By Kenneth Corbin

Annuity providers are worrying about recession while they lean more heavily on artificial intelligence as they revamp their product menus and asset allocations, according to a new industry survey from Goldman Sachs. The survey describes an industry undergoing dramatic change, driven in part by concerns about an economic slowdown.

In the survey of more than 100 insurance professionals, 76% said an economic slump or recession is the biggest macroeconomic risk, and 79% said a recession is likely to occur within two years.

The survey was conducted from March 24 to April 22, a period that saw the announcement of Trump's "Liberation Day" tariffs on April 2 and the roller coaster of market volatility that followed as the terms of those levies kept changing.

"Our latest survey makes it clear that insurers are not standing still," says Marci Green, who heads the Americas unit of Goldman Sachs Asset Management's retirement distribution and third-party insurance business. "They are reassessing annuity platforms to reflect real concerns around market volatility, longevity, and investor engagement."

Lifetime income. Amid that backdrop of uncertainty, more insurers are looking to products that offer lifetime income, according to the survey. Goldman reports that while registered index-linked annuities remain a "bedrock" of the industry, 60% of respondents said that guaranteed variable annuities are a "key product focus," up from 44% in last year's survey.

The industry is also warming to AI, with 90% of respondents saying the technology will be instrumental in helping investors better understand annuities and guaranteed income products. Forty-seven percent of respondents say they expect AI to "significantly improve" investor education and engagement in the variable-annuity sector, while 25% say they expect AI to help deliver personalized investment advice.

Retirement focus. Another major focus for insurers is adding an annuitization option to existing retirement plans, with 64% saying that push ranks in their top three business priorities. "In-plan annuity adoption is no longer just a long-term objective," Goldman says.

The macroconcerns about the U.S. economy are driving more portfolio managers to look overseas. Goldman reports that AI-themed strategies remain the most popular, but 29% of respondents said they plan to increase their exposure to international equities in developed markets. Just 2% said they plan to lower their exposure to those markets.

"This is not a year of incremental change," Green says, noting that the insurance industry seems to be moving more or less cohesively toward a future marked by guaranteed income and personalized, AI-driven advice. "The industry is moving with purpose, and the direction is clear."

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(END) Dow Jones Newswires

June 12, 2025 15:16 ET (19:16 GMT)

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