Lincoln National Corporation's 2025 Annual Meeting: Navigating Challenges with Strategic Partnerships and Operational Resilience

Lincoln National Corporation (NYSE: LNC) is preparing to host its 2025 Annual Meeting of Shareholders on May 22, 2025, a virtual event that will spotlight the insurer’s progress in executing its long-term strategy amid a challenging macroeconomic backdrop. The meeting, open to shareholders of record as of March 17, 2025, will likely focus on the company’s recent strategic moves, financial performance, and its partnership with Bain Capital—a key initiative aimed at bolstering value creation.

Strategic Momentum: Bain Capital Partnership and Operational Gains
The partnership with Bain Capital, announced earlier this year, represents a pivotal shift for Lincoln. Under the terms, Bain will take a minority stake in the company while also collaborating on private asset origination and operational improvements. This alliance is expected to close in the second half of 2025 and could provide Lincoln with enhanced access to alternative investments, a critical area for insurers seeking to diversify returns.

Lincoln’s first-quarter results underscore the effectiveness of its operational discipline:
- Group Protection: Earnings rose 26% year-over-year (YoY) to $101 million, driven by strong persistency in premiums and favorable long-term disability outcomes. Sales increased 9% to $157 million, with supplemental health products leading growth.
- Annuities: Sales surged 33% to $3.8 billion, with spread-based products (e.g., fixed index annuities) now comprising 60% of sales. Operating income grew 12% to $290 million, excluding prior-year headwinds.
- Life Insurance: The segment’s operating loss narrowed by $19 million to $(16) million, reflecting cost-cutting measures and improved mortality trends.

These gains highlight Lincoln’s ability to capitalize on demand for its core products while optimizing costs.

Financial Performance: Adjusted Strength Amid Market Volatility
While Lincoln reported a net loss of $756 million in Q1 2025—driven by non-economic factors like declining interest rates and equity markets—the adjusted operating income of $280 million ($1.60 per share) marked a 33% increase from the prior-year period. This metric excludes volatile items such as unrealized losses on securities and market-driven liability adjustments.

The adjusted figures are critical for investors, as they reflect operational resilience. Notably, adjusted book value per share rose to $73.19 (up 0.8% from December 2024), while the Risk-Based Capital (RBC) ratio remained above 420%, reinforcing capital strength.

However, challenges persist:
- Unrealized Losses: Pre-tax unrealized losses on available-for-sale securities totaled $9.4 billion as of March 31, 2025, though this represents a $400 million improvement from 2024.
- Segment Pressures: Retirement Plan Services saw a 6% drop in operating income due to a large plan termination, and Life Insurance’s alternative investment income fell amid lower market returns.

Forward-Looking Outlook and Risks
CEO Ellen Cooper emphasized that Lincoln’s focus on partnerships, capital discipline, and product diversification positions the company to weather macroeconomic headwinds. The Bain Capital collaboration, in particular, could unlock value by accelerating private asset deployment and enhancing operational efficiency.

Yet, investors must weigh these positives against lingering risks:
- Market Sensitivity: Lincoln’s results remain tied to interest rates and equity markets, which could continue to pressure earnings in volatile environments.
- Regulatory and Operational Risks: While Lincoln’s RBC ratio is robust, further regulatory changes or unexpected claims could strain its balance sheet.

Conclusion: A Resilient Play for Conservative Investors
Lincoln National’s Q1 2025 results and strategic initiatives paint a cautiously optimistic picture. The partnership with Bain Capital offers a tangible pathway to long-term growth, while operational improvements in Group Protection and Annuities demonstrate executional strength. With an adjusted book value per share up 0.8% year-to-date and a consistent dividend payout ($0.45 per share in the latest quarter), Lincoln appears well-positioned to deliver stable returns.

However, the stock’s performance—down approximately 8% year-to-date as of late April 2025—reflects broader market skepticism about insurers’ exposure to interest rate fluctuations and unrealized losses. Conservative investors may find value in Lincoln’s diversified product mix and capital resilience, but the path to outperformance hinges on stabilization of macroeconomic conditions and further progress on strategic priorities.

In sum, Lincoln National’s Annual Meeting will serve as a critical platform to reinforce confidence in its strategy. For now, the company’s adjusted metrics and strategic partnerships suggest it is navigating challenges with discipline—though success will ultimately depend on execution in an uncertain environment.