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The post-COVID annuity sales surge is waning, but “economic anxiety” may be sparking a second wave.

Total Q1 annuity sales were $105.4 billion, down 1% from the record set in first quarter 2024, according to preliminary results from LIMRA’s U.S. Individual Annuity Sales Survey, representing 84% of the total annuity market.

Bryan Hodgens, senior vice president and head of LIMRA research, said economic concerns could still drive annuity sales higher.

“Our latest Consumer Sentiment Survey shows Americans’ concern about the economy has risen sharply since January,” Hodgens said. “This growing economic anxiety drove March sales results to be the second highest in history. LIMRA expects the current environment will likely attract more investors to registered indexed-linked and fixed-indexed annuities, which offer greater protected growth opportunity.”

As it stands, total annuity sales topped $100 billion for the sixth consecutive quarter, he added.

LIMRA provided a breakdown of Q1 annuity sales by product type:

Registered index-linked annuities

Registered index-linked annuity sales continue to outperform traditional variable annuity sales in the first quarter of 2025. RILA sales jumped 21% year over year to $17.5 billion.

“Product innovation, new market entrants and expanded distribution have broadened the market capacity for these products,” Hodgens said. “Because these products are attractive to both insurers and investors — providing investors the ability to mitigate equity market downturns and allowing companies greater flexibility to hedge against risk as market conditions change. LIMRA is forecasting 2025 RILA sales to match or exceed the record-high sales set in 2024.”

Traditional variable annuities

Despite the heightened market volatility, first quarter traditional variable annuity sales increased year over year for the fifth consecutive quarter. In the ninety days of 2025, traditional VA sales were up 14% to $15.6 billion, compared with first quarter 2024 results.

Fixed-rate deferred

Total fixed-rate deferred annuity sales were $39.5 billion in the first quarter, down 8% from first quarter 2024 sales. Despite the decline, FRD annuities remain the primary driver of annuity sales growth, representing nearly 38% of the total annuity market in the first quarter.

“Although first quarter FRD sales were lower year-over-year, sales rebounded 35% from fourth quarter results – driven largely from March sales results,” Hodgens said. “The average crediting rate for a three-year FRD products remains nearly 200 basis points above the average CD rate. For conservative investors who wish to avoid market volatility risk, these products continue to be an attractive option. LIMRA predicts — even with expected interest rate cuts — FRD sales will be above $120 billion in 2025.”

Fixed indexed annuities

Fixed indexed annuity sales fell 7% year over year to $26.7 billion in the first quarter of 2025. Although lower than the prior record-setting sales experienced throughout 2024, this quarter’s results ranks as the fifth highest recorded in history.

Income annuities

Although interest rates remained steady in the first quarter, income annuities tumbled. Single premium immediate annuity sales were $3 billion in the first quarter, 17% lower than the prior year’s results. Deferred income annuity sales were $950 million in the first quarter, down 19% year over year.

“While all fixed annuity product line sales dropped below the record first quarter sales in 2024, sales of these products remain at levels higher than historical norms,” Hodgens said. “LIMRA believes broader distribution, product innovation and, most importantly, greater investor awareness and interest in the investment protection fixed annuities offer, will keep fixed annuity product sales strong through 2025.”

Preliminary first quarter 2025 annuity industry estimates are based on monthly reporting. A summary of the results can be found in LIMRA’s Fact Tank.

The top 20 rankings of total, variable and fixed annuity writers for first quarter 2025 will be available in mid-May, LIMRA said, following the last of the earnings calls for the participating carriers.

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California consumers and litigators are firing back at the state’s insurance companies and regulators for what they contend was a conspiracy to eliminate standard property policies and force homeowners to accept the state’s beleaguered insurance plan of last resort, the California FAIR Plan.

Two lawsuits filed earlier this month on behalf of property owners impacted by the wildfires that devastated the Pacific Palisades, Malibu, and Altadena areas in January, allege the companies, including State Farm, Farmers, and the top 25 insurance companies, colluded to limit coverage in the fire struck areas, cancelled existing policies and refused to write new ones. Their actions, the complaints allege, forced property owners onto the FAIR Plan with its drastically lower coverage limits, leaving homeowners underinsured, resulting in many suffering massive uncovered losses from January’s wildfire disaster.

