There were twice as many rating upgrades than downgrades among U.S. life/annuity and health insurers during the first half of 2026 when compared with the same prior-year period, according to a new AM Best special report.

The Best’s Special Report, titled, “More Upgrades, Fewer Downgrades for L/H Insurers in First Half 2026,” notes that U.S. life/annuity insurers have enjoyed strong growth in recent years, especially with strong annuity sales. Life companies remain well-capitalized, with increasing surplus growth over the past few years, while maintaining favorable risk-based capitalization. The ratings upgrades were primarily life companies, while downgrades were mostly annuities writers.

“Life/annuity insurers have been able to offset some recent increases in policy surrender activity with robust asset/liability matching and surrender charge protections,” said Helen Andersen, industry analyst, AM Best. “However, some US L/A insurers continue to depend on reinsurance for capital management, particularly offshore reinsurance.��

Health carriers also remain well-capitalized and have reported favorable net investment income. However, margins are under pressure across the industry due to continued increases in utilization and claims costs. Insurers are pursuing initiatives to combat challenges to their operating performance that may take several pricing cycles to fully address the headwinds.

Among the report’s other highlights:

• The life segment experienced five upgrades and three downgrades, with two more upgrades and one fewer downgrade than in the first half of the previous year. The downgrades were driven by various factors. The upgrades were primarily life companies, and the downgrades were annuities writers.
• One-third of the upgrades in the life/health segment were driven by improvements in operating performance, while another one-third were driven by improvements in enterprise risk management.
• Affirmations still accounted for the large majority of rating actions, totaling 82.3%. The same number of ratings were placed Under Review through the first half of 2026 as the first half of 2025.

To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=369189.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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