What’s driving growth in ETF usage among insurers to all-time highs? S&P DJI’s Anu Ganti and Nick Didio share key takeaways across asset class, company size and geography from their latest research, “ETFs in Insurance General Accounts – 2026.”
[TRANSCRIPT]
Paul Murdock:
Insurers continue to increase their use of ETFs for a broad range of strategic and tactical functions, with 2025 marking a record high for ETF usage in insurance general accounts.
Hello, I’m Paul Murdock from S&P Dow Jones Indices, and joining me today for a closer look at their latest research are Anu Ganti and Nick Didio from S&P DJI’s Index Investment Strategy team. Anu, Nick, thanks for being here today.
Anu Ganti:
Nice to be here.
Nick Didio:
Happy to be here, Paul.
Paul Murdock:
Thanks. And Anu, to kick things off, what were some of the key takeaways from your research on ETF usage in insurance general accounts this year?
Anu Ganti:
Yes, well this is our 11th annual year of producing this study of analyzing these ETF results among insurer general accounts, and there were some fascinating results. And, we slice and dice the data across numerous different ways. By type of company, by size, we also look at trading patterns. So, there’s a lot to dig into. But, as far as the highlights go, we saw ETF assets reached roughly USD 49 billion, increased by roughly USD 10 billion compared to last year, so, a 25% growth rate.
Now if you look at the big picture, the overall U.S. ETF market is roughly USD 13.5 trillion. The overall insurance general account market is roughly USD 14 trillion. So, it’s really a small portion of the overall market here. So, as a result of that, we can see some idiosyncratic activity where the impact of one insurer, for example, can really sway our results, which is pretty interesting.
Now, if we dig into flows, we saw roughly USD 4.9 billion in net flows. If you look at the equity side, we did see some outflows pick up in Q4 2025. But, of course, we had a strong market last year, so, we got those valuation gains on the equity side. Now, coming to fixed income, it was generally a positive story. We saw some inflows. We did see an outflow in Q2. Again, there was some idiosyncratic activity there. But, overall, it was a very nice year for usage of ETFs within the insurance space.
Paul Murdock:
Thanks, Anu. And, Nick, specifically turning to asset class, what's been changing in recent years in terms of the types of ETFs that insurers are using?
Nick Didio:
Yes, that’s a great question, Paul. So, first off, we can drill down even further than just asset class. Within equities, you can see by market capitalization how are insurers buying and using these ETFs. Within fixed income, you can see that corporates, for instance, are favored much more heavily by insurers as compared to the general U.S. market. And, then, if you break that out into the wider space of equity versus fixed income, you will notice that fixed income has been rapidly approaching total holdings of equity over the past few years. As Anu alluded to, talking about flows where equity, there was a little bit of outflows buffeted by valuations. Fixed income valuations went up, but there was also roughly USD 6.5 billion in net inflows by insurers. So, at this rate, the holdings of fixed income ETFs are rapidly approaching a one-to-one ratio of that with equities, which is pretty different from the general U.S. market, where that ratio is roughly five to one.
Paul Murdock:
Anu, how do these trends vary across company type, size and geography?
Anu Ganti:
Excellent question. And, if you look at property and casualty (P&C) companies, for example, they have a greater proportion of ETFs. If you look at life insurers, they have a greater invested asset base. And, in fact, looking back at 2025, we saw gains across the board for P&C companies, life insurers, even health companies, where, in fact, we saw a decline in the prior year. So, that was great to see that.
Now, if we slice by company size, we see that ETF assets tend to be concentrated among the larger insurers. In fact, we saw a 55% growth rate for mega insurers. But, there were a couple of notable results, which, in fact, we saw gains for smaller insurers, small and medium-sized insurers. And, we saw that the gap narrowed between large and mega insurers. But, of course, we do see that the proportion of ETF assets as a percentage of invested assets is going to be higher for the smaller companies, which is only natural.
Now, switching gears and looking at flows. If we look at companies of all sizes, we saw flows across the board into fixed income generally. If you look on the equity side, it was a little mixed. We saw declines for large companies and slight inflows for the other size categories.
Now, what’s really interesting is if we dial in by state-level trends. This is important because state-level regulations really influence things and really influence ETF usage. If you look at a handful of states, they make up roughly 50% of ETF assets. In fact, New Jersey was in the lead. We actually saw an increase in New York, which was a reversal compared to the decline last year. And, there are a few other states as well, including Wisconsin, Illinois and Michigan. So, the state-level trends are interesting. And, we also analyze the ETF usage as a percentage of invested assets for these states as well. We see some of the leaders here are Wisconsin, New Jersey and Michigan. So, there are so many different metrics to dig into here.
Paul Murdock:
Thanks Anu, a lot to unpack there. And, Nick, one thing we didn’t touch on yet though are trading patterns. How have those varied by insurers in recent years, and what appears to be driving this?
Nick Didio:
Yes, so, 2025 was actually a record year in trade volume for U.S. insurers. We increased 51% over trade volume seen in 2024. And, that was primarily driven by a very large increase of trading done by life insurance companies. And, on that note, 2025 was the first year where life insurance companies were the dominant type of insurance company when it came to trade volumes. Every other year, that’s been in P&C companies. So, that was an interesting divergence from historical norms.
Then, adding on to that fact, we've talked about holdings increases, we've talked about trade increases. You can look at these both in tandem by analyzing something called the trade ratio. You basically take the volume of trades in the numerator, divide it by the holdings at the beginning of the year, and see how that has evolved. Interestingly enough, despite very large gains in holdings, a roughly three-fold increase in the past 10 years, that trade ratio has hovered roughly between 1.5 and 2.0 over the course of the history of this report. So, even though holdings are going up, whether by valuations or flows, the amount being traded tends to increase relatively similarly. We break this down further in multiple different ways in the report, analyzing by, for instance, what assets were bought and sold in the same year. I encourage anybody interested to go check out the report.
Paul Murdock:
Well, thanks, Nick. And, absolutely, viewers should go check out the paper. Nick, Anu, really appreciate your insights today.
Nick Didio:
Thank you so much.
Anu Ganti:
Thrilled to be here. Thanks, Paul.
Paul Murdock:
And to read that latest report from Anu and Nick on how insurance companies are using ETFs and to stay up to date with the latest indexing data and trends, visit us at the link below. Thanks and have a great day.
