26.05 - 2 - Volatile P&C Market Sparks Interest in Life Products

May 2026

California’s wildfires in January 2025 highlighted the significant financial strain that catastrophic weather events can place on property and casualty (P&C) insurers. Insured losses — driven largely by the Palisades and Eaton fires — are expected to total between $25 and $30 billion. In response, a range of strategies aimed at reducing future loss exposure have been proposed or are already underway. Some insurers have opted to withdraw from select markets altogether, leaving P&C agents in those regions searching for alternative income sources.

As these dynamics play out, some P&C insurers and agents are turning to life insurance and other financial services products to strengthen revenue streams and bolster their financial position. Several factors are shaping this emerging trend, including:

• A need to reduce exposure to catastrophe‑driven volatility. Insurers seeking more stable, longer‑duration income streams increasingly view life insurance products as an effective counterbalance to the unpredictability of catastrophe losses. These products demonstrate greater resilience across economic cycles.
  
  
• Carriers are seeking ways to retain customers. As rising auto insurance premiums encourage more consumers to shop for lower prices, the longer-term customer relationships that life insurance and other financial services products bring with them are increasingly attractive.
  
  
• Leveraging modernized distribution and underwriting. Advances in digital onboarding, automated underwriting and streamlined platforms have significantly reduced friction for carriers, agents and consumers. These capabilities remove many of the traditional barriers associated with selling life products, making them more accessible and efficient to distribute.

Multiple-Line P&C Agents

The sale of life products by P&C agents is not a novel idea. Companies with multiple-line exclusive agent distribution (MLEA) have done so for decades. The MLEA channel has ready access to a broad range of consumers, including the middle-income market, a segment that the financial services industry has historically struggled to find a way to reach profitably. 

According to LIMRA research, life insurance products sold by MLEA agents in 2025 were predominantly term (61%) and whole life (33%), with an average policy size of $181,000.  Another LIMRA study tracking MLEA agent productivity across P&C and life, health, and annuity products shows that in 2024, new life, health, and annuity policies represented an average of 7% of all new policies sold by MLEAs. Individual company results varied, with life, health, and annuity policies ranging from 4% to 14% of all new policies sold.

These metrics have remained stable over time. For example, the life, health, and annuity share of new policies has not changed since 2020, and its share of total agent earnings has declined from 6% to 5%. The reason for this trend becomes clearer when considering agent compensation: Although the average MLEA agent sold 33 life insurance policies in 2024, the income from those sales accounted for only 5% of the agent’s total earnings.

Addressing this compensation challenge, along with agent training, consumer education, and reducing sales friction, will accelerate growth. How can that be accomplished? A LIMRA study of MLEA cross-sell activity concluded that the three most effective ways to encourage multi-line sales are to provide incentives for customers and incentives for agents, and support for P&C agents at the point of sale.

A 2023 LIMRA consumer study, Cross‑Selling Life: The Multi‑Line Customer, confirms these observations. The research found that multi-line customers demonstrate significantly stronger loyalty to their auto carriers than those with auto‑only coverage: 62% of multi‑line customers have remained with their carrier for more than five years, compared with just 33% of auto‑only customers.

This pattern is also evident when examining in‑force policies. Although new life, health, and annuity policies represent only 7% of all new policies, they account for 14% of existing policies. This disparity underscores the idea that, while P&C policies often shift among carriers, life insurance policies tend to stay in place longer, contributing to more durable customer relationships.

Conclusion

P&C carriers facing rising catastrophe losses, higher reinsurance costs, and increased volatility — marked by more frequent high‑loss years — are seeking new sources of stable revenue. While legislative measures such as rate‑increase approvals, along with capital‑markets solutions like insurance‑linked securities and catastrophe bonds, offer important relief, these tools alone are often not enough to counterbalance the growing pressures on profitability.

Expanding beyond traditional P&C offerings is emerging as a strategically important approach to stabilizing earnings, deepening customer relationships, and mitigating the unpredictability inherent in the P&C market.

The carriers best positioned for long‑term success will be those that combine catastrophe‑resilient risk‑transfer strategies with purposeful diversification into life, health, and annuity products — supported by modernized technology and robust multi‑line distribution capabilities.

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