Lincoln National's Q4 2024 Earnings: A Deep Dive into Segment Performance and Capital Strength

Lincoln National Corporation (LNC) recently reported its Q4 2024 earnings, showcasing strong performance across segments and a robust risk-based capital (RBC) ratio. The company's earnings beat analysts' expectations, with net income available to common stockholders of $1.7 billion, or $9.63 per diluted share, and adjusted operating income available to common stockholders of $332 million, or $1.91 per diluted share (source: Business Wire, 6-Feb-2025).



The company's strategic initiatives and operational execution contributed to its impressive Q4 performance. Key metrics driving this success include:

1. Annuities segment: The Annuities segment reported operating income of $303 million, a 14% increase from the 2023 fourth quarter, driven by account balance growth due to strong markets and higher spread income. Fourth-quarter sales were $3.7 billion, up 7% year-over-year, reaching the highest level since 2019. The diversified product mix, with spread-based products comprising approximately two-thirds of sales, contributed to this success (source: Business Wire, 6-Feb-2025).
2. Group Protection segment: The Group Protection segment reported operating income of $107 million in the quarter, more than doubling year-over-year, with a margin expansion to 8.4%. This was driven by continued favorable long-term disability results, improved mortality, and strong operational execution. Premiums increased by 3% year-over-year, reflecting ongoing pricing discipline on new sales and renewals (source: Business Wire, 6-Feb-2025).
3. Retirement Plan Services segment: The Retirement Plan Services segment reported operating income of $43 million in the quarter, up 13% year-over-year, due to higher account balances and lower net G&A expenses. First-year sales were $1.3 billion in the quarter, 46% higher than the prior-year period, and full-year total deposits increased 25% compared to 2023. Net inflows were positive for a tenth consecutive year (source: Business Wire, 6-Feb-2025).



Lincoln National's risk-based capital (RBC) ratio evolution has been a critical factor in its financial stability and growth prospects. As of December 31, 2024, the company's estimated RBC ratio was in excess of 430%, significantly higher than the regulatory minimum requirement of 200%. This high RBC ratio demonstrates the company's strong financial position and its ability to withstand potential risks.

In conclusion, Lincoln National's Q4 2024 earnings reflect the company's strong performance across segments, driven by strategic initiatives and operational execution. The company's robust risk-based capital ratio further enhances its financial stability and growth prospects. As investors evaluate the insurance and retirement industry, Lincoln National's Q4 performance serves as a testament to the company's resilience and potential for continued success.