Lincoln National ((LNC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Lincoln National’s latest earnings call revealed a strong overall performance, marked by consistent growth in key segments such as Annuities and Life Insurance. The company’s strategic initiatives and disciplined execution have been pivotal in driving this success. However, challenges in the Group Protection segment, particularly due to volatility in disability claims, were noted. Despite these hurdles, Lincoln National’s strategic direction and financial health remain positive.
Consistent Year-over-Year Growth in Adjusted Operating Income
The company reported strong financial results, achieving its fifth consecutive quarter of year-over-year growth in adjusted operating income. This consistent performance highlights the company’s broad-based momentum and disciplined execution of strategic priorities.
Annuities Business Success
Annuities sales reached $4.5 billion, marking the fourth consecutive quarter of increased sales. Notably, there was significant growth in fixed annuities, which saw a 36% year-over-year increase, and RILA sales, which grew by 21% year-over-year.
Life Insurance Earnings Improvement
Life Insurance recorded earnings of $54 million, representing a significant year-over-year improvement. This was driven by a strategic shift towards products with stable cash flows and higher margins.
Strong Group Protection Premium Growth
Group Protection achieved a 5% year-over-year premium growth, with supplemental health increasing by 33%. Sales growth was nearly 40% year-over-year, showcasing strong performance in this segment.
Retirement Plan Services Performance
Retirement Plan Services delivered a 5% year-over-year earnings growth, with total deposits increasing by 20% year-over-year and positive net flows during the quarter.
Disability Loss Ratio Increase
The disability loss ratio increased to 76.7% from 70.5% in the third quarter of 2024, reflecting volatility and lower LTD recoveries, which impacted the Group Protection segment.
Volatility in Group Protection Earnings
Group Protection earnings were modestly below expectations due to volatility in disability severity and lower LTD recoveries, highlighting challenges in this segment.
Forward-Looking Guidance
Looking ahead, Lincoln Financial remains focused on increasing risk-adjusted returns on capital, reducing result volatility, and expanding its franchise. The company reported solid financial results for the third quarter of fiscal year 2025, with key performance metrics including a $4.5 billion sales increase in Annuities and a 5% earnings increase in Retirement Plan Services. The robust RBC ratio exceeding its 20 percentage point buffer indicates a strong capital position to support future growth investments.
In summary, Lincoln National’s earnings call reflected a positive sentiment with strong performances in Annuities and Life Insurance, despite challenges in the Group Protection segment. The company’s strategic initiatives and financial health position it well for future growth, maintaining a positive outlook.