“By colluding to push plaintiffs and so many like them to the FAIR Plan, the defendants have reaped the benefits of high premiums while depriving homeowners of coverage that they were ready, willing, and able to purchase to ensure that they could recover after a disaster like January’s wildfires,” said Michael J. Bidart of Shernoff Bidart Echeverria LLP, one of the law firms bringing the suits.

FAIR plan had inadequate reserves

California insurance companies must fund the FAIR Plan proportionally according to their market share. At the time of the January wildfires, the plan had significantly inadequate reserves to cover a catastrophic wildfire – funding levels that were determined by the insurance companies as the only voting members of the FAIR Plan’s Governing Committee. The California Department of Insurance agreed in 2024 to allow insurers to pass 50% or more of any added funds needed for coverage to customers in unaffected areas in the form of higher premiums, further incentivizing the insurers’ push to force homeowners onto the FAIR Plan.

“California’s antitrust and unfair competition laws exist to address the very kind of conspiracy and collusion that the complaints allege the defendants engaged in,” said attorney Stephen G. Larson of Larson LLP.

The suits come on the heels of several others alleging improper actions by Insurance Commissioner Ricardo Lara and the FAIR Plan following the Eaton and Palisades fires.

The homeowners in the two recent cases are seeking compensatory and treble damages, as well as an injunction preventing insurance companies from engaging in more anticompetitive behavior.

Insurers meet to talk about market issues and administration of the FAIR Plan. But the lawsuits and consumer groups contend the companies use those meetings to collude about limiting coverage in fire prone areas.

Concerted attempt cited

“This was clearly a concerted attempt by the entire industry to push people in high-risk areas to lower benefit policies, and at the same time keep collecting higher premiums from everyone else,” said Jamie Court, president and chair of the board of Consumer Watchdog.

An investigation by the Los Angeles Times lent credence to the accusations. The Times found that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls shot up last year a combined 47%. From 2020 to 2024, the number of homes in both areas on the plan nearly doubled from 14,272 to 28,440. Four ZIP Codes in the fire-affected zones enrolled more than a third of their households in the state plan, the report said.

Insurance company representatives called the lawsuits “meritless” and said they divert attention from really solving California’s insurance crisis.

“We have been sounding alarm bells about the deteriorating conditions in the California property insurance market for years with government officials and in the press,” said Stef Zielezienski, chief legal officer for the American Property Casualty Insurance Association (APCIA), the primary trade association for home, auto, and business insurers. “APCIA has, in California and throughout the states, consistently opposed the creation and expansion of state property residual plans such as the California FAIR Plan. Insurers are ultimately on the hook for the liabilities of such plans.”

Lawsuits ‘defy logic’

Zielezienszki said the insurers comply with all “applicable antitrust laws” and “has legal counsel monitoring every member call and meeting for that purpose. These suits defy logic, advance meritless claims, and we are going to focus on solving the challenges in the insurance market in California.”

Meanwhile, Commissioner Lara’s provisional approval of a 22% emergency rate hike for State Farm, set to start in June, has been assailed as a quick fix “band-aid” that will not improve conditions in the state.

“State Farm has never claimed that it would start writing new policies in California if the rate hike is approved, so there is no reason to believe this increase would resolve the underlying issue,” said attorney Dan Veroff, of Merlin Law Group. “As new laws go into effect, it will force insurers to increase coverage in high-risk areas at much higher premiums.”

State Farm said it needs the added funds to boost capital and avert increasingly dire financial situations in the wake of the Los Angeles fires. The company 20% of California’s homeowners market with nearly three million policies.

The crisis in homeowners insurance is not relegated to California. An investigation last year by the U.S. Senate Budget Committee showed that since 2018, more than 1.9 million home insurance policies have been dropped nationwide, with every region in the United States affected. The Senate report also said, “the data confirm it is climate change that is driving increasing non-renewal rates, as the counties that are most exposed to climate-related risks, such as wildfires or hurricanes, are the counties seeing the highest non-renewal rates.”

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Congress returns to Washington from its spring recess to face a jam-packed agenda, with extending the 2017 Tax Cuts and Jobs Act its top priority.

That was the word from Geoff Manville, partner with Mercer’s law and policy group, during a recent webinar.

Manville said “a lot of legislative oxygen will be consumed” by congressional Republicans’ push to pass a fast-track budget reconciliation resolution.

Committees in both houses of Congress are drafting bills based on the GOP goals in the budget resolution. Those goals include extending – and possibly increasing – the TCJA’s tax cuts that are due to expire at the end of this year. Other goals include at least $1.5 trillion in spending reductions; more funds for border security, immigration enforcement and defense, and increasing the debt limit by as much as $5 trillion.

