, annuities, investment-linked insurance and health and wellness riders) to stay relevant, per a McKinsey and Company report.  Life insurers continue to roll out investment products that provide bundled covers of guaranteed retirement income, life and healthcare to cater to customers preferring policies with “living” benefits more than those with death benefits. Increased awareness about having coverage continues to support the life insurance business. LIMRA estimates U.S. annuity sales to remain above $450 billion in 2026 after hitting $464.1 billion in 2025. Despite U.S. individual life new annualized premiums increasing 10% and policy count rising 7% in 2025, LIMRA expects premium growth to moderate to 2–6% in 2026 given softer economic conditions. According to a Deloitte report, global life insurance premiums are expected to slow amid U.S. policy uncertainty, while annuities should retain momentum. Demand may shift from fixed-rate to indexed products. Annuity sales have been a major growth engine, but the boost from high rates is fading. Advanced markets will likely see limited growth, whereas emerging markets are expected to expand faster due to low insurance penetration and rising middle-income populations.

Increased Adoption of Technology: The U.S. life insurance market is adopting digital platforms, online distribution, artificial intelligence and machine learning. Insurers are strengthening digital sales capabilities to offer faster, more convenient access to policies, particularly for tech-savvy consumers. AI, machine learning and real-time data enable customized coverage, streamline premium calculations and improve risk assessment. Automation should support premium growth, enhance efficiency and reduce operating costs, aiding margin expansion. Investments in generative AI, cognitive technologies and blockchain are also improving operational performance and customer experiences. However, as digitization accelerates, insurers must strengthen cybersecurity safeguards to protect sensitive data and minimize exposure to evolving cyber threats.

Zacks Industry Rank Indicates Weak Prospects

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bleak prospects for the near term.
The Zacks Life Insurance industry, within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #174, which places it in the bottom 29% of the 255 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the bottom 50% of the Zacks-ranked industries is the result of a negative earnings outlook for the constituent companies in aggregate.

Before we present a few life insurance stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.

Industry vs. Sector & S&P 500

The Life Insurance industry has outperformed the Zacks S&P 500 composite and the Finance sector year to date. The stocks in this industry have collectively gained 17% compared with the Finance sector’s increase of 7.7% and the Zacks S&P 500 composite’s increase of 11.4% in the said time frame.

Year-to-Date Price Performance

Life Insurance Industry's Current Valuation

On the basis of trailing 12-month price-to-book (P/B), which is commonly used for valuing insurance stocks, the industry is currently trading at 2.25X compared with the S&P 500’s 7.2X and the sector’s 4.43X.

Over the past five years, the industry has traded as high as 2.33X, as low as 1.05X, and at the median of 1.75X.

Price-to-Book (P/B) Ratio (TTM)

Price-to-Book (P/B) Ratio (TTM)

5 Life Insurance Stocks to Watch

Here, we present two Zacks Rank #2 (Buy) and three Zacks Rank #3 (Hold) stocks from the industry.   You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aviva: Headquartered in London, United Kingdom, Aviva provides various insurance, retirement, and wealth products in the United Kingdom, Ireland, Canada and internationally. This insurer’s solid results across all business lines bode well for growth. The proposed acquisition of Direct Line will position Aviva as a strong leader in UK Personal Lines, accelerating its capital-light business while generating cost synergies.

Its earnings growth, coupled with balance sheet strength, enables this Zacks Rank #2 insurer to return wealth to shareholders through dividend hikes and share buybacks while also investing in the business. This drives efficiency and growth, both organically and inorganically. 

The Zacks Consensus Estimate for AVVIY’s 2026 and 2027 earnings indicates a year-over-year increase of 12.8% and 15.6%, respectively. The consensus estimate for 2026 and 2027 earnings has moved 1.8% and 3.8% north, respectively in the last 30 days.

Price and Consensus: AVVIY

Primerica: This Duluth, GA-based, second-largest issuer of term-life insurance coverage in North America aims to be a successful senior health business while continuing to enhance its shareholders’ value. Strong demand for protection products drives sales growth and policy persistency benefits for this insurer. A strong business model makes this Zacks Rank #2 insurer well-poised to cater to the middle market's increased demand for financial security.

The Zacks Consensus Estimate for PRI’s 2026 and 2027 earnings indicates a year-over-year increase of 9.2% and 8.1%, respectively. The consensus estimates for 2026 and 2027 earnings have moved 2% and 1.3% upward, respectively, in the past 30 days.  PRI delivered a four-quarter average earnings surprise of 9.3%.

Price and Consensus: PRI

Reinsurance Group of America: Timberlake, MO-based Reinsurance Group of America is a leading global provider of traditional life and health reinsurance and financial solutions with operations in the United States, Latin America, Canada, Europe, the Middle East, Africa, Asia and Australia. Reinsurance Group is set to benefit from better pricing and expanding business in the pension risk transfer market. Solid in-force business ensures predictable long-term earnings. Product-line expansion contributes to risk diversification. It carries a Zacks Rank #3.

The Zacks Consensus Estimate for RGA’s 2026 and 2027 earnings indicates a year-over-year increase of 24.4% and 2.9%, respectively.  The consensus estimates for 2026 and 2027 earnings have moved 5.3% and 1.3% north, respectively, in the past 30 days. RGA delivered a four-quarter average earnings surprise of 22.81%.

Price and Consensus: RGA

Voya Financial: Based in New York, this retirement, investment, and employee benefits company in the United States is poised to grow, given its focus on high-growth, high-return, capital-light businesses, solid market presence and cost savings. Expansion of its distribution network and achievement of efficiencies through automation are expected to drive Voya Financial’s performance.  The insurer carries a Zacks Rank #3. 

The Zacks Consensus Estimate for Voya Financial’s 2026 and 2027 earnings indicates a year-over-year increase of 4.8% and 22.3%, respectively. The expected long-term earnings growth rate is pegged at 11.2%.

Price and Consensus: VOYA

Lincoln National is a diversified life insurance and investment management company headquartered in Radnor, PA. The turnaround in the Life Insurance business, a favorable mix shift toward spread-based annuity products, and continued strength in Retirement Plan Services, enhancing earnings quality and long-term profitability, should favor this Zacks Rank #3 insurer.  Lincoln National is bringing share buybacks back in the third quarter of 2026, marking an important turn in its multi-year effort to repair capital and reduce balance-sheet risk. 

The Zacks Consensus Estimate for Lincoln Financial’s 2027 earnings indicates a year-over-year increase of 8.9%. The consensus estimates for 2026 and 2027 earnings have moved 1.9% and 2.9% upward, respectively, in the past 30 days. The expected long-term earnings growth rate is pegged at 3.5%.

Price and Consensus: LNC




 

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