Zacks Industry Outlook Highlights AIA, Manulife Financial, Sun Life Financial, Aviva and NN Group

For Immediate ReleaseChicago, IL – June 25, 2025 – Today, Zacks Equity Research discusses AIA AAGIY, Manulife Financial Corp. MFC, Sun Life Financial Corp. SLF, Aviva AVVIY and NN Group NNGRY.Industry: Life InsuranceLink: https://www.zacks.com/commentary/2546110/5-life-insurance-stocks-to-watch-in-a-steady-interest-rate-environmentRedesigning 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 AIA, Manulife Financial Corp., Sun Life Financial Corp., Aviva and NN Group. In its recent FOMC meeting, the Federal Reserve decided to keep the interest rate steady at 4.25%-4.5%, given high inflation and muted economic growth.However, with two rate cuts expected this year, life insurers will likely 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 IndustryThe Zacks Life Insurance industry comprises companies that offer life insurance coverage and retirement benefits to individuals and groups. The products include annuities, whole and term life insurance, accidental death insurance, health insurance, Medicare supplements and long-term healthcare policies. Sales benefit from the increasing demand for protection products.The industry also includes companies providing wealth and asset management solutions. With a rise in the number of baby boomers, the demand for retirement benefits is increasing. Economic growth instills confidence. Per a Statista report, the life insurance market is expected to grow, with gross written premiums expected to be $1.34 trillion in 2025. 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 IndustrySteady Interest Rate: After three rate cuts of a total of 150 basis points in 2024, the Federal Reserve has kept the rate steady at 4.25-4.5% since December. However, the Fed also hinted at two more cuts in 2025, given high inflation and muted economic growth. Life insurers are direct beneficiaries of improved rates as they invest the premiums to meet the contractually guaranteed obligations of policyholders.Thus, muted rates will likely weigh on investment return. Nonetheless, in times of persistently low interest rates, life insurers direct their funds into alternative investments like private equity, hedge funds and real estate. With an improving equity market, lower interest rates could relieve pressure on indexed universal life (UL) and whole life sales, given low unemployment as per the LIMRA report. It expects life insurance sales to grow 2%-6% in 2025, with new annualized premium growth across indexed UL, fixed UL, variable UL, term life and whole life.Product Redesigning: Industry players are finding new solutions and ways to improve their sales and profitability. Insurers are refraining from selling long-duration term life insurance. Also, 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 coverages continues to support the life insurance business. A compelling product portfolio will thus aid sales of life insurers. Also, prudently pricing products and balancing customers' preferences and claim costs will be the key to driving growth.Per a report published in ReporterLinker, global life insurance gross written premium is expected to be $2.5 trillion by 2026. Per Statista’s report, gross written premium is expected to show an annual growth rate (CAGR 2025-2029) of 3.54%. Per Deloitte, life premiums are projected to rise 1.5% in 2025 in advanced markets. Solid sales in emerging markets like China, India and Latin America are expected to boost premiums by 5.7% in 2025, per the report.Increased Adoption of Technology: Per Statista, the United States is experiencing a shift toward digital platforms and online sales in life insurance. Carriers have started selling policies online that appeal to the tech-savvy population. At the same time, the use of real-time data makes premium calculation easier and reduces risk. Increased automation is expected to drive premium growth and boost efficiency.Moreover, accelerated digitization, as evident from the increased adoption of generative AI, cognitive intelligence and blockchain, should help life insurers curb operational costs and aid margin expansion. Insurers are investing heavily in technological advancements to ensure efficiency and smooth functioning. At the same time, players must shield themselves from falling prey to cyber threats.Zacks Industry Rank Indicates Solid ProspectsThe group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates strong prospects for the near term.The Zacks Life Insurance industry, within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #64, which places it in the top 26% 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 top 50% of the Zacks-ranked industries is the result of a positive 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 500The Life Insurance industry has outperformed the Zacks S&P 500 composite but underperformed the Finance sector in the past year. The stocks