Lincoln National Said to Seek Deal to Cut Life Insurance Risk

Lincoln National Corp. is seeking a reinsurance deal that would shift billions of dollars of life insurance reserves off its balance sheet, according to people familiar with the matter.

The firm, which markets itself as Lincoln Financial Group, is in talks with peers to backstop roughly $5 billion of life policies. These could include so-called universal life with secondary guarantee policies, which prevent coverage from lapsing under certain conditions.

Reinsurance deals allow insurers to shift part of their reserves off their balance sheets. This frees up capital to support sales expansion amid strong demand for annuities and life insurance products.

Why the Move Happened

Books of policies with secondary guarantees are attractive to policyholders but can be costly for insurers to keep on their balance sheets.

In 2023, Lincoln reinsured a $28 billion book with Fortitude Re that included similar policies, along with fixed annuities and other life insurance products with long-term-care riders.

Lincoln said it is focused on improving the free-cash-flow profile of its life business, including through risk transfers. The firm added it is open to exploring these options but is not committed to any specific transaction.

How Markets Responded

Lincoln National has seen recent earnings growth, with Q4 2025 EPS of $1.91 and revenue of $4.92 billion surpassing forecasts.

The company reported full-year 2025 adjusted operating income of $1.5 billion, a 23% increase from 2024.

Lincoln National's stock increased by 4.83% pre-market after the earnings report.

What Analysts Are Watching

Lincoln National's return on invested capital of 0.7% is higher than the industry average of 0.64%.

The company reported cash and invested cash of approximately $9.5 billion at 2025-end, reflecting a significant increase from the prior-year level.

Lincoln National's debt-to-capital ratio is 36.5%, significantly above the industry average of 16.3%. This elevated leverage may increase financial risk, particularly amid volatile market conditions.

The stock is trading at 4.15X forward P/E, below its five-year median and the industry average.

Lincoln National has a dividend yield of 5.3%, higher than the industry average of 3.5%.

Lincoln National's earnings for 2026 are expected to hit $1.69 per share.

The company's expected revenue for 2026 is $4.99 billion.

Lincoln National is currently trading at a price that reflects investor skepticism.

Lincoln National has seen insider activity recently, including a significant increase in shares held by National Life Insurance.

Lincoln National's stock is currently valued at $4.93 billion.

Lincoln National's shares are currently owned by 0.51% of the stock by corporate insiders.

Lincoln National is currently valued at $349 billion in end-of-period account balances, net of reinsurance.

Lincoln National recently launched new fixed indexed annuity income solutions with digitized rates and statement on demand capabilities.