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FORECAST 2026: Economic Landscape

Author

Jennifer Rankin
Contributing Editor
LIMRA and LOMA
rankin@loma.org

January 2026

Insurers are facing a complex and ever-evolving economic landscape. They must plan for and adapt to inflation, interest rate volatility, equity market ups and downs, and global uncertainty, among other challenges. How are they navigating these pressures? What adjustments — if any — are they making to stay resilient?

According to the executives participating in our annual FORECAST survey, it is important to continuously monitor the economic environment.

“As does everyone else, WoodmenLife monitors economic metrics and events and routinely adjusts our business investment and asset management decisions/actions to reduce risks to our ongoing success,” says Denise M. McCauley, Chair, President & Chief Executive Officer, WoodmenLife . When interest rates were higher, for example, the company strategically lengthened the duration of its asset portfolio.

Like WoodmenLife, Aflac takes a proactive and data-informed approach to navigating economic volatility. “We continuously monitor key macroeconomic indicators and adjust our strategies to ensure resilience and relevance in a dynamic market environment,” says Virgil R. Miller, President of Aflac Incorporated & Aflac U.S.

Inflation and equity market downside risk are two primary concerns for Robert M. (Bob) Jurgensmeier, Chief Executive Officer, Ameritas Life Insurance Corp . Interest rates, while showing some volatility, have been at a healthier overall level than they were five years ago.

“With this more favorable interest rate environment, we continue to focus on our fixed and indexed life and annuity product lines, says Jurgensmeier. “Within both of those lines, ensuring access to attractive assets across a variety of categories is a priority.”

Risk management is a core strength of RGA and is integrated throughout the company, adds Ron Herrmann, CFP, EVP, Head of Americas, Reinsurance Group of America (RGA) . The reinsurer continuously monitors risks and stress tests its balance sheet across a variety of macroeconomic, insurance and operational scenarios.

Meeting Challenges

Beyond monitoring and adapting, some leaders see opportunities within these challenges — ways to turn economic headwinds into strategic advantages. Miller offers several examples:

  • Inflation. While rising inflation may lead some employees to reduce discretionary spending, it also increases awareness of financial protection needs. This can drive demand for comprehensive voluntary benefit products that help offset out-of-pocket costs.
  • Unemployment. Elevated unemployment levels can challenge the employee benefits market, but they also present opportunities to strengthen your agent recruitment pipeline.
  • Interest rate volatility. Higher interest rates can positively impact investment income by improving carrier yields.
  • Currency fluctuations. A weakened U.S. dollar may contribute to inflationary pressures and reduced consumer confidence. Delivering high-value products that meet essential needs encourages customers to prioritize protection even in uncertain times.

Some executives also recommend having a diversified business model — across products, investments and geographies.

Diversified Approach

“Economic ups and downs are nothing new,” says Marc Giguère, President and CEO, Munich Re Life US , “but our organization is built to weather them.” The company’s resilience comes from its size, strong capital position and global diversity. Thus, if one sector or region faces challenges, Munich Re’s broad business mix and international footprint help balance the impact.

“The diversity of our in-force business provides a natural hedge,” saysWade Harrison, Vice Chairman & Chief Operating Officer, Protective Life Corporation.

This allows Protective to absorb market fluctuations without overreacting, and helps the company to remain resilient in a dynamic environment.

Guardian also believes that a robust product portfolio can offset economic volatility. To keep its participating whole life products on solid footing, for example, the company is sharpening its asset-liability management (ALM) practices, keeping liquidity accessible for policyholder needs and maintaining conservative, diversified credit selection. In addition, “We are taking a ‘controlled agility’ approach across the enterprise,” says Kevin Molloy, Chief Financial Officer, Guardian. “This includes accelerating how we close and forecast financials [and] managing expenses more efficiently.”

Corporate Structure

Executives who lead mutual and fraternal insurance companies see these corporate structures as a big advantage in navigating economic uncertainty and volatility.

A mutual insurance company is owned by its policyholders. A fraternal insurance company is a not-for-profit, member-owned organization. Unlike stock insurance companies, owned by external stockholders, mutual and fraternal insurers do not have to meet investor demands for profits.

“New York Life’s mutuality and long-term focus offer a unique advantage in navigating uncertainty,” says Aaron C. Ball, EVP, Head of the Foundational Business, New York Life (a mutual insurer).

“As a purpose-driven, rather than shareholder-driven organization, we’ve embraced a long-time horizon with our investments, offering a very unique value proposition,” says Matt Berman, President & Chief Executive Officer, Foresters Financial (a fraternal insurer).

On the capital side, Foresters Financial has taken several steps to strengthen and optimize its balance sheet in order to ensure resilience through market cycles while honoring its member promises.”

Conservative Strategies

Several of the survey participants say a conservative approach to investment and risk management does much to offset economic volatility.

“Our conservative investment management philosophy is designed to weather all market conditions and achieve long-term results, based on diversification across asset types, high credit rating requirements, strong risk modeling and a high level of liquidity,” says Jasmine Jirele, President & Chief Executive Officer, Allianz Life Insurance Company of North America .

According to Hermann, RGA has created a high-quality investment portfolio in which more than 94% of its fixed maturity portfolio is rated investment grade. RGA also maintains a strong asset-liability matching (ALM) posture. “We are in a strong position to manage risk and uncertainty,” he says.

Modern Woodmen of America also takes a conservative approach to investment and risk management. “We never invested long with our bond portfolio in the low-interest rate environment,” says Jerald J. (Jerry) Lyphout, President & Chief Executive Officer, Modern Woodmen of America . This allowed the company to swap out lower-yielding bonds for higher-yielding bonds when interest rates spiked a few years ago; it also allowed Modern Woodmen to realize significant annual gains while taking a one-time insignificant loss for calling its bonds early. He adds that Modern Woodmen continues to prudently increase its exposure to alternative investments and to focus on portfolio diversification.

Change, then, is the only constant in today’s business climate. To thrive, FORECAST survey participants are — among other things — monitoring and responding to external conditions, emphasizing operational flexibility, embracing diversified business models, and taking a conservative approach to investments and risk management.

“We are all navigating a world that is in constant motion that requires all of us to be ready for anything,” says Paul LaPiana, CFP, Head of Brand, Product & Affiliated Distribution, MassMutual . To navigate uncertainty, he believes the insurance industry must focus on its mission. “We must continue to offer customers great products, meaningful advice, a personalized experience and — above all — certainty and trust.”

Of course, it’s impossible to predict exactly what the future holds on the economic front. Harrison sums it up best: “We don’t need to predict every change; we need to be prepared for ANY change.” To that end, Protective has implemented Achieve Competitive Fitness, a strategy focused on building agility into its systems, culture and processes so it’s ready for whatever comes next. “By developing capabilities ahead of demand, we position ourselves to lead from a place of strength, no matter how the environment evolves.”

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