in this industry have collectively gained 13.7% compared with the Finance sector’s increase of 18.1% and the Zacks S&P 500 composite’s increase of 8.8% in the said time frame.Life Insurance Industry's Current ValuationOn 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 1.95X compared with the S&P 500’s 8.01X and the sector’s 4.12X.Over the past five years, the industry has traded as high as 2.11X, as low as 0.91X, and at the median of 1.43X.5 Life Insurance Stocks to WatchHere, we present two Zacks Rank #1 (Strong Buy) stocks, one Zacks Rank #2 (Buy) stock and two Zacks Rank #3 (Hold) stocks from the industry. You can see the complete list of today’s Zacks #1 Rank stocks here.AIA: Based in Central, Hong Kong, AIA Group Limited, together with its subsidiaries, provides life insurance-based financial services in Hong Kong. This Zacks Rank #1 leading pan Asian life insurer benefits from its solid agent force, exclusive bancassurance tie-up, strong free surplus generation and a shareholder-friendly capital return program.The Zacks Consensus Estimate for AAGIY’s 2025 and 2026 earnings indicates a year-over-year increase of 8.1% and 11.9%, respectively. The expected long-term earnings growth rate is pegged at 9.63.%. The consensus estimate for 2025 and 2026 has moved 3.1% and 7.1% north, respectively, in the past 60 days.NN Group: Headquartered in the Hague, the Netherlands, NN Group is a financial services company that engages in the provision of life and non-life insurance products in the Netherlands and internationally. Continued strong sales and margin improvements in Europe as well as higher defined benefit sales and pension buyouts in Netherlands Life should drive this Zacks Rank #1 insurer.Looking to be an industry leader, this insurer has been focused on enhancing its shareholders' value through dividend hikes and buybacks.The Zacks Consensus Estimate for NNGRY’s 2025 and 2026 earnings indicates a year-over-year increase of 31.1% and 2.3%, respectively. The expected long-term earnings growth rate is pegged at 9.63%. The consensus estimate for 2025 and 2026 has moved 4.5% and 4.1% north, respectively, in the past 60 days.Aviva: Headquartered in London, United Kingdom, Aviva provides various insurance, retirement, and wealth products in the United Kingdom, Ireland, Canada, and internationally. This Zacks Rank #2 insurer’s solid results across all the 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.Earnings growth, coupled with balance sheet strength, enables Aviva 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 2025 and 2026 earnings indicates a year-over-year increase of 12.2% and 10.9%, respectively. The consensus estimate for 2025 and 2026 has moved 3.8% and 2.7% higher, respectively, in the past 60 days.Manulife Corporation: Headquartered in Toronto, Canada, this Zacks Rank #3 insurer is one of the three dominant life insurers within its domestic market and possesses rapidly growing operations in the United States and several Asian countries. A strong Asia business, expanding wealth and asset management business, investments to ramp up digital capabilities and solid capital position poise this life insurer well for growth. MFC estimates core EPS growth between 10% and 12% over the medium term.The Zacks Consensus Estimate for Manulife’s 2025 and 2026 earnings indicates a year-over-year increase of 4.3% and 7.7%, respectively. The expected long-term earnings growth rate is pegged at 10%. It delivered a four-quarter average earnings surprise of 4.11%. It has a VGM Score of B. The consensus estimate for 2025 and 2026 has moved 2.1% and 1.3% north, respectively, in the past 60 days.Sun Life Corporation: Based in Toronto, SLF is the third largest insurer in Canada. This Zacks Rank #3 company is well diversified by geography and product, providing protection and wealth management products and services to individual and group customers worldwide.Its focus on Asia operations, asset management businesses’ growth, scale-up and integration of U.S. operations and strategic buyouts bode well for growth. The underlying return on equity continues to trend toward a medium-term financial objective of 18% plus, thus reflecting a sustained emphasis on capital-light businesses.The Zacks Consensus Estimate for Sun Life’s 2025 and 2026 earnings indicates a year-over-year increase of 8.4% and 7.8%, respectively. The expected long-term earnings growth rate is pegged at 7%. The company delivered a four-quarter average earnings surprise of 2.5%. The consensus estimate for 2025 and 2026 has moved 3.1% and 3.3% north, respectively, in the past 60 days.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Manulife Financial Corp (MFC): Free Stock Analysis Report Sun Life Financial Inc. (SLF): Free Stock Analysis Report Aviva PLC (AVVIY): Free Stock Analysis Report AIA (AAGIY): Free Stock Analysis Report NN Group NV Unsponsored ADR (NNGRY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks