Economic, political uncertainty impact life insurers

The current climate of economic and political uncertainty is impacting every aspect of the life insurance industry. Insurers are working in an atmosphere influenced by shifting interest rates, inflationary pressures and evolving regulatory policies. These factors have an effect on everything from product development and distribution to consumer behavior and profitability.

A session at the 2025 LIMRA Annual Conference will feature a panel who will discuss navigating volatility amid the economic and regulatory forces shaping life insurance. The session will feature expert perspectives on how carriers are responding to today’s challenges and preparing for what lies ahead.

Ron Rovner, assistant vice president, LIMRA member relations and sales, will be the moderator for the discussion. He told InsuranceNewsNet that one part of the discussion will be around the implications of rising debt on interest rates and how that affects the life insurance industry.

“We will discuss the current economics and the political uncertainty that we are under,” he said. “How will that affect insurance companies? We’ll talk about interest rates fluctuations, inflationary pressures and regulatory changes. How will all those affect the products, their distribution and consumer behavior. Will consumers buy life insurance if things tighten up? Will people see life insurance as something that they should have but they really don’t want to spend money on? And we also will discuss all of these factors on the profitability of the life insurance carriers themselves. Will they be able to make money if any or all of these things are in a constant state of flux?”

A ripple effect on life insurance

Economic and political factors have a ripple effect on the life industry, Rovner said.

“All these things affect consumer behavior. When you have inflationary pressure or regulatory pressure or interest rate pressure and they affect people’s ability to spend money, even if someone needs life insurance, there’s a chance they would pivot to term insurance instead of a permanent policy. I think these pressures all have an effect on what consumers do, and they directly affect the wholesalers, the finance people, the salespeople and everybody else.”

LIMRA’s most recent consumer sentiment study showed that 1 in 3 adults have high levels of stress about their finances. More than half (53%) report high concern over the economy.  In addition, the 2025 Insurance Barometer Study found 46% of consumers say they don’t own life insurance because they believe it’s expensive and 33% say they have other financial priorities. Nearly 30% of consumers say they worry about paying their monthly bills.

Rovner said he will ask the panelists to give some predictions on what they believe the industry will do in response to economic and regulatory trends.

“I’ll ask questions of those who be up on stage with me and hopefully they’ll be in comfortable chairs and we’re probably going to talk about some uncomfortable things that I believe those who are in attendance will be interested in hearing about.”