3 Insurance Stocks That Could Gain From Higher Long Term Yields

Bond markets are under pressure, inflation worries are back and long term yields are climbing, which is forcing investors to rethink what risk really costs. That reset can hurt some stocks that rely on cheap money, yet it can also shift attention toward businesses that may be better aligned with higher yields. This article explores three life insurance and annuity stocks exposed to this story and what that could mean for your portfolio.

The three stocks below are just a sample from this theme, and the full screen surfaced 11 more global life insurers and annuity providers with equally compelling narratives that are not covered here. To identify, compare and analyze those opportunities side by side, head straight into the Global Life Insurers and Annuity Providers Benefiting from Higher Long-Term Yields screener.

Principal Financial Group (PFG)

Principal Financial Group is a US based retirement, asset management and insurance company that fits this higher yield theme because it runs large retirement and annuity style books that invest premiums in long duration bonds. Most revenue comes from Retirement and Income Solutions at about US$7.8b and Benefits and Protection at about US$5.0b, with another US$2.9b from Principal Asset Management and smaller corporate and unallocated items. The company has a market cap of roughly US$23.6b, which places it firmly in the large cap bracket for this screener.

Principal Financial Group provides exposure to retirement income and annuity products that can become more attractive when long term bond yields are higher. It also offers access to a sizable global asset management arm that is seeing client interest in credit and infrastructure debt. The stock screens as offering a wide gap between its current price and independently assessed fair value, yet that still needs to be weighed against funding risks and pressure on certain active equity strategies. For investors seeking a large cap insurer with meaningful retirement exposure that may be positioned for a higher yield environment, this is a story worth looking at more closely.

Principal Financial Group’s wide gap between price and assessed fair value could be masking the real story in its retirement and annuity book. Get the full picture in the DCF valuation analysis for Principal Financial Group

F&G Annuities & Life (FG)

F&G Annuities & Life is a US focused provider of fixed indexed annuities, registered index linked annuities, pension risk transfer solutions and indexed universal life products, which ties it closely to long duration bond yields that back these long term promises. The company reports around US$6.1b of revenue from life insurance related activities and has a market cap of roughly US$3.1b, putting it in the mid cap bracket within this higher yield theme.

F&G Annuities & Life offers focused exposure to retirement income products that can look more appealing when long term yields climb and advisers want simple, rate driven solutions for clients. Management has been pushing into registered index linked annuities and pension risk transfer deals, while also shifting more earnings toward fee based and owned distribution businesses. At the same time, reliance on external funding, legal and regulatory questions around pension risk transfer and leadership changes through 2026 mean investors still need to think carefully about how this higher yield exposure is financed and managed over time.

F&G Annuities & Life is leaning into higher long term yields with indexed products and pension risk transfers that many investors may still be underestimating. See how the analysis report for F&G Annuities & Life could change your view on its funding and regulatory trade offs.

MetLife (MET)

MetLife is one of the largest global life insurers in this higher yield theme, with big books of annuities and long duration insurance that put a large pool of customer premiums to work in bond markets. Most revenue comes from US Group Benefits at about US$27.1b and US Retirement and Income Solutions at about US$21.5b, with sizeable contributions from Asia at US$12.4b and Latin America at about US$9.1b, alongside smaller units and unallocated items. The company has a market cap of roughly US$60.5b, which gives it significant scale in the global life and annuity space.

MetLife provides direct exposure to a life insurer whose business is closely linked to the level of long term yields, since spread income and the pricing of guaranteed products are central to its model. The New Frontier strategy, the growth of international operations and a mix of fee based and capital heavy lines have supported earnings, buybacks and a regular dividend. At the same time, the funding structure, debt levels and past earnings volatility indicate that changes in rates can have mixed effects. For investors trying to distinguish between insurers that are mainly exposed to rate moves and those that may be positioned to use them to reshape returns, MetLife merits closer review.

MetLife’s mix of global scale, long duration guarantees and fee based lines could be masking where the real earnings leverage sits. See how the 3 key rewards and 1 important warning sign might reframe both the upside and the catch.

Seeking Alternatives Beyond Life Insurers?

Fresh ideas often move first, and the most interesting stocks can be flying under the radar for now. Before the next breakout gets caught by the crowd, consider researching opportunities sooner rather than later.

• Identify companies that generate strong cash flows and may have further potential by scanning a curated 50 high quality undervalued stocks before valuations change and conditions shift.
• Explore the development of next generation energy systems by checking a focused list of 39 power grid technology and infrastructure stocks while infrastructure projects and related activity remain in focus.
• Concentrate on companies with financial resilience by filtering a curated list of solid balance sheet and fundamentals (53 results) and reviewing these stronger balance sheets while they may still be less widely followed.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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