What does Lincoln National do and what are its main business segments?

What were the key takeaways from Lincoln National's earnings call?

What factors drove the changes in Lincoln National's revenue and profit?

What is the market's earnings forecast for Lincoln National next quarter?

What were the key takeaways from Lincoln National’s earnings call?

Did Lincoln National beat or miss consensus estimates last quarter?

What is the revenue and EPS growth rate for Lincoln National year over year?

What is Lincoln National's gross profit margin?

- **Record Growth Across Businesses**: Annuities sales up 32% YoY, Life Insurance earnings +357%, Group Protection premium growth 5%, and RPS earnings +5%.
- **Strategic Capital Deployment**: Full retention of fixed annuity flows, $1.9 billion in FABN issuance YTD, and legacy life block optimization to enhance free cash flow.
- **Improved Profitability**: Annuities spread-based products now 29% of account balances, Life Insurance mortality loss ratio down 6.7pts YoY, and Group Protection margin expected +50bps YoY.
- **Strong Capital Position**: RBC ratio well above 420% buffer, with $411 million GAAP net income and $397 million adjusted operating income.

**【CEO Summary Section】**
- Lincoln delivered fifth consecutive quarter of year-over-year growth in adjusted operating income, driven by strong execution across all businesses.
- Annuities sales reached $4.5 billion, with spread-based products (fixed, RILA, variable) accounting for 63% of new business, reflecting strategic diversification.
- Life Insurance sales totaled $300 million, with executive benefits driving growth, supported by improved mortality experience and operational efficiencies.
- Group Protection maintained record third-quarter earnings, with 5% premium growth and 33% increase in supplemental health sales.
- Retirement Plan Services (RPS) achieved 5% earnings growth, $2.4 billion in first-year sales, and positive net flows, driven by strong sales pipeline and market engagement.

**【CFO Financial Commentary】**
- Third-quarter adjusted operating income available to common stockholders: $397 million ($2.04 per share), including $2 million benefit from annual assumption review.
- GAAP net income: $411 million ($2.12 per diluted share), impacted by fair value changes in embedded derivatives and market risk benefits.
- Free cash flow generation and capital efficiency remain priorities, with RBC ratio well above 420% buffer.
- Capital deployment initiatives include full retention of fixed annuity flows, institutional funding agreements (FABN), and optimization of legacy life blocks.
- Alternative investment returns of 10% (annualized) aligned with targets, supporting long-term profitability.

**【Q&A Key Highlights】**
- **Life Insurance Earnings Drivers**: Stabilized mortality, increased alternative investment income, and expense discipline drove $54 million in operating earnings (vs. $14 million prior year). Seasonal fourth-quarter pressure expected but long-term growth intact.
- **Capital Deployment**: Excess capital from Bain transaction being used to retain fixed annuity flows, scale FABN program, and optimize legacy life blocks. Share buybacks on hold until 2026 outlook provided.
- **Group Protection Margins**: 2025 margin expected in mid- to upper 8% range, with normalization of LTD recovery rates offsetting premium growth in local markets.
- **Private Credit Investments**: Portfolio credit quality remains strong (97% investment-grade), with disciplined expansion into private credit and structured strategies.
- **Product Optimization**: Focus on higher-margin, capital-efficient products (e.g., executive benefits, RILA, pooled employer plans) to reduce volatility and enhance risk-adjusted ROE.

Lincoln National Corporation (LNC) Q3 2025 Earnings Call Transcript

- **Record Growth Across Segments**: 32% YoY adjusted operating income growth, driven by Group Protection (33% margin expansion), RILA sales up 32%, and Life Insurance turning positive.
- **Strategic Margin Expansion**: Group Protection targeting 100+ basis points of margin improvement via local market and supplemental health growth; Annuities diversifying into spread-based products (28% of annuity balances).
- **Capital Deployment Focus**: Excess capital allocated to growing Group Protection, optimizing annuity mix, and derisking legacy life. Free cash flow conversion target maintained at 45-60% for 2026.
- **Operational Discipline**: 4 consecutive quarters of adjusted operating income growth, disciplined pricing in Group, and expense management in Life Insurance.
- **Future Growth Drivers**: Local market expansion, RILA product innovation, and deployment of Bain Capital into high-return opportunities.