But a major flashpoint in passing such legislation is how much Congress will cut Medicaid spending, Manville said.

Congress also will need to hunt for new revenue sources to offset the tax cuts, and proposals to limit the tax-preferred treatment of employer-provided health coverage could be on the table, he said. Manville said the uncapped tax-free treatment of employer-provided health coverage is the biggest expense under the Internal Revenue Code.

Some unfinished business tops Congress’ retirement-related agenda, he said. Retirement plans are not a target for raising revenue, but “budget math” could force a closer look as Republicans in Congress want to reduce debt and offset the $4.5 trillion cost of extending the 2017 tax cuts.

Past ideas for raising revenue, he said, include requiring more Roth treatment of retirement accounts, freezing qualified plan limits, and limiting nonqualified deferred compensation plans.

How Washington might impact group health plans

Employer-based health plans “are very much affected by what’s going on around us” in Washington, said Cheryl Hughes, principal with Mercer’s law and policy group.

Executive orders issued under President Donald Trump’s Make America Healthy Again initiative aim to understand and reduce chronic illness and disease and end childhood chronic disease.

Among the various executive orders surrounding MAHA, those that will most impact group health insurance are orders ensuring the availability of expanded treatment options and flexibility for health insurance to cover beneficial lifestyle changes and disease prevention.

Transparency is another topic addressed by executive order, Hughes said. Trump signed an order on Feb. 25 that aims to improve existing price transparency requirements and identify opportunities to provide patients with meaningful price information. The order also requires agency action to ensure disclosure of actual prices, and not estimates.

Changes to preventive services also will impact group health plans. Plans are required to cover osteoporosis screening at no cost for women ages 65 and older and postmenopausal women age 64 or younger who are at risk for a fracture. This takes effect for plan years beginning on or after Feb. 1, 2026.

Group health plan sponsors also must notify Medicare Part D-eligible individuals and the Centers for Medicare and Medicaid Services whether the plan’s prescription drug coverage meets or exceeds the actuarial value of standard Part D prescription drug coverage.

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House Republicans in February pushed through a budget plan, now under consideration in the Senate, that would require about $880 billion in cuts to Medicaid over the next decade to help cover the cost of $4.5 trillion in tax cuts. The move could result in 11 million Americans losing health coverage, the Urban Institute estimates.

What could come next for this public health program was the topic of a recent webinar by the University of Southern California Center for Health Journalism.

Medicaid is the largest public health program in the U.S., covering more than 72 million Americans, said Edwin Park, Georgetown University research professor. Medicaid covers 40% of births in the U.S. and covers 60% of all spending for long-term care services and support. More than one-third of Americans with disabilities rely on Medicaid to pay for medical and support services.

In addition, he said, Medicaid is the largest funder of behavioral health services and substance abuse disorder services. Rural residents disproportionately depend on it, as do communities of color.

One-third of Medicaid enrollees are children, he said, and 23% of older and disabled Americans depend on the program. But older and disabled Americans account for more than half of Medicaid spending.

Proposals under consideration in Congress would move more of the program’s costs to the states, Park said. Some of those cost shifts could include placing a per capita limit on federal spending, reducing support for the Medicaid expansion that occurred as part of the Affordable Care Act, and cutting eligibility by establishing work requirements on recipients.

States have three choices on Medicaid

Park said the likely impact of these cost shift would depend on how the states would be impacted. Medicaid currently accounts for 56% of all federal funding to the states.

“The states will have three stark choices to make,” he said. “They are raise taxes, cut other parts of their budgets or cut Medicaid.

“This would involve significant reductions in number of people enrolled and, for those enrolled, reductions in access to needed care, whether it’s long-term care or acute care services. States would not be able to sustain their current Medicaid programs as they are over the long term.”

Impact on rural communities

Medicaid cuts would hurt rural hospitals that disproportionately rely on Medicaid, Park said. “These cuts would impact not only those enrolled but entire communities because rural hospitals could be pushed over the edge and forced to close if Medicaid cut. This will have economic impacts on entire communities because rural hospitals are often a leading employer in rural communities.”

Reductions in federal Medicaid spending would hit the states at a time when they are losing a lot of unrelated federal health spending, such as public health program support, said Alice Miranda Ollstein, senior health care reporter for POLITICO Pro. “This would leave them with fewer resources to make up for the Medicaid cuts,” she said.

