Lincoln National's Q4 2024: Diverging Views on Cash Flow, Premium Growth, and Strategic Direction

These are the key contradictions discussed in Lincoln National's latest 2024Q4 earnings call, specifically including: Free Cash Flow Growth Expectations, Group Protection Premium Growth, Free Cash Flow Projections, Bermuda Strategy, Annuity Sales and Competitive Pricing, and Capital Structure and Leverage Reduction:



Strong Financial Performance and Strategic Progress:
- Lincoln Financial Group reported adjusted operating income available to common stockholders of $332 million for Q4, with full-year 2024 adjusted income from operations over $1.2 billion, a 16% improvement compared to 2023.
- This growth was driven by earnings improvements in the group and annuities businesses, which more than offset headwinds in the life business.

Group Protection Business Performance:
- The group protection business delivered a record fourth quarter with earnings more than doubling year-over-year and a margin of 8.4%.
- This performance was supported by strong execution of strategic priorities, favorable macroeconomic conditions, and positive disability results.

Annuities Business Development:
- Total annuity sales reached $3.7 billion in Q4, with full-year sales increasing 7% compared to the prior year.
- Growth was achieved through a diversified product mix, with approximately two-thirds of sales attributable to spread-based products, all meeting their risk-adjusted return objectives.

Investment Strategy and Capital Efficiency:
- The company focused on optimizing its investment strategy, leading to a strong alternative investments portfolio delivering over an 11% annualized return in Q4.
- Additionally, Lincoln's issuance of new money in 2024 was at a yield of 6.4%, supporting capital efficiency and free cash flow growth.