Beyond the boom: The 8 most important things for health and pension executives in 2026 | Insurance Blog

The US life and annuity industry experienced dramatic growth from 2022 to 2024, with record sales, growing margins, and strong cash flows. However, as we entered 2025, the first signs of a slowdown began to appear. While it may be tempting to assume that 2026 will return to the favorable conditions of 2024, I believe this assumption may be dangerous. As we move into 2026, I think there are several strategic areas for Life and Annuity managers to consider. Here are some ideas:

1. The real challenge: Product structure

In 2025, rate cuts by the Federal Reserve depressed yields across the industry, making it difficult for brands to deliver competitive rates for credits. I believe the challenge goes beyond pricing; it’s about product structure. The 2022-2024 forgiving rate regime allowed convenience products to flourish, but that period appears to be over. I think the focus should shift to comprehensive retirement income solutions that provide stability, flexibility, and confidence. For example, Goldman Sachs Asset Management’s annual fund industry survey highlights that almost 80% of respondents prioritize solutions that address these needs in the heavy yield environment.

2. Creating a product environment

Rather than viewing products as isolated silos, I believe carriers should think about creating an integrated ecosystem that addresses lifecycle needs. For example, combining a registered index-linked annuity (RILA) for growth, a deferred income annuity (DIA) for guaranteed income, and a fixed liquidity product may meet a variety of client needs. However, this approach requires product integration, a unified customer experience, and tools that allow consultants to create solutions rather than simply sell products.

3. AI: From exploration to demand

I think AI has become an important tool in the industry. Accenture research shows that 93% of health insurance companies have increased AI investment by at least 5% in the past three years, and 43% plan to increase investment by more than 25% in the next three years. Generative AI is already restructuring tasks, from underwriting to processing claims, while Agentic AI is ready to make autonomous decisions and actions. I believe that the economic impact of AI, such as reducing operating costs and enabling such solutions, will be revolutionary. However, success requires process redesign, integrated data infrastructure, decentralized governance, and employee training.

4. Beyond alpha investing

While private equity has driven complexity in asset management, I think sustainable profitability now needs to combine investment expertise with actuarial innovation, distribution capabilities, and operational excellence. AI can play a key role in resetting cost curves and driving efficiency.

5. Regulation as partnership

I believe the next wave of regulation will be more consequential, driven by private equity ownership and recent failures. Firms investing in risk infrastructure, such as AI-enabled stress testing and compliance monitoring, can make regulation an asset rather than a hindrance.

6. Excellent concentrated distribution

Distribution is becoming increasingly fragmented, and I think carriers should focus on doing well in certain areas rather than trying to serve all segments equally. For example, dominant RIAs may install AI tools that analyze the advisor’s client portfolios and make customized recommendations, while interacting. network agent it may require completely different strategies.

7. Singing skills

I believe that the competitive advantage will come from organizing the best skills rather than building everything in-house. Strategic partnerships can accelerate change and innovation, especially as AI advances.

8. Large market opportunity

Two-thirds of Boomers are not financially prepared retirement, and I think this represents an opportunity to reinvent the brand. AI-powered tools can make complex financial advice more accessible, allowing businesses to serve clients more profitably with modest assets.

Final thoughts

As you plan for 2026, I believe it is worth asking: If interest rates remain low for three years, how can we gain market share? Investing in better products, higher distribution, AI-powered functionality, and the transformation of the customer experience will be key. The demographic wave and retirement 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 important contribution to this idea. Please contact us on LinkedIn or anywhere Shay Alon or Ed Sullivan talking about the future of insurance.