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The unpredictable economy is likely driving consumers to seek security, a trend that brought positive financial results for Principal Financial Group in the first quarter.

Principal reported a 5.6% rise in premiums and fees in its specialty benefits division, totaling $3.29 billion by the end of March. Those figures look even more impressive in light of higher-than-expected mortality.

“We are operating in a market that is incredibly dynamic,” President and CEO Deanna Strable said. “Policy shifts and uncertainty surrounding the market outlook have contributed to a more cautious investor tone and heightened focus on resilience.

“The magnitude of the volatility we have seen in April has been extreme and unprecedented and impacts our fee revenue in retirement and asset management.”

Volatility is such an issue that it makes future quarters “difficult to predict,” Strable added.

Principal Financial continues to pursue asset management, plan sponsor, and group benefits opportunities. Four segments comprise the company: Retirement and Income Solutions, Principal Global Investors, Principal International, and Benefits & Protection.

The Retirement and Income Solutions segment saw recurring deposits up 9% to $13.8 billion in the quarter, while pension risk transfer sales added $800 million.

“We remain a leader in the industry, ranking among the top four providers by sales premium and third by number of contracts, based on the 2024 LIMRA results,” Strable said of Principal’s PRT efforts. “Looking ahead, we see positive momentum in the pipeline across our retirement ecosystem.”

Joel Pitz, senior vice president and interim chief financial officer, said mortality was higher in the quarter, primarily from “net claim severity.”

“This included a single claim of $5 million of a much larger face amount shared by many carriers issued in 1999,” he explained. “While this impact results in the quarter, our one year and longer term mortality is at our expected level.”

In other news:

Tariff War. Pitz also addressed the controversial tariff war between the United States and other countries, mainly China.

“While we are closely monitoring the evolving trade policy landscape and its potential impact, our current assessment is minimal exposure to industries most likely to be directly affected by tariffs,” Pitz said.

Quarterly snapshot:

• Life insurance business market premium and fees increased 20%.
• Pretax operating earnings in the Retirement and Income Solutions segment increased 8% due to growth in business, higher net investment income, and favorable market performance.
• Financial position includes $1.75 billion of excess and available capital.
• PFG’s proprietary AI-powered assistant was honored with a CIO 100 award for its impact on employee productivity. “In just one year, it’s helped cut task completion time in half, streamline training and made it easier for teams to create content and serve our customers more efficiently,” Strable said.

Management perspective:

“Across all of our businesses, the key fundamentals remain strong, including recurring deposits, deferrals, matches and wage and employment growth. We remain focused on what matters most, delivering for our customers, operating with discipline and executing on our long-term strategy. We have built this company to perform through many cycles, resilient, diversified and purpose-led.”

Deanna Strable, president and CEO of Principal Financial Group

By the numbers:

• Net income: $48.1 million ($532.5 million in Q1 2024)
• Earnings per share: Non-GAAP operating earnings per diluted share of $1.81 ($1.65 per share in Q1 2024)
• Assets under management: $717.9 billion ($708.5 in Q1 2024)
• Share repurchases: $200 million in Q1 2025
• Dividend declared: $169 million in Q1 2025
• Stock price movement: $74.04 per share at midday Friday, down 1.28%

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Failure to modernize key back-office operations and embrace new technology that enables efficiency could be holding some insurance companies back, according to new research from data management company AutoRek.

“I think that’s quite often a mindset you see, not just in insurance, but across more traditional businesses in general. But I think there are opportunities out there with automated solutions and cloud opportunities quickly coming down the line,” Mark Baker, a presales consultant at AutoRek with a strong focus on insurance and a qualified accountant, said.

A recent AutoRek study found 21% of American insurance firms have inefficient premium receivables and allocation processes. More than half reported still using legacy spreadsheet tools that require manual input for these processes. According to Baker, this:

• Causes issues with version control
• Is not easily auditable
• Does not lend to scalability
• Is cumbersome and inefficient

Baker noted that American insurance companies tend to give front-office, revenue-generating systems preference when it comes to resources. This could be why many still choose to lean on legacy systems and processes for their back office.

“But as a company grows, it starts to creak, etc., and I think at that point, it’s time to understand that your business, the foundations really come in the back office. If you can then automate those back-office functions, then that just lends itself to supporting the further growth of a business moving forward,” he said.