**【CEO Summary Section】**
- Lincoln reported 32% year-over-year growth in adjusted operating income, marking the fourth consecutive quarter of growth, driven by strategic repositioning across all segments.
- Group Protection delivered record earnings with a 33% increase in operating margin, while Annuities saw strong sales growth in fixed and RILA products. Life Insurance achieved positive earnings due to improved mortality and expense management.
- The company emphasized disciplined execution of its growth strategy, including diversifying into higher-margin products (e.g., local market Group Protection, RILA), optimizing the operating model, and leveraging distribution leadership.

**【CFO Financial Commentary】**
- Second-quarter adjusted operating income available to common stockholders was $427 million ($2.36 per diluted share), with alternative investments generating $101 million in returns.
- Group Protection operating earnings rose 33% to $173 million, driven by favorable mortality, disciplined pricing, and margin expansion. Annuities operating income was $287 million, supported by spread-based product growth. Life Insurance improved to $32 million in operating earnings, benefiting from lower mortality and expense discipline.
- Capital deployment priorities include growing Group Protection, diversifying annuity mix, and optimizing legacy life. The company maintains an RBC ratio above 420%, with excess capital allocated to strategic initiatives.

**【Q&A Key Highlights】**
- **Group Margin Expansion**: CFO Chris Neczypor noted 100+ basis points of margin improvement from strategic initiatives, with local market and supplemental health growth driving future expansion. Group margin for H2 2025 expected to match H2 2024 levels.
- **RILA Product Momentum**: CEO Ellen Cooper highlighted 32% year-over-year sales growth in RILA, driven by second-generation product features and expanded distribution. Sequential growth of 12% underscores sustained demand.
- **Free Cash Flow Conversion**: CFO reaffirmed 45-60% free cash flow conversion target for 2026, noting Bain Capital deployment will enhance long-term returns through strategic investments in Group and annuity growth.
- **Distribution Strategy**: CEO emphasized Lincoln's distribution leadership, with dedicated teams for local, regional, and national markets, and digital tools to enhance broker and customer engagement.
- **Legacy Life Optimization**: CFO mentioned exploring external reinsurance solutions to improve returns on legacy life assets, with potential actions in 2026.


Lincoln National Corporation (LNC) Q2 2025 Earnings Call Transcript

- **14% YoY operating income growth**: Driven by 26% Group Protection earnings rise and 33% Annuities sales surge.
- **Bain Capital partnership**: $825M capital infusion to accelerate spread-based product growth, targeting $0.20-$0.30 FCF accretion by 2027.
- **Resilient capital position**: RBC ratio >420%, with 20pt buffer for recession, and 27.5% leverage ratio (down 30bps QoQ).
- **Annuities mix shift**: 60% new business in spread-based products (RILA, fixed annuities), despite 120bps ROA decline.
- **Life insurance turnaround**: 53% YoY loss reduction to $16M, with mortality normalization and $11M expense savings.

**【CEO Summary Section】**
- Lincoln delivered 14% year-over-year growth in adjusted operating income, driven by strong execution across all businesses.
- Group Protection business achieved 26% earnings growth and 120 basis points margin expansion, supported by disciplined pricing and product diversification.
- Annuities sales rose 33% YoY to $3.8 billion, with spread-based products (RILA, fixed annuities) comprising 60% of new business mix.
- Strategic partnership with Bain Capital will accelerate growth in spread-based products and provide $825 million in capital for strategic initiatives.

**【CFO Financial Commentary】**
- Q1 2025 adjusted operating income: $280 million ($1.60/diluted share), with $298 million normalized for below-target alternative investments.
- GAAP net loss: $756 million ($4.41/diluted share) due to market risk benefits volatility.
- Group Protection operating income: $101 million (26% YoY growth), with disability loss ratio improving 400+ basis points.
- Annuities operating income: $290 million (flat YoY), with spread-based AUM growing to 28% of total.
- Life insurance operating loss: $16 million (53% YoY improvement), benefiting from mortality normalization and expense reductions.

