The U.S. life insurance industry is benefiting from rising demand for products that help consumers protect their families, accumulate wealth and generate income during retirement. In this market, annuities are becoming increasingly important as an aging population approaches retirement and seeks reliable income sources that can last throughout their lifetimes.
The retirement opportunity extends beyond individual consumers. The shift from traditional defined-benefit pensions toward defined-contribution plans such as 401(k)s has placed greater responsibility on individuals to manage their retirement savings and protect against the risk of outliving their assets. At the same time, employers and pension plans are looking for ways to manage long-term retirement liabilities, creating opportunities for insurers through pension risk-transfer solutions.
U.S. annuity sales remained strong in the second quarter of 2026. According to LIMRA, total annuity sales reached $121.2 billion, up 2% year over year, marking the 11th consecutive quarter in which sales exceeded $100 billion. First-half sales reached a record $228.7 billion, up 1% from the prior-year period.
The strength is particularly notable across products offering a combination of market participation, principal protection and retirement income. Registered index-linked annuity sales increased 22% year over year to $23.3 billion in the second quarter, while traditional variable annuity sales jumped 24% to $17.7 billion. Income annuities also remained strong, with single-premium immediate annuity sales reaching a record $4.1 billion.
Several factors are supporting this demand. Higher interest rates can make guaranteed-income products more attractive, while strong equity markets have supported demand for variable and registered index-linked annuities. Higher yields can also benefit insurers over time as they reinvest new premiums and maturing assets at more attractive rates, potentially supporting investment income. The Fed recently raised interest rates by 25 basis points to a range of 3.75-4%, marking its first rate increase since 2023, after three consecutive cuts had lowered the range to 3.5-3.75% by December 2025.
The broader life insurance market is showing similar momentum. According to S&P Global Market Intelligence, U.S. life premiums increased 7.7% year over year in the second quarter of 2026, while individual life premiums rose 4.1%. Meanwhile, the individual life policy count also increased 8% according to LIMRA, indicating that demand is extending beyond annuities.
This combination of growing retirement needs, strong annuity demand, pension opportunities and a supportive yield environment is creating a favorable backdrop for insurers with established retirement and investment platforms. Prudential Financial, Inc. PRU, Principal Financial Group, Inc. PFG and MetLife, Inc. MET stand out for their exposure to annuities, retirement solutions, pension businesses and investment income.
While market volatility, interest-rate changes, competition and investment risks remain important considerations, continued growth in retirement assets should provide a long-term opportunity for these insurers.
3 Life Insurers to Watch
With the help of the Zacks Stock Screener, we have selected three life insurance stocks with an impressive Value Score of A or B. PRU, PFG, and MET each carry a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Prudential Financial: Newark, NJ-based Prudential Financial is a diversified financial services company with significant exposure to retirement, annuities, life insurance, group insurance and asset management.
The company is particularly well positioned to benefit from the current annuity environment. In the second quarter of 2026, PRU generated $3.6 billion in retail annuity sales, supported by continued momentum in its registered index-linked annuity offerings. Its individual life business also recorded a 9% increase in sales to $237 million, driven primarily by variable accumulation products.
Prudential’s broader earnings profile also benefits from investment income and asset management. Second-quarter net investment income rose 12% year over year to $5.15 billion, while assets under management increased 3.9% to $1.64 trillion. Strong retirement sales, growing investment income and continued demand for annuity products position PRU to benefit from the structural shift toward retirement-income solutions.
Estimates for PRU’s 2026 bottom line have risen 2.3% over the past 30 days and suggest a 1% increase from the year-ago reported number. Its expected long-term earnings growth is pegged at 4.6%.
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Principal Financial: Des Moines, IA-based Principal Financial Group provides retirement, investment management, insurance and employee-benefit solutions to individuals and businesses.
PFG has significant exposure to the retirement market through its Retirement and Income Solutions business. In the second quarter of 2026, transfer deposits reached $9 billion, up 30% year over year, while international pension assets under management reached $169 billion, up 18%. The company’s diversified model also provides exposure to investment management and benefits. Principal Asset Management reported $30 billion in investment-management gross sales in the second quarter, while its Benefits and Protection segment reported an 11% increase in specialty-benefit sales. Life Insurance operating margin also improved 280 basis points.
PFG’s combination of retirement solutions, pension assets, investment management and insurance gives it multiple ways to benefit as Americans accumulate retirement assets and structural shifts drive annuity demand.
Estimates for PFG’s 2026 bottom line have risen 0.5% over the past 30 days and suggest a 16.3% increase from the year-ago reported number. Its expected long-term earnings growth is pegged at 6.5%.
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MetLife: New York-based MetLife is a global provider of insurance, retirement and employee-benefit solutions. Its diversified business model gives the company exposure to both individual and institutional retirement needs.
MetLife’s Retirement and Income Solutions segment generated $377 million in adjusted earnings in the second quarter of 2026. Overall adjusted earnings increased 15% year over year to $1.6 billion, while premiums, fees and other revenues increased 7% to $13.7 billion. The company is also benefiting from strong investment income. Net investment income increased 18% to $6.7 billion in the second quarter.
MetLife’s institutional retirement capabilities also provide exposure to pension-related demand. Pension risk transfers allow companies to transfer certain pension obligations to insurers, allowing insurers to generate premium and investment income. The company’s broad retirement, insurance and employee-benefits platform should allow it to benefit from growing demand for retirement solutions, while diversification across businesses helps reduce reliance on any single product category.
Estimates for MET’s 2026 bottom line have risen 0.6% over the past 30 days and suggest a 10.8% increase from the year-ago reported number. Its expected long-term earnings growth is pegged at 10.7%.
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