Back-office processes need to modernize

AutoRek found that, of the challenges American insurers have with back-office processes, the biggest issues are:

• Multiple systems and data sources (39%)
• High volumes of transactions (35%)
• Partial payments and adjustments (33%)

“We found insurers working with vast arrays of different data coming from different systems. Therefore, it’s all in a different format, it’s all got a different column structure, etc. Varying levels of data quality within that. So, as you can imagine, trying to deal with that on a daily basis can be quite cumbersome,” Baker said.

He pointed out that this leaves firms open to “key man risk,” as only the person who set the spreadsheet up would understand those formulas. Additionally, it lacks auditability, as if someone were to change a formula or value in a spreadsheet or cell, none of that may be tracked or recorded in a legacy tool.

How automation fits in

Baker suggested that modernized, automated tools such as service-as-a-software (SaaS) is a key solution.

He explained that, in a typical scenario without automation, a back-office employee may start their day by downloading data, manually entering it into a legacy spreadsheet tool and checking the data quality and formulas. In this example, it may be lunchtime before that person has managed to get the data in, and then they still have to find time to perform value-add activities.

“With an automated solution, really high level, it’s bringing up your resources, your people resource predominantly, for more of those value-add activities,” Baker said. “We found that looking to automate and make use of digitizing can lead to huge levels of efficiency savings and allow clients to produce, in effect, a golden record whereby we can standardize data as much as possible.”

A modernized automated SaaS that runs 24/7 could load data into a unified system and process it as soon as it becomes available, Baker noted. Additionally, every action is auditable whether it’s system-driven or user-driven.

“So. if you go and make a coffee and come back to your desk, by that point, the data would have been brought into the system. It would have been validated, checked, matched and then available for all of those investigations to happen. It’s doing more with less,” he said.

Leaving modernization to a vendor

AutoRek is just one of many SaaS solutions available for insurers seeking to modernize and automate their back office processes. It offers a platform that scales to a company’s requirements as the business grows, Baker said.

But, importantly, it shifts management of data to a vendor like AutoRek, who then becomes responsible for deployment, upgrades, maintenance and generally “taking that headache away from the client, where traditionally that would have all been done by an internal IT department.”

“I think that’s some of the benefits of looking at a SaaS solution and also being able to stay on top of software and the latest technology, etc., because all of that’s taken away from the client and it becomes a managed service,” Baker explained.

He noted that while insurers can be hesitant to embrace new technology or modernized solutions, there are benefits to a SaaS solution over more traditional options.

“Everyone’s favorite buzzword at the minute is all the talk around AI and things. I think it always lends itself to being open minded and embracing new opportunities, and sometimes that’s in the technology space,” Baker said.

AutoRek is a global data management company founded in 1994 and based in Glasgow, Scotland. Its software helps automate data reconciliation for financial institutions across the United Kingdom and United States. For the study referenced in this article, AutoRek conducted online interviews with 250 managers of American insurance companies in November 2024.

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The first e-signature and workflow support platform specifically designed for life insurance should bring speed and simplicity to the industry, MIB Group said.

Paperless Solutions Group, an MIB company, leveraged existing technology to create PSG eXpedite to help manage electronic signatures while improving document processing, explained Andrea Caruso, executive vice president and chief operating officer at MIB.

“It takes the basics of e-signature, allowing seamless, secure interfaces back and forth, but it also adds on abilities like the ability to tag and add from an existing forms library,” Caruso said. “It allows for you to send it to multiple parties and add on additional elements that might need to be signed if you have an application and it needs to go to an advisor and then also to a client.”

The hope is that eXpedite will make life easier for producers and remove a commonly cited barrier to getting life insurance, Caruso said. Much of life insurance investment in recent years has focused on ways the power of technology can make buying life insurance and annuities a less stressful process.

“The agent needs to fill stuff out. The client needs to fill stuff out. And they get stuff from trustees or a policy owner service. There are always things,” Caruso noted. “You need to make sure all of your things are buttoned up. Having that without inconveniencing the client or the advisor and, frankly, streamlining the workflow associated at the BGA level or the carrier level, that was the ultimate goal.”

Not just life insurance

While developed to meet the unique needs of life insurance workflows, eXpedite can also support any process requiring an e-signature, including core functions such as human resources, vendor contracting, and other insurance segments, Caruso said.

“We focused it on life insurance because that was the advisory board that we put together,” she explained. “As we brought this to market, we brought it with life insurance in mind, but any organization that has broader needs is something that we could definitely look at as well.”

