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RILA Market Evolution: The Future of Diversification

Author

Cameron Adams, ALMI
Associate Research Analyst, Annuity Research
LIMRA and LOMA

August 2026

The registered index-linked annuity (RILA) market continues its rapid expansion, with total sales reaching $79.5 billion in 2025, up 20% from $66.4 billion in 2024 and more than tripling since 2020. Though the number of entrants has slowed in recent years, RILAs have increased their sales at a faster rate than any other annuity product line. This growth underscores strong demand for outcome-oriented products featuring upside potential and downside protection. However, beneath this momentum lies an important structural consideration: the product’s heavy reliance on a single benchmark, the S&P 500.

Figure 1. Number of RILA Carriers Versus Total Sales

Filter the data in this chart by clicking on a color bar in the chart legend.

Carriers are increasingly recognizing that overexposure to the S&P 500 may limit both competitive differentiation and portfolio outcomes. From a product perspective, heavy concentration can constrain crediting innovation, especially when cap rates are sensitive to derivative pricing tied to the same underlying index.

Beyond the S&P 500

According to forthcoming findings from LIMRA’s RILA Deeper Dive 2025 data, the S&P 500 accounted for approximately 75% of all RILA crediting selections in 2025. While this represents a slight decrease from prior years (78% in 2024 and 76%–78% historically), the dominance remains overwhelming. The Nasdaq-100 Index, although it saw an increase in its total share of 34% in 2025 fueled by higher demand for tech-heavy index strategies, still only represents 6% of total sales. The Russell 2000 Index, also representing roughly 6% of RILA sales, has continued to decrease in popularity each year. All other indices accounted for 7% of sales, with fixed subaccounts making up the remaining 5%.

Although the growth of non-S&P-linked indices has seemed slow, carriers have continued to offer more and more index options. As of year-end 2025, the 23 RILA carriers offered 35 different indices from 18 different providers. Some carriers have even gone as far as teaming up with index providers to create custom, proprietary indices to maximize differentiation in their product suites.

Competition Is Expanding

At the same time, the rapid rise of defined outcome (or buffered) exchange-traded funds (ETFs) introduces a new competitive dynamic that may further accelerate the need for diversification and product innovation within the RILA market. These ETFs, which similarly offer capped upside and downside buffers tied to equity indices, have gained meaningful traction with advisors due to their daily liquidity, transparency and ease of implementation within brokerage platforms.

In 2025, defined outcome ETFs represented $272 billion in assets, or 20% of the $1.34 trillion combined fixed indexed annuity (FIA), RILA, and defined outcome ETF market. Those assets are projected to grow to $370 billion (25% share) in 2026 and reach $550 billion (28% share) by 2028. Over the same period, RILA assets are expected to increase from $372.1 billion (28% market share) in 2025 to $566.3 billion (29% market share) in 2028, while FIA market share is expected to decline from 52% to 43%. This shift underscores not only strong growth for RILAs but also a rapidly expanding adjacent ETF market that is capturing a larger portion of outcome-oriented allocations.

Figure 2. RILAs and Defined Outcome ETFs Drive Growth in Outcome-Based Solutions

Assets in $ Billions

2025 Actual
2026 Forecasted
2028 Forecasted
Filter the data in this chart by clicking on a color bar in the chart legend.

While RILAs maintain key advantages, including tax deferral, customizable crediting strategies, and insurance guarantees, there is some overlap in the value proposition. Notably, many defined outcome ETFs are also heavily tied to the S&P 500 or Nasdaq-100, reinforcing the broader industry trend toward concentration in a narrow set of benchmarks. However, ETF issuers have moved quickly to differentiate through outcome periods, laddering strategies, and the introduction of new underlying exposures, including inflation protection, crypto-linked exposures, and other innovative approaches that have not yet been adopted into RILA product suites.

Challenge and Opportunity

This evolution presents both a challenge and an opportunity for RILA carriers. As the market grows more comfortable allocating to outcome-oriented strategies across both insurance and asset management platforms, expectations around flexibility, transparency, and index diversity are likely to increase. In this environment, reliance on the S&P 500 alone may limit the ability of RILAs to stand out, particularly as ETF providers demonstrate the ability to rapidly innovate and scale new exposures.

A few annuity carriers have begun to include FIA products with Bitcoin-linked index options, signaling that RILAs with cryptocurrency exposure may be a feasible option for product differentiation in the near future. Looking ahead, to remain competitive, RILA manufacturers may need to expand beyond the S&P 500, continuing to explore alternative indices, volatility-managed strategies, and outcome designs. Greater differentiation will be increasingly critical in reinforcing the distinct role of RILAs as the broader ecosystem of buffered investment solutions continues to evolve and grow at scale.

Source methodology: RILA sales, carrier counts, asset estimates, and index selection data are derived from LIMRA research and sales surveys. Product design information was obtained from publicly available carrier fact sheets. Defined outcome ETF asset and forecast data were sourced from BlackRock research. Market forecast assumptions were informed by Moody's.

 

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