The U.S. life/annuity industry posted a 34% year-over-year increase in net income to nearly $40 billion in 2025, the largest total in the last five years, according to AM Best. These preliminary results are detailed in a new Best’s Special Report, titled, “First Look: 2025 Life/Annuity Financial Results,” and the data is derived from companies’ annual statutory statements received as of March 19, representing an estimated 93% of the total life/annuity industry’s premiums and annuity considerations.

According to the report, total income for the U.S. life/annuity industry increased by 13% in 2025 over the prior year, driven by a $101.2 billion increase in other income, largely due to a combined $84.8 billion increase of reserve adjustments on reinsurance ceded at American General Life Ins. Co. and Athene Annuity and Life Co., along with an 8% increase in net investment income. Total expenses for the industry increased by 13% as general insurance and other expenses rose 66%. The resulting pretax net operating gain of $51.8 billion was a 22% increase from 2024. A 15.7% reduction in taxes was offset by an increase in realized capital losses, resulting in the net income increase.

Capital and surplus increased by nearly $24 billion, or 4%, from the end of 2024 to $530.7 billion, as a combined $64.7 billion from net income plus increases in unrealized gains and contributed capital and other changes in surplus were reduced by $40.8 billion, owing to changes in the asset valuation reserve and stockholder dividends.

To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=363696.

To view a related video, please visit: http://www.ambest.com/v.asp?v=amb1stlook2025la426&AltSrc=182 .

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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