**【Q&A Key Highlights】**
- Bain Capital transaction: Expected to accrete $0.20-$0.30 to 2027 free cash flow per share through deployment in spread-based products and legacy life reinsurance.
- Annuities ROA decline: Driven by mix shift to lower-margin spread-based products, but risk-adjusted returns improving over time.
- Group disability sensitivity: 100-200 basis point margin impact in a recession, offset by pricing discipline and product diversification.
- Life mortality improvement: Sequential normalization after large claims in Q4 2024, with ongoing expense reductions.
- RPS outflows: One-time $2 million termination cost, but 8% YoY deposit growth driven by recurring contributions.


Lincoln National (LNC)-8 May 25-2025 Q1 Earnings call transcript

- **Record Group Performance**: Q4 earnings doubled YoY, with 8.4% margin and 3% full-year premium growth. 2026 target for 8%+ margin reflects strategic execution.
- **Annuities Growth**: Full-year sales up 7% to $13.7B, with 67% from spread-based products. Variable annuities with living benefits nearly doubled YoY.
- **Capital Strength**: RBC ratio at 430%, free cash flow conversion rate improved to 39%. 2026 free cash flow target expanded to 45%-60%.
- **Bermuda Reinsurance Impact**: First flow agreement for fixed annuities, positioning for capital-efficient growth in 2025 and beyond.
- **Expense Efficiency**: Life insurance net G&A down 10% YoY, supporting margin expansion across segments.


**【CEO Opening Remarks】**
- **Strategic Milestones Achieved**: 2024 full-year adjusted operating income reached its highest level in three years, exceeding financial objectives. Key initiatives included capital strengthening (RBC ratio at 430%), operational efficiency improvements, and profitable growth across segments.
- **Business Highlights**: 
  - **Group Protection**: Q4 earnings doubled YoY, with record sales and 8.4% margin. Full-year premium growth of 3% driven by disciplined pricing and segment diversification.
  - **Annuities**: Full-year sales of $13.7B (7% YoY growth), with 67% from spread-based products. Variable annuities with living benefits grew nearly 100% YoY.
  - **Retirement Plan Services**: 10th consecutive year of positive flows, with 25% deposit growth and 13% earnings growth.

**【CFO Financial Review】**
- **Q4 Financials**: Adjusted EPS of $1.91, with alternative investments generating 11% annualized return. GAAP net income of $1.7B benefited from hedge program performance and embedded derivatives gains.
- **Segment Performance**: 
  - **Group**: Operating income of $107M (8.4% margin), up 107% YoY. Full-year margin expanded 280bps to 8.3%.
  - **Annuities**: $303M operating income (14% YoY growth), driven by RILA account balance growth (25% YoY).
  - **Retirement Plan Services**: $43M operating income, 13% YoY growth despite stable value outflows.
  - **Life Insurance**: Loss of $15M, narrower than prior year, with mortality improvements offsetting Fortitude Re impacts.
- **Capital Position**: RBC ratio at 430%, free cash flow conversion rate improved to 39% (from 35% in 2023).

**【Q&A Key Takeaways】**
- **Free Cash Flow Outlook**: 2026 target range expanded to 45%-60%, driven by group margin expansion, Bermuda reinsurance efficiency, and legacy block optimization.
- **Leverage Reduction**: Targeting 25%-26.5% leverage, with share buybacks contingent on sustainable free cash flow.
- **Bermuda Reinsurance (LPINE)**: First flow agreement for fixed annuities, with plans to expand into retail life. Expected to enhance capital efficiency and spread-based growth.
- **Expense Management**: Net G&A expenses down 10% YoY in life, with ongoing initiatives to sustain margin improvements.
- **Group Growth Strategy**: 2025 earnings expected to match 2024, with 8%+ margin by 2026. Focus on targeted segments, pricing discipline, and technology investments.
- **Variable Annuities**: Balanced approach with 25% of sales in GLB products, maintaining risk-adjusted returns while diversifying into spread-based solutions.


LNC

LNC fundamentals

Earnings Call

You can ask Aime