Lincoln National (LNC) Q3 Earnings call transcript Oct 31, 2024

In the third quarter of 2024, Lincoln Financial presented a strong performance, reporting a record high quarterly earnings of $358 million or $2.06 per share, excluding the impact of its annual assumption review. This significant achievement is a reflection of the company's strategic realignment efforts, which are driving consistent momentum across all four businesses.

Key Highlights

Lincoln Financial is executing on a multiyear journey to build a strong capital foundation, optimize its operating model, and focus on businesses that deliver profitable growth. The company's capital position continues to strengthen, with a RBC ratio above 420%, and it has successfully launched its Bermuda reinsurance subsidiary to further strengthen its ability to deliver against its strategic priorities.

Group Protection and Retirement Businesses

Group Protection delivered record third quarter results, with earnings more than doubling year-over-year. The annuities business also experienced substantial sales growth and earnings increase, driven by a diversified product mix that includes spread-based products and expansion of its addressable market. The Retirement Plan Services business sustained its momentum, producing another quarter of sequential earnings growth and first-year sales that more than tripled year-over-year.

Annuities Strategy and Performance

Lincoln Financial's annuity strategy is taking hold as it grows and diversifies its earnings mix to more spread-based products. The company's Retail Solutions segment, which includes annuities and life businesses, saw total annuity sales of $3.4 billion, up nearly 25% from the prior year quarter. RILA, the company's second-generation product, has been well-received in the market, demonstrating strong sales growth and customer demand.

Life Business

The Life business also showed sequential sales growth, with a focus on realigning its product portfolio to emphasize more risk sharing within accumulation and protection products. This strategic shift is expected to improve free cash flow and grow the franchise over the long term.

Outlook and Future Prospects

Looking ahead, Lincoln Financial is optimistic about its future prospects, with plans to continue growing and diversifying its group and retirement businesses, evolving its annuity business, and realigning its life business. The company's strong capital foundation, operating model optimization, and broad product portfolio are key competitive advantages that will support its strategic growth initiatives.

Conclusion

Lincoln Financial's third quarter 2024 earnings call highlights the company's strategic focus on growth, capital strength, and operational efficiency. With a clear vision for the future, Lincoln Financial is well-positioned to capitalize on market opportunities and deliver sustained long-term value for its shareholders.