U.S. Life Insurance Industry Faces Elevated Mortality but Maintains Strong Capitalization, Reports ALIRT Insurance Research

ALIRT Insurance Research has released its latest industry analysis, "Mortality in the U.S. Life Insurance Industry," revealing that while death benefits paid by U.S. life insurers remain higher than pre-pandemic levels, the overall financial stability and solvency of the industry remain solid.

HARTFORD, Conn., Oct. 27, 2025 /PRNewswire/ -- In 2020 and 2021, as the Covid pandemic raged, the U.S. life insurance industry saw death benefits surge by 16% and 11%, respectively, representing an aggregate increase of $16 billion over the two years. Although death benefits declined by a cumulative 12% between 2022 and 2024, at present they remain approximately 14% above 2019 levels.

Despite these challenges, ALIRT's findings indicate that the elevated mortality has not materially weakened industry capitalization or solvency. "While higher death benefits have dampened profitability, particularly for individual life insurance, the industry's capital position remains strong and well within historical norms," the report states.

The report also notes that death benefits began to rise again in early 2025, with a 6.4% increase in the first half of the year compared to the first half of 2024. This trend may signal that mortality and death benefit levels have reached a new baseline following the pandemic years, though recent results may have been influenced in part by seasonal factors such as a more severe flu season during the winter months of 2024–2025.

ALIRT projects that while elevated mortality may continue to exert pressure on life insurance earnings, other longstanding factors - such as relatively low interest rates and high policyholder persistency - may also continue to be detrimental to earnings for this segment.

However, the industry has reported improving profitability levels for both individual and group life insurance in each of the last two years. What's more, somewhat improved interest rates, strategic use of reinsurance, and steady annuity and health segment earnings have collectively supported profitability across the life insurance sector.

"The U.S. life insurance industry has demonstrated remarkable resilience," concluded ALIRT senior analyst and author of the report, Ricky Cheney. "Even as mortality levels stabilize at higher-than-pre-pandemic norms, the industry overall remains well-capitalized and financially sound."

For more information, please contact David Paul at david.paul@alirtresearch.com

About ALIRT Insurance Research
ALIRT Insurance Research is an independent financial analysis firm specializing in monitoring insurer solvency and performance trends for institutional clients. Based in Hartford, Connecticut, ALIRT provides analytical insights that assist organizations in managing insurance company exposure and maintaining fiduciary oversight.

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SOURCE ALIRT Insurance Research