MIB rolled out eXpedite last year via APEXA, a centralized contracting and compliance solution that connects Canadian life insurance carriers, MGAs, and advisors through a single digital interface. APEXA is also an MIB business.

“We literally replaced their entire e-signature platform with this, and they have hundreds of thousands of transactions, and we did that last February,” Caruso said. “So, it’s been over a year, and it’s been working seamlessly.”

eXpedite is equipped to handle a multitude of tasks, MIB said in a news release, including:

• Unlimited signature parties and the capability to designate the sequence of signatories.
• Delegation of document control (to a BGA, advisor, or other) to enable other parties to tag fields, add questions or a cover letter, and expand document(s) routing to additional individuals for signature.
• Assignment of roles for recipients (those needing a copy of the final signed document) and watchers (those monitoring status).
• Robust notification system that keeps all individuals (signers or others) informed of document status.
• Adaptable email templates that can be adjusted to reflect client company voice and style.
• Ability to upload unique client forms and/or leverage the PSG carrier library of forms for easy package creation.
• Secure authentication, including text messaging or personalized one-time event (shared secret) process.
• Full API capabilities that easily integrate into new or existing workflows and systems.

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After a rocky stretch and a bit of pandemic-era belt-tightening, the insurance brokerage world came roaring back to life in 2024. Fueled by a flood of private equity money and a handful of blockbuster acquisitions, the industry posted its third-most active M&A year on record, according to MarshBerry’s latest report. And this year might end up even bigger.

All told, there were 847 announced transactions in the U.S. last year — up 5% from 2023. But it was not just the volume of deals that caught attention, it was their enormous size.

Arthur J. Gallagher’s $13.45 billion takeover of AssuredPartners, Aon’s $13 billion purchase of NFP, and Marsh McLennan’s $7.75 billion scoop of McGriff Insurance Services all signaled something bigger was happening. These were not just firms buying up smaller shops — these were giants facing off and reshaping the landscape.

“It’s not just consolidation for consolidation’s sake,” said MarshBerry CEO John Wepler. “Each of these deals reflects a bigger strategic bet on what the future of the industry looks like.”

Private equity dominates M&As

The continued dominance of private equity was one of the clearest trends outlined in the report. A full 70% of all deals in 2024 involved private capital–backed firms, highlighting a trend that’s been building for years.

These weren’t one-off transactions either — many of these firms are still in full acquisition mode. The top three buyers alone — BroadStreet Partners, Inszone Insurance, and Hub International — handled nearly a quarter of all the year’s deals. And between them, they closed 184 acquisitions, MarshBerry reports.

Private equity firms raised an estimated $64 billion in high-yield debt to fuel this expansion.
Independent firms held their own with 163 deals, up from 126 the year before. Many are rethinking their futures — and in some cases, their ownership structures, MarshBerry said. Two of the most active independents in recent years, Leavitt Group and The Woodlands Financial Group, both transitioned out of the “independent” category in 2024 after taking on private equity or going public.

Public brokerages account for few deals

Public brokerages, while still active, continue to lose ground. They accounted for only 6.7% of M&A deals. Arthur J. Gallagher stayed the most acquisitive among them, with 25 U.S. transactions. Marsh McLennan was not far behind, more than doubling its 2023 tally.

Banks, meanwhile, headed for the exits. With only 10 acquisitions last year — matched by 10 divestitures — banks now make up just 1% of the M&A landscape, the research found. The high-water mark was 21.7% back in 2007.

It was not just appetite driving all this M&A activity — conditions were ripe.

The U.S. economy fared far better than expected in 2024. GDP stayed strong, inflation cooled off, and unemployment hovered around 4%. With the Federal Reserve beginning to cut interest rates again, dealmakers saw their moment.

On Wall Street, major indices surged, with the Nasdaq jumping 28.6% and the S&P 500 up more than 23%. The tech sector, AI buzz, and the prospect of lower rates all helped stoke the fire.
For the insurance sector itself, it was a much-needed return to profitability. After suffering a $32.1 billion underwriting loss in 2023, the property and casualty industry posted a $4.1 billion gain through the third quarter of 2024. The combined ratio — a measure of underwriting profitability — dropped below 100 again, landing at 97.5.

That said, hurricanes Helene and Milton made landfall late in the year, so final figures could still shift. Still, it’s clear that insurers are adjusting to the “new normal” of frequent catastrophes, MarshBerry noted. The excess and surplus lines market, which thrives on tough-to-insure risks, grew to 20% of all P&C premium — double its share from a decade ago.

