From 2022 to 2024, the U.S. life and annuity industry delivered extraordinary results, with record sales, expanding margins, and strong capital inflows. That momentum began to soften in 2025, with early indicators pointing to a more challenging environment ahead.
It is tempting to assume that 2026 will restore the conditions of 2024. I believe that is a risky bet. The market has moved on, the environment has changed, and the assumptions that supported recent growth no longer hold in the same way.
As we move deeper into 2026, life and annuity executives must adjust their strategies accordingly. The leaders who succeed will be those who focus on a small number of critical choices that shape long-term competitiveness. Below are eight strategic imperatives I believe matter most now.
1. Rethink Product Architecture
In 2025, rate cuts by the Federal Reserve compressed yields across the industry, making it harder for products to deliver competitive crediting rates. I believe the challenge goes beyond pricing; it's about product architecture. The forgiving rate environment of 2022-2024 allowed simple products to thrive, but that era seems to be over. I think the focus should shift toward comprehensive retirement income solutions that offer stability, flexibility, and confidence. Executives should be asking whether their products are designed only for favorable conditions, or for the full retirement journey customers actually face.
2. Move From Individual Products to Integrated Retirement Solutions
The next step is to stop treating each product as a silo and start designing a connected ecosystem that meets needs across life stages. For instance, combining a registered index-linked annuity (RILA) for growth, a deferred income annuity (DIA) for guaranteed income, and a fixed product for liquidity could meet diverse client needs. This approach, however, requires product integration, unified customer experiences, and tools that enable advisors to construct solutions rather than simply sell products.
3. Treat AI As a Necessity, Not an Experiment
Most carriers have moved beyond asking "should we use AI?" and AI is now a critical enabler for the industry and a baseline expectation. Accenture's research shows that 93% of life insurers have increased AI investments by at least 5% over the last three years, and 43% plan to increase investments by over 25% in the next three years.
Generative AI is already reshaping operations, from underwriting to claims processing, while agentic AI is poised to make autonomous decisions and actions. I believe the economic impact of AI, such as reducing operating costs and enabling scalable solutions, will be transformative. However, success requires process redesign, unified data infrastructure, decentralized governance, and workforce training.
4. Look Beyond "Investment Alpha"
While private equity has driven sophistication in asset management, I think sustainable advantage now requires combining investment expertise with actuarial innovation, distribution strength, and operational excellence. AI has a role here, too, not as a buzzword, but as a lever to reset the cost curve and improve decision quality across the enterprise.
5. Treat Regulation as a Partnership Opportunity
I believe the next wave of regulation will be more consequential, driven by private equity ownership and recent failures. The most resilient carriers will proactively invest in risk infrastructure, from stress testing and governance to controls and AI-enabled compliance monitoring, and they will use technology to make compliance faster and more reliable. Done well, that turns regulation into a trust advantage with customers, distributors and capital markets, rather than a reactive drain on resources.
6. Take a Renewed Distribution Focus
Distribution is becoming increasingly segmented, advisor models are evolving, and I think carriers should focus on excelling in specific areas rather than trying to serve all segments equally. For example, dominating Registered Investment Advisors (RIAs) might involve AI tools that analyze advisor client books and generate customized proposals, while engaging carrier agents may require entirely different strategies.
7. Become an Orchestrator, Not a Builder of Everything
I believe competitive advantage will come from orchestrating best-in-class capabilities rather than building everything internally. Strategic partnerships can accelerate transformation and innovation, especially as AI evolves.
8. Unlock the Mass-Market Retirement Opportunity
According to the Alliance for Lifetime Income (ALI), 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 accessible at scale, enabling carriers to profitably serve customers with modest assets.
Final Thoughts
A few months in, it is already clear that this year is not simply a continuation of the conditions that defined the last cycle. The question for life and annuity leaders now is not theoretical; it is practical and immediate: if interest rates remain flat for three years, how can we gain market share? Investing in better products, superior distribution, AI-powered operations, and customer experience transformation will likely be key. The demographic wave and retirement crisis are permanent, and the AI revolution is accelerating. Preparing for these realities will be essential for long-term success.
The boom is over. The opportunity is not.
