FORECAST 2025: Economic Climate
Written by: LIMRA
Contributors: Aaron Ball - Aaron B. ( New York Life Insurance Company ) Chris Blunt ( F&G ) Caroline Feeney ( Prudential Financial ) Marc Giguere ( Munich Re ) Adrian Griggs ( Pacific Life ) Wade Harrison ( Protective Life ) Mike James ( NFP, an Aon company ) Jasmine Jirele ( Allianz ) Bob Jurgensmeier ( Ameritas ) Jerry Lyphout ( Modern Woodmen of America ) Denise McCauley ( WoodmenLife ) Virgil Miller ( Aflac ) Sarah Mineau ( State Farm ) Kamilah Williams-Kemp ( Northwestern Mutual )
January 2025
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The insurance industry has a history more than a century long, surviving — even thriving — during tough times. It has weathered major wars, the Great Depression, plummeting interest rates, high inflation, pandemics and global financial meltdowns. That does not mean it was easy.
We asked FORECAST 2025 participants how current economic conditions — interest rates, inflation, market volatility and more — might affect their organization this year. They shared a variety of perspectives and coping strategies.
At the moment, inflation is subsiding, but consumer prices have yet to come down. Interest rates are falling, albeit slowly. Uncertainty and fluctuation continue to plague equities markets. No one knows what effect the Trump presidency will have. Few expect a recession any time soon.
“The interest rate environment, equity market performance, tax policy and economy can all influence product sales and product mix and/or financial results,” says Aaron Ball, EVP & Co-Head of the Foundational Business, New York Life. “As such, we anticipate that changes in interest rates, equity market volatility, tax law changes, inflation and/or a recessionary environment could influence sales.”
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“Economic conditions can impact reinsurers and direct carriers differently — our business isn’t heavily affected by interest rates,” says Marc Giguère, President & Chief Executive Officer, Munich Re, U.S. Life and Health. “However, economic conditions will directly impact what products carriers sell and how much they sell. Also, decreasing interest rates can make many insurance products more expensive for customers.”
Inflation Matters
Let’s take a closer look at inflation. Its major effect ...
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