Specialty firms remain hot targets

Specialty insurance firms, with their focus on high-margin, niche markets, remained hot M&A targets — even if deals dropped by 33% from 2023. The reason was not a lack of interest — it was a lack of supply. There just aren’t many quality firms left on the market, the report said.

Private equity continued to dominate this segment, too. Integrity Marketing Group led all specialty buyers for the fifth straight year. And big brokerages like AmeriLife and Ryan Specialty kept shopping, picking up platforms with unique expertise and strong distribution.
U.S. firms also kept their eyes abroad. International deal activity continued to climb, with U.S.-based buyers increasingly targeting Europe and beyond. Brown & Brown alone made 16 cross-border acquisitions last year.

If early 2025 data are any sign — and MarshBerry says it is — this year could be even bigger for M&As. Deal volume was already up 25% through the first quarter.

But the tone could be different. With the biggest players combining, the competitive pressure on smaller firms is increasing. That means more focus on value-added services, tech platforms, and specialization. For those not equipped to build it all in-house, selling may look more attractive than ever.

“We’re entering a more volatile, but opportunity-rich environment,” said Wepler. “The firms that know their niche and know their value will be the ones that thrive.”
For everyone else, the message may be simple: partner up or get left behind.

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A Massachusetts jury delivered a split verdict Wednesday against an advisor accused of making improper annuity sales.

The jury determined that Jeffrey Cutter and Cutter Financial Group did not violate Section 206(1) of the Investment Advisers Act of 1940, but did find violations of Section 206(2).

Section 206(2) bars advisors from engaging “in any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client.”

Cutter and his legal team claimed victory in their long-running legal battle with the Securities and Exchange Commission.

“Today, the jury found what we have been saying for more than four years: that we did not intentionally or recklessly defraud any clients,” Cutter said in a news release. “The jury also found that we complied with applicable SEC rules about compliance policies and procedures. These are claims that should never have been brought in the first place. It is very difficult for a small business to stand up to federal government regulators and prevail. But that’s what we did today.”

Of the decision on Section 206(2), Cutter’s legal team said the jury found CFG “negligent in not also disclosing the specific upfront amount of those commissions for a limited number of clients.”

In March 2023, the SEC filed charges against Jeffrey Cutter and his advisory firm, Cutter Financial Group, for “recommending that their advisory clients invest in insurance products that paid Cutter a substantial up-front commission without adequately disclosing Cutter’s and CFG’s financial incentive to sell the products.”

Cutter is also a licensed insurance agent and the case attracted the attention of industry trade associations who oppose any fiduciary regulation of agent insurance product sales.

In a statement from SEC Division of Enforcement Acting Director Samuel J. Waldon, the agency said it is satisfied with the jury’s decision in the U.S. District Court for the District of Massachusetts case.

“We are pleased with the jury verdict holding Jeffrey Cutter and Cutter Financial Group, LLC accountable for breaching their fiduciary duties to their clients. As the hard work of the SEC team demonstrates, we will continue to hold investment advisers responsible when they engage in wrongdoing.”

‘Simpler language’

According to the SEC complaint, Cutter earned 7-8% commissions on annuity sales as an agent, compared to 1.5-2% fees while managing assets as a fiduciary advisor. Starting in 2014, Cutter generated more than  $9.3 million in commissions from the sale of 580 annuities to his investment advisory clients, the SEC said.

As of 2022, CFG claimed to manage approximately $215 million in client assets across 476 clients, court documents say, “most of whom were individual retail investors of retirement age.”

There were “no allegations that client funds were misappropriated,” Cutter’s legal team emphasized.

“CFG acknowledges that industry-based financial advisory disclosures can be complex. To help clients better navigate these structures, the firm will be launching educational and compliance initiatives, including an educational campaign to explain compensation structures in accessible terms,” the release said.

“We believe the entire industry can benefit from clearer standards and simpler language,” said Jen Farrington, investment advisor representative and chief compliance officer. “We’re committed to leading that conversation—not just for our clients, but for the profession as a whole.”

The trial lasted seven days. Cutter’s defense team called on Ted Nickel, former Wisconsin insurance commissioner and ex-president of the National Association of Insurance Commissioners. He examined the financial situations of clients cited in the complaint, the annuities that Cutter sold them, and the paperwork that Cutter used to sell them the annuities, according to court documents.

“He opined, among other things, that each annuity purchased by Named Clients was suitable and that Mr. Cutter’s sales process was consistent with insurance industry standards,” a Cutter memo said. “The SEC has not disclosed any expert to rebut Mr. Nickel’s opinions.”

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“The Future of Advice,” a new TIAA Institute study in collaboration with MIT AgeLab, reveals that only 40% of respondents said they are satisfied with the financial advice they receive. The study also highlights striking differences in how women and members of younger generations experience financial advice.

Despite retirement planning being the top priority for financial advice, there’s a significant satisfaction gap in the financial advice that people receive, indicating a clear opportunity for industry improvement, the study said. In fact, only 40% of respondents said they are satisfied with the financial advice they receive.

However, of those who worked with a financial advisor, 62% reported higher levels of satisfaction. This underscores the value and need for greater access to financial professionals, the study said. In implementing financial advice, the research shows that financial advisors use technology like AI to enhance, and not replace, the trusted advisor relationship.

‘A fundamental shift’

“At this pivotal moment in financial services, we’re witnessing more than just a change in how advice is delivered—we’re seeing a fundamental shift in what it means to secure financial futures,” said David Nason, CEO of TIAA Wealth Management and Advice Solutions. “As life expectancies extend and complexity increases, our industry’s true measure of success will be our ability to help millions of Americans transform financial guidance into lifetime financial security.”

“The ‘Future of Advice’ study is a unique opportunity to reshape how Americans across the generations receive and act on financial guidance,” said Joseph Coughlin, founder and director of the MIT AgeLab. “Our research shows that successful advisory relationships must combine both high touch and high tech to provide the expertise, efficiency, and empathy clients value.”

Key elements of the study

The following are additional highlights of the study:

Gender dynamics matter. Women and men approach financial advice differently—from when they seek it during their careers to how they value advisor characteristics and communication preferences, with women prioritizing advisor expertise and ethics.
Traditional meets digital. While traditional communication methods dominate advice delivery, digital channels are gaining traction among specific demographics, suggesting the need for a hybrid approach to client engagement.

In collaboration with TIAA, the AgeLab wanted to understand the trends that might go into determining what the future of advice might look like, said Adam Felts, a research associate at the MIT AgeLab….The statistic that less than 40 percent of people are satisfied with the advice they receive about finances suggests an opportunity to provide wider access to advisory services than exists today, he said.

Scaling up advice through technology

One way to scale up access to advice may be through technology, Felts added. Younger respondents were more open to advice mediated through new technologies than older generations. “Social media, for example, could be harnessed as a way for advisors to connect with more people – but with the caveat that today, it is also an influential source of misinformation,” Felts said. “AI, particular tools powered by large language models, may also have potential for providing greater access to better advice.”

And when asked if investing for retirement is an important topic for MIT AgeLab, Felts said that the AgeLab is primarily interested in how people plan for later life. “For our team,” he said, “investing for retirement is just one component of preparing for longevity. We look more broadly at the full range of challenges that people need to plan for: where to live, who will provide care for them, how to get from point A to point B, and how people will use the surfeit of extra time they receive in retirement. And all of these complex topics are also connected with the topic of advice – because people need good advice to make sound decisions about all of them.”

Raising the number of satisfied clients

So, what do financial advisors need to do to increase the number of satisfied clients? Respondents who used a financial advisor had higher rates of satisfaction than those who didn’t, Felts pointed out. So, these results aren’t saying that advisors are responsible for the low rates of satisfaction. People who have an advisor are often happy with the advice they get. “Rather,” he said, “these results suggest a need to provide better access to good advice for more people. Most people don’t use an advisor and instead are reliant upon more informal sources of information and advice.”

The Massachusetts Institute of Technology AgeLab is a multidisciplinary research program that collaborates with business, government, and NGOs to improve the quality of life of older people and those who care for them. The AgeLab applies human-centered systems thinking to understand the challenges and opportunities of longevity and emerging generational lifestyles to catalyze innovation across transportation, longevity planning, caregiving, home and community, and the workplace.

The TIAA Institute is a think tank within TIAA, conducting cutting-edge research in the areas of financial literacy and longevity literacy, lifetime income, retirement plan design and behavioral finance in the context of retirement. The study was conducted with more than 1,000 participants in the U.S., providing a clear look into consumer preferences. Interviews with professionals were also conducted for a comprehensive view of the landscape of advice.

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